Bill Cara’s Blog for January 7, 2010 [See POST-CLOSE REPORT]

Maybe I'm just a dumb country lawyer, but doesn't this prove fairly conclusively that Tim Geithner, then head of the New York Federal Reserve, and current Secretary of the Treasury, counseled AIG to violate securities laws? Or at least suggest we need a real change in leadership in Washington?

Geithner’s New York Fed Told AIG to Limit Swaps Disclosure

Will anyone in the Wall Street/DC trust, short of committing Bernie Madoff like malfeasance, ever be held accountable for their actions?

for purchases less than $ 10.00... Not debit, but credit.. I have never seen such use.. its done at Wall Mart, gas stations, convenience stores, fast food places. Something is going to give, and it will be ugly. The ' average ' person is streched beyond belief. Santelli must be reading the blog.... He is so mad about the government numbers on jobs and all related... He constantly references the Bureau of Labor Stat. on emergency benefits, while the schills at CNBC scream rebuttal.... Oh well, trade what you see, as Bill would say.

SAP - Upgraded to Neutral @ Broadpoint

still watching it as an indicator for the market. So far it's saying the breakout was a headfake, although I would still like to see several days below $130. I added a couple of SPY Feb $116 puts at $3.95 as a result and am still holding my SPY Jan $115 puts.

Info on Boeing...
Boeing delivers 481 airplanes in 2009 http://bit.ly/6c4P5R

And F is still trading up past the 11.00 target of 01/05/2010.
Good thing they didn't take the Tarp handout (CARROT) from Paulson and the Bilderberg's!

http://en.wikipedia.org/wiki/Bilderberg_Group

The list of crooks who are still protected and benefiting from the systematic plundering of the USA is long and well known to more all the time.

Dodd is leaving, but without any charges leveled and Geithner may not last as Sec. of Treasury, but we will see no justice there either.

I see no reason to think we will get meaningful change for the better from either party. We may have a chance at a viable third party by 2012, but even then unless we can amend the Constitution to limit Congressional power we will simply see an eventual return to the elitism now in evidence in D.C.

They will not have to endure the "new and improved" health care — theirs is far superior to what we mere peons will have. The same is true of their retirement.

We need to connect their pay and benefits to that of the constituents. Prevent them going back as lobbyists. And prosecute those who profiteer while in office.

Bring out the guillotine or, more appropriately, outsource the job to the French while we attend to our knitting ;-(

Note silver leading gold up into NY trading hours while dollar climbs. No need for the plunge protection team?

ALOHA!!

Just an aside here ... On Jan 5th, Tuesday, the US Treasury Daily Statement reported that Unemployment Benefit outlays exceeded $1BIL USD in one day for the first time. So the unemployment rate drops and only 1000 more claims yet the US Treasury is spending $1BIL per day, an unprecedented sum, on Unemployment Benefits. You cannot have less claims and lower unemployment and still have record high outlays for Unemployment Benefits month after month. Someone is blatantly committing fraud!

So we have the financial media with all the spin doctors and then we have the US Treasury Daily Statement. Complete opposites! As Bill points out today lets hope not many people trade based on newspaper reports.

David - we played this and ETH last month around the jobs report. I'm back in FBN at $5.11. Furniture/home goods makers seem to be doing well.

Wow. This is really sickening.

Too bad the press is not latching onto this story. it needs more attention than the OJ Simpson case.

It is sad that Madoff was the zenith of press coverage on fraud within wall st and washington.

American Zombies is what this country has become. Give it a few days. another 150+ dow day, celebrity scandal, and the Superbowl in Feb, and all will be forgotten. Life back to normal.

Why do students in Michigan or Americans, need math? its simple. they will work and half will go to taxes, ss, medical. then another half of the remaining half, to spending on things they dont need. anything left will go to their broker of choice and they will never see that money again.

Maybe with a positive payroll number and a possible bounce in equities the perception will change regarding Fed and short term rates ?

SPIN/PERCEPTION - possible job recovery, Fed can start looking into raising short term rates later in year, dollar strength = possible short term correction in equity markets with stronger dollar ?

Please use the "Contact the author" below my comment if you don't want to post a response. But my question is regarding Hail storms in the DFW area. How often do you get them? I am going there this month to look/research relocating there in the future.

But I keep hearing that there is a bad hail storm at least once a yr, where it damages/totals cars, ruins rooftops on homes, and breaks windows. is it overblown? How do you go to work or drive anywhere if there is a hail storm? will your employer allow you to work from home in the case of a hail storm. etc.

Anyone who still uses a credit card may find this information useful.

Creative New Fees Escape CARD Act Rules, Surprise Consumers
by Tamara E. Holmes
Tuesday, December 29, 2009

Question: I have always understood this lending is unsecured. So what if they stab a cardholder with a huge fee and you don't pay? What could they do other than give you a bad credit rating?

http://tiny.cc/oW6Hb

I and a large number of people I know use a credit card for all transactions. There is no interest if you pay your entire bill every month and we get perks for using the card. The stores charge the same amount whether you use cash or credit. Why not get your 2 to 5% of all your purchases back in cash?

interesting. Dec 14 they get the 1st wave of buying right before the dec 15 delisting notice.

http://bit.ly/7aOB9c (new link)

Talk about guts of steel!

