Morning Call [7:11am ET]
The dictionary defines posturing as the striking a pose for effect, and a posturer as one who assumes an artificial or pretended attitude. Thus it follows that if you accept the goings on at Davos 2010, you have been attitudinized, which is to say you have assumed an affected mental attitude, precisely what consensus the gathering in Davos is there to build.
People, don’t fall for that stuff or else you will lose your shirt.
I often use the slang expression that “B.S. baffles brains” because I see that it is so easy to move the majority of people from their grounding in logic and common sense. Get-togethers like this so-called World Economic Forum are convened for just that purpose.
Without belaboring the point, I’ll leave you with the thought that the reappointment of Federal Reserve chairman Bernanke is all about posturing that the global financial crisis is under control. Rather than blind-fold and shoot the perpetrators of the history’s biggest financial disaster, namely Bernanke, Geithner and Paulson, all of whom were on the world stage yesterday, it appears to me that history will be rewritten and those people will be recorded as American heroes, candidates for next year’s Nobel Prize.
Following on what I wrote yesterday about the future of gold, as it became clear to me that Bernanke would be confirmed in the Senate, by an overwhelming majority, I decided to assume the clearly defined risks I discussed and move up to an 8.45% portfolio weighting in precious metals, which is 7.65% in gold company stocks and 0.80% in silver. Among the gold stocks, I hold a 2.7% weighting in Central Fund because it is directly invested in bullion. This is a short-term decision based on my belief that Bernanke is $USD negative.
In Asia-Pacific markets, which were the first to follow the Bernanke vote, my decision appeared to be a bad one. Not one to be easily bluffed, I decided to await the action in Europe this morning. Lo and behold, banks and commodities are up, equities are green, and my day has brightened. Logic and common sense still work.
Let’s see what the rest of the day brings, but I for one already took a place on the yellow brick road.
Spot gold at 7:08am ET Jan. 29, 2010 @ 1083.52
CTA Trading Desk Report
It was a Bull's worst nightmare as the US GDP inspired rally quickly fizzled after sellers happily cleared inventory as prices moved higher in early morning trade.
After several bad days in a row, failing Friday morning rallies often lead to late afternoon routs, and today was no exception as the US equity market plunged over -2% from the morning high, closing at the low of the session (S&P -0.98%).
As and when traders are worried about the fragility of the financial system, risk is sold, money typically moving into the US Dollar (DXY +0.73%) and bonds (TLT +0.92%) and out of small cap growth (IWM -1.15%), and that's what happened Friday.
The US Dollar strength (priced now above the 200-day Moving Average) puts tremendous pressure on commodity prices, with both crude oil (USO -1.47%) and gold (GLD -0.53%) down substantially over the past few weeks.
The stock market appears to need a stronger Euro (FXE-0.77%) before it will mount a sustainable rally. From its October 2008 low the Euro gained around +22% against the Dollar; if it were to give back half of its gains the Euro would only have to decline another half cent (to about 137.8 on FXE, down from today’s close of 138.39). Interestingly, this level is both a previous support area and a measured move where the current decline would be equal to the first leg of the decline which started last November.
The intermediate outlook for US equities has begun to worsen as various support levels have now been broken. The market has become near-term oversold, the futures within a whisker of the Globex Dubai panic low in November (1062.25), and closing in on the lower end of the 4th quarter range (the 1007.25 low hit on October 2).
Depending on your investment time-frame, any short positions should be carefully monitored; the market is nearing a juncture and a short-term bounce is likely. The largest sell-off in 2009 was approximately 87 points (into the July bottom), and 87 points from the Jan high gives 1063 or so, which is very close to the top of an earlier box.
Market movement is normally multi-step affairs, so traders should begin to prepare for a reflex rally back to prior support (now resistance); if the S&P were to hit 1063 and rally look for resistance around 1095, 1105, and 1115.
Active portfolio management is a dance with the market. Closing shorts into support, and selling longs into strength at resistance, in order to take profits, traders can easily find the right rhythm, systematically compounding their capital, while lowering their risk.
Also, to follow up my morning notes, I think it was an important event that, while the $USD soared for the past couple days, the Gold price did not plummet. It did not even break the 1075 support. Accordingly, I held my position, but did not add to it, which would only happen if, as, and when the Gold price moved above the first level resistance (1118).
$USD March contract for Jan 27-29, 2010
Spot Gold for Jan 28-29, 2010
Have a great weekend.
| Attachment | Size |
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| Spot_Gold_0708am_ET_Jan_29_2010.GIF | 14.44 KB |
| USD_Mar_2010_contract_Jan_27-29.GIF | 13.93 KB |
| Spot_Gold_Jan_28-29_2010.GIF | 13.6 KB |
Comments
Banks double down on risk
Bill,
Here is an article from Davos which seems to give a global picture which pretty much matches what we have seen here in the US.
I can see no reason why the banks won't simply give it a new twist and go around again.
------------
27-01-2010 - 13:32
Davos Special Report: What us, worry? Banks double down on risk
By Peter Thal Larsen
DAVOS, Switzerland (Reuters) - The Bank of England estimates governments the world over have spent or committed a staggering $14 trillion (8.62 trillion pounds) to prop up the financial system following the fall of Lehman Brothers in September 2008.
http://tiny.cc/eWiK9
Bernanke vote impact on PM and U$D
I also thought the impact would be Gold/silver positive and U$D negative.
However, U$D spiked dramatically overnight and stays elevated:
http://futuresource.quote.com/charts/charts.jsp?s=DX%201!&o=&a=V%3A15&z=800x550&d=medium&b=CANDLE&st=
What gives? Euro crisis?
Re: Bernanke vote impact on PM and U$D
Well, looks like dollar gapped up overnight but steadily sold off and is almost back to where is came from - now looking modestly weak. Gold just started popping from 1080 to 1088 in a few minutes. Maybe its better to gauge the classic "reaction to the reaction"
Cara 100 Ratings Changes
Good morning.
SNDK - Upgraded to Neutral @ JP Morgan. PT Raised from $18 to $27
Gold and USD
I'm confused, Bill. I see GLD weakening and the dollar strengthening heading into the open.
Anyone catch that $ 10 open drop on Cpsi ?
...
Re: Gold and USD
number2son,
Nobody said that trading was easy. The number of head fakes that happen at crucial times can be enough to confuse anybody.
A strong US GDP is an indicator that the Fed could move forward to tighten, which strengthens the $USD. That's good for an hour or so. Then we are going to be told how jobs, jobs, jobs are going to be financed... That's a longer-lasting story. Unemployment in Japan, UK and Europe, the US, and abroad is the main issue. It takes money to make money (ie, to produce the jobs that will earn the workers enough money to provide for their families, and to save and invest, and pay taxes). That money doesn't grow on trees. There is a helicopter pilot warming up the engines in DC right now to take newly printed money to the marketplace in an effort to create those jobs.
Since I don't see roaring inflation, my money's on Bernanke and the US Congress working closely on the Quantitative Easing programs until unemployment issues are gotten under control.
Re: Gold and USD
number2son -
"I'm confused, Bill. I see GLD weakening and the dollar strengthening heading into the open."
That's because GDP numbers reported at 8:30 reversed the trend in USD and PM. Bill wrote his comments at 7:00. Hope that helps with your confused condition.
Edit: Nevermind.
Re: Gold and USD
Got it. Thanks, Bill. And Dr. S.
Cara 100 Update (Final)
AMZN - Upgraded to Strong Buy @ BWS Financial
AMZN - PT Raised from $140 to $145 @ Broadpoint. Neutral
AMZN - numbers boosted at Government Sachs. Shares of AMZN now seen reaching $160. Estimates also raised, to match the company's new guidance. Buy rating.
AMZN - target, estimate boosted at Barclays. Barclays raised AMZN price target to $165 from $160. Strong 4Q09 results and favorable 1Q10 outlook suggests Amazon can maintain growth in 2010, analysts said. 2010 EPS increased to $2.92. Reiterate Overweight rating.
BMY - estimates raised at Government Sachs. BMY estimates were increased through 2012. Company is seeing higher U.S. Plavix sales. Neutral rating.
NOK - Downgraded to Sell @ Societe Generale
NOK - target, estimate higher at Barclays. NOK price target raised by a dollar to $15 on 4Q09 beat. 2010 EPS estimate improved to $1.11 from $0.96. Maintain Equal Weight rating.
PG - numbers increased at Government Sachs. PG estimates were raised through 2012. Company is seeing better organic sales growth. Neutral rating and new $69 price target.
PG - price target, estimates raised at Barclays. Barclays increased PG price target to $68 from $66 on healthy 2Q10 results. 2010 and 2011 EPS estimates lifted to $4.12 and $4.05, respectively. Maintain Overweight rating.
POT - estimates reduced at Government Sachs. Shares of POT now seen reaching $131. Estimates also lowered, because of lower export prices and more conservative equity affiliate profits. Buy rating.
WAG - estimates cut at Barclays. WAG 2010 and 2011 EPS estimates lowered to $2.32 and $2.58, respectively. Weak sales in December. Maintain Equal Weight rating and $36 price target.
Re: Bernanke vote impact on PM and U$D
As far as I can see, dollar's strength is unstoppable now. I expected a jump in dollar since november 09, but this way more than I expected, and probably a sign of more deflation to come this year.
Hank Paulson interview throughout the day Monday, cnbc...
What a way to start the week.....
TBT
I'm still looking at TBT as a good trade. Using the daily chart, I see we're at solid support level here - right at the 50-day SMA. But I'm concerned that continued QE is going to keep this one down.
I've got my stop set below that lower channel line.
Re: Gold and USD
Trading is as hard as can be right now, Bill. I'm watching your forecast play out. Gold and equities moving steadily higher.
I can't find a trade that works today. Time to reset.
