Bill Cara’s Blog for July 12, 2010 [See post-close report]

http://www.oftwominds.com/blogjuly10/con-of-decade...

Actually...this may be the con of the millenium

ADBE - target lowered at Janney Montgomery to $35. Company lacks catalysts after CS5. Buy rating.

By the time North and South American markets open each day, well over half the world (population AND capitalization weighted) has been trading capital markets either for a full day (Asia/Middle East) or a full day less a few hours (Europe). That's a lot of news and price action that needs to be arbitraged by bourses in the Americas at their open. It suprises me that gaps aren't more prevalent. Actually, what surprises me is how little material impact some of these gaps have if your trading horizon is longer than short-term. I guess that's because the whole circular system is like a dog chasing it's tail, for the most part.

http://bit.ly/cFuNxZ

Kaimu - You have such style!

Today will show you if ' pozn ' is ready to move higher or not ( 3 consecutive am. shakedowns on low vol, followed by recovery on higher vol.. watching for close above Thursdays high ) In and out of ' maxy ' for decent % today..... best of trades to ya'..

nemo,

Are any of the proposed audits of the Fed or others in this merry garme likely to unravel the ruse?

Bill - Just curious how your performance is going for the year.

$RUT and $SPX have disconnected in the last few trading days. Troubling for the Bulls.

I'm not a Fed expert by any means, but this zero hedge article was intriguing. Can anyone tell me if this makes sense?

http://www.zerohedge.com/article/guest-post-fed-fu...

"Recently I decided to take another look at the Fed's balance sheet, and while I am none too surprised, I must report that the Fed has printed approximately $200B from April 7th 2010 to June 30th 2010. What is interesting is *how* they went about doing it."

Bill - if March 2009 thru March 2010 is any indication of what we can expect from the net effect of QE 2, TOF is entirely right, there should be a rally later this year. Profits will definitely be increasing - nominal profits, that is. And exporters should do especially well, given that the dollar should drop as a result of QE 2.

Perhaps it is a coincidence, but note the date of the WaPo article describing the upcoming Fed money printing plan. On the same day, the market rallied 3% - it was the start of the most current (4-day) rally in the market.

http://www.washingtonpost.com/wp-dyn/content/artic...

I'm looking for another vicious move down prior to the start, however, since I am betting that Ben cannot get everyone on board at the Fed without some more unpleasant news. However I could certainly be wrong...

bigwad1...how about a little 'l'? I have them on my shirts but not my forehead :)

All I wanted was to loose some weight; and instead I get embalmed or worse dead head:

http://presstv.com/detail.aspx?id=134506&sectionid...

Loan
Little or not, makes no difference anymore.
My HB&B bullet point goes back to a time many have no first hand knowledge of.
It all started when EVE picked the fruit from the forbidden tree and forced Adam to eat the fruit all gone....that was the very day sin was administered for all future generations on earth. HB&B being a direct descendant of sin in the full context of the word.
HB&B is selling apples by the truck load to investors with every flicker of green in their well run ponzi scheme.
Your little one, still has a great chance to be a bigger one some day?????

I rather like the idea of nationalizing a foreign company. Actually I thought that BP would be given access to TARP funding. After all they are a productive company that produces real goods unlike our Banksters who gamble with no implied loss on the monies from the public's tax sump.

I do like the idea of nationalizing BP because it would set an interesting precedent. The next time Pemex screws up in the gulf, and they will, we simply nationalize Mexico. No more sovereign immunity for them! Perhaps a reverse invasion if you will and all done legally in the American courts. Hey the President could just be 'like' Presidential and decree it so. No shots fired. They Bad, we Take.

Think of the silver streams to our government coffers. Real money? We can even tax Mexican labour at the source! They don't even need to move. We could replace Asian labour in a heartbeat..I think the heavy thinkers like Krugman might be able to write reems about the possibilities. This could be a whole new talking point for bubblevision. "Are you or are you not in favor of annexing Mexico?"

I'm somewhat conflicted so I will ask the foreman of my Mexican crew what he thinks. I've done this before but to no avail. It seems Juan never knows...

If you live at sea level, you are and have always been in peril. If you live below sea level (NOLA) you are probably inbreed idiots or at best romantics. A sane man would move inland, upland or to the highland. I have no empathy for coastal dwellers. Someday in someway you are going to get thwacked. Simply pay a just actuarial insurance rate for the pleasure of putting your toes in soft sands and surf. But don't shine me with your misery...when it comes.

Offshore oil drilling MADE the gulf over the last 50 years. Extort what you can from BP and the Feds. That's where the money is! I invision thousands of Willy Loman's with writs instead of crowbars...robbing the public bank.

ALOHA!!

With the Katrina and now BP's disaster it is pretty obvious that there are no BIG GOVERNMENT guarantees. Even though we vote our futures down the drain in the pursuit of "guarantees" from the hostilities of living on planet Earth we still end up with endless "promises". A promise is very easy to make, but since when has a promise ever been a guarantee of anything?

From MISES ...

