Bill Cara's Blog for Apr 29, 2011 [See Post-Close report]

http://www.rollingstone.com/politics/news/america-...

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BH, I was thinking more along these lines when I looked up your royal music link: http://www.youtube.com/watch?v=MeP220xx7Bs

Regarding education and jobs, recession or not, likely unrest, etc...

I'll bite my tongue today and wait for a non-trading day.

Grym

AAPL - PT Lifted from $375 to $415 @ Argus. Buy

BA - Boeing upgraded to Neutral from Underweight at HSBC.

BC - PT Lifted from $26 to $30 @ RBC. Outperform

MSFT - PT Lowered from $30 to $28 @ FBR. Market Perform

NE - Noble Corporation initiated with a Hold at Canaccord. Target $56

RCL - Royal Caribbean downgraded to Outperform from Strong Buy at Raymond James.
Price target lowered to $46 from $50.

RIMM - Research in Motion downgraded to Neutral from Buy at Gleacher. Price target is $56

RIMM - Research in Motion downgraded to Sector Perform from Top Pick at RBC Capital based on mis-execution and lack of earnings visibility. Price target lowered to $55 from $90.

RIMM - PT Lowered from $72 to $61 @ Hudson. Buy

SLB - Schlumberger coverage transferred with a Hold at Canaccord. Target $99

JMO.

http://on.ft.com/iB55uD

PG - numbers lowered at Morgan Stanley. PG estimates were cut through 2012, Morgan Stanley said. Company is investing more in future growth. Overweight rating and new $72 price target.

Will it hold?

FD: no position in dollar trade, but some short positions in various assets. Also in cash.

Edit: It holds for a time being. While dollar is essentially flat, silver and miners are making lower highs since yesterday. A sign of weakness. Gold is doing fine though. Bonds also holding well considering the previous run up. VIX probably bottomed. People quietly exiting risk trades (notice NASDAQ vs Dow Jones divergence since yesterday)?

lessmore,

I totally agree. My protests to my rep in 1993 about NAFTA went unheeded until 2003 when he commented in his newsletter, "I'm beginning to be concerned about manufacturing job losses in our area." By then we'd lost over 10,000 jobs and my business was done for. At 65, I had already retrained myself to do computer graphics, but all my clients had left town.

He's still in office ;-(

Grym

Excellent earnings and hedgies are on it.

They can't BOTH keep rallying as Jim O'Sullivan pointed out this morning on Bloomberg. Even today, TLT & TIP are hardly falling apart on the continued $ weakness, but equities still getting pumped higher. This is a couple that is destined to de-couple (hopefully, unlike Kate & William).

I'm starting to think inflation protection (TIPS) securities should be a part of everyone's portfolio for the next few years. A small part (certainly no more than 15% max!), but an important part.

After all, we can't all have Swiss (Franc) accounts.

Gold hitting all time highs and bonds still catching a bid, despite Bill Gross talking his book to the contrary, its hard to tell these days which market is true north.

We will know soon. I remember summer of 2007 when both went up to a point when no more.

As for TIPS, the long term TIP:TLT chart shows that TIPS are expensive now, but not as expensive as stocks as the TIP:SPY chart shows as.

http://www.fiserv.com/mobile-deposit-taking-off-am...

"It make sense for Fiserv to partner with Mitek
given that the San Diego company has proven technology, Epperson said. “They’re sort of like the ‘Intel inside’ of mobile remote deposit capture.”

Here's another interesting article:
http://digitaltransactions.net/news/story/2962

Dave - Did you look into the USAA app any further?

FD:
I own shares of MITK.

I think TIPs will always trade at a slight premium to ordinary treasuries, no? I'm straying from the confines of a straight up TIP:TLT ETF comparison, I know, but the point is basically the same. TIPs are about as unsexy (and horribly boring) as you can get, but I'm starting to re-think them a little.

My general point being that we're all waiting for the money to really drain out of the treasury tub and come hard off the sidelines and chase this rally and it STILL hasn't really happened...in fact, bonds are being perhaps modestly accumulated (it can't all be the Fed). Perhaps equities are not climbing a "wall of worry" but the "Mt. Everest of worry" and its taking a long time with the petulant weather near the summit.

The QEII is a massive distortion that makes portfolio management difficult.

I think we all feel defensive and are trying to plot the course for the "sell in May" event that seems to be fairly well-telegraphed...but where do you put the money? Could it actually be the US$? Holy contrarians, Batman.

