Morning Call [7:17am ET] Yesterday the S&P 500 rallied +3.13%, which was a remarkable feat, and probably enough to bring in capital from enough sidelined investors and money managers to push prices higher in that near-term Bear market rally I wrote was bringing me back to work a couple days before I had planned. You see, I had sensed this rally was about to happen and didn’t want to miss it.
Here is my note from yesterday’s Morning Call:
Rather than continue on a break from markets and blogging and miss the present goings-on, I decided to return… International equity market trading today, including the current equity and financial futures market prices, is clearly bearish… In fact markets now are mostly in a primary bear phase… As for the ultimate bottom of the Bear, no one knows; however, I have said I believe it will be in the S&P 880 range, which would mean that at least one more down-cycle is likely… I have also stated my belief that we are likely to experience, in the near future, a rally attempt, to trap and squeeze the shorts… (so, in spite of the prevailing bearishness) doing nothing is probably not the right thing unless you can step 100% away from the market, and I can’t do that. So, I’m back.
At the end of the day, Patrick Veech wrote an outstanding CTA Trading Desk Post-Close Report. Thank you Patrick for your take on the goings-on that brought me back a couple days early so I wouldn’t miss the action I felt was about to happen.
Traders understand the dominant factors that drive capital market prices, i.e., interest rates, macro-economic data, government policy and intervention, corporate fundamentals, commodity prices, forex, and the like. The public is now getting a sense there is an even bigger force, which is the role of ‘mood’ or sentiment (feeling, emotion, response, reaction, attitude, opinion, outlook are terms in the Thesaurus).
Before I address this, please consider a letter I received yesterday from one of you, which poses an interesting question that must be on the minds of a lot of you:
Bill - I am a 50 year old commercial banker in the (major US city) area. Been a commercial banker for 31 years. My degree is in economics so I have a good idea about "things". I have watched all the political, market and economic manipulations and movements in the last 3 years with utter disbelief. Are there really "powers that be" that are powerful enough to make these things happen? … I mean by that all the things going on in the markets that make no "sense" - a rising stock market in the face of the economic calamity we face, etc. "Rational" markets doing irrational things. You talk about it all the time on your blog... Are we talking Davos, etc?
Now, think again about the link I gave yesterday in the Morning Call for reading material I wanted people to consider:
Government for Sale: How Lobbyists Shaped the Financial Reform Bill
http://www.time.com/time/politics/article/0,8599,2000880,00.html?xid=rss...
If you are not shocked that lobbyists for vested interests basically write the laws of the land, then you should not be shocked that the same people engineer your ‘sentiment’ with respect to your financial dealings.
I have never liked the word ‘conspiracy’ as it is applied to capital markets. Lobbying, which is an ongoing unstoppable process, is the accurate term. The same people, companies, organizations and loosely organized networks, are behind the lobbying. The result is that prices are pushed too high and then pulled too low, reverting to the mean, which, for lack of a better word, is known as ‘fair value’.
Because all this pushing and pulling, and other forces I listed above, must average out over the long term, I use the very long term 300-day Moving Average to give me an approximate fair value.
But the important point here is that lobbying is as yet under-estimated in its direct impact on capital market prices. That lobbying is done mostly by mainstream media, and increasingly by bloggers pretending to be reporters but in fact are advertising messengers as much as or more than MSM. It’s the reason why in 1999, in the offices of a major securities commission, I argued that financial media (described generally by me as Financial Entertainment TV because I don’t want people to take them too seriously) ought to be regulated. These organizations and their people are carrying out the legal process of trading in securities, as defined by the laws, every bit as much as your registered stockbroker or financial advisor. Moreover, I believe they are every bit as much to blame for the “nonsense” that goes on in capital markets as ANY other source.
I have even railed about this, as you know. Please recall my “Hey Bill Griffeth, did you save that tape” blog.
http://www.billcara.com/archives/2006/05/hey_bill_griffe.html
You know I have been saying this for years.
