Bill Cara's Blog for Dec 2, 2011

A near universal view has emerged that Europe's crisis can only be solved by governments and fiscal policy, with varying views over the proper dosage of pain.

I beg to differ. This is a monetary crisis, caused by a jejune central bank that aborted a fragile recovery by raising rates earlier this year, allowed the money supply to collapse at vertiginous rates in southern Europe, and caused a completely unnecessary recession — and a deep one judging by the collapse in the PMI new manufacturing orders in November.

Note that five-year break-even spreads have dropped below zero for Italy, meaning that markets are now pricing in outright deflation. For a country with public debt stock of 120pc of GDP, that is a death sentence...

http://blogs.telegraph.co.uk/finance/ambroseevans-...

It's interesting that Ambrose Evans Pritchard needs to say this. This has been the opinion at this blog for some time, yet with Merkel hell bent on pushing a new fiscal treaty through without providing any central bank medicine it leaves me to wonder who is pulling the strings and what their agenda is.

NET CHANGE IN EMPLOYMENT (Nov)
Actual: -18.6K Cons.: 17.2 KPrevious: -54.0K

UNEMPLOYMENT RATE
Actual: 7.4% Cons.: 7.3% Previous: 7.3%

http://www.fx360.com/calendar/

Les,

I can't see how what they are espousing for Europe is different than what we in the US have done. Too much lending followed by attempting to provide more lending. Setting aside the pre 2013 debt seems a lot like suspending the FASB for an indefinite period (3 years and holding).

Covering over the crap won't make the smell go away. Feeling better is not the same as getting better. Eventually we must all revalue in real terms. Sooner is better, IMO.

The whole world id awash with debt. I expect a lot of the in-crowd is making out like the US bankers and Congress.

Grym

Accumulation Zone: Monthly 7, Weekly 2, Daily 1
Distribution Zone: Monthly 5, Weekly 2, Daily 7

We're here to trade prices and this week they are rallying. I think of it as "what do the elite and powerful want as a the preferred outcome?" Answer is obvious. Market's going up. Even if it is a dead cat bounce.
What is it about Utah?

http://baselinescenario.com/2011/12/01/the-huntsma...

http://www.bloomberg.com/data-visualization/federa...

http://en.wikipedia.org/wiki/Jon_Huntsman,_Jr.

This Huntsman has balls to take on HB&B. We will soon discover that he cheats on his wife, is gay, raped someone, had sex with minor, or solicited sex for money.

... but one of today's reasons is highly ironic:

European banks move higher, led by French banks, amid reports that the EBA might not make the stress test criteria more strict

I don't even know where to begin, lol. "It doesn't matter how sick we are, let's celebrate the improved indication from miscalibrated thermometer?"

The Federal Bureau of Investigation has warned of an elaborate spear-phishing campaign that wires money out of victims' accounts under the cover of a distributed denial-of-service attack against the bank.

The new spear-phishing campaign masquerades as emails from the National Automated Clearing House Assocation (NACHA) and downloads a variant of the Zeus banking Trojan onto the victim's computer, the FBI Denver Cyber Squad said in its warning issued Nov. 23.

The malware steals the user's online banking credentials and launches a DDoS attack on the financial institution to hide the fact that it is also transferring money out of user accounts. The DDoS attacks may also make it difficult for the financial institution to stop or reverse the transfers even if they are detected in time.

The email informs the recipient that there was a problem with a transaction at their bank and it was not processed. By clicking on the link in the email, the recipient is directed to a Website that downloads the Zeus variant called "Gameover" to the recipient’s computer, the FBI warned. Gameover is capable of keylogging to steal banking credentials as well as defeating several forms of two-factor authentication mechanisms the banks may be employing.

The new spear-phishing campaign involves "personal and business bank accounts, financial institutions, money mules and jewelry stores," according to the warning.

Attackers are becoming increasingly smart and stealthy in their DDoS methods, Mike Paquette, chief strategy officer at Corero Network Security, told eWEEK. While a brute-force or flooding type of DDoS attack can be relatively easy to identify, it requires high-performance and sophisticated real-time analysis to recognize and block attack traffic while simultaneously allowing legitimate traffic to pass, according to Paquette.

Application layer attacks, such as the one posed by the recent Apache Killer, are "more insidious" and require the financial institution to have a thorough understanding of the typical behaviors and actions of their actual customers, he said.

Paquette suggested that financial institutions should automate DDoS defense to create user profiles to identify suspicious traffic, much in the same way automated credit card fraud-detection technologies look for unusual spending activity.

A portion of the wire transfers is being transmitted directly to high-end jewelry stores, according to the warning. The criminals contact a jeweler looking for precious stones and luxury watches. They promise to wire the money directly to the jeweler's account and someone will come to pick up the merchandise.

Once the fraudulent wire transfers are complete, a money mule comes to the actual store to pick up thousands of dollars of goods, the FBI said. Even though the transaction is reversed when the fraud is discovered, the jeweler is unable to recover the goods.

DDoS attacks against high-profile targets are generally perpetuated by intelligent, determined and persistent adversaries, and this "new breed" of attackers will switch to different sources and methods as necessary, Paquette said. Therefore, advance preparation is key to being able to respond to these DDoS attacks effectively, Paquette said. A response plan lists the steps the institution should take during a DDoS attack.

Hiding malicious activity by distracting the defenders with a DDoS attack is not new. The perpetrators who breached Sony's PlayStation Network and Sony Online Entertainment services earlier this year appear to have taken advantage of the fact that the entertainment giant's IT staff was busy trying to contain the DDoS attacks that had been launched by the Anonymous hacktivists.

Institutions shouldn't rely on just the Internet service providers to be able to mitigate the DDoS attack, but should deploy technology in-house to serve as the front-line defense against both flooding type and application-layer DDoS attacks, according to Paquette. DDoS mitigation tools need to be deployed alongside monitoring services so that organizations can rapidly identify and react to sustained attacks.