Insolvent?

Ireland and Portugal on the same track.

A year ago when the part 1 of euro crisis happened, euro sold hard and stocks corrected. How come no reaction to part 2 of euro crisis? Can someone tell me please!

http://3.bp.blogspot.com/-RexmWOccr4I/Tbfm_-XkgoI/...

"Crowd Begins to Capitulate on USD, Warns of Turnaround"

http://www.fxstreet.com/technical/market-view/spec...

FD: no direct position in dollar trades, but short in some assets. Also, positions in bonds and lots of cash.

Not sure, but people figure out what they think is really important over time and react more calmly when it is not a surprise.

I have a small position in National Bank of Greece (NBG) and it is actually up today!

any big gain that seems too big, can get bigger when something in play is indentified. Almost 44 now

is "N" that can squeeze off earnings into close from 34.

Lessmore wrote: bbarberayr responded, "That is exactly what needs to happen. People in America have been living beyond their means for probably 10 years and need to reduce their life style as people in China and other emerging markets increase theirs."

Perhaps bb did not mean that this is what "needs" to happen, but it doesn't deny the economic theory behind globalisation. This being that Chinese standards are not going to be dragged all the way up to Western Europe and Nth America's. From what I understood of a number of economists, OECD standards of living will marginally decline to meet developing nations in the process.

Whether the bearded one intended this or not, it is clearly transpiring now and likely to be further accentuated in the next economic decline.

Above.

Beautiful couple. Beautiful wedding this morning.
NT

Grym,

NAFTA and free trade really didn't make any difference. The big change was when China joined the World Trade Organization in 2001 (? can't remember the exact year).

Even without free trade, oil, food and other commodities would be ramping due to increased demand from China and the inability to have a fast supply response. Americans, especially lower income ones, would be hurting just as much from these regardless.

The benefits of free trade are seen in a lot of areas (eg. $500 big screen TV's), so the issue then becomes that people want these, but don't want to lose their high-paying job and the 2 obviously don't work together. If we force American standards and wages on these other countries,we are back to $1,500 TV's and most people can't afford them.

And I do think this will end well - it just takes time and painful adjustments which unfortunately aren't borne evenly across society. The lower US $, especially against the Chinese Yuan also helps.

The other big benefits to the US are seen in companies like 3M which I posted earlier which are able to grow sales by double what their sales growth would be in the US.

barberayr,

It is obvious we live indifferent worlds and will never agree. My experiences and yours are not tracking in any form.

You assume you know what people want, but it is plain to see you've never been in a real financial bind.

I'm telling from what I have seen and from people I know. A flat screen TV is nowhere close to what they are concerned with these days. When you are 45 to 50 and lose a well paying job to some foreign cheap labor country, you have paid 20% down on a house, can no longer make the payments and the value drops, but you cannot sell it and can't afford to walk such frivilous things mean nothing.

NAFTA made a lot of difference to a lot of people, China simply added to the woes.

You think it is good that people do with less. Tell that to my neighbor two doors away who had to pull her son out of the university of Wisconsin this year and is about to lose her home. She's a 24 year military vet.

The weak dollar is good. Tell that to my neighbor behind me whose golf store went belly up and he's driving 160 mile round trip each day to the closest job he could find — gas today is $4.09/gal here. He tried to sell his house last year but has given up.

How much demand would China have if not for US companies deserting and leaving the consumer at their mercy — with low pay and forced to buy their lower priced, government subsidized goods.

"The other big benefits to the US are seen in companies like 3M which I posted earlier which are able to grow sales by double what their sales growth would be in the US."

Exactly my point — 3M can do that by transferring jobs elsewhere and leaving our people to die on the vine.

Enjoy you complacent to-hell-with America life — if you can.

Grym

Rarely comment but always following..
Just a repeat of a previous post..

Re: QE II : Massive deflation or hyperinflation If one believes as I do that the Flash Crash was nothing more then a signal from the House of Rothschild, telegraphing their family and friends that the war on the dollar has begun, gold will be an excellent holding in the future.

Just look at the UUP chart starting 30 days after the flash crash.

The only thing that makes sense to me is that nothing makes sense any more.

But I better wait on buying gold until after CNBC releases their report on the flash crash!

9/26/2010

http://infobeautiful2.s3.amazonaws.com/true_size_o...

Look how many big countries and world regions FIT within Africa's footprint!

No wonder China is all over that continent! BUT, why does the US give it such short shrift?