You also know that for years, I have been pointing to the extreme highs and lows of share prices of companies who consistently – for decades – grow their financial metrics in every possible way. Take Wal-Mart (WMT), a name I figure most everybody in the world knows. Look at this Value Line quarterly report:
http://www3.valueline.com/dow30/f9638.pdf
Go back every year for the 15 years of this report and for years before this one and note there is not a single year where there was not a Year over Year increase in sales, cash flow, earnings, shareholder equity, book value, or dividends, either absolute or per share. Yet, directly above the chart is an annual table showing the share price high-low, which presents a totally different picture.
I cannot lay it out more clearly for you. If Wal-Mart was under the control of people with direct links to Wall Street and Humungous Bank and Broker (HB&B), the price would be much higher, but it would be pushed and pulled to suit their purposes.
So, take heart. There are explanations as to why the nonsense goes on.
http://seekingalpha.com/article/70159-should-we-listen-to-mainstream-med...
That reminds me of what I believe was the last interview that “the most trusted man in America” Walter Chronkite gave to CNBC’s Maria Bartiromo. As they strolled across the floor of the NYSE, Cronkite opined that the media had become more powerful than in his day, and to make a joke of it, he reached into his suit pocket and pulled out a sheet of paper and said (paraphrase), “Do I have a list of stocks for you (to hype)” and then admonished her with the advice, “You’ll be ok if you stick to the facts”.
http://en.wikipedia.org/wiki/Walter_Cronkite
Unlike Cronkite and many of his colleagues, what we get from Financial Entertainment TV today is a production that uses every trick in the book to try to put you at ease while the on-air personalities read words that have been carefully scripted and produced for them to communicate to the public with the purpose of engineering sentiment that favors the vested interest group that is paying for results to come.
Think about this the next time your nerves are getting the better of you, and you make the decision to sell at the bottom of a price cycle or buy at the top. You are being played. The market is a game that plays you. My advice: “You’ll be ok if you stick to the facts”.
The facts today are that European trading is bullish for equities. Asia-Pacific equity markets were also very bullish. Let the day begin. My partner Patrick had it accurately presented in yesterday’s post-close report.
Have a great day.
CTA Trading Desk Post-Close Report
Bulls had to be encouraged by the price action today, sporadic selling easily absorbed by latent demand with the broad averages overcoming intraday weakness, rallying to session highs on the close (S&P+0.94%). Although volume was underwhelming, sellers could never get anything going on the downside as trapped shorts reached to lift offers – indicating the path of least resistance appears to lead upward.
Now that price action finally appears to be more constructive (less bearish?) traders can target a test of the 200-day moving average currently just above 1100. Many short-term technical traders seem to have pressed bearish bets as the S&P broke below 1050 and they are now feeling the heat. Various measures of sentiment (bull/bear consensus, Rydex bullish vs. Rydex bearish funds, elevated VIX, etc.) indicate too many people crowding into the same downside trade.
Mr. Market eventually reaches his ultimate destination but arrives there on his own time schedule, not ours. Even if prices have a date with destiny later this year at much lower prices the weight of the current evidence argues for higher prices or sideways action prior to the resumption of an impulse wave lower.
Time will tell.
Have a great evening.
Comments
China
AP 7/8/10 7:09am
BEIJING (AP) -- China will keep its currency at a "basically stable and reasonable" level and financial pressure for the yuan to rise is easing due to Europe's debt woes, the country's foreign exchange regulator said Thursday.
...just as expected, but it worked well as a pre G-20 talking point.
http://tinyurl.com/2don7bc
Cara 100 Ratings Changes
Good morning.
