Bill Cara’s Blog for April 9, 2010 [See post-close report]

As a person with an accounting degree, capable of reading the auditor's sign off paragraph, I really DO NOT understand how any of these companies balance sheets and income statement could possibly have been misconstrued by their auditors as fairly representing the true financial condition, (ie assets and liabilities honestly valued within limits of materiality) of those companies.

As I see it, we got Sarbanes Oxley, yet the numbers STILL were and are allowed to be fictitious at best.

Given that ALL of them are signed off on, how is an investor to determine which have honest financials vs those who don't?

"Mr. Prince said Citigroup could have lost market share or key employees if it veered away from the sorts of bets that so many banks and securities firms were making at the time. "It would have been impossible," he said, "to say to bankers, we're not going to participate ... and expect to have any people left."

"But Mom, all the other guys were doing it."

-----------
"Mr. Prince said he asked regulators to intervene to curb such risk taking industrywide."

My view: You only need to shoot the first one. (I expect no real justice to come of this investigation.)

Thursday, April 08, 2010 5:27:10 PM
Ambac Financial Group, Inc Reports Q4 $1.93 (includes $472M tax benefit) v -$8.14 y/y, R$567M v -$202M y/y
- Q4 Net change in fair value of credit derivatives $133M v loss $594M y/y (driven primarily by price improvement in certain reference obligations, partially offset by a narrowing of Ambacs short-term credit spreads (ASC Topic 820 adjustment) during the quarter)
- Q4 Net Premiums Earned $184M v $228M y/y
- Q4 net investment income $119M v $110M y/y (The increase was primarily due to an increase in the average yield of the portfolio as the mix of securities has shifted from primarily tax-exempt to a greater percentage of taxable securities)
- Q4 other-than-temporary impairment losses $118M v loss $66M y/y (During the fourth quarter of 2009, Ambac incurred $98.7 million in credit losses on securities that are guaranteed by AAC as a result of those policies being placed in the Segregated Account)
- Q4 net realized gains/losses and other settlements from credit derivative contracts: loss $648M v loss $989M y/y
- Q4 net unrealized gains on credit derivative contracts $782M v $394M y/y (The net gain during the fourth quarter of 2009 is primarily the result of the net decrease in mark-to-market liabilities due to improvement in the average values of reference obligations other than CDOs of ABS, reclassification of $658.9 million to realized losses related to commutations and interest claims paid during the quarter, and, to a lesser extent, amortization of exposure in the portfolio)
- Q4 total net claims paid $490M v $288M y/y (primarily related to RMBS transactions)
- Fair value of consolidated investment portfolio $9.2B v $9.8B as of Sept (The decrease in value was primarily due to commutation and loss payments made during the quarter)
- Cash, short-term securities and bonds at the holding company amounted to $136.5 million as of December 31, 2009.

- Comments:
- Q4 results reflect a tax benefit recorded during the period, reduced loss and loss expenses recorded relative to fourth quarter 2008, and unrealized mark-to-market gains in the credit derivatives portfolio.
- A tax benefit of $472.0 million was recorded primarily as a result of legislation that passed during the quarter that allows Ambac to carry back 2008 and 2009 operating losses as far back as 2003. Ambac Assurance Corporation (AAC), Ambac's principal operating subsidiary, received the tax refund amounting to $443.9 million in February 2010.
- In the financial services segment, the results for the derivative products business improved by $105.8 million compared to the fourth quarter 2008.
- It is highly unlikely that AAC will be able to make dividend payments to Ambac for the foreseeable future.

I'll have to take evil advocate position on this one. He is absolutely right in that there was no way for their or any other big institution to refuse to participate. They would have been eliminated, and the consolation of being proven right in a few years wouldn't be anything but bittersweet "after-the-death" acceptance. He choose right way to ask regulators to change the system, and their attacks on him now is nothing but lame and inexcusable attempt to exclude themselves from the circle of guilty ones.

Blaming the part of the system with acting in accordance with system rules is hypocrisy. They have created the system, and they are first in line to be blamed. You don't build the system rewarding unethical, immoral and eventually harmful actions, count on parts of the system acting against the interests you built in the system, and then go around blaming those who did just what your system motivated them to do. Organizations, like countries, don't have friends or morals - they have interests. Build them right - you'll get right results. Create wrong motivations - you'll get what we got.

Before jumping at my throat, realize that I am not saying bankers were blameless. I am saying they were second in line to blame, and when those who were first in line pretend now that they were/are clean as a whistle and try to become the judges, I don't accept it as the way to move forward.

Could something be considered a coincidence if it happens almost daily over a 4 year period - anyone?

http://tinyurl.com/yacw47l

feed..

CVX - estimates increased at UBS through 2011. Company is seeing higher earnings both in upstream and downstream operations. Buy rating and $92 price target.

INTC - PT Raised from $25 to $27 @ Canaccord Adams. Buy

TGT - PT Raised from $58 to $62 @ Piper Jaffray. Overweight

VALE - price target boosted at Barclays to $41 from $37 as it should benefit from the 2-3 year tightness in the iron ore market. Vale is top pick in the group. Maintain Overweight rating.

*(GR) FITCH CUTS GREECE TO BBB- FROM BBB+ (two notch cut); OUTLOOK NEGATIVE
- Agency has simultaneously affirmed Greece's Country Ceiling at 'AAA' and the Short-term foreign currency IDR at 'F2'.
- States: The downgrade reflects the intensification of fiscal challenges in response to more adverse prospects for economic growth and increased interest costs. It also reflects ongoing uncertainties about the government's financing strategy in the context of increased capital market volatility.
- States: The sharp rise in interest rates faced by the government this year, in combination with a deterioration in the outlook for economic growth, will make it harder for the government to achieve its fiscal targets of reducing the deficit to 8.7% of GDP this year and ensuring that public debt peaks at just over 120% of GDP in 2010 and 2011. Pressures on the banking system underline the adverse spill-over from sovereign risk concerns on the wider economy, while contingent liabilities from the banking sector will increase as the government provides banks with increased guaranteed funding.

** Note that Greece's sovereign debt carries an A2 rating at Moodys, two notches above the equivalent ratings at Fitch and S&P (BBB-). If Moody's were to recalibrate its rating in line with its peers it would render Greece's sovereign debt ineligible for ECB repo operations when collateral criteria reverts to the normal minimum thresholds (A3/A- or above) at the end of 2010

giving it another shot. How low can it go? Ready for a bounce

in onxx.... is Bayer showing an interest ?