UNG advice
I'd like to ask the knowledgeable people here for some advice. I am not really a trader. I buy some stocks for my 401K and I follow the board and Bill for general trends, I like trying to pick the "buy low" point. Anyway when "natural gas" was much cheaper then it is now I bought some UNG. I figured how could I lose? and in terms of the price of NG I called it right on the money. So now months later NG prices are up quite a bit from when I bought and UNG is -30% in my portfolio. Since then I have learned about the problems with these rolling futures. Contango. My question is will it every be fixed or go the other way? I have a 10-15 year time frame. Will this just continue to erode? Should I sell at this big a loss or hold. I appreciate any thoughts.
Re: Gold and USD
number2son,
That is one wild market for gold and silver and $USD right now!
Extreme volatility is usually a sign of a cycle reversal.
ADES, CYMI
ADES - picked up more at $5.75. I mentioned this company a few days ago. They're a tiny little company that is in the cleaning coal business. Recent tax rules have been changed to their benefit and they were recently awarded a $245 Million loan by the DOE.
CYMI - Another one that beat and raised but the stock is down. Valuation at 10 times next year's earnings estimates is quite low. I bought some a little early at $32.9
Will History Repeat itself AGAIN??
I have asked the question in the past as why the USD index rose too high when market was crashing last Oct/2008 all the way to March 6? Why did people/investors/international banks run to buy the USD or its equivalent as a safe heaven instead of buying the Yellow GOLD?? and I got several mixed answers.
I see a similar pattern here where we have seen the USD index going up from 74 levels to over 79 this morning and stock market so far has been correcting about 5% from the high of 2009. Truth is why do you think this time it's going to be any different than last time? why would investors rush to buy GOLD versus Money Market accounts= TBills=High USD demand?? So far, it seems to me that HISTORY is repeating itself AGAIN...
Bill and others, you thoughts please..
Thanks.
RSI App
When I look at RSI (7) data on stockcharts.com, the numbers are different from those on the RSIApp. Why? does it matter? is the RSIApp only updated once a day? for Cara100 companies its only off a bit, but for a stock like ECA RSIApp has the RSI(7)daily: 19.77, whereas stockcharts RSI(7) daily: 30.93 which seems significantly different. thanks for any help.
Bil, concerning the hedge at ABX
if gold takes a hit, would you trust this company ?
NLS
bought some at $2.65...turnaround play.
Re: Will History Repeat itself AGAIN??
analyst
My understanding was that there was so much leverage in the system when the crisis hit full force that very leveraged entities were forced to liquidate assets en masse, regardless of long-term value. It was all about reducing leverage and repaying the creditors in $USD. The more leverage in the system, the more forcefully the pendulum will swing, I suppose.
Last year, Wall Street controlled Washington..
Seems the worm has turned...
Re: RSI App
schnauser,
RSI is a simple calculation, but sometimes data gets in the way! Some calculations use actual closing prices and others prices that have been adjusted for splits. In the case of ECA, the company was recently split into gas and oil components, so it's more than likely some calcs are using pre- and post-split prices. The Exchanges could have simplified this by changing the two ticker symbols.
As per wiki, "In Dec of 2009, EnCana split the company into two independent companies focused on distinct businesses. The unconventional natural gas company retains the name EnCana and the integrated oil company is called Cenovus Energy."
Re: Bil, concerning the hedge at ABX
baz22
Barrick says they closed the hedge book.
http://www.telegraph.co.uk/finance/newsbysector/in...
ABX is not in the Cara 100.
Re: Will History Repeat itself AGAIN??
I think the unique thing about that crash was that it was triggered by the fact that a few very specific types of assets, Mortgage Backed Securities/Collateralized Debt Obligations/Auction Rate Securities, all which had been characterized as lower-risk/fixed income type products were actually massively volatile and speculative. Thus the holders of these products became massively under capitalized when prices crashed down.
I think the kicker was that these products were widely understood to be low risk when in fact the were extremely high risk, speculative bets. And in most cases the RMBS/CDO/ARS couldn't be liquidated so all other assets were sent to the chopping block.
Re: Bil, concerning the hedge at ABX
The reason I ask, is what the article pointed out... ABX's total reserves are nearly 70 % more > than those of Newmont... If the hedge is still unwinding, I'm not sure how much is left, and at what prices ... as ore grades decline worldwide, and production becomes more difficult, it seems ABX would hold an advantage in future sales revenue... Thanks for the response and article.
Anyway, if I go back to 1990
and use a smoothed chart ( along with all the other bells and whistles ), the $ 29.00 range looks like an excellent entry on Barrick ( plus or minus 5% )... I am thinking the ' splits ' money has already been taken..
Re: Gold and USD
n2s- I'm in total agreement with Bill's comment re head fakes. Was it Todd Harrison who used to say, 'If trading was easy, we'd all be driving Lamborghinis on the way to the bank?' Or something like that.
Of course, investing is another matter. The average investor needs rubber boots to wade through the sewage.
CYMI
stopped out at $32.
Re: Bil, concerning the hedge at ABX
if barrick spent a little more time actually mining for gold instead of spending their days sending out peter munk to give his quarterly prediction of high gold prices and press releases about their endless hedge book monstrosity this would be a great company.
i havent heard barrick make the news for an actual mining related story in forever!!! its always about complicated explanations for their hedgebook that was supposed to be closed out loooooooong ago, and many thought it was until non-recourse/off market/subordinated shares/options and blah blah blah come to light. this company's share structure requires a phd in quantum theory to understand.
this stock will as always go down hard if gold stays stable or goes down, and will go up a bit if gold goes up a lot. period.
USEC - USU / uranium enrichment
Hi All - Someone must be thinking USU will benefit from the following news clip. "The Obama administration will publish its budget for fiscal year 2011 on Monday. The proposal will include a budget increase for nuclear issues while paring back other areas in an effort to control record deficits. I also note SLX on the Aust. exchange had a decent move today. SLX's technology is licensed to the SILEX Laser Uranium Enrichment Project owned by GE (51%), Hitachi Ltd. (25%) and Cameco (24%), and is currently undertaking a test program for laser enrichment. I am probably too heavy on the U3O8 thing, or at least that is what my wife tells me, but a nice move on KIV today may act to keep her at bay. I own all of these and lots more in the sector. Happy Trading
Re: Gold and USD
2nd.... Welcome back!
Re: Gold and USD
.
Layered
The "layered support" from SPX 1130 to 1115, 1100 and recently 1085 has now become layered resistance. And both the investing public and those feeding at the public trough both distrust their masters.
Re: Gold and USD
Bev- From you, I would have expected something like 歡迎回來! Thank you.
Canadian Gold Fund Premiums
Bill mentioned the Central Fund of Canada (CEF) today.
Both CEF and it's sister fund GTU are selling at
unusually low premiums to net asset value. CEF under 4% and GTU under 3%.
Premiums are usually 2-2.5x higher. Those seeking to add to their gold positions
can enjoy the end of the month sale.
Fed restructure late summer
Noted business astrologer/economist Madeline Gerwick says the time is right for major restructuring in all aspects of our economic systems. She predicts late summer for the Federal Reserve to get an overhaul. http://www.askmadeline.com
An end to greed and corruption will require our full attention and willingness to speak up http://www.congress.org
GDX just made a lower low
trading at 41.09 at the moment after failing to break 42.50...
can anyone here tell me the support and resistance for GDX? It is falling like a rock for the last two weeks.
Greek/ Euro Slam
The US news media seems to have a heightened interest in picking on the Greeks and portraying their economy as steeped in crisis and the sky is falling across Euroland, yet they totally ignore the same financial condition of many US states which have larger GDP numbers than Greece. California, Ohio, Illinois, New York each produce more than the Greek economy.. If tax revenues continue to fall, many states may soon be facing insolvency. State accounting gimmickry has been used to kick the can down the road but that is soon to become ineffective.
It seems a "dollar good/euro bad" message is being delivered by our corporate media masters, perhaps designed to counter global negative dollar perceptions. With 40% of the US debt in need of refinancing this year, a better perception of the dollar would assist in peddling all those Treasury bonds and mortgage securities.
$HUI RSI14 = 25.9
$HUI RSI14 = 25.9
Re: Greek/ Euro Slam
USA does't look good at all! Los Angeles is going or is bankrupt. California is about bankrupt. California the eight largest economy in the world is having major financial problems. With a national economy based on 70% consumption and massive debt through out the land, it looks like the crisis is just beginning not ending. How long can the government keep giving money away to the chosen few? How long can unemployment checks last when the states and feds are broke? How long is this sustainable? This is never mention in the USA news media.
3pm market internals
good afternoon, I just looked at some market data. Indexes are down about 3/4%, with Nasdaq down about 1.5%. But when you look at the internals it is much worse. The A/D line is very negative.
$USD:$WTIC
Is looking Good for a long position in oil perhaps. Are their any other opinions out there? Thanks for any feedback. Not long or short, just noticing.
$USD:$WTIC
What is the reasoning behind using $USD:$WTIC as an indicator? I did a search but could only find how to use but not the rationale behind using it. Also would a $USD:$GOLD be a good indicator?
Re: 3pm market internals
Definetly seeing extreme weakness in PMs. GDX is now trading at $40.70 while GLD is $105.8.
Last time GDX closed in the $40s was 8/28/2009 at $40.18 while GLD was at $93.87. So GLD has risen about 12.5% in 5 months while GDX is up 1.2%.
Looking at the long-term data for GDX is even more dispicable. According to Yahoo data, GDX debuted on 5/23/2006 closing at $37.22. GDX has payed $0.971 in dividends since inception. GLD closed on 5/23/2006 at $66.38.
In a little less than 4 years, GDX has gained 12% while GLD is up 59.3%! So much for large cap gold miners being positively leveraged to gold!
GFI
Hello,
Pukeing in the miners? $GFI with a heavy sell side order imbalance on the wire.
A question for you chart people.
Looks like S+P has broken intermediate support of 1080 ish. Is next stop 1029?