After the shoe bomber hid PETN in his tennies, I joked that - if al Qaeda had a sense of humor - they’d put explosives in some guy's underpants, and then we’d all have to take off OURS at airports for the next 10 years.

But Michael CHertoff has a better idea – spend a trillion on full0body scanners.

Sadly, al Qaeda reads the NY Times, and is now likely planning to have their bad guys INGEST PETN, the way cocaine "mules" swallow cocaine packed into condoms.

Then the bad guy swigs a little nitro glycerin, and drinks to his ill-health, and does a dance down the aisle to "shake things up" !

Only way to detect PETN hidden thusly is to force all passengers to throw up before boarding a plane !!!

FYI, here's the Guardian's excellent article on PETN:

http://www.guardian.co.uk/world/2009/dec/27/petn-p...

PS: With destructive materials SO portable, and available to all with donations from mid-eastern "charities", isn't it time for governments to reduce the violence on THEIR side? Violent action now serve terrorists better than governments, IMO.

Isn't the US' zapping of suspects from unseen drones wherever, whenever they wish going to drive more young islamists to PETN?

Imagine if such drones circled above the US or Canada, striking with impunity, and without warning! That certainly wouldn't win MY "heart or mind"!

NYU,
I live in Dallas. Actually east of Dallas in a burb called Rockwall. It borders a 22,000 surface acre lake. It is not a Corp of Engineers lake so you can own and improve the waterfront.

Dallas is a good place to live. The DFW area is low cost but with lots of amenities. Sales taxes are high at 8% but there is no income tax. Property taxes average around 2% per year. Housing is priced on a replacement cost basis for the most part. There are some expensive areas but the average 3 bdrm 2.5 bath (2,500 sq ft.) 10 year old home on a third acre will sell for around $185,000.

I've lived in the Metroplex since 1971 and had one roof damaged and one car that needed hail repair. Last year we had no hail at all in most of the southwest. The weather is typical southwestern. Occasional tornados but no floods, hurricanes, earthquakes or severe freezes. Today it is 25 which most Texans equate with the Antartic, but it only lasts a few days then back into the 50's.

Good luck with your research. Let me know if you need some help.

There are some great places to live in America. Overall I'd put DFW somewhere in the top 20. On a purely economic basis it would rank in the top 5.

Thx for the heads up. I will be looking in the Grapevine area as well as closer to ft worth. It amazes me i can buy a new home there for $120k with warranty. And $280k in Grapevine in a house i would never want more for anything for a looong time.

I can make prob just as much income there as well. What i also like for business travel is you can fly to both coasts from Dallas in 3.5 hrs.

Why not? Piling in on a stock with a 130% increase would bring back those late 90s glory days.(:
Bob

I am looking at different strategies for downside protection for 2010.

I am zeroing in on OTM December 2010 put spreads (IWM, SPY, DIA, and QQQQ) placed just above the level of the March 09 lows. In particular I am considering the SPY BTO Dec 2010 80 and STO the Dec 2010 70 for a debit of apporximately $.84 per share.

December 2010 Put protection for around $.86-$.92 per share can be purchased at the 70 level.

From my calculations the put spread trade is better (about $.02 per share gain in theoretical value) that the streight put purchase if interst rates, and volitility increase, which could well happen if the market declines. One drawback is that time decay is slightly more for the first half of the year. The big downside risk verses the streight put purchase is that there is not additional protection below 70, but if SPY drops below 70 (there is huge open interest at the 50 and 55 level) I would have been stopped out of my portfolio long before anyway.

At any rate I could use a critique of this strategy if anyone has any input or if there is a better strategy I have not considered.

Thanks.

An add on question (if I may)... how does HL compare to SLW as a trading vehicle?? Thanks

I understand new ETF's begin trading tomorrow. Probably a bad idea given the thin markets for these metals. My point is beware of short squeezes especially with Palladium. I moved to Moscow after the Russian meltdown in 98 and watched Ford get squeezed in the Palladium market. Pall traded at over $1,000/oz. I tried to get inventory data from Norilsk Nickel until I was 'ahem' informed that it was a state secret and people had disappeared in the Gulog for trying to find out. No one would lend me the metal to short back then either.

Times have changed but inventory positions from Norlisk are still closely guarded. I would not be short Pall. That is one tight market subject to being cornered and/or miniplulated both up or down. It's fun if you are on the right side but that market is NOT transparent.

FD, I'm currently long the physical and the stock PAL but my trigger finger feels itchy.

Bill,

What is the best email to contact you/others at CTAB?
Not sure if my recent email got through.

Thanks and Happy New Year!
kp84

Thanks Bill.
Your write up in March 05 was spot on and I appreciated reading it. Guess I didn't join the 'community' til 08 or so. Love your archives.

I made it as far as Lake Baikal/Krasnyarsk in 2000 but 'they' wouldn't let me go north. Lake Baikal is amazing so the trip was not a total waste. It supposedly contains about 16% of all the fresh water in the world. The giant hydro dam is remarkable. General Lebed, a very nice guy was Governor of that region before his death. I miss him.