All good points you make there, lessmore. My emotional reaction could perhaps be replaced with something more rational if his views were more detailed.

The only specific one (flat screen TV desires) only serves to make me think his views are superficial due to lack of experience or knowing no one who has been adversely touched by these policies.

It is my opinion, developed over the past 20 to 25 years, that we in the US and perhaps the world will be hurt by such if they are allowed to progress to the ultimate conclusion.

Even the wealthiest, unless among the privileged and influential class will be at least saddled with far heavier taxes to support those who may be permanently on welfare with no work. This has gone on for generations in England, I believe, with what they call "the dole".

The world when suffering some tragedy or natural disaster will receive less aid when individuals have nothing to spare.

Grym

Anyone notice the high-volume vertical spikes in both stocks in the final minutes? Explanations? Most likely 'explanation' I can come up with is a Flash Launch. A clear example of maximum frustration, should both stocks gap up big time on Monday.

FD: I'm no longer holding either one. And not too happy about it right now.

(a) Illini: Quite frankly, at times during the past many years I've had to wonder whether my investing strategy is more in the nature of buy and "hope" rather than buy and hold. Anyhow, to clarify, I certainly don't subscribe to the notion of hanging on forever and do acknowledge that some degree of nimbleness is essential... but am more comfortable with a style of longer-term trend following (whatever the heck that means! ).

(b) Jack Black: Re your #84875 post and conclusion that "... I would take profits if long." The simplistic notion of buy in November and sell in May has been around for a very long time... indeed, probably well preceding your relatively short time-frame dating back to year 2000. Aside from that... your year to year " analysis " is not at all instructive. Please be assured that I do not intend to disparage you, and I shall indeed do my own (admittedly simplistic ) research pre-dating the year 2000... but I just happen to believe that... if one is going to toss stuff out for folks to ponder and act upon... such should be backed-up with solid data/reasoning rather than shibboleths. Best wishes re your investing.

timing of the "sell" is a little tough..... a simplistic read of the "cup w/handle we just broke out of at 1340 projects the SPX into the low 1400's before a noteable correction but I will make you a side bet that "history" will out (last 50 to 90 years average) and that we will be trading lower in a few months (late sept/mid oct?) than we are today.....how about a $100 dollar bet to the fisher house???? on stocks, DCTH looks like a good 7 put sale for this mo, ditto RBY 5s and ASTM 2.5s, all good for over 5% cash on cash.....have a great week-end.....toby PS, I sold GERN 5 puts recently which may end up being called stock ownership

As davefairtex said, "We're seriously doing something wrong. I can't quite put my finger on it, but its not good."

I first saw this "something" in the mid 1980s when Elco Consumer Products, a long-time client of mine, decided to auction all standard fasteners production (screws, nuts & bolts) to the cheapest labor countries. They weren't the first as this article in The Week magazine recently pointed out.

"The trend began in earnest in the late 1970s at large manufacturers such as General Electric."

“Ideally,” Welch said, “you’d have every plant you own on a barge to move with currencies and changes in the economy.” Not only did GE offshore much of its manufacturing, so did its parts suppliers, which were instructed at GE-orchestrated “supplier migration seminars” to “migrate or be out of business.”

http://theweek.com/article/index/213217/where-amer...

Before long virtually all of my local manufacturing clients were either doing the same or had sold out to competitors who had already been following the same policy. Remember Al Gore claiming we had no choice, but it would only affect "the low end jobs"?

We had a choice and it was made in Washington and Wall St. My question to Rep. Don Manzullo, Illinois (R) was, "Where will the low-end US workers work — in Mexico?"

The NAFTA stampede made it an officially sanctioned US move backed by both parties with legislation favoring to follow. Before long nearly all manufacturing was gone and any of their suppliers were exporting to the off-shore operations. The spin was' "US exports are growing." Nice sounding names on legislation (The 2004 American Jobs Creation Act) were simply spin for tax breaks to large corporations — no requirement the jobs created must be in the US.

Eventually, due to the ease of internet job shifting many other job categories were threatened and now, here in the midwest, even barbers and dentists have been hit as people making far less or on welfare put off such luxuries as haircuts and dental checkups.

We were supposed to believe this would raise the standard of living in emerging market countries enabling them to buy from us. No so. (Read "Who will tell the people?" by William Greider and "The next Decade," by George Freidman.)

Greider tells of the ruthlessness of the of Delphi when asked by the mayor of a small Mexican village to help provide water and sanitary facilities to the workers who crowded into his town. They would simply walk away from the multi-million facility there and go to China for even lower labor costs.