INTC - PT Lowered from $27 to $25 @ Auriga U.S.A. Buy
Cara Select Account performance to date
From May 1: starting at 100.00%
S&P 500 = 89.35%
TSE Composite = 93.34%
Junior Gold Index (GDXJ) = 89.92%
Cara Select Junior Gold = 104.36%
Cara Select Emerging Market = 101.61%
I had terrible days on June 17 and 18 and July 1 and 6 because of gap reversal openings that could not be worked out of very easily. But the market has been worse, and I'm satisfied.
toby
good morning... little more work to do, but will post today on possible bio-option that may interest you... best of trades to all...
Twiggs on Preventing Future Bank Panics
Colin Twiggs (incrediblecharts.com) has produced a good blog today (July 8) on banking, panics and prevention.
Cara 100 Update
BCR - Upgraded to Buy @ Morgan Joseph. Target = $97
GOOG - estimates, target lowered at Oppenheimer. Shares of GOOG now seen reaching $600. Estimates also cut, given slower international growth and currency issues. Outperform rating.
RY - Royal Bank upgraded to Buy from Hold at TD Newcrest
SCHW - numbers cut at Morgan Stanley through 2011. Company will be hurt by interest rates and the recent stock market decline. Overweight rating and new $18 price target.
From california
Sitting this rally out. Been in cash since last week. The number of consecutive down days told me there might be a rally this week. I had no idea of magnitude. However, just as the toothless 5.9 earthquake we had in Los Angeles yesterday, this rally hasn't impressed me in terms of trend change...yet.
Since I am occupied with other business I decided not to try to game the up move. But as we approach past support and now resistance, my ammo is being reloaded to the downside.
This morning 454,000 people filed to receive unemployment for the 1st time. I don't care what "experts" were expecting. This isnt earnings. I am finding that times are just as hard for people in Los Angeles as in NYC.
baz22/bio
looking forward to your comments.........will probably sell the ARIA aug 2.5 puts for .2 today........almost 8% cash on cash, also buy the ANDS in lo 2s and sell the sept 2.5 call.........percentages are great and risk seems livable..... we are coming from opp sides on VVUS since i sold the 5 puts for next fri......think even if FDA is hesitant it holds above 5.... currently about 11 ........a cliffhanger........thinking of doing something w/DRYS...any thoughts???..... one thing keeping me very cautious now is that Arch Crawford (of astrology fame), who has had many brillant timing calls, looks for something very ominous about Aug 1st.........
Re: From california
The way I see it, unemployment could be considerably high for years and years, but to me that doesn't mean that equities will be weak at the same time. What I am seeing is an environment in which many corporations are finally, finally, finally, being forced to do what they haven't been forced to do in many years if not decades - do more with less. They are learning what is required to be efficiently operated and competitive.
Yes, the consumer is an important piece of the puzzle in the long run, but the way I see it, the amazing consumer spending of the 2000's was actually serving to keep our gigantic bubble afloat, not to help the economy organically grow and become more efficient and improve long-term profitability.
So right now we may be at the point of the cycle where the companies that can best adapt, gain operating efficiency, and separate themselves from the pack are doing so - grinding it out - slowly but surely - picking up market share even if the overall market is not growing. The weak companies are finding that their business models were built on consumer fluff (not competitive advantage) and they aren't able to gain efficiency or grow market share.
The ultimate point - if you are holding out for consumer spending and employment to start looking rosy before deciding there is any reason to be bullish - you might get left behind while the great companies separate from the fluff.
An attempt to con me
from Thomas Xu
reply-to thomas@ds-network.org.cn
to
date Wed, Jul 7, 2010 at 10:49 PM
subject URGENT Notice Regarding caratrading
(It's very urgent, Please transfer this email to your CEO or appropriate person, thanks)
Dear CEO/Principal,
This is Thomas Xu---Senior Consultant of domain name registration and solution center in china. have something to confirm with you. We formally received an application on Jul 7, 2010, one company which self-styled "Kaen Company" were applying to register "caratrading" as Network Brand and following domain names:
caratrading.asia
caratrading.cn
caratrading.co.in
caratrading.com.cn
caratrading.com.hk
caratrading.com.tw
caratrading.hk
caratrading.in
caratrading.net.cn
caratrading.org.cn
caratrading.tw
After our initial checking, we found the name were similar to your company's, so we need to check with you whether your company has authorized that company to register these names. If you authorized this, we will finish the registration at once. If you did not authorize, please let us know within 7 workdays, so that we will handle this issue better. Out of the time limit we will unconditionally finish the registration for "Kaen Company".