"Continuous and automated monitoring is required in order to recognize an attack, sound the alarm and initiate the response plan," Paquette said.

Not going to make further comment for the moment as I see I have reading to do on the matter. Ambrose might be jumping on the back of market monetarism, some new fangled economics, which I'm reading up on here:

http://thefaintofheart.files.wordpress.com/2011/09...

http://marketmonetarist.com/2011/12/02/wauw-we-hav...

Jesse calls it more shenanigans to be avoided. I'll reread his thoughts on it this weekend.

http://jessescrossroadscafe.blogspot.com/2011/11/c...

I'm also thinking of European bank nationalisation and/or debt jubilee as part of the printing exercise. Obviously not the policy proposal Europe is thinking about and probably not what Ambrose was writing about.

BUT regardless of what Ambrose was thinking of, I'm not unconvinced that Merkel's intent to impose fiscal restraint upon EU members is NOT a bad thing, if it is accompanied by monetary assistance from the ECB while no commercial bank or foreign investor is interested in buying EU debt.

Italy and Spain don't require haircuts to their debt levels, they need structural reform. I cannot understand, off the top of my head, why this 2 pronged move in monetary loosening and fiscal tightening is not workable as these structural reforms are pushed through.

good luck everyone.

Les, I'm disappointed, but not surprised at the negative reactions to your post.
Say what you will about Keynesian inspired stimulus, it worked when we last faced this type of problem.

Ciao, Z.

Saw this earlier, Jack.

Conservatives craft bill to prevent IMF bailout of crumbling eurozone
http://bit.ly/u4K5qn

Thank you all who responded to the request for suggestions. I am reposting the original request for anyone who missed it and a sampling of the ideas sent in. This way everyone can see the feedback; it may encourage more ideas to be brought forward. Cheers Athan

Hi all,
Bill has requested that I poll the CaraCommunity members and see what the level of interest is in forming a Premium Traders Club. Bill does not have the time right now to organize it, but he will be an active member.
It will be focused on the exchange of trading ideas and not educationally motivated. It will be a place where Bill and the club members could discuss, explore and exchange in a more focused environment their ideas on trading.
I can administrate it in the interim until it gets started and the group decides who the annual leader and club rules would be. Let me know what you would like included as featured content in the Premium Traders Club. I will then collate all the suggestions and we can together fine tune the final product. Along with your itemized suggestions please give me an idea of how much you would be willing to pay for membership in this Premium traders club on a monthly basis.
Please send me your ideas and thoughts on this at athangadanidis@billcara.com
CaraCommunity will always remain for free. We are actively exploring a variety of enhanced fee based products, information and services that we can offer to the CaraCommunity members.
Thank you for taking the time to write in your feedback in the past, it is very appreciated and always welcome.
Looking forward to hearing from you,
Athan

Here is a sample of replies:(some of these are picked out of longer statements; I tried to maintain their contextual relevance.:)
1. I am for actionable intelligence intraday trading, and also trade options getting in the right trend at the right time
2. I would like a site where Bill and others more experienced and able to grow accounts in this choppy environment would discuss trading strategies and ideas, and perhaps answer questions. If this is what you have in mind, count me in.
3. I'd like to see sector-analysis with a run-down on specific issues within the sector - possibly have a member volunteer to be responsible for each sector - I know this is available elsewhere (VL for example) but I always like to hear experienced trader opinions on issues which they are familiar with and may have been trading for years.
4. So if I am thinking of buying shares of xyz and someone is able to say that it might be better to hold off as it looks a little high, or there's a reason why it is so low right now, or the stock is in unbroken downtrend; I like to hear things like that.
5. Will it be geared to short or long-term traders, both, will it have a place for individuals to develop their own interest areas, etc.
6. lf it's more thematic, with specific investing ideas for several months to several years, then l could be interested.
7. l also want to see situations where l can see Bill's 26% a year potential, not just a few percent scalping if l'm directionally right.  l do look however at selling puts, etc., at 3-6 months out and hopefully capturing the premiums or getting stock at a price l like.
8. Awhile back there was a discussion in the community on crowd sourcing; maybe that's a place to start, where there are 3-5 ideas posted with people asked to share their perspectives, both pro and con.
9. Focussed 100% on actionable trading ideas, not opinions about macro issues or vague ramblings about the stock like you get on the Motley Fool
10. Standard format to enable quick assimilation of trading ideas and to discourage useless bald statements like you get on a squawk box or StockTwits
11. A method of comparing past performance of traders so that those with consistent success can be followed
12. Real-time posting of ideas with no possibility of back-tracking so that real performance can be assessed
13. Ideas capable of being sorted imaginatively with summaries being produced easily
14. If you had a number of people with good technical skills, each one could handle one particular duty, or stock, or Index, and bring his (her) information forward on a established, but flexible, time frame, addressing relevant issues as to where the market is going, and what its trends are. Bringing forward ideas on an ad hoc basis should be encouraged as well. There are many different trading styles and markets. The mutual educational aspect of this could be fun, and financially rewarding.
15. I have several technical trading systems that I use, but  currently I miss trades or forget about ideas because I am too busy trying to sort out wheat from chaff. I need to focus, not diverge. I sense that many others have this same problem. This could be a tool to do that.
16. A fraternity of like-minded traders who pool their skills, and band together, in mutual respect, for the betterment of one and all.

Yeah.

Yesterday I tried to find out what percentage of the "better than expected" job growth was real, long term job improvement, what was part time, and what was temp (Christmas retail). The best I could get was that seasonal adjustment may be a large part.

We have a good friend who is always upbeat — nearly all restaurants are superlative, movies are great, etc. He never seems disappointed.

Since I had no expectation number, and don't know who did, I'll just ignore it.

Grym

Zed II,

"Say what you will about Keynesian inspired stimulus, it worked when we last faced this type of problem."