Bill, et al --

I will be visiting Canada soon and want to open a bank account when north of the border. I am considering TD Canada Trust as I already have an account with TD Bank in Vermont. I also like the association with TD Waterhouse and TD Ameritrade if I want to do invest these funds. Are there any reasons to be concerned about banking with TD Canada Trust, and are there any other banks that you might recommend instead?

Thanks so much for all of your valuable insights!

Selling over..........back to your regularly scheduled GS ramp job. News doesn't matter in this market

tof- Likewise, I could lose it all, but I'm placing a few chips on C. Opened 100 contracts on the June 5 call @ 0.15.

sadleb,

My oldest son has a degree in statistics (a grad of Northwestern on a national merit scholarship) and is in danger of having his job outsourced. The younger one is a graphic designer, but is currently working in pre-production at a printing plant. Both are in their 40s with a couple decades of experience.

I have a list of more than 90 friends and acquaintances who, since the move to globalize (1993 to 2006) have either lost at least one job, closed their own business or were forced to take an early retirement. I have stopped counting.

I realize my view is colored by the dismal manufacturing climate in the midwest, but I believe the optimism of others (especially gov. and media) is likewise colored by their personal views and experience.

The other factor which affects my thinking is how much better things were for most of my life. I NEVER was turned down for a job when I applied — 1955 to 1966. Was able to support a family of four after 1966 working at my own business as a graphic designer and illustrator. My wife never had to work outside the home, but chose to do so after the boys were grown.

The only people I know who are not fearful of losing their job, are my neighbors who both work for the unemployment office. My regular job went away years ago; struggling since.

A son of one of my friends bought a modest home with the $8K deal, that was 245K last year, for $145. Yet, the realtors local data shows a price rise. Foreclosures are up vs last year, to just under 1K for the county.

I know a man who was laid off from his long-term job as a cable TV installation supv. When I had my internet upped to turbo, the service man was an independant contractor.

Took a vaca to FL in March, to find my favorite restaurant closed. Massive timeshare building with few interested (took a tour). Orlando must have enough housing capacity to handle all of Cuba and Mexico combined. Restaurant prices had doubled from 4 years ago, and the rental car was close to 3x ($700 for a week) with huge taxes. I met a former associate for dinner who has been job hunting for years, a sr. electronics designer. Nothing.

I can tell you that the people that are out spending like it's 1999, are the ones that have no clue about the economy. Soccer moms, face-attached-to-PDA office workers, illegal aliens, young women, and trophy wives. My Dentist did have half a clue and is doing well.

Can not believe any govt. statistic or just about anything carried my the MSM. This is not the USA I grew up in. I live the the portion of Mexico north of the US border. Even Bloomberg seems to be towing the party line.

On TV, BBC news is still genuine and accurate. And TG for the net; if you know where to look there are still people in their right minds.

The best scenario I can envision is shorts re-establishing positions at 11,000. That is exactly what we would need to nail in a solid floor at 11,000.

ALOHA!!

I posted this last night and I wanted to add this blurb from the BEA on "personal savings" rates, which continue going down and are now at 3.1% from a high of 4.8%.

Personal saving -- DPI less personal outlays -- was $340.0 billion in February, compared with $374.9 billion in January. Personal saving as a percentage of disposable personal income was 3.1 percent in February, compared with 3.4 percent in January.

If the Average Joe is taking money out of the stock market via institutional funds 401k or IRA and if he is not saving any more then where are those funds going? Of course there is not one single answer as some will try managing their own funds in the markets and some may be buying real estate at the "bottom", but still many more funds will undoubtedly be bound by debt. But the fact remains that money is leaving the components of the ICI, Investment Company Institute. For the Average Joe it all comes back to quality jobs in the end not big banks.

There is a trend happening with the BUY AND HOLD types who invest in "long term" institutional money funds. The following chart should concern many who trade here as it seems the sheep are not only being fleeced by the trading wolves like GS but by "debt attrition". Notice the long term "buy and hold" lost some favor after the TECH CRASH but nothing like the global financial crash(GFC) of 2008. Looks like the steepest drop in market funds since 1980. These are the people that CNBC and GS want back in the markets. It looks as if this chart could still lose another half trillion.

WIMSFL CHART LINK: http://research.stlouisfed.org/fred2/series/WIMFSL...

Next I move to the ICI, the Investment Company Institute, which is the source for the WIMSFL chart, to look at the details on a weekly basis for March 2010 and it is astonishing how in just one month time the long term capital has evaporated from the system on the retail and institutional side.

Even the hallowed domestic BOND MARKET has taken a huge hit. From a high the first week of March of $10BIL down to $4.5BIL the last week of March. Then MUNIs took a huge hit as well with only $6MIL for the last week of March, which was down from $1.3BIL the first week. What a haircut! It confirms that the WIMSFL chart displays some massive bleeding of long term money flows from the markets.

Next look at DOMESTIC EQUITIES and you see for the month of March it has had some serious bleeding showing that only $396MIL net came into the DOMESTIC EQUITIES markets while the FOREIGN EQUITY markets way outperformed the domestic equity markets.
MARCH LT FUND LINK: http://www.ici.org/research/stats/flows/flows_04_0...

Next we get a hint of how "taxation" has influence the markets and the flow of funds with TOTAL MONEY MARKET MUTUAL FUND ASSETS. Notice the only sector showing any staying power is "tax exempt".
TOTAL FUND ASSETS LINK: http://www.ici.org/research/stats/mmf/mm_04_08_10

Seems 2009 was the year the straw broke the long term camels back according to the US FED WIMSFL chart. How many Americans liquidated their retirement accounts to pay bills and save their homes? That is called DEBT ATTRITION. With sustained high unemployment this is a by-product, so without long term well-paying jobs the markets are sunk as the sheep move to the poorhouse. Without SMALL BUSINESS hiring the DEBT ATTRITION will continue and who was it that Obama left out of his last JOBS SUMMIT? Obama invited the Fortune 500 execs and the union bosses but had no place at the table for the SMALL BUSINESS sector. That was a major oversight by he and his economic advisers. At this rate GS and JPM will be the only market participants left other than Bill and Vad! Once again those at the top prosper at the expense of the Middle Class.

Grym... you know, I am a constructive man. To me, major criteria to evaluate the situation and the course of action is, will it lead to right result or not. From this point of view, focus on vendetta against bankers is taking the attention away from what must be the most urgent matter: re-making the system, so that the debacle could not repeat itself. Pretending that the crisis is a doing of a few dishonest individuals will leave us where we were - with system full of conflict of interests, destined to ruin lives once again in a short while.