George Friedman points out that fewer than 5% of the 1.3 billion Chinese earn the equivalent of $20,000 a year while 80% live in conditions equal to the poverty of sub-Saharan Africa.

"People in America have been living beyond their means for probably 10 years and need to reduce their life style as people in China and other emerging markets increase theirs." to quote bbarberayr.

Today we have so many on various emergency measures here it is approaching, if not exceeding, the 1930s Great Depression. Social Security, Medicare, food stamps, food pantries and unemployment insurance serve to mask the real conditions. Many if not most are people who would be willing and in fact want to work.

While this has happened to our middle class, CEOs are making hundreds of times more and it is still shifting their way. Unless we do something to equalize the rules — either lower our domestic regulations or require them on imports, the US will eventually look like China. The top 1% would be advised to read the history of the French Revolution.

A degree, but still no job: College graduates having tough time in slow economy
Wednesday, June 30, 2010
http://www.northjersey.com/news/business/97455919_...

As Dave said, "...it's NOT good!"

Grym

Cheapy,

"Price something manufactured in China. Price the same thing made here. For example, a brake rotor. The Chinese made rotor sells for $20 or $25, vs the US or Canadian made rotor for the same car sells for $45 or $50."

I can accept your experience on rotors as I have no similar, but a former client announced at his 2003 annual meeting that the casting for their spin-on truck filter fitting from South Africa cost them 10% of what it cost the prior year here in the US. I must assume that to do that while shipping it thousands of miles must mean the EPA, OSHA and other regulations here added to the wages and benefits had to be the difference.

They have since increased the move out of the US and cost us over 300 jobs locally and many more nationally with their other locations.

"The solution is to REQUIRE a balance of trade. By definition, trade is where you sell something to someone and buy something from them. Last I read we buy $10 worth of goods from China for every $1 we sell to them. That is NOT trade."

If you try to buy Made in the USA products you will have tough time finding what you need — we just can't compete without equal rules. Today all that counts with most things is price — quality is not a factor to people without enough money. Wal-Mart and other big box stores are a self perpetuating customer creation machine. They pay little and their workers have no choice other than to buy cheap stuff. Henry Ford saw it just the opposite — he paid his people enough to buy his cars.

Grym

My guesses as to the reason why the price difference on rotors is only 100% different are because the cost of a rotor is probably much more weighted by raw material cost than a filter would be, and possibly that I am comparing selling prices, not cost, and that the seller might be selling the Chinese made product at a higher margin.

But really, those are not important compared to the concept that changing the rules a bit will not bring back the jobs, because even if it DOUBLED the cost of your filters, for example, they would still cost 5 times as much to make here.

If we REQUIRE a balance of trade, but still let the free markets decide what goods we should trade (ie using Buffet's Trade Certificates idea, not tarrifs or arbitrary limits by type of goods or particular country), then in time, manufacturers will choose what products can best be made here or are worth buying certificates to import.

The most important thing I'd want to get across is that the depression can not end until this is done in some way or another. People without jobs can't afford to buy much, and produce nothing to export.

Cheapy,

I'm not acquainted enough with rotors and how they are made, but I was very familiar with the filter part I mentioned. The foundry here was highly regulated and subject to OSHA and EPA inspections (gone now). I would expect the nature of the job required high insurance premiums. After the aluminum casting phase they were machined, something which required trained, union workers.

Perhaps the cost could be cut using NC machining techniques, but there is simply no way it is as economical to make such an item here under our restrictions.

I'm talking about massive regulation change if we were to drop them and I very much doubt there is anything close in emerging markets countries. Unions were another major factor. When I worked in a corporation way back in 1960 the burden rate was 20% — health insurance, holiday, sick leave, maternity leave, unemployment insurance, COLA, paid vacations, minimum wage requirements, child labor laws, matching Social Security payments.

I'm very aware of these costs because except for three years there and my military service, I paid all of these things for the four in my family out of my pocket. Believe me, this makes foreign operations very enticing to management and shareholders, but it has killed our 70% consumer supported economy.

Our people don't produce much anymore because CEOs are making huge salaries and cashing in on stock options by cutting these costs when firing employees here.