If you are referring to the Great Depression, I think you will find the FDR socialist programs produced nearly a decade of questionable value and only the WW2 mobilization (eventually "employing" 16 million in uniform) and the manufacturing which supported it, were the things which worked.

Grym

This post originally appeared at "Tim Duy’s Fed Watch":

http://economistsview.typepad.com/timduy/2011/11/m...

"This is my fear – that Germany and France continue to press ahead with the “austerity first” plan, with the ECB cheering them along. Unequivocally, this is not going to work. It hasn’t worked yet, and there is zero reason to believe that it will in the future. All Europe is doing is setting itself up for greater speculative attacks as each new turn toward austerity pushes the deficit targets further out of reach.

"We are setting the stage for a massive counter-example to the US reaction to its financial crisis. The US allowed the fiscal deficit to swell while force-feeding capital to the banking sector (not enough, but that is another story). Europe is pushing for massive fiscal austerity and, to prevent additional fiscal borrowing, pretending that the banks can survive via “liability management exercises.” If you think the US would have been better off shrinking the deficit while letting the banking system collapse, it is time for you to go long on Europe."

"...the WW2 mobilization (eventually "employing" 16 million in uniform) and the manufacturing which supported it, were the things which worked."

But where did all of the money come from to support all that!?!

It was borrowed!

"But where did all of the money come from to support all that!?!

It was borrowed!"

So, just to make sure: are we for endless borrowing? Because as it stands, we have borrowed more than we can reasonably repay, and that got us where we are. The recipe is to borrow more?

Just trying to understand where all who argue against austerity stand. Also attempting to understand the logic by which being $100-deep in debt and making $1 a month, one can solve it by borrowing $100 more in hope to make $2 a month.

Hmmm....explain how massive borrowing to fight WWII and then blowing up all the goods produced created wealth? Clearly there was massive borrowing/currency depreciation during the GD, then WWII came along and even more massive borrowing and wealth destruction via expendable resources. bombs blow up, planes crash, ammo is fired and lost, ships sunk, etc. etc. How do we explain how that then bailed us out of the GD?
Wasn't WWII just a huge extension of FDR's 'government' programs?
Wasn't WWII simply a huge Keynsian stimulus?

RE: ""...the WW2 mobilization (eventually "employing" 16 million in uniform) and the manufacturing which supported it, were the things which worked."

But where did all of the money come from to support all that!?!

It was borrowed!"

Well, money were repaid easily after WWII as US was the only major economy not destroyed by war and produced things for the entire world rebounding from war.

Things are much different now, as US economy is becoming eclipsed now by the rest of the world (as it should). Combine this with unfavorable demographics here and Japan is your model for many years to come. Are you long Japan?

Do you address the wrong poster? Did I say anything about WWII?

Vad-

I agree that endless borrowing brings tears. In fact, the lesson of WWII (and most wars) is that a judicious combination of both is required. Austerity alone won't work-- the fruits of labor must be saved!

"... one can solve it by borrowing $100 more in hope to make $2 a month."

How about borrowing $100 more in hope to make $3 a month? One needs to start a "virtuous" cycle going.

"Its easy to compete when your main competition is gone."

I guess that's why Europe and Japan are still in that great post-WWII depression that flattened Eastern Europe!?!

In fact, via the Marshall plan, we gave Europe the wherewithal to "buy America!"

Just another example of how headlines can be misleading.
http://www.nytimes.com/2011/12/03/business/global/...

From Felix Salmon: http://blogs.reuters.com/felix-salmon/

"...the fact is that if you’re a person in America, the likelihood that you have a job was unchanged this month: the employment-to-population ratio ticked up just one tenth of one percentage point."

Market overview and outlook for Dec-Jan letter by TTN has been sent to subscribers; please CHECK your junk mail boxes and unblock TraderWizard as a sender!

"So, just to make sure: are we for endless borrowing? Because as it stands, we have borrowed more than we can reasonably repay, and that got us where we are. The recipe is to borrow more?

Just trying to understand where all who argue against austerity stand. Also attempting to understand the logic by which being $100-deep in debt and making $1 a month, one can solve it by borrowing $100 more in hope to make $2 a month."

1. No one argued against austerity. The article was discussing whether "austerity first" would resolve Europe's issues as opposed to U.S. method.

2. WWII was cited as resolution to GD, which was actually already in process of resolution in the U.S. WWII was example of further borrowing/currency depreciation which was essentially a gigantic Keynesian stimulus, some of which was kept in place and became productive as noted by others here and the largest portion was basically blown up. I gratefully acknowledge those noting that the rest of the world was blown up too. I will add the dollar also became the world reserve currency which was an additional positive.

3. Normyx has it right. Those with ability need to realize that their transient wealth is dependent on demand and babies born into $48K of debt are unlikely to become consumers, while at the same time reducing that $48K per capita and investing in long term production. Something like patting your head, rubbing your stomach and juggling bowling pins at the same time.

Austerity by itself is destructive as it destroys medium term demand and the ability to (counter intuitively) pay debt in the long run. It also is impossible to do any of the above if the populace is in outright revolt and overthrows the entire system and targets those perceived as causing the problem to begin with. That's the equivalent of dropping one of the bowling pins on your head.

"That vast improvement of today was hardly won by Scrooge's methods of blind austerity. It was won by investing in huge new schemes of production, etc. using largely borrowed money."

Norm... it's absolutely true that borrowing is necessary for innovation. This is not however what any reasonable person objects against. It's unsustainable borrowing to finance good times or meaningless projects that dig deeper hope for the sake of employing a few people right now at a huge cost per job that are so objectionable. And that seems to be major theme of the borrowing we observe during all these pre-crisis bubbles and during-crisis stimuluses (is that a word?) IMO, we are yet to see a well-designed thought through program of using borrowed money for anything remotely reminding real rescue plan.