Best Regards,
Thomas Xu
Tel: +86-551-5223-174 || Fax: +86-551-5223-175
Room205,Block12,Youth Community(West),Ningguo Road
Baohe District,HeFei,China
I replied, believing it to be spam or a scam, but wanting to see more:
Thomas,
I Bill Cara own 100% of the shares of Cara Trading Advisors, which owns the CaraTrading.com domain name. I did not authorize the use of my name by any person.
I am a registered financial advisor in the US, Canada and Bahamas. At times, fraudster imposters have tried to copy me and in one case about US$2 million was stolen from many Chinese people and seven people were arrested.
I do not know Kaen Company.
/Bill Cara
Thomas replied:
Thomas Xu
to Bill
Dear Bill Cara,
Thank you very much for your confirmation. if it is the case, I should declare following on behalf of our company:
As soon as receiving the application of Kaen Company, we checked and found "caratrading" is your company's using name and brand. that's why we sent email to you. we don't hope the domains will be registered without your awareness. but you should know that the domain names registration is open in the world, Kaen Company also has the right to apply for the available domain names. you only own the preferential rights to register them.
If you think Kaen Company application will effect your benefit, we can help your company dispute their application and then register them under your own name. pls let us know soon, or else we think it as your waiver. In that time we don't bear any responsibility, Because we had informed you.
have a nice day.
Best Regards,
Thomas Xu
Tel: +86-551-5223-174 || Fax: +86-551-5223-175
Room205,Block12,Youth Community(West),Ningguo Road
Baohe District,HeFei,China
I replied:
Bill Cara
to thomas
Thomas,
When it comes to a possible fraud or an attempt to get me to buy something I don't need to, nothing is "very urgent". I will simply publish this information on my blog and websites, which will be read by maybe 100,000 people in the financial services and investing community, and they will be alerted. Then I will investigate Kaen Company and ds-network.org before making any decision.
http://www.google.bs/search?aq=0&oq=www.ds-network...
Sincerely,
/Bill
Thomas replied:
from Thomas Xu
reply-to thomas@ds-network.org.cn
to Bill Cara
date Thu, Jul 8, 2010 at 8:41 AM
subject Re: Re: Re: URGENT Notice Regarding caratrading
Dear Bill Cara,
Ok, if you indeed in that mind, I am able to say nothing. As a domain registration institution, I have done my best to assist you, but your reply make me annoy. Please waive your preferential right so that we can finish the registration for Kaen Company .
Best Regards,
Thomas Xu
Tel: +86-551-5223-174 || Fax: +86-551-5223-175
Room205,Block12,Youth Community(West),Ningguo Road
Baohe District,HeFei,China
There likely is no Kaen Company and this is almost certainly a fraudulent attempt to get me to buy eleven domains that I do not need. The people who manage the global Internet need to stop this nonsense.
In the mid-1990’s, there was a fraudulent attempt to scam over $2 million from HSBC and me when I was a correspondent with them while in Bahamas. A gang of seven, with apparently a sales force of about 60, incorporated my company name in another country and attempted to scam maybe a thousand Chinese people into believing that HSBC and myself would make 100% trading profits for them monthly, and to push the initial money for my investing into my account in Bahamas. I have no doubt that had they succeeded I would have been kidnapped until those funds were retrieved, and then I would have been murdered. After just $11,000 in total was received into HSBC branches in that country with amounts of $1,000 to $5,000 each, I received an “alert” from the chief compliance officer at HSBC, to which I immediately ordered a system wide alert to refuse further deposits, which would have been automatically forwarded from HSBC to my bank in Bahamas. The securities commission called me a month later and told me that the fraudsters had then set up bank accounts in my company name in that country, which I knew nothing about, and had no business there at all, and they had been shut down, the people arrested and $2 million recovered, but there was still some $300,000 missing.