One year I worked on annual reports for five local corporations and heard these guys comparing notes — disgusting! In forty year I worked on over 70 such reports and got to see how the top guys had it made. They got perks and I dealt with their quirks ;-)

In all fairness, I must say many were honest, considerate people — especially the private owners and those who worked their way up. The worst were 2nd or third generation owners and MBAs who knew nothing and cared nothing about the product, just the numbers. These are the ones who sold out long time, hard working people without a twinge of conscience.

"The most important thing I'd want to get across is that the depression can not end until this is done in some way or another. People without jobs can't afford to buy much, and produce nothing to export."

Absolutely TRUE!

Grym

Having worked in accounting and as a consultant at companies with many manufacturing plants, I can tell you that unless you are trying to do things with chemicals or paints or plating, there are not usually huge costs from the EPA, and if you are running a safe manufacturing shop, OSHA costs are also minimal.

Your major costs are labor, overhead and materials. Overhead can be broken down between what is fixed or semi fixed, like the cost to rent a building, run the office and account for it, buy machinery, and run the lights, insure it, heat and cool it, etc, and costs that are variable, some of which varies depending on the number of people you have like workmens comp, health insurance, and ss/medicare costs, and some of which varies depending on what you do or make, like supplies, consumable tools, etc. You could probably look at the financials of a small manufacturer to get an idea of the percentage breakdowns, but suffice to say that if the total cost is 1/10th of ours, and the raw materials are the same, it stands to reason that their labor and overhead costs must be dramatically lower compared to ours. You aren't going to get the rest of the world to raise their costs to our level. Yes, they will probably rise, but we need to reduce the total costs as much as is reasonably possible to make our products as competitive as possible.

The person buying the product usually doesn't care if it was union made, whether an NC machine was used, or whether the machining was farmed out to some other company, or how much the CEO make for that matter. They just care about the price they have to pay and whether the part will work.

We agree I think on probably 85 or 95% of this stuff, so I won't harp on the minor differences further, but if we don't stop allowing our nation to be taken advantage of trade wise, the depression will never end until we are at a pay scale below that of China and our other competitors. I shudder to think what life here will be like by then, and it just pisses me off that our government has allowed and encouraged this for the past 40 years or so to get us into this sad state.

"it seems to me that labor cost are the prime issue and why foreign operations are so fruitful. If you can employ people without all the fringe (employee overhead), with no age limits, racial quotas, minimum wage, etc. it only makes sense to protect our companies and employees.

We could do that by requiring the same conditions ... or they can't be imported. No tax or tariff just No Entry. We've had tainted foods for both people and pets, counterfeit shoes (New Balance was one.) and phony meds. Better to spend on inspections than health problems."

I think it would be difficult to enforce laws that try to identify what goods made in a foreign country were not made according to OUR laws. Ok, some things can be inspected (at the cost to the seller), but I bet we have many laws, like anti child labor laws, that get skirted around, one way or another, and only rarely get enforced. Those factories are still gone from the US. Once in a while we cut off the import supply of this or that, but it hasn't helped the trade deficit, nor has it brought back the jobs.

That is why we need to put an overall governor on the trade balance, to change it back to where we actually TRADE with other countries, not just borrow more to buy from them.

optionoracle- Man, I'd forgotten all about the rebalancing- thanks.

WTF is this? Care to explain?

I guess the drinking part explained that already.

after it made lower lows and highs. It used to be leading. Reasons?

Much better put Grym!

When Nafta was still a proposal Ross Perot came up with the catchy phrase "Giant sucking sound " referring to the noise made as jobs left the US.

AAPL trading sidewest these days
Submitted by jack black (1630 comments) on Sat, 04/30/2011 - 15:28 #84944
after it made lower lows and highs. It used to be leading. Reasons?

Lack of buyers.
Most of the leaders have been trading sideways recently.
Where will this market be without the Fed pumping billions in POMO money?
Giant flushing sound?

O.K.... a respite for folks who desire to cut away from the political discourse which seems to be an increasing theme on this excellent blog. A few posts ago I challenged the "sell in May' nostrum which I believe has been around for quite a long while. So decided to indeed engage in some (admittedly elementary ) research to track the S&P 500 index from 1980 thru late 2010... 31 years. I used Yahoo finance May initial trading day and November initial trading day closing prices to calculate the % +/- changes for the May to November periods. ( Granted... some of the respective May & November closing prices were not necessarily week-ending, eg. Fridays... but the exercise was easier on my aging eyeballs and, I believe, re the ultimate results probably fairly representative.) Likewise, parenthetically, I recognize that the S&P 500 components during that 31 year duration have shifted both re included/deleted stocks and relative weightings. But... such is as such is.