Deleted by author

"It's unsustainable borrowing to finance good times or meaningless projects that dig deeper hope for the sake of employing a few people right now at a huge cost per job that are so objectionable. And that seems to be major theme of the borrowing we observe during all these pre-crisis bubbles and during-crisis stimuluses (is that a word?) IMO, we are yet to see a well-designed thought through program of using borrowed money for anything remotely reminding real rescue plan"

Agreed. Good point. There appears to be a bought off congressional blockade to such plans.

norm -

Sure I agree, let's not go back to the time of Dickens.

For borrowed money to be long-term economically beneficial, it must be self-liquidating rather than consumer-oriented. You hit this nail squarely on the head when you pointed out that borrowed money was used to invest in new schemes of production and that resulted in where we are today. Borrowing money to buy machinery which will eventually pay for itself and more - that's just smart, because it provides a return on investment. Borrowing money to buy a new gucci bag, that's not so smart, because the new bag doesn't provide an ROI.

Most of our "stimulus" plans end up going into consumer oriented programs. Gucci bags get bought, and the debt remains.

Once economies get complex, governments are awful at figuring out what sorts of spending is self-liquidating. Its not an easy problem. Bridges to nowhere, fixing roads that don't need to be fixed, waste, fraud, and abuse, etc.

Free market systems usually do better figuring out where capital can best go, when appropriate regulations are used to limit fraud and influence on government. Unfortunately, we don't have a free market system anymore, we have Big Bank Socialism, so we're kind of stuck.

That said, I'm still not in favor of borrowing gobs of money and then throwing it at consumers hoping some of it will find its way into the right places and accidentally make everything more efficient in the long run. More likely than not it will go to make bigger consumer-products factories, which will become mal-investments when we stop throwing that borrowed money at the consumers.

Dave,

extremely well put. So well that in fact I will have nothing to add from this point on and can retire from this discussion.

norm -

This same argument could well have been made by buggy-whip manufacturers seeing a car, by farm workers seeing a combine, by pick & shovel miners seeing dynamite used for the first time. Germany today manages somehow to have a prosperous manufacturing and export economy in the face of automation. The workers there are not at subsistence levels, or competing on the basis of very low wages.

Farm mechanization dropped farm labor in the US from 41% in 1900 down to 2% today. And yet I'd say we are better off now than we were back when we had Farm Full Employment. Does anyone today lament the loss of all those farm jobs?

I don't know how Germany does it. But they do it. If it were my hot-button issue, I'd definitely look at Germany to see why they're doing so well.

"That said, I'm still not in favor of borrowing gobs of money and then throwing it at consumers hoping some of it will find its way into the right places and accidentally make everything more efficient in the long run. More likely than not it will go to make bigger consumer-products factories, which will become mal-investments when we stop throwing that borrowed money at the consumers."

The alternative would seem to be a planned economy. Didn't the communists try that? When China decided just to let those fickle peasants decide for themselves on how to 'waste' their money was when their economy boomed!

norm -

You are not clear about what I said. I said it was a bad idea to borrow money and then give that borrowed money to consumers to spend - because that borrowing would ultimately have to stop sometime, and the debt principal (and interest payments) would remain. I never said it was a bad idea to let consumers spend their own money in a way they saw fit. Do you see the difference?

I agree with Dave...to a point. Free markets along with government approval have succeeded in allocating capital off-shore and into automation, which are self liquidating until they result in uneven distribution of employment and incomes which are then demand destructive and lose their self liquifying properties.

The problem is allocation of capital without factoring in human beings and improvement of living conditions and employment for citizens. Capital allocation for the sake of delivering returns in and of itself without a human component is counter productive.

This is what makes NAFTA a complete failure. Such an agreement needs to take into account so many variables, including greed and exploitation, that free market allocation of capital by itself becomes destructive without such considerations.
Automation that saves lives in hazardous conditions, reduces toxicity and exposure, these are good examples of automation technology. Technology that displaces humans simply for greater profits while externalizing health, employment, pollution and poor working and living conditions are not only destructive, they end up generating greater expenditures in military, defense and support services to defend the results of these practices while destroying the ability of the working population to pay for these expenditures.

That's what makes that sucking sound.

Norm -

Perhaps it's time to re-focus the nation on a BIG national goal - Head back to the Moon!!! It would re-build the nations' technological base and the derivative fall-out would stimulate lower-level jobs in many communities. Just like Kennedy did...

"Perhaps it's time to re-focus the nation on a BIG national goal - Head back to the Moon!!!"

Won't work anymore! That's been Japan's famously failed experiment to build bridges to nowheres.

We probably need some form of "profit sharing" where the fruits of corporate success (as well as their failures) can accrue to the general welfare. Any ideas?

Okay, I was thinking about how to allocate capital for the benefit of the owners of capital. I don't like the idea of a planned economy per se ala communism and clearly a purely profit based system has it's weaknesses.

So what about doing what we do better?
Luggie suggested enforcing laws we already have, maybe that is how to best deal with this.

For example, more freedom of individuals to allocate capital in their retirement accounts to individual equities and instruments that benefit the working class rather than broad indices and funds? How about mandating that management of retirement funds be directed to domestic investment that employs citizens and benefits domestic economies?
How about enforcing shareholder control of publically traded corporations including those who own shares in their retirement accounts so that the shareholders determine where those corporations invest, produce and what they expend company funds on (like lobbying)?
How about actually prosecuting firms that trade against their clients order flow and retirement accounts using prop desks?

These things would not restrict private equity or prop desks from seeking returns where they want, but it would direct the funds of working families toward investment that would benefit them and not to invest against those who own that capital.

I'm sure people here have other good ideas.

Dave,
Germany, as we all have noticed lately, seems to have a well developed sense of nationality and loyalty to the country.