Re: UNG advice
squarpeg, re. UNG. I am no expert but have been following it for years. I keep track of NG prices and where we are compared to previous years. IMO, UNG is similar to leveraged ETFs, it is not something that should be held for any long time period. Like leveraged ETFs, on average it loses 15-20% of its value monthly by... doing nothing. Where else can you find those kinds of investments, as in worse ones... Tough to beat.
Over 10-15 years NG could be higher, but by then UNG will likely have reverse split..., like FAS/FAZ et al. Really, there are much better places to invest (that don't lose value by just sitting there).
Buying it is a gamble, like FAS/FAZ et al. The house always wins. You want to take the other side of this trade if you could.
Current losses on FAS and FAZ stand at $3.52B: http://nexalogic.com/fasfazloss-o-meter.html UNG is probably worse.
As I said, just my unexpert opinion.
Re: $USD:$WTIC
What is the reasoning behind using $USD:$WTIC as an indicator? I did a search but could only find how to use but not the rationale behind using it. Also would a $USD:$GOLD be a good indicator?
Bill previously remarked that when $USD:$WTIC is heading up from an oversold condtion, this may be a timely entry point I am assuming do to $WTIC's inverse relationship with the dollar. More than this, other than oil is traded in dollars, I do not know. He has also alluded to the fact that dollar dynamics could easily change with stability in the financial markets however. /edit-also, $USD:$GOLD share an inverse relational dynamic last time I looked, at this time.
Re: 3pm market internals
I guess the real question is, how is this even possible?
My only conclusion is that HB&B has become so efficient at extracting profits through predatory financing, mergers & acquisitions, and other various fees and deal structures that the financial success of a company is now of secondary importance.
I have to imagine this is largely the by-product of the repeal of Glass-Steagal and the numerous conflicts of interest that have been put in place. Can we really compete with huge banks that also own and finance proprietary trading and hedge funds that are privy to information from their corporate financing arms. Show me a Wall Street exec who can say "Chinese Wall" ten times without grinning.
It seems to me that the marriage of corporate finance and proprietary trading has truly turned global stock markets into a glorified casino. Its hard to win unless you are counting cards....
OFF the HUD Short Sales---2nd lender scam!
You gotta listen to this recording. (names bleeped out)
http://www.jeremybrandt.com/short-sale-fraud-recor...
A Realtor is being told by a 2nd Lender to cough up extra illegal money to close an FHA Short Sale transaction as a 'side deal'. If you know anyone who has such stories, the guys at ThinkBigWorkSmall.com are collecting them anonymously to put a petition to the Banking Commission. Email offtheHUD@gmail.com (FYI: 'HUD' stands for the HUD1 Settlement Statement of your loan)
today's action
Well, the surprisingly good GDP numbers resulted in a morning rally, but that's about it.
Things hit worst today were PM miners and semiconductors - commodities and exporters - presumably because of the big dollar rally. Goldcorp alone was down almost 5%; with a daily RSI of 13, one wonders just how much lower it can go. KGC has daily RSI of 12. All this big movement with gold closing the day only off $5. With the buck up a big 0.72% to 79.46 (daily RSI 84), gold should have taken much more of a hit today, in my opinion. Many other miners have daily RSI values ranging from 15 - 25.
So why so much support for gold at 1075? Why do the miners get hit, but gold still retains a bid?
How much in relative terms the miners have been pounded vs. gold is clearly illustrated by the chart GDX:$GOLD. It's daily RSI is 12, and its weekly RSI is 27. The trade: short gold long GDX.
FD: I'm not short gold, but I am long the miners.
Re: Canadian Gold Fund Premiums
Good catch. I used to follow this. As of yesterday the CEF premium is 3.93%. 52 Wk Avg 10.34%. 52 Wk High 21.14%. 52 Wk Low 3.93%.
My other PM sentiment indicators show rock bottom values as well. There should be at least an intermediate rebound in PM, but it may not materialize if $ keeps going up like it does.
Re: today's action
davefairtex -
PM miners fall while Comex gold remains relatively stable suggests to me that the sovereign wealth funds are having a say even while the QE gang props the buck and toys with our low volume equities.
http://tinyurl.com/ybcpapt
Re: today's action
I use GDX:GLD and it's RSI(7) dipped under 10% today. This is clearly a panic selling. Similar values in the last 3 years were good buying points, except for august 2008.
To answer the question about gold vs miners: gold is a fear trade while miners are just stocks.
In Dallas til sunday
My 1st time here and I like what I see so far. What suprises me the most is as you drive away from Dallas downtown for 30+ min u expect Podunk but u keep running into pockets of towns filled with business centers and shopping centers.
This isn't going to be a good year
According to the Stock Traders Almanac the "January Barometer" which has been correct 91.5% of the time the direction of the S&P during January fortells the direction of the market for the next 11 months.
If oil boots down off the open Monday
I will have to take a serious look at Wft, along with some smaller nat gas explorers... ( figures.. I left MMR 3 days befor Davey Jones busted loose ! )..
CLD is a tough one to place..
Third largest thermal producer in US.. Overlay on ACI is the place I start, cause MEE and their met. deposits were not counted when it held down at the lower $ 10.00's ( plus Obama election and March crash )... CLD has ' better ' coal, however, and float is ridiculos... Great rail connections.. If it busts the 52 low, i would have to consider for long term..
Re: UNG advice
SiO2- Don't sell yourself short. I would bet on you against any expert.
Re: In Dallas til sunday
NYU- You don't recall watching 'Dallas' perched on your parents' laps in the eighties?
The Only Living Boy in New York
NYU- You're too young to recall Paul lamenting Art's trips down south (in his case, to Mexico to film Catch-22), leaving him behind.
Homesick?
http://www.youtube.com/watch?v=-IwYQ1Vqf_4
Re: today's action
Well, I bought DGP earlier on, and then GSS, GDX and GG near the close. All 3 of the latter are looking real cheap for $1000+ gold.
I also happened to notice big covering by COT commercials (and that was with data only up to tuesday), so I'm of the belief that THEY think gold is cheap here, or THEY CERTAINLY would not be covering.
Re: today's action
jack black -
"...gold is a fear trade while miners are just stocks."
You mean gold is THE safety trade while miners are just stocks and stocks are all about fear ;)
Weeks like this...
make me glad i spend the time trying to further my learning here and other resources.
Thx to the community for the collective teaching since my 1st visit to this blog.
A couple yrs ago i would have been the one pounding my keyboard preaching, "Apple iPad will change the world, Amazon to cure all ills, blah blah"
Major destruction in big banks/brokers.
I have been day trading regionals of late, but NO more. Big ships cause big waves for small ships.
Voter psychology - Like saying the market is rational!!
Interesting article on why people seem to vote against what seems to be in their best interest.
http://news.bbc.co.uk/2/hi/americas/8474611.stm
VIX looks like its going to erupt
again...
60 min tight bull flag.
Great for options positions :)
http://bit.ly/dpmCs7
Trend following Vs Buy and hold simulation Spreadsheet
The spreadsheet will answer the what if I wouldn't have sold question and compares it to a basic trend following trading system. It also makes use of macros to upload data to excel from Yahoo finance.
http://www.gummy-stuff.org/trends2.htm
A Plea to making this place fun again.
This place use to be a great AFTER HOURS party spot. It was fun. We had music, comedy and an occasional fight. Sure the trading talk was probably not rated triple A, but at least there was some spirit! I get that some people felt that they were left out and not in the "in crowd" because of some dominate personalities on the board, but not one person that I can remember was ever shunned or belittled unless they were a complete obnoxious ass. What was Mr. Hubris name from Vietnam (Go Short or something)? Anyway back on point. This mean savage market is not going away. The worst part is not behind us. The myopic hope that permeates casual conversation disturbs me. There will be no turn around in my state for years. If ever. I am sure many others feel the same in their area. That is why we need the Cara Community to regain some of the vibrancy that has been lost the past couple months. We need it as a sounding board for trading ideas.We need help. We need an independent voices. We need regional input. We need international input. We need a Shanghai Fly in every market in the world. Of coarse we are not going to get it if there is nothing going on in the blog. If there is no fun. If there is no value added for time spent on here. We need people to feel part of a community.We need to laugh together, We need to cry together. We need to debate together. I know that changes were made to focus the community on trading and markets, but that has even disintegrated on this board. Example. Today the S+P broke through major three month long support. This might be an indication of a change of trend, maybe it needs follow through or confirmation, maybe it means nothing. Yet it is not even discussed. WTH! I give praise to Dave, Nyugrad, ToF and a few others for putting themselves out there and providing content. But i am frustrated at the overall participation when compared to the past. I liken the Cara Community to a once popular lounge that lost its mojo. We need some people to take some seats at the bar or its going to be "Get out of here the bar is closed,Goodnight Rose".
Bob
http://www.youtube.com/watch?v=VVRGVpXWaZg&feature...
Added the post-close report this morning
Sorry, I have been busy. Added the post-close report this morning, only to see that bobbyo may want to find a new place to hang, which is fine by me. People come and go all the time. Nothing wrong with that. But, I'll be here.
bobbyo has a point though. Don't you think?
Nice letter from Anon
Hi Bill,
How are you doing? I hope your trader week in the bahamas was great again this year. I looked at the slideshow from last year, it looked like a blast, I can't remember seeing an event where it looked like EVERYBODY was enjoying themselves. I look forward to one day joining you all down there in paradise.
I've been in China for 4 months now, and it's been full of ups and downs. I'm comfortable with basic conversation now and I found a tutor so my progress is increasing. I've also vowed to spend some time with a chinese classmate everyday this next semester speaking. It's pretty cool to speak chinese, considering how foreign it sounded only months ago. I heard of the scholarship through a google search. "csc chinese government scholarship" will take you to the site that administers it. I'd be happy to answer any questions that anyone may have.
There is a defininent trend here that I see wherever I go in terms of brands. For example, KFC, McDonald's, Coke, Pepsi, NIVEA (beiersdorf), volkswagen, OREO (kraft), EXTRA gum (wrigley's), NesCafe (Nestle), L'Oreal, Ferrero Rocher (Ferrero), North Face (I think 90% is fake though), Durex, Colgate, Dove Chocolates, Seamild Oatmeal (australian)... these are some foreign consumer brands that stick out to me that seem of quality, (off the top of my head), that are literally EVERYWHERE. It's nice to have some comforts from back home.