So anyhow, without getting into a detailed reproduction of each year's May/Nov +/- % changes, I summarize as follows ( with the disclaimer and, indeed excuse, that my calculations might be somewhat askew... alto I think not... or hope not... particularly since had not yet engaged in my evening Jim Crow engagement).

The May to Nov periods for the past 31 calendar years have resulted in positive returns for 21 years... which is a 67.7% positive for that duration and, of course, 32.3% negative.

The statistical mean for the 21 year (+) returns is + 9.3%.

The stastitical mean for the 10 year (-) returns is -10.9%

And, aggregating the 21 year (+) and 10 year (-) readings re May/Nov for that 31 year duration produces a statistical mean gain of (+) 2.8 % for any given May to Nov. time period. So bottom line?? Not sure aside from the observation that should always be skeptical about widely-pronounced opinions re why the market must move in this or that direction. And good trading to all.

hi dnfrm, I think you are missing the boat on the sell in may, buy in Nov.......try going back using a 6 mo/daily stochastic chart on the dow/spx and check your results, sell in the 80s, buy inder 20, you will find the buy side is nomally around mid Oct, in fact the next 6 months from mid oct are the best of the year statistically....simplistic to use beginning and ends of months.....does this mean you don't want to make the $100 bet w/loser donating to fisher house/wounded warrior?????? PS my grandson finally was awarded his purple heart from Afganistan, one wonders at the sophistication of an enemy that can remotely detonate two IEDs and get the #1 & @3 armored vehicle in a convoy of 4...........w/IEDs probably made in Iran of course.....thank God for the wonderful medical help available to our wounded.........have a great Sunday and rest up for next week, as for the market the action in AAPL, AMZN, NFLX, etc, etc smacks of distribution but think we can pop over 1400 first.....

Just to add my 2 cents. No one has brought up the issue that as oil prices continue to rise so does shipping costs. Very quickly heavier items will be manufactured closer to the place of demand as oil continues to rise in price. Simple cost effectiveness will drive companies back to the country they left. Unless someone finds a new cheap energy source I see no other option. Granted it will take a couple of more years but I see no other solution. Anyone have an opinion or see where I'm wrong?

Sailor,

I think you have a very good point.

"No one has brought up the issue that as oil prices continue to rise so does shipping costs. Very quickly heavier items will be manufactured closer to the place of demand as oil continues to rise in price."

Along that line of thinking, I understand VW will be building the Passat in TN soon.  The article stated the base price will fall from $27,000 to $20,000 when made here.  European Union is an appropriate name since their unions have even more benefits than ours.  I guess the good news is that we are now a cheaper labor country compared to the Germans.

Lack of shipping expense must be a major factor as well.

We are conditioned by media simplification to think in twos — good/bad, black/white, rich/poor, inflation/deflation, liberal/conservative, but the factors are infinite.

Destruction of the dollar can be seen in the rise of PM and many commodities such as oil. While we have domestic alternatives to Middle East oil, political considerations add to the $4.15 at my local station today.

Bernanke, the almighty Fed "Expert on the Great Depression" continues his experiment with the lives of millions. Obama's crowd prevents drilling in Alaska and the Boeing move to cheaper domestic labor while pandering to the Saudis and looking for more cheap foreign labor. A recent White House conference on border security excluded governors of border states, but included companies who what amnesty and exploitation of cheaper labor here.

As more people fall away from work which pays a decent wage we can expect our average living standard to fall — deserved or not and whether we like it or not.

Energy question:

Both Bush and Obama have followed similar oil policies — foreign deals and Middle East wars — perhaps a candidate will emerge with a better alternative energy policy than windmills and corn usage.

Think what could have been done with the $trillions blown in the last few years by both administrations to free us from foreign dependency. I just heard our last refinery was built in the 1970s! Certainly there must be better, more efficient methods and solutions. For as far as I can see oil is our critical need and will stay high with currency strength/weakness being just one major factor.

Grym

Excellent comments. Just think what we could have done in transforming our energy source/distribution network in the USA over the last decade with the $10 Trillion we've gone in debt. Definitely NOT using corn.

We're quickly coming up on a catch 22 situation. Alternative sources of energy are desparately needed, but to construct the infrastructure/mine the resource/develop the technology will require more of the energy we currently use. Tough nut to crack. Better hurry it along, but I don't see a sense of urgency to do anything. Maybe it's just me.