With that experience, and to prevent it from happening again, I then incorporated Cara Trading Advisors (Bahamas) Ltd – even though this hurts my business because there is an impression that people send me money here, and they do not, and can not.
There are bad people out there, and it’s your job to take care of yourself. I think you understand this, but sometimes an extra word of caution like this helps.
tobty,
For awhile, have been watching ' pozn ', and thought the Sept. $ 7.50 was interesting.. Dec. $ 10.00 is a little out there, but, as some pretty smart people are saying, a buy-out around $ 10.00 - $ 12.00 makes more sense than paying royalties... good trades to all...
Re: An attempt to con me
I own a web business and get these emails all of the time.
Re: tobty,
tobyt, sorry, forgot about ' drys '... short term is everything these days, no ?!! I have trouble being positive on the bulkers, although there certainly is room to run.. I guess ' egle ' is ok, being NY based, but the European ' austerity measures ' ( I am afraid ) will not amount to much ( especially after Trichet's comments today ), weighing on currency ( thinking $ 1.275 top ).. like to trade the ' under-radar's, so I might go with Bill's ' tnp '... best to you..
to live in interesting times
work has been clamping me down as of late, and im leaving for a nice trip to cuba on friday so i wont be around much,
some thoughts on the past while that id like to share:
1. unions give more funds to campaigns than corporations, and part of the funds go towards the smokescreen which makes us think the usual big bad corporate interests have control while the unions are simply defending themselves. they dedicate millions of dollars and man-hours each year to manufacturing opinions and people eat it up because they love nothing more than getting mad about large businesses, be wary:
http://www.theatlantic.com/business/archive/2010/0...
2. gold is looking weak, though this isnt too shocking considering its action as of late. we know the drill, the shares are in an abysmal place, and the HUI is at the same levels when gold was much lower. though most of us knew this by now but prefer not to admit it instead focusing on 1 or 2 jr's that are high flying.
the weakness in the gold mining sector as a whole is troublesome even if your personal portfolio of stocks or stock is doing well. as ive mused previously there is a fundamental problem with the industry, specifically the small-mid capped outfits that continues to show a decline in an ability to generate profits in a $1200 gold environment.
using the 200 dma as guideline for valuating ounces in the ground still fails to capture why the miners cant turn out a record profit. further compounding this problem is the total lack of responsibility taken by most gold bug commentators to articulate why exactly they continue to push a sector that has failed to keep pace w/ the underlying asset and seems to keep getting knocked over during market weakness.
3. the markets look ugly to me imho, but the contrarian suspects that far too many people with wounds from the 2008 crash in their minds are jumping on every bit of suspect news to declare there will be a market crash. while at one time it was all about gushing market predicitons of higher numbers its now about being the next roubini or bear that "made the call" so that they can enrich themselves by writing a book about it and starting a bear fund when the bear has long went back into hibernation.
4. the most profitable business during the market panics has been to write books about market failures by journalists who can only make money in the markets by writing books about them. its easy to criticize your soccer team, to call out players and claim they were lazy or incompetent, but the market allows each of us to step up on the pitch and take a kick at the ball, making the gap between professional and amateur much less.
5. as many of you know i live and work in toronto's financial district, i am surrounded most days by men in fine suits who's living is made selling people the idea that banks and banking activities will make them more money than simply letting their money sit in a savings account.
its fascinating to watch how much back-slapping occurs among canadian bankers for allegedly doing well during this financial crisis. what actually happened was that canadian banks simply did less worse than US banks. most are back to where they were in 2007. thats over 3 years of a total inability to raise their stock prices along side a failure of most large cap canadian companies to breach their 2007 highs.
yet the nice suits and $100 lunches remain, the "reputation" of our banks seems stronger than ever for no real reason. people have forgotten that the crisis was in banking, not just US banking and that doing less bad is no real badge of honour.
canadian banks enjoy virtual free run in canada charging "user" fee's that would be unacceptable in a competitive market, allowing them to generate profits that are essentially tithes. lets not fool ourselves.