My scholarship is until Feb. 2011. Can I please ask your advice on something?
I am very confused on whether to start my career in a wealth management position (associate at RBC Dominion for example), Analyst/broker type position within say RBC, Commodity company such as Viterra, ADM, etc. or an oil company for example. I know you do not too much about me and we've only met one time (PDAC!) but you are a huge role model and I value what you say very highly. Could you lend a bit of clairvoyance on how you would approach things if you were 26, writing L2 of the CFA in June, Commerce undergrad, 1.5 yrs chinese training in China, ~2 yrs accounting experience in an energy income fund. I think an MBA is still valuable but maybe better to do part-time, or after a few years of full-time experience as opposed to going back to school right away. WWBD? what would Bill do?
3 or 4 lines would be more than enough.
Take Care, Best of health,
/Anon
------------------------------
Anon, if I were 26 and in your shoes, I'd stay in China to become fluent, move to Shanghai, teach ESL for an income, finish the CFA (and then the MBA at night school over several years), hook up with the Fly, and go to work there for Cara Trading Associates introducing CTA actively-managed ETF's to capital managers and financial advisors.
btw, you need a blog handle, something like canuckindalian
/Bill
Re: A Plea to making this place fun again.
bobbyo,
Perhaps there are no "fights" because we are pretty much in agreement on the overall problems and inevitability of the effect of them not being realistically addressed by those with the responsibility and power.
The "myopic hope" you refer to appears to me to be for short term trades only.
My frustration comes from reports like, "Bernanke may not have been too good at alerting us to the fire, but he was sure the person needed to put it out." Mark Haines, "The Lehrer News Hour", last night. (nearly verbatim)
Suggestion: If you want a "fight" with me give a detailed defense of any of the following...
1. Obama administrion's accomplishments and promises kept.
2. How fortunate we are to have Beranake reinstated.
3. The end of the recession now that few people are applying for first time unemployment benefits.
4. How the "best and brightest" in banking deserve massive bonuses for the good job they've done so they don't leave to mow lawns.
5. How a vote to raise the debt limit to $14 Trillion+ is good for our country.
:-)
P.S. I've been consciously doing my best to avoid opening such discussions during trading hours and I think others are too.
Russell 1000 financial service index, long way to fall from $754
1 yr chart, http://bit.ly/9qHhri.
When you short or buy puts, often the max profit potential is the underlying equity going to zero. In this case of RIFIN, the distance to zero is significant. I am not saying its going to zero. just reminding myself the different profit profile of puts/short vs calls/long.
Components of RIFIN: http://bit.ly/adL7RL
Disclosure: FAZ call options in my spec play portfolio.
Re: A Plea to making this place fun again.
"Perhaps there are no "fights" because we are pretty much in agreement on the overall problems "
Hey, since when did being in agreement about anything prevent people from fighting about everything else - including the subject they agree about?? :)
On a serious note, as far as "fighting department" is concerned... I am all for disagreement and discussion of it. It is disagreement that makes life tick and market move. Nothing could be more boring than a group of people that nod to each word of others, and the market in which everyone agreed about the price and direction will never more from that agreed-upon point. Still while everyone is gearing for a good fight, one thing probably needs to be highlighted in order to keep "fights" civil and casualties minimal. It;s not a new point by any means, but patterns repeated a few too many times, so may be worth repeating.
Personal attacks, making and taking things personal. Yikes. Last resort of those who run out of worthy arguments or have zero self-control. Compare exchange "-but sir, data shows glaciers melt, see www.world.ends -no sir, data is doctored, see www.worldlives.on" and exchange "-if you don't think glaciers melt you are Neanderthal! -my knuckles may be scratched but you are brainwashed alarmist!" Needles to say, former may lead to useful information flow while latter - to gunfire.
Now, how about'em Bahamian sunrises: http://www.realitytrader.com/photography/2010/01/g...
Why the Market Was Down 7 Days in a Row
The Battle of Titans.
http://webofdebt.wordpress.com/jpmorgan-vs-goldman...
At least someone elses' thoughts on why the markets are down, it fits the Humongous B&B theme. Hope it was not posted earlier.
Re: A Plea to making this place fun again.
Bill,
Yes, I think Bobbyo has a good point.
You could expand your online community quickly through linked in and then set up local CTA Group to give your members a place to socialize
Here are 2 examples - different styles
http://www.meetup.com/BayArea-Forex/
http://www.meetup.com/batsig/
vb
Re: A Plea to making this place fun again.
Well Bobbyo I'm in Thailand right now, so the amount I can do after market close is limited. :)
(Market close for me is 4 AM)
That's my excuse anyway. But I do hear what you're saying. I'm not sure about others, but I'm really suspicious of this particular drop. Like, I"m waiting for the bomb to go off and for the market to move (once again) up through 1160 as if to laugh at me and say "THERE, I tricked you once again!"
Which, interestingly enough, tells another part of me that this could be the real thing.
I have noticed one thing in my recent trading, however. When I go into the day with an idea of what I think might happen, I am a lot less nimble. I tend be focused on looking for my prediction to see if it will pan out or not, and so sometimes I end up fighting with the market. If I think things will go up, I tend to be focused on long setups and I generally ignore the shorts. Entry, stopped out, entry, stopped out. Frustration. Would Vad have something to say about this? I suspect so.
The good news is, at least I'm aware enough of my own behavior and how it affects my trading. Perhaps next I can actually avoid doing it more often. :)
One more thing. I like swing trades. However, I tend to be impatient. Instead of waiting for the bounce to actually happen on the daily chart, once that RSI dips below 30, I start watching the intraday for my entry, and - well, that hasn't worked out so well, since in a significant move down what may be a good entry point intraday often just means the selling pressure is done for that day, but will resume again next day (possibly even with a gap down) invalidating the entry.
There's some content. Vad, want to say something about what I just wrote?
Re: A Plea to making this place fun again.
ive been on message boards of all stripes for 15 years and can say that the content, quality and quantity of dialog cycle through changes just like most things do in life.
ass-hattery tends to spike during market spikes, but i think this community does a good job of self-policing.
now if someone is looking for a disagreement, you need only bring up a nice ripe gold stock for discussion! ;)
traffic and posting will pick up again, no doubt, especially w/ PDAC around the corner.
for me, i have taken a 2nd job doing writing for a mining magazine which occupies much of my free time these days hence my infrequent posts. speaking of which, i have a few big stories close to publishing which i hope to post up here for everyone's consideration, as this board has been integral to my development over the past few years.
Re: Why the Market Was Down 7 Days in a Row
Thank you, barry.... Fantastic read... http://www.webofdebt.com/
For the international ETF crowd
iShares Drafts Four New Country-Specific ETFs
Coming soon:
Poland Investable Market Index Fund
China Small-Cap Index Fund
Indonesia Investable Market Index Fund
New Zealand Investable Market Index Fund
http://tinyurl.com/yacego4
Observation: Lot of international ETFs out there in the trading universe, but I think this is the first New Zealand one.
Also, these are index funds and appear to be passively managed.
Where are all the Libertarians ...
... decrying the recent Supreme Court ruling that will allow corporations and unions to spend freely on political campaigns?
Think reform of any kind, least of all financial reform, has a chance in this climate? Not a jot.
Re: A Plea to making this place fun again.
See my earlier post, Grym. You're not exercised about that?
dr. cosa
I know how much you love ABX... How about Timberline ( TLR )... several pretty good traders like this company and its prospects...
Re: A Plea to making this place fun again.
"I have noticed one thing in my recent trading, however. When I go into the day with an idea of what I think might happen, I am a lot less nimble. I tend be focused on looking for my prediction to see if it will pan out or not, and so sometimes I end up fighting with the market. If I think things will go up, I tend to be focused on long setups and I generally ignore the shorts. Entry, stopped out, entry, stopped out. Frustration. Would Vad have something to say about this? I suspect so.
...
Vad, want to say something about what I just wrote?"
Certainly... I am just afraid I'll be stoned for writing about it yet another time, lol. Opinions, once we form them, govern our actions. Nothing's wrong with that per se, after all this is how we conduct our whole life - observe, identify the situation, create a mental model of it, play the response to it in our head, verify the effectiveness of the response, then realize it. The problem arises when the reality turns out to be different from our model - "Map is not a territory" kind of thing. Challenge of our opinion is not always taken as a directive to change an opinion - Ego springs into action and whispers in our (all too willing to listen) ear "Nope, you are right, persevere and you will prevail". We don't like being wrong, it makes us feeling stupid. We start proving that we are right by holding out positions against what market tells us. The rest is well known - perseverance ends in catastrophe.
The answer is in approach I advocate at each and every possibility. Do not make your opinions so strong that you get locked in them in order to protect your being right, your Ego. In fact, try not to form an opinion at all. Try to form a set of possible scenarios, determine your responses to them, identify which of them takes place and pick the appropriate response from your pre-canned set. Leave the room for your identification and response being wrong by incorporating this possibility in your whole game plan (applying atop loss).
http://www.realitytrader.com/blog/2007/07/bit-aboi...
Re: Why the Market Was Down 7 Days in a Row
Great read, Ellen Brown is her usual concise self, thankfully.
REPUTATION
ALOHA!!
I am back in Hawaii ... I was in San Diego, Las Vegas, Dallas, Miami and Freeport Bahamas and nowhere was it warm until I got back to Hawaii. Hands down the best Winter weather in North America.
Thanks to those who braved the cold weather to attend the CTA Conference in Freeport. I enjoyed the company!
After being gone nearly a month I am faced with a mountain of paper work, mainly from the idiots at the Hawaii State Taxation Dept. If this were a private company they'd be in bankruptcy court because they have no idea what the right hand is doing while the left hand is threatening Class C Felonies! When I worked for the IRS they said income taxes were "voluntary" ... what happened?