I guess, that's my main problem with this circus. I don't see them doing it as a part of solution. I see it as the intentionally fake solution, exploiting popular rage to replace real solution and distract attention from the need of real one. They will pretend they are doing something, they will play this feigned indignation on TV - and we will be left with cosmetic changes on fundamentally flawed system. I say, focus on what is vital first, make sure that the real healthy system is built - and only then when there is no danger of the show becoming the distraction, have your trials.

ALOHA!!

As the Euro and other European paper currency sink against the USD lately there is one non-paper currency making new highs. On a ten year POG chart.
EURO +196%
CHF +168%
GBP +325%

Then we have the USD ten year POG gain of 310% ...

Then we have these ten year charts.
DOW -1.39%
S&P -21.56%

Buy and hold has turned out terrible for those in the US stock markets.

Grym, thanks for the reply. You've got me dreaming of a world where one paycheck is enough to raise a family!

The responses made me remember a few more people in different sectors that I thought I should mention.

The people that I know in construction are screwed right now. One is older and has decided to retire because there is no work (he's near Sacramento, CA). The other is my age (mid-twenties), lives in NH, never went to college, and lives with his parents. He is working, but is only getting a fraction of the work that he used to.

In FL I have a friend that has been waiting tables full-time since he graduated high school. Lately, he has been talking about switching careers and working for the electric company repairing electric wires. He says that the restaurant business in FL has slowed to the point where he is ready to get out just because he wants a secure paycheck that he can rely on.

Jobs aside, the biggest problem that I see in my generation is the inability to save or plan for bad times. Other than my wife and I, everyone I know in their twenties has no concept whatsoever of saving. Most have a negative net worth. Either they don't make enough and saving a portion of their paycheck would drastically alter their quality of life or they do make enough but they see saving for the future as something they'll start doing later in life when retirement is a real concept. Lastly, most in my generation can't see a good easy way to save that "feels good". They distrust the stock market and savings accounts or CDs don't earn enough interest to lure them.

Ummm... should I even point out that IF this market has such predictable pattern, than it's the easiest market to trade EVER? :)

That's my major problem with these rants. Either there is no patterns in this market as some claim, or as others claim there are, artificial or not, but very clear patterns so reliable that they must be extremely profitable. Latter is obviously not the case; former, if it is, should be a blessing for traders...

I do agree with some of that. Unfortunately, all of these +35 Dow days will/can be wiped away in a week or so. Trading long now is like picking up dimes in front of a slow moving bulldozer.

But anyone who thinks this is a healthy and normal market should start bunking up with Dennis Kneal and the other CNBC shills.

Actually, come to think of it... I don't even understand anymore what the argument is about. It seems simply come to this: some think it's impossible to profit from this market - and they don't; others think it is - and they do. What else is there to argue about then...?

"But anyone who thinks this is a healthy and normal market should start bunking up with Dennis Kneal and the other CNBC shills."

That was rude and uncalled for. Care to take it back?

I don't know if you all have TD AMeritrade, but they now have ThinkorSwim and the services they provide are excellent. They have a chat room as one of the services through Shadow Trader...this quote below is a prime example of the wrong psychology that will cloud you from making money in this market because you will be too jaded to recognize opportunity...from someone in the chat room:

"Robin Hood: short covering started the bounce from march...rigged accounting rules extended it....banks parking stocks prolonged it...want more? plus the banks secondary stock offerings right around when they parked the stocks so nobody can sell or short em"

Another..

"The US is Lehman Brothers on a scale writ large. And when it is exposed by some series of events, the implosion could be more sudden than any can imagine. But in the meantime the US is still the ’superpower’ of the world’s financial system, through its currency, its banks, and its ratings agencies."

what is fascinating is how a squeeze is almost telegraphed.... away from that, BioSante is grinding along.. love their partnership with Teva Pharma... some things take time...

Those guys sound right on the mark. Not popular views but the truth rarely is.

Fly- Here's another take on 'atypical.'

In the summer of -08, we were all targeing 10,000/1000. It overshot those targets to the downside by quite a bit, to 6500/667.

Now we're back to 11,000/1190. So in essence, there was a panic bottom, and now we're probably back to where we should be? We may never return to a 4-digit DJIA.

I'm not about to predict anything. But it pays to consider all perspectives.

Should be on your radar. They've been moving. FD Long ANS.to @ $3.23 (after watching it rise up from $2.20!)

without getting all into the economic of unemployment being double when the dow was over 12000 and GDP etc and etc being fractional of 2 years ago and nevermind Fed debt levels exploded to beyond historical levels and of course Dow 14000 was a levered number by the banks that will not be coming back anytime soon.

Perfect example of irrationality: Oil. Inventories build by the week and demand drops with each nickel higher yet it continues to climb. Be sure to thank JPM and GS for buying all that oil and storing it offshore in a bunch of otherwise un-used tankers.

I agree. I don't mind a bull case because I want things to get better. The big problem with CNBC is they trot out a bunch of Boston and NY fund managers to talk their book with a complete conflict of interest. But guys like Kneal are completely retarded and useless. They talk over cut off and disagree with any guest with an opposing view. Bull guests outnumber bears 10:1 and Kudlow conveniently cuts to commercial everytime a bear guest states a logical case. Unfortunately I can't get Bloomberg or even Fox. Good thing the Masters is on later.

I agree we get some kind of a shallow 4-6% pullback and then a summer rally to S&P 1225+ and then kick to the nuts reality pullback this fall to under 900.

Sounds like a perfectly valid reason to ramp the market into the close and over the weekend.

BUY BUY BUY

Looks like it's spiking...anyone know why?

Vad,

"Pretending that the crisis is a doing of a few dishonest individuals will leave us where we were..."

Yes!

But allowing any of them to simply say, "I didn't have any idea this would happen," rather than hanging all the willing participants encourages more of the same.

This came from a well engineered, long term plan which included changing regulations and legalizing bad products. The perps include many from GS, Congress, rating agencies and not a few cheerleaders among the talking head crowd.

We need Constitution change to limit the power of professional politicians, (prevent their elitist pay and benefits) regulatory change to prevent conflicts of interest (Bill has listed these.) and Most of all we need punishment for those who plundered the system.

I agree also that the current TV show will do nothing worthwhile.

We need to make it too costly for any to do it again. (For those who benefited — not the taxpayers.)

as somewhat evidenced by volume, then, just who is Cramer, et al, speaking to ? I never listen anymore... just turn the volume down ( unless a news flash pops up )... Its a lot easier to trade listening to some good tunes...