6. mutual fund managers are like weathermen, they earn their salaries in spite of longstanding inability to predict anything.
7. for all the lessons of the financial collapse people still fall for the same shit in a different bag, the talk of China "buying gold" or of using their t-bills as a "weapon" against the US continue and have no basis in reality. people have been harping about china gold buying but say nothing about who is selling it to them, and there is nothing to suggest china could use their surplus to do anything to the US.
i hold a mortgage debt, i cant simply turn around and burn my condo down to screw over my bank. china can do nothing to hurt the US via dumping of t-bills, it is in their ultimate interest to have their largest investment rise in value.
8. there is no attack on Iran, there hasnt been any indication of one, there has been only baseless bluster about one for 5 years. when will people give this one up. dont buy into the geo-political scare machine that claims the sky is falling at any given moment. you are playing right into the hands of those that have a vested interest in scaring you.
9. emails from strangers about anything legal are almost always fraud, ive seen emails that simply take a familiar person's name and create a new email account ie: billcara@email.com, and send out emails for solicitation, and surprisingly people eat this shit up thinking its them not realizing how easy it is to cut and paste a picture of anyone and start a fake facebook or twitter account. lets be smart gang.
10. i was out of gold around $1230 or so, and got back in at $1190. im not entirely comfortable short term but long term i am, so im going away for a week and hope to avoid most market watching, perhaps ill send a "hallo" from the beaches of Veradero, Cuba w/ me and misses.
best of luck gang, we are all going to need it.
Semantics
Bill -
"I have never liked the word ‘conspiracy’ as it is applied to capital markets. Lobbying, which is an ongoing unstoppable process, is the accurate term."
Funny, I never liked the term 'lobby' which I see as a euphemism for 'bribe.'
From Wikipedia:
"Bribery, a form of corruption, is an act implying money or gift given that alters the behavior of the recipient. Bribery constitutes a crime and is defined by Black's Law Dictionary as the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or other person in charge of a public or legal duty."
http://en.wikipedia.org/wiki/Bribe
Cheers.
Inv Intel
Out of pocket yesterday but here is the chart on Inv Intel.
Note that the Bear % is just shy of 35% !
1066
BTW we are back again flirting with the Battle of Hastings - the beat goes on.
http://www.youtube.com/watch?v=umrp1tIBY8Q
gold today
I'm getting the sense that there are some big forces playing with gold today. Just now the intraday chart of gold was looking a bit vulnerable, and the volume that came in trying to move gold down through the 1090 level was really impressive. The market just feels faster, and the forces on the short side seem poised to come in with a ton of selling when things look vulnerable. I say this because this is the third time I've seen this type of price action today.
FD: after I was stopped out once at 1198, I've just been watching
Re: gold today
Hi Dave,
Here is a snapshot of the hour future chart just a minute or two ago. Might be helpful to others.
Ventana Gold - VEN.TO
This one is a highly speculative Colombian gold play. For those who follow, Silver Wheaton participated in a $20.7m Private placement @ $11.50/share that closed on 5/17/2010. The shares came along with some warrants at $15 as well as the negotiation rights to the silver stream from VEN.TO flagship project.
Since then, VEN.TO shares have gotten absolutely destroyed, hitting the mid-$6 range this morning. Yesterday management had to issue a statement of no knowledge of new info affecting the stock price.
I opened a small position today at $6.68. If this was good enough for Silver Wheaton to invest $20m a month and a half ago at $11.50 (+ $15 and silver stream negotiating rights) I think it is worth risking some capital right here. I am still considering this capital I am prepared to lose, but if I had to guess, I would think that some fund is getting blown out and forced to liquidate shares right now.