Here is the ultimate reason I have staked my reputation on real wealth companies and PM.
US TREASURY JAN 28th, 2010
Total net US Income Tax revenues = $560BIL USD
Total US DEBT = $18.4TRIL USD
Total US Treasury outlays = $3.65TRIL USD
Revenue/Total DEBT leverage = 33:1
Revenue/Total DEBT+Outlays leverage = 39:1
Look at that DEBT leverage. Those are the same kind of leverage numbers we were seeing right before the entire derivatives market imploded when BSC and LEH and AIG all went under. Who is the counterparty to the US TREASURY DEBT DERIVATIVE being leveraged now 40 to 1? For every $1 USD of taxes you pay you get nearly $40 of DEBT in return. This is why US Income Tax needs to be eliminated and we need to clean house in DC. All I heard from Obama was "propose this" and "propose that" ... When he proposes he is talking DEBT, because tax revenues are dead.
What happened the day after Obama presented the State of the Union? Another $65BIL USD worth of US Treasury Bills were issued. That brings the total four month short term Bill issues to $1.7TRIL USD. Total US Treasury(Bills, Notes, Bonds, etc) issues over the past four months are at $2.44TRIL USD. Nearly a TARP per month!
The LIABILITY BUBBLE has not abated one inch ...
After the Obama State of the Union speech Senator John Ensign(R:NEV) called us in Las Vegas talking about the measly $20BIL in cuts Obama touted. I said, "Let me put that in perspective!" ... "On Jan 27th the US Treasury spent $18BIL USD that day and issued $65BIL in debt on the 28th!" Perhaps because Ensign is "tainted" or because he is Republican, but he did not agree with anything Obama said. I saw my two Senators from Hawaii(both 85 years old)Akaka and Inouye, sitting in the front row and I could swear they were either dead or asleep!
Both Hawaii Senators voted for Bernanke's reappointment. Here is the reply I got from Senator Akaka from my letter to him urging him not to reappoint Bernanke. Of course my Senator knows what is best for me and did not listen to my pleas.
"I supported Mr. Bernanke’s nomination because his testimony demonstrated his ability to lead the restructuring of the regulatory structure for financial services to better protect and educate consumers. In particular, I recognize his commitment to improving financial literacy in our country."
How out of touch can this man be? He has spent 20 years in the US Senate and this is the best he can do. PROTECT AND EDUCATE CONSUMERS ... FINANCIAL LITERACY!!! UNREAL-L-L !!!
There you go ... My "reputation", such as it is, is on the line! With people running the US government like Obama, Bush and Akaka and with people like Bernanke running our money where's the gamble? The USA is owned by two monopolies. One political and one money! Its been 97 years of abysmal monetary policy and 71 years of never ending debt accumulation.
Bruno Ganz as Hitler responds to the iPad
:)
you win Grym, someone has a sense. ROTFLOL with this one.
http://www.youtube.com/watch?v=lQnT0zp8Ya4
(some foul language. not for young audiences)
Re: A Plea to making this place fun again.
Aha! I knew you'd clear it up for me. I definitely put in the possibility I could be wrong, but what I did not do is form a set of possible scenarios. I went in with "my (one) current scenario" and I allowed that it could be wrong, by using stops. That approach I did not find to be flexible enough, because I would keep asking, "am I right yet? How about now. How about NOW??"
Thanks for the article link as well. I think I'll scan some more of your stuff to make sure I don't ask questions you've already answered. :)
Having just said that - as a teaching tool, could you describe your set of possible scenarios for the overall market this monday? Or don't you do that? Or are they always the same? If the same, could you describe you you spell them out so they are helpful to you during the day? Perhaps a link to one of your blog entries would do the trick.
Interesting data point: over the last 20 weeks, Monday has been up 16/20 weeks, for average gain of 7.4 SPX points. 7/20 Mondays have seen gap ups by about 9 SPX points on average.
Friday on the other hand has been down 14/20 weeks, for a loss of -4.3 SPX points.
It's all rear-view mirror stuff, but offered in the hope it may illuminate recent historical patterns and trends.
Re: A Plea to making this place fun again.
Dave,
two sides to it. First is "constant" - my IF-THEN scenarios are materialized in my setups. Each of them is based on a set of possible developments and defines my actions for each of those.
Second is variable - when I encounter/expect an unusual day, unusual event etc (most of such examples occurred in the fall of 2008, we had them on almost daily basis), I develop a set of such scenarios. Some material event that is going to influence the market requires this kind of preparations. To give an example of how such scenarios are being prepared (this below is actual set from the September 2008):
- IF TARP is approved and the market doesn't spike, THEN I look for short entry.
- IF TARP is rejected THEN I short outright.
- IF TARP is approved and market spikes up sharply, THEN I look for short entry on one of trend reversal setups.
- IF TARP is approved and market climbs slowly and orderly, THEN I wait for pullback and seek long entry.
First scenario (which I put first because I gave it the highest probability at the time) materialized, and according trades took place.
I don't expect anything ground-shaking on Monday, so I don't have any specific scenarios. Simply waiting for my setups to be spat by a scanner and going to trade them as on any other day.
thinking as it shapes our trading
had plenty of thinking shaping my trading this week, which shook me up good and proper. Reading Bill's commentary for Tuesday trading (deleveraging) set my mind to a foolishly inflexible position. It was coupled with a very sloppy trade on FCX (+.50) which I benefited from as it swung wildly back and forth in the opening minutes.
This was all the negative reinforcement I needed to go after FITB in a similar manner, and FITB's 1 min. chart for the 26th tells the story of my ruin. Oh it went down all right, after cleaning me out of $500+ in those huge morning swings - "price check on an attitude adjustment for aisle 3 please..."
A return to form is coming slowly as I've also decided to up the ante on the desired ROC for first years trading when it comes about, so I've paper traded larger share sizes this week. This can be rather disconcerting and it reflects in the unfortunate tendency to take losses in larger share sizes and profitable trades in small share sizes.
With experience now trading real money and paper shares, I find there is little difference in emotional commitment. Happily Vad has shifted the focus of my attention from money to the points being gained in the trade, but I don't like to be wrong, real money or not. It's given me a focus in paper trading and I expect a switch over to real trading to be relatively smooth as a result, once the correct technique is solidly in place.
Friday was frustrating in that the market was falling through various support levels following the brief rise as noted on the attached chart yet I can see from post-session analysis that this chart dominated my thinking.
Unfortunately I was off to friends by the time SPY was testing new resistance before its end of day sell off and the weakness I had been seeking in SLW materialised (it was a very reluctant short in the morning) so I was unable to recover from the hole I had dug myself in the morning's trading. Yet it was also clear that a useful aid to determining market direction had superimposed itself on the correct setups that I should be looking for and trading.
New lessons learnt and a psychological setup that is to be avoided was necessarily experienced. Unlike my teenage years, this education is appreciated :)
Bobbyo, I follow the markets with the craziest bunch of traders I'm ever likely to meet. If ever you want to join the funny farm, happiness is just a click away...
Re: A Plea to making this place fun again.
Hi number2son,,
I don't consider myself necessarily a Libertarian, more of a voter independent of any and all parties (None are conservative enough in the original sense of the term to suit me.), but if you are referring to the supreme court decision I have already stated my total opposition to it.
I see no justification for spending shareholder dollars on any candidate, party or issue, since such a diverse group could NEVER possibly be unified to that degree. The same applies to union funds.
As one who is sick and tired of campaign BS I hate to think how much more we will have shoved in our faces. Even though I am on the no call list I keep getting prerecorded "vote for me" messages.
A ray of hope: This new unlimited decision may just backfire if people decide the unfunded using the internet are more in tune with the mainstream of America.
Re: Bruno Ganz as Hitler responds to the iPad
LOL, Les. Alles ist jetzt upgescrüden und verbotten!
I know there are questions as to the value ( company or trade )
ABX, but if you look at the 15 year chart, and the ebb and flow, there is a visible pattern, regardless of the moves of the past 1 1/2 years... What interests me most, is a steady, inflow of money since September, 09'...This stock is being bought.. For the amount of shares registered, this stock moves quite aggressively.... This company has over 65% more > reserves than Newmont, and the grades are good.. I try to never start a position in a stock everyone is in love with.. As for the hedge, it is what it is ( or was )....... but, the gold is still there...
Everyone is expecting a near term bounce...
including myself.
But prices go up the escalator and come down the elevator right?
With high freq trading making most of the vol, + retail investors freshly remembering 667, the escalator down may be "out of service" and yellow signs for "Use Elevator" may be the only way out.
http://bit.ly/9aLMW0
118 of the Forune 500 companies call Dallas home
List: http://bit.ly/aYkdcX.
I can't get over the number of chain restaurants that line the highways here.
How do they all survive clustered around each other? near my hotel i have over 20 big store chain restaurants all next to each other, with parking lots full.
California pizza kitchen
Olive Garden
Joes Crab shack
and on and on
mixed feelings about going back to home to tri-state new york tomorrow.
Re: 118 of the Forune 500 companies call Dallas home
Did you get to Ft. Worth? More of a western flavor. You would go right by Bell Helicopter in Hurst, a Textron company. You might even hear the whop, whop of the Bell two bladed helos on the deck or in flight.
Re: 118 of the Forune 500 companies call Dallas home
I havent. Wanted to correct myself. that's 118 co's in the state of texas from the fortune 500.
But if you sort and include only the dallas, ft worth, and plano, which are all 20 min from each other, the Dallas metro area consists of 42 of the fortune 500. not too bad.
I came mostly to look at retail space prices, school districts for future family planning, food, and house browsing.
Never even got the chance to browse downtown ft worth. Will do next time in.
Re: 118 of the Forune 500 companies call Dallas home
NYU
Dallas is still a good ole boys network. Do you have connections??