...or is it silver uncertain? As a silver long, I'm curious about current events surrounding market pricing. Maybe someone knows the answers.

Are countries/governments outside the USA ganging-up to try & beat JPM/HSBC into submission & get them to cover their shorts?

Are hedge funds ready to pull the trigger and unload their longs to harvest profits?

Will these two events offset each other?

Are they even real?

Another question: who are the major industrial users of silver? If rumors are true that physical supply is hard to come by, will users begin to panic and pay higher & higher prices in order to stay in business? Or is physical readily available? Some of the big, publicly held users should be reporting some comments in their SEC filings if risks of obtaining the metal are growing.

Everyone jumping on the "dollar is dead" bandwagon. We know how that ends, unless this time it really is different LOL

http://www.telegraph.co.uk/finance/economics/84868...

Still, jumping on a dollar short has worked well until now (since what, 2001? LOL!) I continue to sit aside waiting to see otherwise. Could be while yet. Good education in practising patience. I mean it really, having watched good money being thrown after bad in account Mark 1 & 2, I'm happy to be able to stand aside and let this play out. I'm not sure how you get junked out on a high every time you lay a trade 2nd, that killed my account more than once. Happy to keep it a business decision now.

Been speed reading through all these posts reading from others how things should be politically and economically. Having read Armstrong and gaining an inkling of cycle theory, I wonder - actually seriously doubt - if it is even possible to maintain "the republic" as some here remember it 40 years ago. Absolute power corrupts absolutely. Something I think we've worked from a casual glance at histories of empire; English, Roman, etc.

TOBYT, happy to hear recognition of the valor of your grandson, but alway leery of the same command structure unable to recognise the potential for an opponent to adapt to changing conditions and in a manner that undermines the occupiers strength of arms. I'm sure I've heard this story in another theatre of conflict America sucked itself into. Heck, isn't that what we learn here - how to recognise a given strategy and adapt accordingly to 'improvise, adapt and overcome'. I for one remain grateful for the education I received in the army. Why the political class haven't wisened up I'm beginning to understand.

Titled "The High Margin Growth Story". For interested parties:

http://t.co/Skrbzcr

I'm seeing it down about $5 and dropping like a rock......

Finviz reflects a $6 (12.35%) decline. Volatility here we come!

As soon as I caught your post title, it took me right back to 2006. Silver prices can't help themselves- it's in their nature to sting traders.

Hey listen, I'm not trying to be difficult here. I understand a lot of individuals are going through a lot of pain now and it is very unfortunate.

My point re NAFTA is that NAFTA started in 1993 and the US did fine, even excellent through the 1990's. The more difficult transition started in the early 2000's when China joined the WTO and became a much more fierce competitor on the manufacturing side and drastically increased the demand for natural resources driving up prices.

What I think is going on now is the standard Comparative Advantage of Nations (http://en.wikipedia.org/wiki/Comparative_advantage). This should result in overall higher standards of living for people on average in both countries. The BRIC countries obviously have more to gain the developed world, but it should help both. The transition period is difficult, especially for the unskilled and uneducated who are now competing against people in other countries who are willing to do the same work for less.

My comment re cutting the average American's standard of living is really that America as a country had it too easy for quite a few years in that many people wanted to come here / invest here and this drove up the overall standard of living and wages. It meant people in Boston with no College degree were making more money than MBA's in Toronto working in the same software sales centres. Now that the tailwind is gone, these people are losing their $100K jobs and probably having to get by on $40K jobs, but the real core question of the situation is - should those people in Boston really have been making that $100K to begin with. I say probably not and now they are having to adjust their lifestyles downwards which is always difficult.

US GDP is still up 40% from 2000, so there is more to go around - whether that is being done fairly is a complete other issue, but the economy is growing and these painful transitions are probably (hopefully) getting fairly far along.

That's it - correction over. Continue upwards!

Allowing free trade with a country with super low labor cost was a sure disaster for USA. This is no brainer. What was interesting how every politician supported that move, no doubt greased by large corporation money. There were only 2 winners in that: large corporations and Chinese. Chinese also got all top world know-how for free.

As for that 40% increase in DGP, it's a joke and artifact of currency debasing and CPI counting scam. The 2011 $ buys me much less than 50% what 2000 one did in every imaginable asset (except for PCs and large screen TV sets).