We, on the other hand, seem to have forgotten love of country in favor of love of profit and money. The communists said we would sell the rope used to hang ourselves and on that point it is hard to argue.
The countries that have a healthier nationalism also seem to have a higher regard for education, caring for their most prized resource....their children.
We seem to have one entire party that focuses solely on profits at all cost.
One candidate recently said we should get rid of child labor laws and 'poor children' should clean their school bathrooms and they don't have any good examples of hard work. This from a politician! The height of arrogance from someone that has never produced anything in his life. In the meantime the families he is so fond of talking about suffer as two parents work to make ends meet (if they can find a job) and the kids come home to an empty home (if they have a home). Or...they are raised by a single parent working two jobs.

I am currently on only my 3rd intraday trade.
First was a bust. ummmm forgot to set a stop. (oops!.. still own it) Second was breakeven. (better) Third one the charm? "We'll see" said the blind man.
In any case after having been through your book Techniques of Tape Reading twice now I am definitely looking forward to the upcoming online course.
This is all such fun and I am so addicted. heheh..

Norm, it could be easily argued that *not* enforcing our existing laws is what got us here.

If on the other hand, we put workers in charge of their own retirement capital to be invested in enterprises that only benefited them instead of the current system of Wall Street managers charging gobs of money to do as they please wherever they please, then that substantial amount of capital could be directed at domestic wealth building and construction.

M R - I'm right there with you Bubba. I interpreted a pullback in FAS this AM as an opportunity to go Long FAZ. Bad move. The FAS was one of Vad's JBE moves and the FAZ Long was a screwdoodle (to use Shark terminology).

So I'm torn right now between seeing today as a bad technical result (a failed test of the SPX 200 day moving average) or simply the usual terror of holding anything into a weekend where Just About Anything can happen (and usually does) in the Eurozone Breakup Follies.

Not sure exactly what to do. I cashed in some put writes, but that's about it.

Great, then mandate that managers allocate that domestic retirement capital only to domestic production and investment. Why should domestic workers subsidize foreign investment that displaces them with their own money?

That is my point. Not that people must choose their own investments, although I think they should be able to do that too.

Example: my brother has a retirement account and he has a handful of investment choices, none of which include a means of hedging inflation in something like precious metals, etc. His choice at my urging has been bonds, which have done great, but what will happen when bond prices top and interest rates start to climb? Will stocks do well in a rising rate environment? Bonds will go down.
Where does someone go when there are only so many choices? People should have more choices.

Normxyz, davefairtex,

The move to automation and computers cannot be stopped, nor should it. I lost my business largely due to computers. Although I switched to computer graphics, all that did was buy me an extra 15 years to work. They cost me many times more than I had been paying for ink, paint, pens and pencils and eventually caused my clients to leave town for cheap labor.

While they can be compared to the buggy whip or combine transition, the speed of change was far more extreme.

What is killing us is something I watched happen with nearly all of my manufacturing clients — we no longer make pleasing the customer our primary goal. Along about the 1970s companies began hiring guys with MBAs in business who neither knew much about the specific product and cared only about showing good numbers to the financial guys on Wall St.

Then the experienced worker became expendable and "productivity" in the form of cheaper labor unencumbered by US safety, environmental and benefit costs the goal. The result: a trashed Middle Class, contaminated food and medicines, counterfeit "name brands" and a huge loss in individual freedom of choice. Price determines where many people can buy which further hampers US made products and jobs.

Tariffs may not be a good thing, but neither is importing uninspected foreign made stuff.

We need to realize we are competing based on price, but force a more level playing field. We can out do other countries if we stop passing legislation which encourages off-shoring. We must demand imports meet the same standards we force on our own companies. Lower wages are a given as well as fewer benefits. I can hardly believe some of the benefits packages I 'm hearing about these days — especially with public unions. People who pay NOTHING toward their own health care and retirement. No wonder we can't compete.

Grym

Hi All - Lively discourse today. Using an adage of our host: here is a company with a new & proven management team that has moved up quite a bit since I added to the watch list. Happy Trading

http://business.financialpost.com/2011/12/02/inves...

The Senate voted to approve the main Defense appropriation of $662B for the fiscal year.

Provisions in the Senate bill run by John McCain and Carl Levin allows the Defense Department to become involved in domestic affairs in its global war on terror. The bill is off to the Senate/House for conference committee debate.

The right to have a country without federal military involvement in domestic activities, the right to a fair and speedy trial, the right to bail and deemed innocent until proven guilty, the right to privacy... all these rights will gone if one is declared a citizen terrorist. Note these actions are being driven by legislators.... not by the Pentagon. The Senate vote was 93-7. We shall see what ends up on Obama's desk.

What is the definition of a terrorist? "What ever we say it is"

The police state behavior continues to emerge. And business as usual for our control the world military affairs. Add in the off the books expenditures and were borrowing and spending $1 Trillion we don't have. No wonder Congress has an approval rating nearing zero.

* The law could be designated unconstitutional by the Supremes if enacted... but I will believe that... when I see it.

"* The law could be designated unconstitutional by the Supremes if enacted... but I will believe that... when I see it."

It all depends on how Chief Justice Diana Ross and conservative Justice Mary Wilson vote. I hope they vote "Stop in the Name of Love".

http://www.youtube.com/watch?v=GJzcGO0qUfw

http://jessesublett.files.wordpress.com/2010/01/th...

I am going to slow down again.

maybe i am too young to understand the complexities of govt back stops. but i believe if we all continue on this road of global printing and political theater, this is going to end very badly for everyone.

And i think this yr, with the scenes of OWS, police enforcing tactics of borderline marshall law, etc, this is only the beginning of a very long movie. in fact we are now only seeing the previews.

Maybe an alien civilization will land and save us by introducing us new natural resources and wealth. otherwise, the end of this tunnel is in plain sight for all of us to see. but how many actually choose to see it before it is 3 feet in front of their face?

Global Credit Market Debt to Global GDP is about 340%. Never before has this been the case.

I still often ask myself, what is the point of trading or even capital markets, when in the very near future, all that will matter are the possessions you can carry on your back, the people you can trust with your life, and your personal health.