Not to discourage you. Being flexible and curious is good since we are changing faster than the speed of light. FYI I grew up on the deep south and married a Nyorker. Opposites attract but plastic menus I don't miss
vb
Re: Russell 1000 financial service index, long way to fall ...
NYUGrad..
I couldn't agree more.. I am also short on the market and China too for now, mostly financial sector and I Play FAZ and EDZ. Being finally on the right side of the trade is a blessing and yes I did let the price come down to me. I would expect more down side coming at least until we hit 10% correction but a possible bounce for a small gain on the indexes will happen this week which would cause these two Ultrashort ETF's to fall for a day or two only before they bounce up again and continue going higher. All technicals have broken on the down side and it about time this happens many small investors have been waiting too long for this.
Some say Obama and the FEDS won’t let the market slide back to March Lows or lower and they will come up with another stimulus package as the DEM;s can't afford to lose election but you have to remember that the banks now are not in the same position as they were back in Oct/2008. They have sold lots of shares to innocent investors to raise capital and benefited tons from that and traded the TARP money and made billions in profit and are not lending out the money to stimulate growth. Therefore, they won’t be in need for another stimulus money this time around and the FEDS will allow the market to fall. Obama will try few strings but none will succeed this time because banks and republicans want to punish the DEM’s and OBAMA in particular and win the next term. Making Obama and DEM’s lose next election is their main target.
In short, NO JOBS=NO HOUSING RECOVERY = NO GROWTH = NO RISE IN STOCK market to the highs we saw last year. It’s that simple, welcome to the Japanese experience who were EXACTLY in same situation as in the USA back in 1989 and their long recession that lasted 19 yrs and still not clearly over it. They kept interest rate at ZERO like it's being done in the USA to stimulate their economy and help borrowing to create growth but they failed for many years. Their stock index the NIKKEI fell from high 38 K to lows of around 7.5 K over 13 yrs. Too bad the US govn't has learned nothing from other countries failures/failed policies.
As for the USD$, I still see people running to sell assets (stocks) and switch to Money Market funds as a safe heaven instead of buying GOLD fearing for loss of their cash. A repeat of what happened between last Oct/2008 and March 6/2009, so far I have not seen any difference. If history repeats itself here then we will see GOLD prices remaining under pressure until the world decide the US currency is no longer a reserve world currency due to the huge, huge debt and huge deficit the US has specially if the US defaulted on some of the debt payments as few other nations have experienced lately. Imagine this happening,!! WOW, a major collapse of the USD$ will take place If and only If this scenario happens but this is any body’s guess.
Another scenario that could also happen, that price of physical GOLD could stay high or go even higher but Gold stocks will take a hit regardless if equities continue to correct and they will. The reason is people still have to sell their winners including Gold stocks that have risen 50 to 100% or more to lock their gains and even meet margin calls and park their cash or go short. They will be too afraid to remain invested in stocks in general when they see the whole market collapsing around them and correcting 20 to 25% in the short term (3 to 6 months horizon). There are many opinions in this market and people get so confused reading and listening to so many different opinions coming from analysts to get a clear direction to where the market is going next. My take on this is read all opinions and take them with a grain of salt but judge for yourself and use careful mental stops to protect your gains or limit your losses. Never BUY and HOLD for long period of times again. This policy is DEAD.
Good Luck to you all.
E-Mini 500 Futures Contract
Does anyone trade this on CME? I don't and don't do options or futures (very unprofessional) but I have been blogging and have heard the following:
1) This trade is the favorite following of the professional traders. Whatever that means, I assume it means at least GS and other HBB&B. (I have not heard it mentioned on this blog.)
2) They say it leads the cash market (SPX). The March contract is currently below 1070 on my INO chart.
Re: 118 of the Forune 500 companies call Dallas home
Welcome to BIG D NYU. Sorry you must go back east.
Dallas really isn't like the snooty 'South' or the 'blue blood' north. Actually the good ole boys network changes every generation or so. Maybe it's a leftover from the oil patch days but A lot of Texans I know have been through business bankruptcy a time or two. There has never been much stigma attached as they always seem to bounce back.
My wife is head of a private non profit Montissori school with an enrollment of a whoping 57 students aged 3years - 8th grade.they have a denims and diamonds ball each year to raise tuition money for families that can't afford a first class education. This year it will be held at the Mesquite Rodeo and you might be supprised at the diverse socio-economic spectrum that will attend. From plummers to wildcatters. Actually I've known a few plummers that became wildcatters and a few wildcatters that became plumbers! Life is what you are willing to risk and Texas is full of risk takers. It used to be more so but the U-Hauler influx these past decades has damped that down a titch.
My son lives in Southlake close to Grapevine and is fluent in the investment business. If you need general recommendations about the area, I'm sure he would take a phone call. I taught him everything I know. I'm glad he ignored it!
Bon Chance. If you decide to move, leave a note on your door "Leaving taxes going to Texas."
Puts Surge In Emerging Markets ETFs
http://www.benzinga.com/etfs/emerging-market-etfs/...
Posted on 01/26/10 at 2:42pm by The ETF Professor
Options traders have pushed bearish volume on select emerging markets ETFs to a 17-month high with put ratio in the iShares MSCI Emerging Markets Index (NYSE: EEM) to 1.97, the highest level since August 2008, according to Bloomberg News. EEM is the most heavily traded emerging markets ETF.
Put volume in the iShares MSCI Brazil Index (NYSE: EWZ) and the iShares FTSE/Xinhua China 25 Index Fund (NYSE: FXI) jumped to multi-month highs as well last week, Bloomberg reported.
All three ETFs were down more than 5.5% last week on concerns that risk appetite is declining and news that China would curb bank lending in an effort to cool economic growth.
Re: 118 of the Forune 500 companies call Dallas home
We do have some connections here, family and friends who have lived here for 15+ yrs showing us the ropes. But coming from Hard Knock Life NYC, Dallas is a much more economically sensible place.
Our retail location in Manhattan is $125/sq foot. That is not a typo. There is nothing that comes close to that gauging in Dallas metro. I don't run our family business but i consult my opinions and give my family advice.
You see, the problem with Manhattan is costs are astronomical! You need to either be selling the highest of highest margin products/services, and a lot of them, to make any money to break even and profit on your overhead. Many private shop owners are going under. Replaced by big name brands, who have enough pockets to lose money on madison ave or soho, and chalk it up to "Marketing Expense" to advertise for their national stores.
In Dallas metro, you have the population of people who consume. Starbucks and a cheeseburger cost the same in Dallas and NYC. but the overhead to deliver that to the consumer is so low in Dallas, so low I consider it almost free vs NYC.
The way I described it to my mother in simplest terms.
In NYC it's 10 - 10
In Dallas it's 5 + 5
If you own a business, you should know what I am talking about.
I bet anyone anything if you found two people to open up a pizza shop in Manhattan vs Dallas, the Dallas proprietor will be happier, have a longer chance of survival, and still have his or her hair on top of their head.
EDIT: When you grow up poor in NYC and make it out, any other "hood" seems like a vacation. When you run a successful business or career in NYC, running one somewhere else doesnt seem as difficult. "Hard Knock Life" was coined for a reason.
Re: 118 of the Forune 500 companies call Dallas home
Thanks for the welcome!
The people of Dallas have been ultra nice. I am Korean American so I prob stick out like a sore thumb, but no one has made me feel uncomfortable and i feel no different than when i am in NJ. Well besides the fact everyone here doesnt wear the NYC Scowl. The "Don't mess with me, i am dangerous" look. If you are from NYC, you know what i mean.
The people have been offensively polite and kind and attentive.
The pockets of Korean American centric towns are also bustling with business and activity. No different than Flushing NY.
I have learned to not judge people or situations until i try something and push it until it pushes me back. So far i am still looking for the push back.
Indian Market seen choppy to negative next week - Economic times
Market seen choppy to negative next week
31 Jan 2010, 0858 hrs IST, ET Bureau
MUMBAI: The Indian stock market is seen choppy with a negative bias next week. With the end of the third quarter results season and Reserve Bank
of India’s monetary policy review behind, traders will eye cues from overseas markets.
Last two days of the current week, already cut short by a holiday Tuesday for Republic Day celebrations, saw the bulls try to get a grip on a losing market. Whether they will be able to hold their own against the bear onslaught is the question.
Bombay Stock Exchange’s 30-share Sensex ended the week ended Jan 29 at 16,357.96, losing 501.72 points or 2.98 per cent from the earlier week’s close of 16,859.68.
National Stock Exchange’s Nifty closed the week at 4882.05, down 153.95 points or 3.05 per cent from Jan 22 close of 5036.00.
The recent correction in stock prices was anticipated following the sharp run-up in stock prices on the back of expectations of good performance from India Inc. Overall, the third quarter results have surpassed or been in line with street estimates but with inflation becoming a worry, traders advise caution.
“We are very cautious at this juncture and suggest all short term players to lighten the position to avoid a sudden and sharp fall in the market. On the upside till Nifty does not move above 5000 levels we are not comfortable in suggesting in any long position to traders,” said an Anand Rathi report.
On Friday, in its Q3 monetary policy, the RBI raised the cash reserve ratio (CRR) by a higher-than-expected 75 basis points to 5.75 per cent against estimates of 50 bps hike. The central bank left its policy rates, repo and reverse repo--unchanged at 4.75 per cent and 3.25 per cent respectively. The CRR hike will be effected in two stages: by 50 bps for the Feb 13 fortnight and by 25 bps from Feb 27, sucking out Rs 36,000 crore of surplus liquidity from the banking system.
However, the sharp rise in food inflation led the RBI to revise upward its wholesale price index (WPI) inflation projection to 8.5 per cent end-March 2010 from 6.5 per cent. The apex bank also revised upward its GDP projection to 7.5 per cent for FY10 from 6.0 per cent, on the back of a strong rebound in industry and better prospects of Kharif crop.