Yes Norilsk IS the Gulog. Even worse than Sudbury if that's possible. Just kidding. I used to follow I Nickel back in the 70's.

Thanks again and I wish you a successful conference. I have a conflict this year but next year for sure.

Regards

A perfect example why watching unusual volume is important. This stock came to my attention back on December 12th, then followed by a 3 week pullback that formed a type of "handle", if you will.

http://chart.ly/dk4qvw

Muy simpatico siempre - An experienced exploration geologist, Brent has long experience in Latin America. He always seems like a straight-up, real guy, giving you good advice. He responds to questions on MANY juniors, seemingly off the cuff. He panned several, in a direct, plain-talking way.

He's visited the majority of the companies he comments on, and/or knows the managements. Quite a contrast with the average newsletter writer. (For Exploration Insights, he charges US$1400/year, so I limit my consumption to his BNN/TV appearances.

Cook considers Quebec the best mining jurisdiction in the world, and Colombia the 'new frontier' in terms of major unexplored mineralization in a safe jurisdiction (although he surprisingly made NO reference to the particular threat in Santander from paramilitaries to the deposits of hot companies Ventana, Greystar and Gallway).

He likes Brazil, certain Argentine provinces, Ghana, Mauritania, but would not invest in either Russia or China. Having worked there, he flatly stated that it is impossible to negotiate a favorable deal structure in China.

If you're interested in exploration juniors, it's well worth your time to listen to the full hour:

http://watch.bnn.ca/#clip253274
http://watch.bnn.ca/#clip253275
http://watch.bnn.ca/#clip253276

TerryC -

You wrote, "further inconvenience travellers to the point where alternative transportation will be quicker and safer and more agreeable."

You're right! I've decided to DRIVE to Bill's conference (just taking a puddle jumper from FLL to Freeport) and 6 weeks later to DRIVE to Toronto for PDAC!

Bye bye, full-body-scanner; hello open road!

short term, from Simon Johnson, contagion likely in emerging markets, particularly China, which is speeding recklessly towards a cliff:

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

longer term, from Foreign Policy magazine, the positive features of occidental innovation and ideas outweigh the negative and retain a significant lead over the often praised advantages in Asia:

http://www.foreignpolicy.com/articles/2009/06/22/t...

Well, in the school of "See setup - take setup, and nothing else matters" I am rather principal than a student, LOL... still, I wouldn't go as far as to say that % of gain doesn't play a role. Granted, it's a bit more complicated than simple "the higher stock goes the higher odds of profit-taking" - up to a certain point the gain attracts more buyers and fuels itself. However, incentive to book profit does exist and the balance of buyers and sellers will reach the tipping point, especially when we are talking about 300% gain on a stock with active delisting notice from NASDAQ.

While these spectacular runs seemingly defy the gravity, it still works in overwhelming majority of cases. It's just that those cases are routine, and don't attract our attention all that much... but they still constitute a rule while these high-fliers are more of an exception. The trick is to recognize those that have serious potential to turn into momentum-fuelled insane runners... was much easier in 1998 when we had whole market of those that doubled and tripled on daily basis :)

I think I've figured it out. The market will continue to advance until the world encounters such a devastating black swan that generates so much selling that it overwhelms the Fed Hedge Fund's ability to stop the decline. But I think "normal bad news" just won't move things in any dramatic way.

This is because in the current low volume environment, the Fed Hedge Fund can beat back the current level of traders interested in shorting - especially now that 9 months have passed without any major declines.

My belief is, given a clever computer algorithm, a reasonable amount of firepower, and a high enough short interest, a computer could apply that firepower at a tipping point (such as a news item release, such as "good pending home sales numbers" - situations that are ripe for short squeezes. It might even make money - but it doesn't need to, it just needs to be "revenue neutral."

Citing "national security" the Fed could develop a rather complete picture on the overall level of short interest and stops from each of the market makers. A regulator could easily make that information a requirement from its market makers. They might even have this information real time.

Further add the clever market makers ability to watch the Fed Hedge Fund's actions and follow along behind them, which gives new meaning to the advice "don't fight the Fed."

Lastly, tack on various stop-tripping measures, such as periodic major gap-up opens in selected stocks and you have a recipe for a continuous melt up such as we have seen lately.

I don't pretend to be an expert trader like Bill. But when he says repeatedly this environment is nothing like he's ever seen before, I listen. And, I am an expert software engineer, and in my experience this kind of program is not only possible, it is something that given enough time and experimentation, I could develop in a reasonable amount of time were I employed by the PPT to move the stock market back up to pre-crash levels "by any means necessary" - all in the name of national security, of course.

After all, who would possibly complain? Short sellers? When all my voters are mom and pop and folks who depend on their pension fund's stock market returns?

Of course, corporate insiders and wall street folks "in the know" get rich along the way too - Goldman's streak of 100M dollar days - but would you rather have all those 401ks and pension funds drained dry? That sure sounds like a national security issue to me.

I mean, we handed trillions to wall street. What's a little market manipulation done in the name of saving pensions of retirees?