"Going Long Into The Weekend? ECB Calls Emergency GC Meeting Tonight, Flashbacks To Paulson And Summer Of 2008
Submitted by Tyler Durden, ZeroHedge.com

there are two possibilities:
1. A Greek package will be sorted this weekend. I’ll give this less than 5% probability. I have spoken with people in Athens this afternoon (I am all over the papers there today with my note from yesterday that they’ll have to go to the IMF) – and the message continues to be that there is a huge hurdle to climb before they’ll ask the IMF for help. Also, the key IMF people are still in Washington at this time.

2. A serious banking problem is about to emerge and a safety net has to be provided before Monday morning. This could relate to Greece – or it could be another of these cross-country unclear cases, like Alpe Hypo, where Trichet had to step in." - blog

Trying to decide how long to be. Monday pops have been sold off sharply.

These EU clowns need to be sent to bomb squad class, and given snippers and a 5 minute countown, so they can learn to make a decision for once.

Time for GS, JPM et al to fire up the HAL 9000 for the daily ramp into the close.

Vad,

Call the CNBC crowd by any other name and their pumping of the markets smells the same.

I have read several people's comments on why they no longer appear on CNBC anymore — they refused to tailor their views to meet the presentation of the day.

I'm surprised anyone is still listening to them. It's much better with mute turned on ;-)

As for what kind of market this is, doesn't it simply depend on the time frame each of us is following. For me (longer term) the "new normal" is higher volatility than I like and so I'm doing very little right now. My time will come I expect.

Oh, OK. As Rosann Rosanadana would say, "Never mind."

BTW, I enjoyed your kitty pix. She reminds me of our Ella (Named for Ella Fitzgerald because she "sang" so much.) We had her for 17 years and she understood more than any other cat we've had.

We would spell ice cream and a few other words because if she heard the word she would cry until she got some. She even picked up a bit of Swedish, but never learned to spell. She loved to play fetch with little circles of twisted pipe cleaners.

Here's comment from the english edition of the Athens Kathimerini newspaper
The Greeks are saying they don't need the IMF except as a back up guarantee and they are
going to get the rich who aren't paying their tax. The IMF is engaged in teaching the Greeks some
techniques to capture the booty that has evaded collection. Good luck!

" Government officials insisted yesterday that Greece can extricate itself from a deepening financial crisis and will not need to resort to a bailout, as a revised tax bill aimed at increasing the burden on higher-income earners was approved by a parliamentary economic affairs committee.

“We do not require the activation or further specification of any mechanism,” government spokesman Giorgos Petalotis told reporters, referring to a rescue plan hammered out last month in Brussels that foresees the provision of bilateral loans and International Monetary Fund support in the event that Greece requests it. Petalotis added: “We wanted and still want this mechanism for one specific reason: to act as a guarantee to normalize borrowing conditions. So there is no reason to take any initiative at this point.” He added that Athens was striving to avoid borrowing at “barbaric” interest rates.

But Petalotis’s comments and those of European Union officials failed to reassure the global financial markets and Greece’s borrowing costs soared to a record high.

Meanwhile visiting IMF officials continued advising Finance Ministry staff on how to improve budget management and crack down on widespread tax evasion."

I'm sorry if I do not understand how this rant "People today are trying to change the history of America by leaving God out of it, but the truth is, God has been a part of this nation, since the beginning. He still wants to be...and He always will be!" is anything but a religious one. You are certainly allowed to have your opinion but as to why the rest of the quote was left out on the tombstone is unclear to me. You seem to attribute it to the government but are you sure about that. BTW the framers of the constitution were very aware that religious intolerance including forcing the idea of GOD on people were areas that the government should explicitly stay out of because it was none of the governments business.

Hey Fly, I've gotta ask what is stopping you from making more than 3% YTD, if you know it's a ramp job? Perhaps its holding overnight that is damned difficult - well join the club. As a neophyte of Vad's these last 5 months I have come to realise it doesn't matter at an operational level who is doing what. There's a setup for almost every occasion and the time frame is almost always intraday.

I was getting a bit frustrated with the way things were this past week and decided to look up a very experienced hand I hadn't thought of these last six months (Vad and the gang have been keeping my mind busy until now). John Lee had something to say about AIG and the casino's these past few sessions, and what do you know, it helped me focus on a couple of successful plays:

http://ibankcoin.com/chart_addict/2010/04/08/casin...

(I see the MGM short I was considering just before midday turned into a very nice long, except I decided to start the weekend early).

I quickly came to appreciate shorting once I was introduced to how it works. It took me a little longer to learn to not fight the tape and this has cleared up my trading a lot. I've noted that my thinking has changed substantially in my university education as well and is reflected in the most recent paper I submitted.

Change can be good. A pleasant weekend to all.

Bankers in training to taker her all the way back down.

http://tinyurl.com/ybfn8l8

"Crude is clearly rolling over."

Very obvious on the cycles charts. Weekly stochastic peaked and turned down.
Weekly swing high almost complete with downturn of the cycle turn indicator.

On the dailu USO chart, there is a failed cycle in the price, based on the pop/drop, and the Full STO is warning sell on the pending drop below 80.

A lot will depend in when the dollar gets another foothold. Have a Gyro over the weekend and check back Monday. Gotta go lighten up now. SPXU was a wash.

team... WATG had two upgrades today but none of them matches the time of the spike... I'd guess some hype somewhere added fuel. Sure has a nice looking chart on daily.

Read it for yourself.

http://www.minyanville.com/businessmarkets/article...

Agent Graifer- We've breached 11000 three, now four times this past week without being able to close above it.

This is one slick mind playing with us.

Do you mind if I smoke- the heat here is overwhelming and I'm not accustomed to devastation on this scale.

In the meantime, when it comes to 11k:

http://www.youtube.com/watch?v=XfuBREMXxts

Vad,

I like your scientific approach to the market. Repeatable patterns should result in trading opportunities and profits, regardless of what causes them. I have your book on order, looking forward to reading it.

~Brent

Hello All,

If you would like to know more about the coming long-only CTA accounts -- now known as the Cara Select Portfolio Accounts -- click the button at the top of the right-hand column on the home page.

Best regards,
Jack

"These EU clowns need to be sent to bomb squad class, and given snippers and a 5 minute countown, so they can learn to make a decision for once."

This presupposes they actually want to make a decision. Consider:
* Germans do not want to print money, but want a lower euro
* Germans don't like the other euro countries to exceed deficit targets
* Germans are the big fish of the EU economy
* the EU has never punished any member for exceeding targets

British Admiral Byng was shot for his military failures in 1756 for failing to do his utmost - or as Voltaire suggested, "to encourage the other commanders." Is it possible that Greece will be shot by Germany in order to encourage the other member nations to get their budgetary act together? Shoot the smallest (and most egregious) violator of the budget limits, and the others will almost assuredly fall in line. And the beauty here is, Germany need take no action at all. Simply standing by and doing nothing works perfectly.