Tobyt: Well, respectfully, I believe that you missed the point of my admittedly simple exercise. I'll follow-up later when have more time. Suffice to say at this point, however, I was not at all advocating the premise that the historical May-November duration subset was more favorable from an investing standpoint than the November-May subset. Have a pleasant evening.

comeback comment was said in jest

however... from Jesse's Cafe:

The Comex is facing a default, and the powers that be are very nervous since it involves at least one of the TBTF monstrosities. Shock and awe in the thin Sunday night trade, running the stops of the new futures holders whose options were filled. Even more heavy handed and blatant than usual.

I don't buy it, at least in short term. Before that could happen, the economy will seize again a la 2008 and collapse under the heavy weight of energy and commodities cost (of course Bernanke will say that no one saw it coming).

Long term, maybe, especially if the pessimistic peak oil scenarios play out.

and commercials did cover a huge chunk of silver short at the top of the peak. Clearly a short squeeze. Is it over? Not sure but possibly. There is still a possibility of a second peak like in 2006 though.

On a surface, dollar sentiments are rock bottom. However, there is one thing that is worrisome. While COT are bullish on dollar for a few months now (smart money but poor timing), small speculators maxed out on bullish dollar positions for a second week! They are definitively dumb money and jump in worst times possible. I'm afraid there could be one more huge leg down in dollar when everyone capitulates.

Maybe people are positioning long for a defense of 2008 lows coinciding with the coming of the end of QE2. What if they could be right, but still be stopped out?

Nice!
Who is driving this train??? Casey Jones?

curious why silver is knifing thru support and gold has held up fairly well especially after the 10:45 announcement of Bin Laden? hmmm?

CNN reports that a SEAL team assaulted the compound where he was living. SEALs - when we care enough to send our very best. Let's hope it makes a difference.

It is also heartening to see that the ISI was making a positive contribution, and that they allowed the US forces to carry out this mission. I wonder if the back story will ever be known.

"[Updated, 12:24 a.m. ET] A team of U.S. Navy SEALs carried out the operation in Pakistan that ended in the death of al Qaeda leader Osama bin Laden, CNN's Chris Lawrence reported. The operation lasted about 40 minutes, and the team had practiced the raid a few times.

Earlier, CNN's Nick Paton Walsh, citing a senior Pakistani intelligence official, reported that members of Pakistan's intelligence service - the ISI - were on site in Abbotabad, Pakistan, during the operation that killed bin Laden. The official said he did not know who fired the shot that actually killed Bin Laden."

Amazing - Obama gets bin Laden and neuters Donald Trump on the same weekend. His poll numbers should go through the roof this week.

just settling in with a Monday morning coffee, but the following point hit home having seen silver futures:

3. The silver “crazies” continue to participate in a global exercise to corner a market, hoping to jump first when the music stops, ignoring the share price weakness across the board in the silver miner companies.

one just has to look at SLV price and volume to see dumb money getting sucked in and boy, with this morning's prices, that's gotta hurt.

The miners were a great warning signal - even PSLV which I've come to see as a smart money silver indicator made a lower 2nd high on lower volume.

The silver price has been broken, but let's see Uncle Buck get up to taxi home all the young kiddies coming late to crash the party.

--------------------------------

I note Bill's remarks on defensive sectors being strong the last week. That was notable in the charts. But does it precede a move lower or is it simply sector rotation? Something I'll be watching. As always, it's up to Uncle Buck to deliver.

Les, why do you think now is the "right timing" to drag Bin Laden out of the deep freeze? Honestly, I don't get it. Are things so especially bad at the moment? Market is doing well, the recovery (such as it is) is clicking along, we are still quite far away from the Presidential election cycle so this will not have an impact. I'm not buying any sort of "political" timing here. My gut feeling is this likely happened on its own schedule.

If it were 4 weeks before the election, now that would be quite a different thing.

bbarberayr,

WTO is, IMO, also bad. There is no single reason for the sorry state of our poor job situation. A series of events and decisions over many years lead us here.

As for which or what caused the most trouble, consider a smoker — he can smoke for years, decades with no apparent problem — then BINGO!

The worst was a view that business and personal gains are more important than national economic health. Rickard's Comparative Advantage works well if each country is autonomous. In the 1930s we were a much more closed system. Time, associations, and the internet (biggest factor) changed all that. (as your 4th para points out).

I could go on to challenge the idea that the economy is growing at a rate anywhere close to what you see, but the weekend is over. If you like we can pickup again later.

Grym

Jack,

"Ah, Ross Perot."

YES! One of the few people I ever voted FOR.

Grym