EDIT: And without a doubt, the U.S is in better footing than other areas of the world. but i still think it will be painful here.

I like the simplicity jeff

If the USD is the world reserve currency and we get a downturn that the Fed tries to resolve by even more massive injections of liquidity, then how can it be a 'black swan' when it is predictable that poorer countries who don't have the same level of wealth will experience instability due to rising food and fuel prices driven by US currency policy? It has always been so...well, at least since WWII. Before that it was British currency....

Each of these in turn is then visited upon the US (or in Britain's case WWI and WWII) by either war or domestic uprising.
We saw this in the 60's and then 70's with international uprisings followed by domestic strife.

It's not really a Black Swan, it's a predictable result of central bankers and their political enablers.

The Teaparty and OWS are really early because you can fool some of the people some of the time, but after awhile they get wise to your game.

A Cow based Economics Lesson;

SOCIALISM
You have 2 cows.
You give one to your neighbor.

COMMUNISM
You have 2 cows.
The State takes both and gives you some milk.

FASCISM
You have 2 cows.
The State takes both and sells you some milk.

NAZISM
You have 2 cows.
The State takes both and shoots you.

BUREAUCRATISM
You have 2 cows.
The State takes both, shoots one, milks the other, and then throws the milk away.

TRADITIONAL CAPITALISM
You have two cows.
You sell one and buy a bull.
Your herd multiplies, and the economy grows.
You sell them and retire on the income.

ROYAL BANK OF SCOTLAND (VENTURE) CAPITALISM
You have two cows.
You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company.
The annual report says the company owns eight cows, with an option on one more.
You sell one cow to buy a new president of the United States , leaving you with nine cows.
No balance sheet provided with the release.
The public then buys your bull.

SURREALISM
You have two giraffes.
The government requires you to take harmonica lessons.

AN AMERICAN CORPORATION
You have two cows.
You sell one, and force the other to produce the milk of four cows.
Later, you hire a consultant to analyze why the cow has dropped dead.

A FRENCH CORPORATION
You have two cows.
You go on strike, organize a riot, and block the roads, because you
want three cows.

A JAPANESE CORPORATION
You have two cows.
You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk.
You then create a clever cow cartoon image called a Cowkimona and market it worldwide.

AN ITALIAN CORPORATION
You have two cows, but you don't know where they are.
You decide to have lunch.

A SWISS CORPORATION
You have 5000 cows. None of them belong to you.
You charge the owners for storing them.

A CHINESE CORPORATION
You have two cows.
You have 300 people milking them.
You claim that you have full employment, and high bovine productivity.
You arrest the newsman who reported the real situation.

AN INDIAN CORPORATION
You have two cows.
You worship them.

A BRITISH CORPORATION
You have two cows.
Both are mad.

AN IRAQI CORPORATION
Everyone thinks you have lots of cows.
You tell them that you have none.
No-one believes you, so they bomb the ** out of you and invade your country.
You still have no cows, but at least you are now a Democracy.

AN AUSTRALIAN CORPORATION
You have two cows.
Business seems pretty good.
You close the office and go for a few beers to celebrate.

A NEW ZEALAND CORPORATION
You have two cows.
The one on the left looks very attractive.

van: thank you, thank you... a very refreshing respite from the non-constructive back and forth bantering which seems to have pervaded this excellent blog-site for the past couple of days. But... a word of caution(?)... perhaps some folk(s) might misconstrue the intended humor as follows: (1) sexist... you only reference cows... why not bulls!! (2) profiling... again, the same observation... you focus only upon cows! (3) nationalistic exceptionalism... again, notably, your excerpts encompass primariy nation-states which would probably be generally acknowledged as those among the major world-wide. My above comments are obviously " tongue in cheek " but who knows what kind of replies your inflammatory attempt at humor might engender on this blog!

Earl: With all respect I do sense the desperation in your message but am not sure that I can really decipher much beyond that. If your commentary is based on personal/family experience then I do empathize. Conversely, if it's intended as a generalized social/political perspective, then I guess I can appreciate but it does seem to be a bit overwrought... altho , again, I'm sure that you and other folks might disagree with that characterization. Anyhow... believe it or not, some of we " left-coasters " do love you Texas folks and your principles.

Hi Dnfrm, na it's just a bit of frustration spilled out at once of groups who seem to catch the blame simply because their easy targets, like parents - they catch a lot of blame. No one can convince me that every person in prision had bad parents but that's an easy scapegoat commanly used. I'm not going to defend the lazy boomers, I know there are many but their not the ruling class, and no more responsable for the current events then Jews were responsable for hatred thrown their way during WW2... There is too much of this blame this group, or that segment. Truth is our leaders are to blame.
Take care.

Yikes! Is that what schools are like in Texas? Now I know why my family moved!

I went to school in California and my neighbor was a teacher. I don't remember anything about being taught communism or socialism other than what was taught in social studies. My neighbor told me there would always be prayer in school as long as there were chemistry exams.

I always thought the baby boomers would change the world. We had the numbers, but somewhere along the line you get a career, get married, have a family, buy a home, and the next thing you know you are your parents.

Good luck kids. Let's see if you make the big changes necessary. They tend to happen quicker when you are younger and have nothing to lose, but as you get older getting arrested for civil disobedience interferes with your boss's idea of work and you have to work to pay the rent.

I do agree with you and support the cause and I get out there and raise the average OWS protester age when I can. Dear old dad is 80 and he gets out there too. On those days the average is up over 33.

My wife works in a public school. Many parents blame the schools. Clearly they haven't looked around at their fellow "parents" and I use that word as loosely as possible....as if bearing a child makes one a parent.
Wolves have better parenting skills than many American parents.
The schools have to cope with idiots. Not the kids, their parents. The kids only know what they're taught or what behaviors are modeled for them. And I use the word idiot as generously as possible as it doesn't quite describe the stupidity that passes for 'parents' these days. Happily that isn't everyone, some parents are awesome. Some are less than pond scum. Some simply muddle through.