The Strange Case of BP

After setting up the debate, Glaeser moves in for checkmate:

"Consider the purely hypothetical case of a massive oil spill in the Gulf of Mexico. The traditional libertarian would argue that regulation is unnecessary because the tort system will hold the driller liable for any damage. But what if the leak is so vast that the driller doesn't have the resources to pay? The libertarian would respond that the driller should have been forced to post a bond or pay for sufficient insurance to cover any conceivable spill. Perhaps, but then the government needs to regulate the insurance contract and the resources of the insurer."

"Even more problematically, the libertarian's solution requires us to place great trust in part of the public sector: the court system. At times, judges have been bribed; any courtroom can be influenced by the best lawyers that money can buy. Andrei Shleifer and I have argued that the early regulations were appealing precisely because of a sense that the courts couldn't be counted upon to protect private property."

We've seen this rhetorical move so often that it no longer shocks, but I ask the reader to stop for just a moment and consider what Glaeser has done. In order to "prove" that heavy-handed government intervention works — in contrast to a world of libertarian laissez-faire — Glaeser points out that our present system allows massive oil spills and corrupt judges.

This is really amazing when you comprehend it. It would be as if we were arguing about capitalism versus socialism, and Glaeser said, "Well, the greed of the Communist Party officials in the USSR clearly shows that the profit system can't be trusted to provide a fair society."

Let me make the point from a different angle. We can argue theoretically all we want about a purely private "regulatory" framework, in which insurance companies and private judicial rulings constrained businesses in their narrow pursuit of profits. But we also would want to occasionally check our theoretical musings against reality.

Now then, what system is currently in operation — the unregulated utopia of the libertarians? Or the highly regulated, social-democratic world of the interventionists? It is clearly the latter.

Suppose for the sake of argument that the libertarians are right, and that big government can't be trusted to provide us with a safe environment, a drug-free world, inner cities free of crime and poverty, and a well-educated citizenry. In that case — if the libertarian critique of big government were correct — then wouldn't the world look exactly like it currently does?
"The radical libertarian critique is that the people in DC are quite literally a bunch of thieves and killers."

Try it this way: Suppose we initially started in a society where the federal government had no oversight at all over international oil companies and offshore drilling. Then some worry warts come along and say, "But there might be a huge oil spill! We need the government to ensure safety."

The libertarian critics would say, "You naïve fools! What makes you think the politicians would actually deliver on such promises? Sure, they could set up a fancy new agency — call it MMS, say — that in principle would guard the American public against the rapacious oil companies. But in practice, this agency might be really corrupt. I'm not saying its employees would accept drugs and sex from the companies they were supposed to be regulating, or that MMS employees would have a party with a cake that said 'Drill, Baby, Drill' on the frosting. I'm just saying the regulators might not actually enforce the regulations on the books. In practice, the people of the Gulf would be more vulnerable to a giant spill by ceding authority to the federal government."

So I ask you, What does the real world say about this hypothetical debate? If anything, the BP spill is a strike against the case for government intervention. The people who think otherwise are implicitly relying on the premise that government intervention can only help.

In other words, people like Glaeser assume that there are a certain amount of potential private-sector disasters waiting to occur, and the government might be able to intercept some of them in time. So whenever a disaster (9/11, the financial collapse, the BP spill) happens, that just proves how fragile voluntary society is, and is further evidence of the need for bigger government. It never occurs to people like Glaeser that the massive failures on the government's watch might be evidence that the government is incompetent when it comes to protecting us.

One final point: Notice how Glaeser's argument works. He says an oil company can't be trusted to pay for damages, because it might not have enough money. Then he rules out an insurance company for the same reason. He implicitly relies on the premise that the government does have enough money, and that's why it's OK for the government to be in charge of these operations.

But of course, the government only has what it first takes from taxpayers. So Glaeser's argument boils down to this: A free market in offshore drilling wouldn't work, because it's possible that an oil company could cause more damage than it could compensate the victims for. So that's why we need a government, in order to take money from people in Montana to pay people in Texas for the damage caused by international oil companies.

Even if we accept the validity of this argument, notice that there's no logical stopping point. After all, what if there's a disaster so big that even the federal government can't pay for it?! Clearly everyone in the world must fall into line under one global government, the only entity with the resources to adequately oversee modern commerce.
Conclusion

Glaeser ends his post with this: "I may not always agree with [Miron], but I can think of no one who is better suited to write an introduction to the economics of libertarianism." With all due respect to Miron, permit me to say, "Mr. Glaeser, meet Murray Rothbard."END

LINK: http://mises.org/daily/4535

It never occurs to people like Glaeser that the massive failures on the government's watch might be evidence that the government is incompetent when it comes to protecting us.

I would say it goes beyond "incompetence" as government only has the ability to "promise". If "actions" mean anything at all then it is obvious government never even intended "protecting us".

When do we allow a new team to bat? One that isn't entrenched in the monied monopoly that dominates all our lives, whether we are "traders" or "union carpenters" or "housewives"? One that quits "promising" to bat and actually starts batting for once, for the home team? When will Freedom ring again? It feels like it hasn't rung since 1913 when the Promise Machine was first plugged in one late Christmas Eve night.

"Two Federal Reserve officials said the central bank has no plans to deploy additional tools for stimulating the economy and that the recovery is intact."

Well, that's a relief! ;-)