Good portal for tracking crude and metals
http://www.cx-portal.com/wti/oil_en.html
............
cluster .... around $ 6.90 level at ' seed '.. obv may be supporting that level, as other indicators are near 2 year retrenchment areas.. watching.
Kinross - KGC (K.TO)
Hit a 52 week low today even with gold close to $1200 - any ideas of what is up with this stock?
Re: Kinross - KGC (K.TO)
I like the gold stocks here. Don't know why KGC is back to April 2009 prices.
Dead give-away ?
This thought just struck me listening to an oil spill debate on our favorite network... the moratorium in the Gulf would cause appx. 200,000 barrels (less) production per day - That I understand. There were the usual claims that the President was siding with Big Oil, because this would keep oil prices high ( yeah, right ).. and then the points about out-of-work people.. true... but what got me wondering, is this; is the President aware of how bad the economy Really is ( and not leveling with the American people ), and that the oil production will not be needed, nor, missed ?
Re: Kinross - KGC (K.TO)
Maybe someone is upset with John Paulson ? !( or maybe Paulson is wanting to add more !! )
re: kgc
wouldn't the low $ 12's look nice ...
Federal Reserve weighs steps to offset slowdown
http://www.washingtonpost.com/wp-dyn/content/artic...
"Federal Reserve officials, increasingly concerned over signs the economic recovery is faltering, are considering new steps to bolster growth.
... Fed officials do not rule out launching a major new asset-purchase program. Rather, they say they would consider one only if their basic forecast -- of continued steady expansion in the economy -- proves to be wrong. A key factor that would build support for new asset purchases would be a rise in the risk of deflation, or a dangerous cycle of falling prices -- which has become more of a concern as the world economy slows."
Via the Washington Post, the Fed is explicitly sending the signal that if any hint of deflation crops up, or if the economy double dips, they're going to print. And since a double dip in both housing and retail is pretty much baked into the cake, its just a matter of timing. Awfully nice of them to let us know what's on the way. Wonder why they did that, rather than just telling their lords and masters in Big Banking and keeping us in the dark?
My trades would include: long US exporters, short dollar, long gold. Perhaps a flier on short treasuries, in case the ROW got tired of holding depreciating dollars. But again, why tell us?
If we play the information straight, timing on this will be tricky, since increasing presence of the double dip should encourage the market lower - perhaps to Bill's target of 880?
It does fit though - just enough bad news to get everyone piled short, and then the Fed comes in with the money drop and another perfect quarter on Wall Street.
MAY CONSUMER CREDIT (rather remarkable numbers I'd say)
3:00:05 PM
*(US) MAY CONSUMER CREDIT: -$9.1B V -$2.3BE
- prior revised lower from +1.0B to -$14.9B
- Total consumer credit annual rate -4.5%
- Revolving credit -$7.4 v -$8.5B (20th straight decline; longest decline on record); -10.5% annual rate
- Non Revolving credit -$1.8B; -1.4% annual rate
KGC
I think their stock is down because they are acquiring companies and properties such as UW in the Yukon, and a piece of Redback for example
http://www.reuters.com/finance/stocks/keyDevelopme...
FYI on VVUS
VVUS FDA reportedly reschedules Qnexa review for 1 day earlier than planned
- Staff review now to come on July 12, ahead of July 15 advisory panel meeting
Re: Kinross - KGC (K.TO)
There are a lot of gold stocks that are back to their April 2009 prices even though the price of gold at that time was 900ish.
Here a few more:
NAK, MFN, AUY,
Re: Kinross - KGC (K.TO)
Relative to Gold and Junior Gold miners here is a perf chart. I pull the days to 50. The chart is thru yesterday's close. Anyway, you can see that the Junior GoldMiners are way down percentage wise vs Gold being up during that 50 day time frame. As of yesterday Gold was up 2.7% from the close on April 27th thru yesterday and the GDXJ was down 6.69%. The difference is a positive 9.39% cushion for GDXJ to move higher. You can see the other down spike in GDXJ within this time frame. At that point GDXJ was 25 when the GLD and GDXJ lines crossed GDXJ was over $30 - quite a %age move in a short period of time.