“Increasingly confident of the economy's return to growth path (sustained domestic demand; early signs of revival in private sector demand for consumption and investment; growth in exports; signs of improvement in external demand factors), the RBI is moving further in reversing the crisis-driven expansionary stance. Capacities across many sectors could be stretched by this time next year. Hence, further upward pressure on product prices. There is upside risks to inflation from higher-than-expected commodity prices (including oil prices that have been range-bound). The RBI has also called for a gradual but simultaneous exit from the fiscal accommodative stance that was necessarily adopted during the crisis. This would be almost mandatory if the system interest rates need to be kept under check,” said Murali Krishnan, Head of Research, Ambit Capital, on the RBI’s policy moves.
Ambit expects WPI inflation to rise to double-digits in March, moving above the RBI’s projections once again. Thus, it expects 150 bps of repo and reverse repo rate hikes and a further 75 bps of CRR hikes between now and March 2011.
Re: A Plea to making this place fun again.
excellent material!
Making this place fun again?
Although i understand where bobbyo is coming from and how sometime i miss even Shark's odd posts, the value of trying to deciphering how Bill comes to his analysis on WIR, for free, is enough to keep me coming back.
this blog has presented to me the best stock market related training I have ever had for any money. it makes me feel like a f'ing idiot for paying more than $1 for my NYU Stern diploma.
there are many riddles within the posts of contributors here. Try to read between the lines and deduct why/how they came to their conclusions. that alone should be time well spent.
its a free community, free service, but definitely not free for Bill Cara to deliver.
And lastly I have gained contacts and more importantly real world friends from this blog, so it has been priceless. as much in life, it is what you make of it. my 2 cents.
EDIT: One day when i have kids, i plan to archive every daily commentary and WIR i can, so that one day when my kids are ready, they can read one each day and provide me a 1 paragraph summary of what they learned and 1 thing they had a question on, which they will have to seek the answer to and report back to me. That is if Bill decides to allow us to access the archives.
ABX
ALOHA !!
Aside from the obvious immorality of Barrick, which has been dealt with many occasions in the past acting as an agent for the US FED with JPM, a few negatives for shareholders still exist that in my opinion make ABX unsuitable for a large cap buy.
I found some hidden or deceptive accounting practices whereby the unsuspecting investors would be misled without reading the notes in excruciating detail, especially notes regarding derivatives and their values. Barrick has already settled past claims of falsifying financial reports. I am not surprised by the Blanchard Coin lawsuit, which in my opinion, makes Barrick the Fannie Mae of the large cap gold mining sector. Sucking up Placer Dome and its huge debt and hedge book did not improve their Fannie Mae image at all.
BASED ON 9/30 REPORT:
1-Dilution of 110mil shares and 13mil options Sept 30th 2009 cover gold hedges.
2-Total long term debt $5.13BIL
3-Negative PP&E classified under Level 3 fair value ASC 360 and 820 impared ($122mil USD)
4-Falling ore tons processed down 41% Q3
5-No real increase of gold grades mined(.049 to .050 opt au)
6-Falling copper grades mined(.68 to .62 cu)
7-Projected capex $2.3BIL adding debt
8-Unadjusted total liabilities to shareholders equity Sept 30th 1:1 ratio
9-Adjusted basis uses $5.13BIL Common share/Bond offerings to mitigate derivatives
10-Gross debt basis of $10.736BIL USD
11-Cash&equivalents drops 60% to $2.6BIL excluding Common share issue 9/09
12-Derivative counterparties = 11 with total "other" derivative positions of $5.4BIL
13-Derivative liabilities, long term debt and interest repayments skyrocket after 2012 to over $14.5BIL USD.
14-Long term annual debt principal repayment increases to $4.21BIL in 2014.
15-Wagner complaint $24mil settlement falsified 2002 financials.
16-Pakistan
Regarding Barrick's derivatives participation they offer this statement as to their derivatives structuring and risk management. After seeing BSC and LEH go bust over a weekend this offers little comfort to shareholders in my opinion, especially the part where Barrick is "monitoring" financial conditions. No explanation is given as to how this monitoring is done. Simply put ... they can't!
We mitigate derivative credit and liquidity risk by:
- Entering derivatives with high credit quality counterparties.
- Limiting the amount of exposure to each counterparty.
- Monitoring the financial condition of counterparties.
Once again this company tends to "mine" too much paper risk!
DYODD
Re: Making this place fun again?
I want to be perfectly clear. My lonely rant last night was definitely not an indictment of Bill or trying to get him to change anything in regards to the structure of the chat room. Continuing with my lounge analogy I see Bill as running the nicest place in town. In fact he is serving top shelf stuff for free. The daily blog and WIR are more than enough and his actual participation in the blog itself is a bonus. His role should be that of respected and dignified proprietor. He should be able to come into his place and find it tidy and running smoothly,maybe he could enjoy a drink himself. Instead on many occasions he had to come in and mop up the puke!
So it is easy to see why changes were made. Yet, we are now here with this blog barely getting 50 posts a day. Before it was closer to 200. Sure there was a lot of, "I'm long SLW" (which is probably a waste of 8 letters), but there was a camaraderie that is lacking. One example, A member a few days ago was sharing that Gold was killing him at the moment. I had a feeling he might be underwater and sinking fast. I feel bad that I did not engage him in conversation at that moment. And you know what? No one else did either. I don't think that could of possibly happened a few months ago.
Its obvious I favor a return to the spirit of the old community sans the puke. I really think most of you want the same thing. Its not up to Bill its up to us.
Bob
Tribal specialist bank fails
The Nooksack Tribe in Whatcom County WA has defaulted on $26M amid a flurry of accusations of misuse of funds borrowed to build a second casino. Marshall Bank of Minnesota was shut down by the FDIC on Friday. Ironic twist of risk gambling. These are glorified pubs with pokies. A crying shame in terms of resources used to promote addictive behaviors in an area where education, health and housing standards are abysmal for tribal members.
http://tinyurl.com/ycj7pzv
Understanding the Sell Side a little better
If you haven't seen it:
http://www.imdb.com/title/tt0181984/
While the main character's brokerage company is not as "legitimate" as Goldman Sachs (his father is always asking him why he hasn't heard of this company) if I understand correctly, Goldman Sachs is presently being accused of the same practice as what is going on in this film. A must see for understanding the sell side a little more clearly.
if you're new to trading like me and have only appreciated the present crisis as laid out to us without the BS by Bill, you might be surprised to hear the full history of Enron - it's deja vu:
http://www.imdb.com/title/tt1016268/
Re: Making this place fun again?
Ah. I def misunderstood. :)
Gold trade far larger that oil trade ...
GATA's put up an interesting essay this month countering the common belief that gold is a tiny commodities market.
http://www.gata.org/node/8248
Re Toyota prod halt and faulty parts.
Toyota should be commended for actively fixing their cars. Many other cos would have waited for ROI models to act. Makes me want a toyota.
Should Germany bail out Club Med or leave the euro altogether?
The spike in yields on 10-year Greek bonds to 400 basis points above German Bunds has been shockingly swift – a warning to Britain, too, that markets can suddenly strike any country that takes creditors for granted.
We can argue over whether Greece, Portugal, or Spain are at risk of being forced out of the euro. But there is another nagging question: whether events will cause Germany and its satellites to withdraw, bequeathing the legal carcass of EMU to the Club Med bloc.
This is the only break-up scenario that makes much sense. A German exit would allow Club Med to uphold contracts in euros and devalue with least havoc to internal debt markets. The German bloc would enjoy a windfall gain. The D-Mark II would be stronger. Borrowing costs would fall. The North-South gap in competitiveness could be bridged with less disruption for both sides...
http://www.telegraph.co.uk/finance/comment/7119986...
Short term future of gold - Indian Newspaper - The Hindu
After a fantastic recovery over the past few months, global commodity markets are currently experiencing some turbulence, what with renewed caution over macroeconomic outlook, concerns over the impact of monetary tightening in China (the world's mover and shaker of commodity markets) and the US President's comments that suggest the possibility of greater regulation of commercial banks' activities in the commodity market. To be sure, the extant concerns over the US commodity futures market regulator CFTC's interventionist role have not waned either.
Together with a positive outlook for the US dollar over the coming months, the aforesaid developments have exerted a negative influence on commodity prices. Crude is under pressure, having fallen to less than $75 a barrel and showing signs of stabilising in the low $70s.
Gold prices have already fallen below $1,100 an ounce with continued long liquidation and less-committed speculators quick to exit. Base metals complex is under pressure too because of uncertainties over the effect of Chinese measure. Favourable crop prospects in the northern hemisphere are seen capping agricultural commodities' upside.
In the short-term, growth signals, gyrations of the US dollar and market fundamentals of specific commodities will determine the price direction. It may be necessary, especially for speculators, to limit exposure to the commodity markets until the effects of recent developments unravel.
Gold: Weaker equity markets and a stronger dollar have weighed upon the entire precious metals complex. With China tightening, the dollar has appreciated against the euro more quickly than expected. For the second month in a row, gold ETPs have witnessed net outflows.
Already under pressure from a firming dollar, expectations of further strengthening are likely to continue to weigh upon the complex. Silver is seen as the most vulnerable as investors continue to liquidate. Foreign exchange strategists are sanguine, the dollar will continue to strengthen until the second quarter or until the time the US Fed begins monetary tightening cycle.
As we have maintained in these columns time and again, it is fickle speculative investor interest that poses the biggest risk to this market. Gold bulls continue to bet on further purchases by central banks. However, on current reckoning, it is at best a hope. So, while the yellow metal's allure will remain intact over the next few months, its glitter may appear to fade somewhat because speculators would exit due to weakening prices.
Physical demand, on the other hand, is far from robust. While consumers may be slowly getting used to high prices, there is nothing to suggest that jewellery demand in terms of volume is picking up markedly. As for India, the saving grace would be weaker international prices.
Base metals: Renewed concerns over growth and China's monetary tightening are exerting pressure on the complex. Long liquidation is now turning into short selling. This suggests there could be further downside to prices.