You may say that a Greek default will harm all members, and that's probably true. However, Germany has historically been very willing to take short term pain for long term gain. As evidence, consider reunification - integrating East Germany was astonishingly expensive for West Germany, but 20 years later, Germany is doing quite well. German PM Merkel is originally from East Germany, interestingly enough.

Just read through the comments. Very entertaining day. Best in a long time. Fly welcome to the board, but please apologize. There is nothing nastier you can do to a person then compare them to that Kneal dude. We appreciate debate, but going full Kneal is not allowed.
Bob
I am re-posting my short if- then- scenarios from last night to give you bulls more ideas on another bear slaughter.

What us bears would like to see:
1.a euphoric spike
2. a little consolidation,
3.a large 150 pt gap down.
4.Have CNN call it profit taking.
5. confirmation with a major break of support.
Then the bears are off to the races. Strange enough the catalyst for these events is likely to be some really good economic news. That is what I and every bear want's to see. Not likely to happen.

What we don't want to see is the reverse of the last 5 weeks. Little 1/2 point gap downs a little fade up then stagnation. Little stair steps down until this frothy market is completely flat like yesterdays glass of beer.

Really what is more likely.
Bob

http://economictimes.indiatimes.com/news/news-by-i...

http://economictimes.indiatimes.com/Interviews/Ind...

http://www.watblog.com/2010/04/06/internet-touches...

It's clear that the internet advertising market in India hasn't seen nearly the type of growth the rest of the world has seen, despite its huge online market potential and huge population. These articles point out the growing disparity between internet usage and actual spend on advertising online. I think this disparity will eventually go away, creating enormous growth opportunities in India. The main beneficiaries of this are GOOG and YHOO, but I think a lot of people are writing off REDF. REDF is so tiny and really just an afterthought when it comes to investors, but I think there should always be a decent premium in this company given (1) it's excellent balance sheet (almost $50 Million in cash, no debt) and (2) it's huge base of registered users (about 85 million as of last quarter). To me there is a big disconnect between the actual market value of REDF and the intrinsic value of the company because of the above.

FD: I'm long REDF at about $2.68 from the past few days.

Those are great TV links....

Being the novice at the link technology, i was having trouble just book marking the internet TV links for future use.

Can you give me the plain links and not embed them in the spreadsheet?

I would like to book mark them under favorites in microsoft internet explorer.

Here are the links:

http://www.bloomberg.com/?b=0&Intro=intro3
http://www.bloomberg.com/streams/video/LiveBTV200.... (For Media Player)
http://www.cnbc.com/id/24596546/
http://www.bbc.co.uk/worldservice/meta/tx/nb/live/... (For Media Player)
http://watch.bnn.ca/
http://live.cnn.com/

I'd guess part of the EU is enjoying a lower Euro... making their exports more competitive and generating higher earnings from their dollar sales and investments in the US.

Any kind of assistance to Greece now is the kick the can down the road strategy. Sooner or later the big banks
are going to have to acknowledge their losses. Same in the UK and US.

I was talking to some Greek friends and asked if the strikes would settle down as tourist season approaches
and would the Greeks get down to work for the summer? They replied that they must as for many, it is their major
source of income.

By the way...if you think US gasoline is expensive, I read today that in Britain it just went over $9.00 per gallon.
Yikes! We have it good at near $3.

Hi Cheapy,

I am learning to be more methodical and have built myself some tools to help me trade and be more efficient. I work all day so I needed a tool that incorporated multiple tools together without hogging all my computer resources. Now I only need to have one spreadsheet open to see my charts of interest (I still go to stockcharts if I am looking for an entry), some technicals of interest, and fundamentals of various companies.

I have attached my 1st generation spreadsheet that can be used as a start. The 1st tab of the spreadsheet explains how to install the add-in into excel to allow these tools to work.

Refer to Posts below for more examples:
Submitted by Northern Otoko (39 comments) on Sun, 02/21/2010 - 16:55 #57834
Submitted by Northern Otoko (39 comments) on Mon, 02/22/2010 - 22:12 #57894

Loannetter,
Perhaps you can clarify something which is not mentioned in this article.

"Ex-Fannie Mae execs try to defend track record

Former Fannie Mae executives blame competition
from Wall Street for risky loans"
http://tiny.cc/q5n70

------

I seem to remember that when Barney Frank's boyfriend was an exec at Fannie Mae changes were made which paid them commissions based on the amount of lending they did. Seems like a bit of incentive to make unwise loans, right?

But, like the big bankers who "were out of the loop," they felt they had no alternative than to lend, lend, lend.

------

"Could we really sit out?" Levin told the panel. "Would we be permitted to sit out? That's what we were grappling with."

sadleb,

I just came across this WSJ article related to our discussion.

---------
Joblessness: The Kids Are Not Alright
Will the U.S. accept youth unemployment levels like Europe's?

"Unemployment today doesn't look like any unemployment in the recent American experience. We have the astonishing and dispiriting new reality that the "long-term jobless"—people out of work more than six months (27 weeks)—was about 44% of all people unemployed in February. A year ago that number was 24.6%."
http://tiny.cc/mxgq7
---------

Sadly, it appears to be even worse for young people in much of Europe.

Guard that job you have as much as possible.

Grym,

"Could they really sit out?"

For any political party to claim a GSE was pressured by Wall Street to do this or that is to admit THEY pressured them. Wall Street's pals in Congress were paid to support these programs.

I recall attending a particular conference with Fannie Mae executives beaming in front of their 'affordable housing for all' banners. It was all so slick. The re-packaging of the disadvantaged borrower for consumption. To suggest they were 'out of the loop' is disingenuous. More like 'on the bankwagon'.

CNBC's Robert Reisch and WSJ's Steve Moore comment:
http://www.cnbc.com/id/15840232?video=1464755636&p...

The Office of Federal Housing Enterprise Oversight (OFHEO) stated: Fannie had "an arrogant and unethical corporate culture" after their 3 year investigation revealed that Fannie Mae employees "manipulated numbers to trigger executive bonuses from 1998 to 2004".

http://projects.washingtonpost.com/post200/2007/FNM/

So Yes, I'd agree your "Bit of an incentive" is an understatement. Follow the money!

http://tinyurl.com/y2xucvb

They usually post audios too, here:

http://tinyurl.com/yymkf4o

Don't let the accent fool ya...