My wife teaches special ed kids. Children with autism spectrum disorders and things like that. What can you say about parents when their autistic kid comes to class and unknowingly repeats what he hears at home....."fuck, fuck, fuck, fuck, fuck" He has no idea what he is saying or what it means (he doesn't really communicate), he is simply repeating what he hears at home.
Last year some of the kids came from home with yesterdays clothes and crappy (yes, you know what I mean) underwear. Some are not fed or bathed.
Then there is the single mother just trying to make ends meet that does everything humanly possible to be a great parent to her child. God bless her, I wish they were all so caring.
But, the school cannot overcome idiot parents who have the child for 3/4 of their day and weekends and squander that on their own selfish desires, addictions and unfulfilled lives.

Yeah, it's the schools. Uh huh. Seriously, in some cases if the school or state wasn't the parent, there wouldn't be any parent. Do not blame the schools. They aren't perfect, but neither are any of us. For the most part they do a great job with what they are given.
For many they are a dumping ground for irresponsible people who had children because they put as much thought into birth control as they do now in parenting, which is to say, none.
The schools don't need our scorn, they need our help.

I won't condem all schools and for sure not all teachers, administration yes!. No reason for that. But their track record is not a good one. Where you have an opportunity to effect each and every generation I get the impression there is no less pond scum by and by.

Prisons have touched many generations of the convicted public, where they concentrate up supreme criminal knowledge to turn loose on the public at a specific rate, kind of like a pic line, feeding toxins... In this the prison system is superb. There are many more examples of 'state' successes...

MoKat,

"The right to have a country without federal military involvement in domestic activities, the right to a fair and speedy trial, the right to bail and deemed innocent until proven guilty, the right to privacy... all these rights will gone if one is declared a citizen terrorist. Note these actions are being driven by legislators.... not by the Pentagon. The Senate vote was 93-7. We shall see what ends up on Obama's desk."

I find this very disturbing and remarkably similar to the situation, pre-revolution, when British troops were a problem and actually being billeted in private homes. A primary reason for the Second Amendment was the right to have a militia (citizens able to defend against government suppression).

I haven't written to my representatives for over ten years now, but this must not be passed.

Grym

Craig,

"Do not blame the schools. They aren't perfect, but neither are any of us. For the most part they do a great job with what they are given. For many they are a dumping ground for irresponsible people who had children because they put as much thought into birth control as they do now in parenting, which is to say, none.
The schools don't need our scorn, they need our help."

Federal controls make it impossible to remove even the most extreme trouble makers. In the 1940s two kids up the street were trouble and expelled. They went to the Catholic school where non nonsense nuns turned them into honest business men at their father's construction company. Now we have armed cops patrolling the halls and all people, including parents, must be cleared through one entrance. Drug dealers, armed kids in the same schools I attended when smoking on school grounds got me a "Zero Hour" at 7AM the next day. No cops needed to enforce it either. Now they are bused and can't make kids come early or stay late. (What! No legs?)

Federal money sees all kids as a ticket for cash support and racial mandates stifle PTA fundraisers. We were under 12 years of federal oversight — one of the prejudicial charges because some schools bought video equipment ($ from spaghetti dinners and bake sales) and those in lower income areas did not have equal. My wife and I plead guilty to having help raise money for our neighborhood grade school.

Ron Paul wants to end the Secretary of Education. That would be a surefire way to help schools.

Grym

Grym,

Everyone has to feel good, a trophy for everyone (don't have to do much to get one), winning is not important and competition frowned upon (everyone plays); history books rewritten (important facts deleted)... makes us rather ill

MoKat,

Were you referring to the bill on terrorist detention? If so it looks like your question as to who/what is "a terrorist" is key here.

Unless defined, anyone could be in trouble and the Supreme Court may overturn it. On the other hand, as with those detained at Gitmo who were captured on a battle field, or anyone admitting to being a part of a fatwa and committing violent attacks here, should in my opinion be held and tried as a prisoner of war (by the military). Such a situation has been declared by them and is not simply a civil crime.

Historically, anyone not in uniform should/could have been summarily executed.

Grym

Investor's Market Pulse: S&P close 1244 ( + 7.39 % )
Did the action this week trace a perfect Elliott 2 wave with rejection Friday at the 200 day MA or is this bullish as the S&P 500 trades above the daily 50 day MA? First resistance is a confluence 1265 (200 day MA) and 1269 (weekly 50 MA), second resistance is 1293 (daily UBB). First support is 1226 (daily MBB); second support is 1210 (daily 50 day MA).

It took a while, but I found a simple answer to our "improvement" in the joblessness.

Charts of the Day: Labor Force and Unemployment Rate Adjusted for Population Growth Since 1948 Show Falling Unemployment Rate is "Statistical Mirage"
http://globaleconomicanalysis.blogspot.com

Actually an adjustment to the rise in population. Just the latest continuing spin in the web of lies being dumped on us.

Grym

I have searched for gains of +7% or more within 5 trading days in the S&P500 and compiled some charts: http://www.tradersquest.de/2011/12/03/barenmarkt-r...

ALOHA!!

Dave-It seems you are the only proper "gamer" on the blog. The rest of us must have quit after PacMan!!

"There are no moats. The industry is all about "what have you done for me lately." Advances in technology obsoletes engine cores built around taking advantage of specific hardware approaches that are best of breed one year, and hopelessly outdated four years later."

But isn't that the nature of many sectors, especially the tech sector? Heck in the junior exploration sector you are only as good as your last hole! Big Pharma is only as good as its last FDA approval ...

Some at Motley Fool say ...