Lower prices are likely to spur physical activity in base metals, especially in the context of tight scrap supply and low inventories with producers, consumers and distributors. The key question is whether OECD demand will pick up and when. Until the situation in China becomes abundantly clear, market participants are likely to exercise caution.
The story of an average american walking away from her mortgage
http://www.nypost.com/p/news/business/walking_from...
you gotta wonder about the trickle down effect - no, not the free market wealth trickle down effect, but the accumulating economic impact to be felt with such individuals walking. Not paying to fix the roof, the toilet, not paying the mortgage, the health costs both mental and physical etc...
Wall St 2 trailer:
http://www.youtube.com/watch?v=cXMJGa5vkoA
Why Soros Is Probably Buying Gold Now
Good article on Seeking Alpha.
Re: Re Toyota prod halt and faulty parts.
It is simply good business management to accept responsibility for mistakes and address them ASAP. Probably good legally also in order to avoid huge lawsuits for negligent behavior.
What seems strange to me is how something this basic can be overlooked until so many are produced. How long have cars had accelerator pedals? The last car I drove with a throttle was a 1932 Chevy.
Whatever happened to field testing? I just recently began to use my wife's old Walkman while riding my stationary bike. If I look at the front side the controls on the top are upside down. When I place a cassette into it and have the controls reading right side up, I must insert the tape backwards.
We went to the Chicago Art Institute last week and with our two tickets received another which was labeled "COMP". Since our son was meeting us there for lunch I asked if that ticket would get him in free of charge. The young lady said it was not a valid ticket, just the first one of the day and was a test to make sure the machine was working properly. I suggested they either keep the ticket rather than give it out, or change COMP to TEST.
Re: Should Germany bail out Club Med or leave the euro ...
If I were a German citizen I would favor pulling out. This economy may be the test which Milton Friedman said would be needed to test the feasibility of the EU.
The last I heard only Luxembourg had stayed within the deficit guidelines, but Germany has been head and shoulders above many others.
Re: The story of an average american walking away from her ...
That's nothing. Imagine you bought in Westport CT or Greenwich for $2.5M and now the valuation is 1.5M!
Ugly ugly ugly charts for longs
iyt iyr blk gs rifin
"Swiss warn UBS bank could collapse" if the U.S pushes too hard
Are the Swiss using fear mongering?
http://bit.ly/9R4qMu
I take this type of article with a grain of salt.
But with Volker Rule tuesday, bars on wall st/Jersey City/stamford ct, will be busy this week.
Citigroup Said to Plan Sale of $10 Billion Private-Equity Unit.
http://bit.ly/doqI5l
"We could see 8,000 on the Dow, easily," Tiomkin says.
I guess we will have to wait and see..
http://finance.yahoo.com/news/Selling-on-good-news...
http://news.ca.msn.com/top-stories/msnbc-article.a...
and the USD$ keeps going up and GOLD continues to remain under pressure in Asia as of this hour plus all Asian indexes.
http://www.chinapost.com.tw/business/global-market...
Obama will be fielding the questions from citizens by most voted
He will respond on youtube tomorrow.
here are some of the questions submitted.
http://bit.ly/cXkpp7
Highway pirates robbing tractor trailor loads $350M+ each!
http://bit.ly/8YREI7.
Just like the movie "The Fast and the Furious"
Is it life imitating art, or art imitating life?
Soon you will have people hijacking 18 wheelers carrying oil, or also in the movie "Gas is gold", http://bit.ly/csXX6S.
Re: "We could see 8,000 on the Dow, easily," Tiomkin says.
They rang a bell around January 19. Dr. copper is relapsing back into a defined downturn. The pig farmers in China who hoarded copper billets behind their woodsheds are getting nervous. Dollar bashers are still drunk at the bar and the hostess is announcing 'last call.'
I'm just a trend anticipater. Never had the time, inclination and therefore decipline to trade. Others can navigate day to day and week to week far far better than I can. My 2 cents is that you need to follow the dollar and Dr. Copper. When they do reverse turns, I will become positive again. Until then, I swim in digital cash.
FD: Sold 60% of my Pal at $4.75 but like a dummy still own 25,000 shrs. Small position but as penitence, I will eat pintos next week.
Nice start for monday?
NIKKEI 225 down @ midday -24.23points -0.24%
HANG SENG down @ midday -109.89points -0.55%
Lloyd Blankfein of Goldman Sachs 'expecting $100 million bonus'
http://bit.ly/ckcLQp
This could get interesting.
Re: "We could see 8,000 on the Dow, easily," Tiomkin says.
Ross what is your criteria between copper and the dollar? What does reverse turns mean and on what time frame do you use.
Bob
Re: Lloyd Blankfein of Goldman Sachs 'expecting $100 million ...
"And that is the nature of Goldman. Gather up as many customers as possible, aggregate the available information to achieve a superior market view and then relentlessly extract rents from the marketplace. Better yet, tell yourself you’re smarter than everyone else and you’ve earned the rents from the symbiosis."
http://dailycaller.com/2010/01/18/the-frog-the-sco...
I've watched in recent days Enron, Wall St and The Boiler Room. I perceive a little the attitude held by these people as they go about their rent seeking.
hat tip to Jesse's
January inflation jump raises rate rise chances in Australia
http://www.abc.net.au/news/stories/2010/02/01/2806...
Keen's relation of debt to aggregate demand in rebuking Bernanke
"So during the 1920s boom, the change in debt was responsible for up to 10 percent of aggregate demand in the 1920s. But when deleveraging began, the change in debt reduced aggregate demand by up to 25 percent. That was the real cause of the Great Depression.
That is not a chart that you will find anywhere in Bernanke’s Essays on the Great Depression. The real cause of the Great Depression lay outside his view, because with his neoclassical eyes, he couldn’t even see the role that debt plays in the real world.
If this were just about the interpretation of history, then it would be no big deal. But because they ignored the obvious role of debt in causing the Great Depression, neoclassical economists have stood by while debt has risen to far higher levels than even during the Roaring Twenties."
http://www.debtdeflation.com/blogs/ (see title "Misunderstanding the Great Depression)
This article is worth reading to understand possible outcomes in relation to debt reduction versus demand, if debt is tied demand in this present recession as Keen suggests was the case following the roaring twenties. Likelihood of a couple of years recession to go yet. FWIW
Re: The story of an average american walking away from her ...
Les,
"The lenders flat out refused to modify the loan, and now I am too far behind to catch up. I am sure my credit score is affected. But I hope the credit agencies will take my special circumstances into account and give me a break."
This is a perfect example of why the latest HAMP initiative is mooted to get banks to reduce the principal as well as the interest rate. If they can keep folks in their homes by a combination of lower rates and reduced principal homeonwers under water would have a fighting chance. To think credit agencies will 'give me a break' is beyond naiive.
Related note: Cenlar, the servicing agency for failed Taylor Bean Whitaker (shut down by HUD back in August) has NOT reported 250,000 mortgages as paid and RUINED the credit of those folks lucky enough to still be on their books. Homeowners will have a devil of a time getting a refinance or another mortgage with 3 plus late mortgage payments on their credit reports. To correct something like that you need ideally need the cooperation of the lender/servicer. Imagine 250,000 people trying to get their credit reports corrected when most proably don't even know this is going on.
Euro Proving No Reserve Asset as Central Banks Shift
"Feb. 1 (Bloomberg) -- Investors are pulling cash out of Europe at a record pace as central banks slow euro purchases, jeopardizing its status as a substitute to the dollar as the world’s reserve currency.
Last year, policy makers loaded up on euros, while analysts at Barclays Plc in London and Aletti Gestielle SGR SpA in Milan predicted central bankers would make good on threats to reduce the greenback’s dominance. Now the euro is down 8.4 percent since Nov. 25 in its fastest slide in 10 months amid concern that cash-strapped countries like Greece won’t pay their debts. Billionaire investor George Soros said Jan. 28 that there’s “no attractive alternative” to the dollar.
Traders have spurned European stocks in favor of shares elsewhere for a record 19 straight weeks, “clearly hurting” the currency by draining a net $13 billion from the market, said Geoffrey Yu, a UBS AG analyst. Investors are as bearish on the euro as they were when the 2008 financial crisis was pushing them to the dollar’s perceived safety, futures data show. After buying more euros than ever in 2009’s second quarter, central banks pared back, International Monetary Fund data show."
http://www.bloomberg.com/apps/news?pid=20601087&si...
I'd like to understand what this means. Are all those exported US dollars coming home to roost? That would spell disaster wouldn't it?
From Jesse's:
"Monetary inflation is the growth of the money supply in excess of the demands of the real economy, not nominal growth of the supply. The US has been shifting its growth into the reserves of other central banks for the past twenty years or so, and those eurodollar present an overhang that will egulf the Treasury should they come home to roost too quickly. The great nations see the US problem, most surely."
http://jessescrossroadscafe.blogspot.com/2010/01/f...
not sure if money being pulled from Europe means its coming home to papa. Interesting that big shots and wannabe's like Soros and Rubini are talking down the Euro at present - both are bearish on gold as well.
Always looking forward to this blog's translation of events into layman speak.
Re: Keen's relation of debt to aggregate demand in rebuking ...
Les,
Thanks for the link to a very interesting article. We will all suffer the consequences of Ben's grand experiment for an extended period.
Bernanke on the "Great Moderation" in 2004:
"Reduced macroeconomic volatility has numerous benefits. Lower volatility of inflation improves market functioning, makes economic planning easier, and reduces the resources devoted to hedging inflation risks. Lower volatility of output tends to imply more stable employment and a reduction in the extent of economic uncertainty confronting households and firms. The reduction in the volatility of output is also closely associated with the fact that recessions have become less frequent and less severe."
http://www.mraeresources.com/focus/articles/?aid=88
-------------
Irving Fisher:
"It is as absurd to assume that, for any long period of time, the variables in the economic organization, or any part of them, will “stay put,” in perfect equilibrium, as to assume that the Atlantic Ocean can ever be without a wave. (Fisher 1933, p. 339)