According to Dr. Lawrence Parks Executive Director Foundation of the Advancement of Monetary Education (FAME) our monetary system is dishonest and cannot be fixed. He comments on the information block about this issue in texts, media, universities. On the current system he says 'without a doubt it's not salvageable'.

http://www.financialsense.com/ (2nd hour recording today 4/10)

be a necessary reality for some so quickly:

"Ashtabula County Common Pleas Judge Alfred Mackey was asked what residents should do to protect themselves and their families with the severe cutback in law enforcement.

"Arm themselves," the judge said. "Be very careful, be vigilant, get in touch with your neighbors, because we're going to have to look after each other."

http://www.wkyc.com/news/local/news_article.aspx?s...

Did the judge just declare open season on criminals? :) hat tip to Jesse's.

Thanks, I thought you'd have the scoop on this.

The troubling part both from the video and the article nothing really serious is done to punish these kinds of behavior. A fine paid by the organization still leaves the individuals doing it untouched. I want this kind of robbery treated the same as one by a guy in a sky mask and a gun. I want them pit away like Skilling at Enron.

Giving them bonuses or a fine which leaves their money intact is as bad as simply ignoring that it ever happened. No, actually it is worse in that it denigrates our justice system in public.

I'm glad my kids are grown. I'd feel really hypocritical trying to teach them that "crime does not pay" today.

Grym,

Expecting justice is probably a set up for disappointment.

I will press for healthier, fairer more transparent systems. The current abusers are just opportunists. I imagine that anyone who pays $67,000 for a dinner with their cronies is just feeding a great empty unfillable hole where their happiness should be.

Sadleb,

You have only made a handful of comments in a few weeks and I find them interesting in a regional economic and generational sense. The last two paragraphs of your last post speak loudly to me. I am a pre-baby boomer as is Grym. I am retired for some time now. Never did own an SUV but had a van for a while when I had a family place on a river out in the country in Missouri.

Grym, speaking of ' hollowpoints '... I am waiting around for Smith & Wesson to get near $ 3.71 ( might not get there ) and then see what the players do... That is a pretty important pivot area. I would not be surprises to see them get taken out at $ 5.50 - $ 6.00...

From The Pragmatic Capitalist:

The playbook for this market is simple:

1) Buy any dip greater than 0.25%

2) Go all-in on Friday afternoons in anticipation of the Monday rally

ALOHA!!

The US Treasury decided to issue more short term Regular Series Bills and CMB debt on April 8th of $148BIL USD, which pushed up the US PUBLIC DEBT by another $34BIL to $12.77TRIL USD. I looked at the FY1998 to see where we were on April 8th and the US PUBLIC DEBT was at $5.46TRIL USD, so a 230%+ increase in 12 years time. Should we just accept that as normal?

I also have an interest in a certain line item listed as "Health and Human Services". This is the line item that deals with the mental patients that used to be locked up in asylums until Reagan released them all for "outpatient" services. My interest is due to my wife who has a Psych degree and is studying for another certificate. She is currently "interning" at some of these mentally ill "outpatient" service providers, whereby she either visits them at their apartments or they come into her office. These budgets are now under threat here in Hawaii and her sister who works in San Diego County says California is cutting their budget as well, so I am sure these cuts go everywhere to every State and County entity. Not only are the States and Counties releasing inmates from prisons but the mentally ill are roaming the streets without meds or food or shelter. Now if you think that the inmate prison populations being released are free of metal problems think again or better yet go get yourself locked up for a year in any prison in any State or City and see how your "mental state" fares. If you were not neurotic and paranoid before you went in you will be after. I used to work in the prisons and I got to go home every day after work and that drove me batty having to deal with the thug mentality and the guards with all the rules and threats.

I look at the US Treasury expenditures on Health and Human Services YTD as of April 8th and I see this:

FY1998
HHS - $19.35BIL

FY2010
HHS - $52.22BIL

A 270% increase since FY1998 yet budgets are being cut. Once again waste is rampant in these programs. Let me just say from what I see with my wife, aside from med and food/shelter costs there comes the added cost to "document" and "chart" plus the administration of privacy laws, which is mainly to protect the company from being sued by clients(welfare recipients). Without this "outpatient" service which sometimes includes rehab and half-way houses and domestic abuse safe-houses for women these clients would be out on the streets drugging, stealing and hooking, which is probably what the inmate populations being released will be doing "outside" as well! I am not sure how "welfare recipients" ever got the right to sue anyone whose services they are using for free. You get what you pay for seems logical. Generally these inmates and mentally ill are not known for their large voting block or their "union", so I can see how cutting their budgets would be politically painless. America can no longer afford welfare, in truth it never could. The biggest welfare freeloaders in America are not those on food stamps or Section 8, but those US corporations on "FDIC STAMPS" and "SECTION TARP" and "PENSION EBT"! These are the Americans who need welfare the least, but lets cut the most politically impotent groups first to show just how tough and committed the US CONGRESS is on spending cuts.

US BANK and CORPORATE WELFARE, guarantees and promises, $17.214TRIL USD and counting!

I have to agree ... you cannot fix a financial system like we now have while we keep the same corrupt monetary system and its monopolies in place. Our elected leaders and the US FED have had 100 years to fix it and its more broken now than it ever was. Is anyone here still giving OBAMA his 100 days? Is that the mentality ... 100 more days ... 100 more years? Stockholm Syndrome ...

sadleb, Illini,

I am unconvinced climate change is not mostly a natural phenomenon. Core samplings show historical precedence. As an asthma sufferer, I am all for cutting pollution regardless. The mpg averaging and Gore-styled offsets are simply stupid.

I do know attempts to profit from environmental change during 1970s "oil crisis" were futile. The current move, if relying on subsidies, will never make it against the entrenched forces of the big companies, IMO. Change needs to include a profit motive or it will die.

Our local subsidized public transport system is running buses to seat 60 passengers (to meet Federal requirements) when an SUV or van could handle the load.

The government never looks at the realities — only the ideology. This is generally the case. The new health care plan is only the latest example. Like Social Security and Medicare the federal government imposes a mandate to pay in advance, uses the income immediately on more vote gathering handouts, and drops in an IOU to be paid when the next wave of elected bloodsuckers takes office.

I have a 1991 VW (30+ mpg) with 130,000 miles on it and a 2004 Jeep Liberty (20 mpg) with 40,000 miles. We drive very little these days and use the VW for in town, good weather trips, the Jeep when our street is unplowed (city budget forbade it this winter). What someone owns has little bearing on the issue. We could simply ration, as in WW2, and people would choose to economize. Cost increases will have the same effect.

Cheapy,

"If anyone has suggestions or examples of what they did or how they got teens or college aged kids interested enough to learn intelligent gambling/investing in the markets, I'd love to hear it."