Sorry this was so long but I do think it's a worthwhile look see if you like gold.
http://stockcharts.com/charts/performance/perf.htm...
Quick setup example
Today's Catch of the Day will be familiar to conference participants, illustrating the "follower trade" (remember the sheep slide?)
http://tradinglog.realitytrader.com/2010/07/jul-08...
Re: Kinross - KGC (K.TO)
I agree that Kinross' investment in Redback Mining is a bit suspect and seemed to be a move to keep up with the Jones' with minimal upside compared to acquisitions that would leverage KGC's development expertise. Essentially when they bough their 10% stake for $600m, Redback stock was already trading at a very full valuation ($6B market cap, about half that of Kinross') and Redback was up 500% off its 2008 crash lows. So, doesn't look nearly as savvy as some of the moves made by it's peers (I.E. Agnico's Comaplex deal, Osisko's Brett Resources deal, Goldcorp's CanPlats deal, etc.).
I still think that there is a lot of value in KGC although it almost seems that separating some of the assets may be required to unlock value. I also think that the market is pricing in that the 10% Redback buy could sour if gold prices were to make a near-term swoon. The market seems to really be favorimg the gold companies with solid exposure in Africa (Tanzania, Burkina Faso, Ghana, Mali, DRC, Ivory Coast) of which Kinross has zilch, zippity. Kinross is pretty much confined to the Americas. If I remember correctly KGC still has an, albeit small, hedge book open that isn't favorable. All in all, KGC has been beaten pretty badly so I would consider it fairly low risk unless gold prices really take it on the chin but gonna take some real execution to get the mojo working.
I would suggest taking a long hard look at IAMGold for a company with an attractive market cap ($6B to KGC's $11B, which makes it easily takeout-able, unlike KGC imho), large and growing production profile, exposure to a good diversified mix of jurisdictions (Botswana, Burkina Faso, Canada, Ecuador, Ghana, Mali, Suriname). They were pretty savvy doing panic deals like the Essakanne takeover from Orezone, a shovel-ready project at pennies on the dollar which they just brought into production. I like the growth potential better in IAG.
First steps toward QE II
good article at Fleck tonight... http://www.washingtonpost.com/wp-dyn/content/artic...
Tobyt,
you had mentioned the date ( astrological reference around) August 1... odd... the FOMC meeting is August 12...
Re: Federal Reserve weighs steps to offset slowdown
Sorry Dave !!... I did not see your post, as I had just finished reading Fleckenstein's rap, and pasted the article before the afternoon message review... keep up the good work !
Re: FYI on VVUS
People need to be sure to place the appropiate option protections ( I currently have no positions in ARNA, VVUS, or OREX ).. Fireworks are guaranteed in all three, either with VVUS approval or not...http://www.reuters.com/article/idCNN159865520100615?rpc=44
re-try
..http://www.reuters.com/article/idCNN159865520100615?rpc=44
A lesson on betrayal
Cav's owner is heated,
http://bit.ly/cZLwDw
"I PERSONALLY GUARANTEE THAT THE CLEVELAND CAVALIERS WILL WIN AN NBA CHAMPIONSHIP BEFORE THE SELF-TITLED FORMER ‘KING’ WINS ONE"
Re: An attempt to con me
I have seen the same con several times now, always from China or so they say.
Re: An attempt to con me
Bill, I have received these mostly from Asian domain companies. Yes, a scam and extremely dishonest way to sell domains.
I am sorry to hear that anyone would go to the extent of stealing your name and goodwill to defraud others. Hopefully as more information about these scams is revealed and published, people can do their own due diligence and avoid loss...as this posting of yours will provide evidence.