I suspect the necessity angle is going to be the prime motivator for most, but personality too plays a part, at least with my two sons.

The older has always been a saver and now an pretty savvy investor (gold these days). He is very numbers oriented and is a statistician by training. He used to add all the numbers on the church bulletin and average them — for fun ;-)

Our younger one hasn't the ability due to job losses lately, but never was serious about it.

But their big now and I try to offer general suggestions only. They must develop their own survival skills, I guess.

as far as buyer of Smith & Wesson, I would keep an eye on Tyco....

Ron,

That's for pointing out the obvious. I never wouldathunkit a year ago, but am now ready to bet a bit (with a 5% stop). Never underestimate the public.

"No one, as far as I know, has ever lost money underestimating the intelligence of the great masses of plain people." H.L. Mencken, 1926

I do believe, however, the current spending is mostly the top 1% who are buying bargains while the majority are afraid of losing their house, their savings and can't afford to move to where a job may be hiding.

This may be a way to profit from the excesses of the elite.

Grym, "Desertec" should interest you:

http://www.desertec.org/en/concept/

The idea itself is great, but whether it could be realized or not is up to anybody to decide. ABB (supplier) says this is the way to go ;-))

I should add a disclaimer to the above post. None of this discussion about green tech, Peak Oil, or climate change have taken into account how it should or should not affect trading strategies. These issues operate on much longer time-frames than trading does.

I have learned this first hand by losing money "investing" in green tech when I first learned about the reality of Peak Oil some 5 - 6 years ago. I let emotions get in the way of objective price and money flow studies and it cost me money. It was my first lesson in what not to do. My second lesson came after reading Ben Graham's book "The Intelligent Investor" and failing to profit after attempts at finding companies trading at prices below their intrinsic value. I just don't have the time or patience to follow his methods. I want to see results now and "investing" takes years or decades to pay off. Also, "investing" is nearly impossible when market intervention and manipulation are at the high levels that they are now. I thought I wanted to invest in companies, when in reality I want to trade stocks.

I can thank Vad for helping instill the right perspective on trading.

I can't say that I've been too profitable yet, but I have learned a lot. My #1 rule - don't be stubborn. Admit defeat, take the loss, and move on. Letting small losses turn into big losses has been my number one mistake.

Reminds me of the "new" chickens without feathers. I must say they look frightening.

An interesting idea to control bankers from this weeks Barron's

CONGRESS, HOLD YOUR HORSES! SURE, EVERYONE except the perps favors better regulation on Wall Street. But we need more efficient and intelligent policing than what the current House and Senate financial-reform bills offer.

The aptly named Richard Vigilante, who recently co-wrote a book called Panic with Minneapolis-based hedge-fund legend Andrew Redleaf, suggests this approach: Force all firms managing other people's money to publish their investment positions in detail before the market opens; this would include hedge funds. Then, the short sellers could punish ineptness before it spreads by betting heavily against a particular institution's stupid decisions.

"Bankers would hate it. It's their worst nightmare," says Vigilante, whom I met with at Firehook bakery on Washington's Farragut Square. If the system had been in place in 2006, short sellers would have stamped out the smoldering subprime mania before it had a chance to spread, he asserts.

His suggestion is both brilliant and a model of simplicity -- it could protect consumers against all kinds of risky financial products -- but it will never become reality.

Bankers would scream about the need to protect their proprietary-trading information. And, as was the case with health-insurance "reform," Congress is bent on ramming a bill, no matter how flawed, through the legislative sausage works in order to mollify an uncommonly angry electorate before Nov. 2. To entertain new ideas at this juncture, even good ones, would upset the ambitious timetable.

Grym,

I think the viable solution for the US economy would be to simply replace all payroll, income and corporate taxes with consumption and excise taxes, hitting imports like fuel and other non-essentials the hardest, with taxes as bad as europe's, and dramatically cut the size and scope of government to what can actually be afforded from revenues.

People would then think a lot harder about driving or buying gas guzzlers if gas was $10 a gallon, and if Chinese crap were priced 50% higher, any domestic company that is currently carrying the tax burden would find things at least a little easier to survive, and the people would have the money to make choices.

The problem is that politically, nobody that talks about taxing the 50% who no longer pay anything at all is going to get elected.

The Euro is rising in the initial response, according to Bloomberg.

ballena, sadleb, baz22, cheapy, loannetter,

If anything is to be self sustaining it must be profitable to attract investors, solve problems and create jobs.

Money is always a key factor and government spent money is inherently wasteful and most costly. IMO, Obama's "Backdoor Bailout of Bankers" is a good example. I've watched Obama long enough to always suspect his "plan" is:

1. to get himself reelected and

2. to create more government control

Again money tells the story — he's spent more money than all other presidents combined — even Bush, who was certainly no miser with our money.

Government subsidies become monopolies and prevent private companies from being able to make innovations which benefit them and consumers for the long term. Look at all of the major inventions of the past couple of centuries — Edison, Ford, the Wright Brothers, the list is a long one — all without government involvement. The same is true with many great scientific and medical discoveries.

Now look at the government projects, War on Drugs, Aid to Dependent Children, Social Security and Medicare, Katrina — nearly total screw-ups, extremely expensive and eventually unsustainable.

Take away subsidies for everything from agriculture to oil and pay field labor the same minimum as any other job. Let all prices float with the market demand eventually we would have inventions to pick crops, far cheaper energy sources, less pollution, mass transportation, more and better jobs.

The 70-year Soviet experiment should teach us government controls are a surefire killer to incentive, creativity and a pleasurable lifestyle.

Illini- Here's a beautiful song by Paul Kantner that I haven't listened to since the summer of 1976.

http://www.youtube.com/watch?v=asCo--DF_gY

So the $USD is down -0.9%, and we may see a few noble bears fall on Monday.

I used to love reading that comic strip.

In the 'It's about time' category:

SEC inspects derivatives-based funds.
ETFs could be affected as regulators examine derivatives, position limits.

http://www.marketwatch.com/story/leveraged-etfs-un...

tof- Yes, interesting comparison. I suppose we're always drawn to symmetry.

At this point, I continue to believe the only two viable positions are (a) long (with tight stops), and (b) cash. I opted several weeks ago for 100% cash, and thus missed the entire ramp from 2/5.

Now at 95% cash, having placed a few chips on a short squeeze. It won't be long before we see a correction (IMO). The trick will be deciding which way to play the correction- buy the sell-off, or short the sell-off?

ALOHA!!

Bill, thanks for the WIR ... One word that comes to my mind when I read the WIR each week when you mention sovereign debt is the word "liability". Back in the 1980s there was a very popular bumper sticker that read HE WHO HAS THE MOST TOYS WINS ... Well, let me just say it was popular in California and Nevada which is where I was living at the time. That one bumper sticker kind of expressed the mentality of the times and the importance America has always placed on "spending" in order to enhance an image. It was a top down mentality then and it still is, although the air is out of the balloon more now. Well, I thought that if the same bumper sticker could be used today it would read HE WHO HAS THE LEAST LIABILITIES WINS! Governments seem to accumulate "liabilities" faster than I can change my underwear. In my mind the most devastating liabilities have yet to surface and of course when governments enlist the assistance of GS and JPM who really knows where true debt loads are hidden.

I was reading the Keynes essay from 1930 entitled ECONOMIC POSSIBILITIES FOR OUR GRANDCHILDREN. He spoke in terms of where economic wealth would lie by the year 2030(in 100 years) from a UK perspective. Of course nowhere in his predictions did he mention there would be no gold standard and that all the currencies would be "free floating". He missed that! From a psychological point of view, people who lived under the gold standard back then(1930), would have found life inconceivable without one, just as people of today would to go back to the gold standard. He did predict that lifestyles would improve 4-8 times where they were in 1930 and of course its not hard to predict better times ahead at some point when you are at the bottom of a cycle. Keynes then predicts advanced technology would lead to more unemployment and he is way off base with the world population when he says this: "And from now(1930)on we need not expect so great an increase in population(world)." In my way of thinking without a fiat monetary system there would not have been a way for infrastructure to keep up with global population growth, so if you apply the inverse logic it is fiat money that has been the catalyst for living longer(medical and other high tech advances) which has allowed the world population to explode. Travel anywhere in the World and there is electricity almost everywhere and cell phones and bridges and all the usual modern era social devices and infrastructure. Is the global use and issuance of sovereign debt at fault in any way? Hummmmm ... At "fault" meaning without over extended debt issues there would not be enough infrastructure for housing and "socialized medicine" and food in order to keep the expanding population in a constant expansion mode. Can global governments just continue to issue debt forever with no consequences at all? Certainly Greece is in the news now and a focus of "austerity" is in the global spotlight. I seriously doubt that Greece will be the only casualty and I doubt the casualties will only be European.

Here is Keynes conclusion ...
"I draw the conclusion that, assuming no important wars and no important increase in population, the economic problem may be solved, or be at least within sight of solution, within a hundred years. This means that the economic problem is not-if we look into the future-the permanent problem of the human race.

He ends with this proposed formula for future success ...
"The pace at which we can reach our destination of economic bliss will be governed by four things-our power to control population, our determination to avoid wars and civil dissensions, our willingness to entrust to science the direction of those matters which are properly the concern of science, and the rate of accumulation as fixed by the margin between our production and our consumption; of which the last will easily look after itself, given the first three."

We all know our World History, so the first two went out the window and are still out the window. We do trust in science, sometimes too easily. The fourth and last formula is in LALA LAND just as Keynes predicted if we ignore the first three! What is more inflationary than the "permanent" WAR we now engage in? I think Keynes downfall was his overlooking the true nature of the "human condition" or as Mises put it better, "Human Action". Now we have a monetary system based on the frailties of the human condition. In layman's terms, who wouldn't write a blank check with as many nines as possible? We'll call it the "five nines" account, because "99999" is higher than "00000"!!! Maybe not as lucky though ...

So in the end it is probable that HE WHO HAS THE LEAST LIABILITIES WINS. I think we as Americans would serve our future generations better 100 years from now, in 2110, if we moved as fast as possible from further exponential liability accumulation since any legitimate Balance Sheet will attest to that fact. A focus of accumulating debt has always been a major liability. I am not sure why American voters believe otherwise ...

Keynes essay ...
LINK: http://www.econ.yale.edu/smith/econ116a/keynes1.pdf

ALOHA!!

Les-Thanks for the Aussie/China bubble analysis.

Just some thoughts here ...

As I read the ten bubble indicators I notice about six or seven of them have been permanently embedded in the monopoly system for 100 years now here in America. Maybe we are actually near the peak of a 100 year monetary bubble that started in 1913. Three more years left to go!

The Aussies have their financial wagon tied to most of Asia, not just China, but China is a major player like Japan was in the 1970s, so I would hazard to guess the manufacturing hub of the World has not changed locations since the 1970s as it is still going to be Asia, even after any bubble. Is there a India bubble to worry about yet? The Aussies work the Chindia trade and throw in Japanesia(Japan/Indonesia) as well.

I sense that if the Chinese float the Yuan and it goes up in value against the USD(unless the Chinubble bursts) then that would help kill off more Chinese exports to its main debtor which in turn would trigger a economic downturn in Australia as Aussie exports depend on China exports to the USA, so its a daisy chain. Well, the USA is already importing less due to the unemployment recession but more pressure would come from a higher Yuan. Why would the Chinese want the export factor exacerbated at such a precarious moment in their economic recovery? They just had their first trade deficit since 2004($7.5BIL), so on a fiscal basis all is not easy-peasy!

Also if and when China suffered a more severe economic downturn then the Communists would divert US Treasury purchases in favor of internal stimulus and stability measures. It is not in America's interest to have China quit US Treasury auctions. As a "debtor" you can protest the actions of your largest creditor but you cannot do anything about it in reality, unless you threaten to pay them back. So far I have not heard the US Congress or Obama or Geithner threaten China in that manner.

I've been mentioning this for a week or so now that I think GOOG is being undersestimated by the market, a rare anomylous big cap technology stock that has underperformed the market. The reason: 100% China. I'm speculating with one $560 April call option that this anomaly will be corrected Friday after earnings are released and people realize that ad spending has rebounded and that the fears over China are way overblown.

Big gold buying out of India...

Since 15th century, Gujaratis have been doing business from various small ports in India and abroad. They have been involved in the business of spices, textile, diamond, gold and other almost all tradeable items. The Gujarati acumen, as far as business is concerned, is the top most one in India.

So, if you watch the Gujarati trend in bullion, you will get the perfect hint for making a killing in the gold market. And, now the time has come for that. Just check out the recent gold imports in India.

You can definitely say that gold is in for a bull run. Because all the Gujarati traders are buying gold now and stocking it up. Any doubt? Just read this statistics. Despite gold prices still ruling high, the northern Indian state of Gujarat has imported around 1,300% more gold in the last quarter of 2009-10 than the previous fiscal.

Around 69.74 tonnes of gold was imported through the Air Cargo Complex in Ahmedabad, between January and March 2010. This is almost 13 times the 5.04 tonnes imported from January to March 2009.

http://tinyurl.com/y2jlan3