Playing the Game
As the fantastically successful fantasy role-playing game World of Warcraft gets long in the tooth, can Activision Blizzard stop the hemorrhaging of its player counts? It says it lost 800,000 subscribers in the third quarter -- at the same time fending off pretenders to the throne, such as Electronic Arts (Nasdaq: ERTS ) and its soon-to-be-released Star Wars: The Old Republic, which one analyst says will drain as many as 1.6 million subscribers from the WoW franchise.

While the bears would say the bleeding will continue, bulls point to the success of Call of Duty to show why Activision remains at the top of its game, as it has become the top-selling title at retailers including GameStop, Best Buy, and Wal-Mart.

CAPS member jmbenning suggests that there's little to worry about.

With games Modern Warfare 3, Diablo 3, and Blizzard working on a new MMORPG, the company looks to prosper and remain prosperous. Not to mention a slated Warcraft movie in the works. If there are two franchises that have undying followers, it is Modern Warfare and Warcraft.

ATVI has over $2BIL in cash with $0 debt. Most large mining companies can't even say that in terms of $0 debt/$0 forward sales!

In the meantime I am also seeing how MSFT and Sony are losing box buyers due to consumers who are cutting back on spending due to unemployment, paying down debt or less cash flow. You do not need a box every year but you need games and they are cheaper than a box. Like I do not buy a DVD player every year but I buy DVD and BluRays every month. Back to Sumner Redstone's admonition, "Content is KING"!

Good find Luggie.
How about we just enforce the laws that have been on the books for decades.
It's not like RE law is some new frontier. Every state has a well described process. It's MERS that screwed up the process of title possession.

The banks have to weight their options. Live according to well established laws and pay the price to sort it out legally or take the write downs and pay the price. This is 100% their problem.

I see this as one more very good reason to move funds out of HB&B and into a local credit union. Besides, if "Ally" and their criminal cohorts take their 'business' elsewhere (Lord knows where that will be) then they will leave all those loans to CU's with proper risk models.
Hopefully all 50 states will pull their plug leaving them their GM book and it's defaults to deal with.
Does the government still own any GM? If so they might do well to sell that ASAP.

worthcap yours is the best post of the weekend. Thank you! Looking at your chart the SPX is neither over bought or over sold with with the 50 MA above and 200 MA below. Plenty of room for the SPX to drift around with out going anywhere.
Perhaps a false breakout above the 50 MA to trap Santa Claus rally believers.
Ho Ho Ho, Bear E

Hi Craig,
"Please, explain what you are doing to arm your schools to deal with this universal media onslaught?"

Since you ask no, I'm not kidding! I see the 'media' in general framing questions I and many other like myself will refuse to get involved with – I believe they should find their own answers to their own questions since they support a ‘way’ I find ignoble inside and out, through and through. My children went to both public and private school, public when we liked the school, private when we moved and didn’t care for the school – our church has a school we still support as best we can. Like you our children are long past public school but we have grandchildren that attend public school. I believe if we continue to keep a close family we can get through the social problems this interphase of our family with the public school dregs up. I firmly believe in teachers that believe ‘teaching is a calling’. One can’t fix the world’s problems but they can make local decisions for the best as you described for your daughter getting into AP classes. You describe how public schools have to deal with pond scum – I believe the public school system has had the guiding hand in creating generation after generation of such you describe. The following video explains my unwavering position. If you believe Columbine was a pure parental problem think again.
http://vimeo.com/13912103

Grym-

Your URL reference has changed. Try http://globaleconomicanalysis.blogspot.com/2011/12...

Hi Tradylady; Great blues, I know you’re very proud:-) I like Santa’s Wearing Blue This Year but I really like The Reign. I agree, great sounds and I'm bias anyway - I love the blues sound.
Earl

Earl, thank you and I'll pass it along. Do listen to his debut album... some great songs!

I ordered the CD. Santa's Wearin... is digital only so I'll need my computer for that. I was hoping it was on itunes since apple makes life difficult for windows users when trying to upload purchased music other then their site but no problem, I can work around that! thanks for the links. this is my granddaughter Collette with her guitar she got last Christmas. http://youtu.be/_zyxX3Z8nBA

Latest is "carrier iq" which logs (!) and transmits (?) EVERY keystroke after installation in 150M phones, per carrier request.

"The revelation that the locations and other sensitive data of millions of Americans are being secretly recorded and possibly transmitted is deeply troubling," Sen. Franken said in a statement. "Consumers need to know that their safety and privacy are being protected by the companies they trust with their sensitive information."

The company earlier sent a letter to one security researcher, Trevor Eckhart, demanding he remove any reference to Carrier IQ in his published research, or face court proceedings and fines.

Carrier IQ later withdrew its demand after the Electronic Frontier Foundation, a digital rights advocacy group, backed Mr. Eckhart's research."

-- from Murdoch's WSJ, which -despite Murdoch's UK phone hacking, has done the BEST US reporting on this issue.

Earl, You and I live on different planets. On my planet and in the country I envision, I don't infringe on your rights and you don't infringe on mine.

I watched the video and for the life of me I can't figure out how the people on the video hope to resolve their issue without infringing on the rights of everyone else attending schools. The only way for people that believe that video is to home school or send their kids to their own private school in the hope that everyone similarly indoctrinated agrees completely with them, which in my experience isn't possible. My family was the first Methodist preachers in East Texas which had a good deal of bearing on their fighting with Sam Houston to free Texas from Mexico and Spain. However, even people in the family disagree on the tenets of Methodism and then my Grandparents were Southern Baptists, which caused no shortage of teeth gnashing when my Dad married my mom, a Catholic. I don't want that in the schools. They have a lot to teach that can't be taught at home, that is their job. They're public schools, not seminaries or Sunday Schools.

Who's God are the schools supposed to teach? Is it the Christian God? Jewish God? Muslim God? Hindu God, Buddha, Sikh, Baha'i, Jain, Shinto, Cao Dai, Rastafari, Scientology?

If you say Christianity, which sect? Southern Baptist, Methodist, Catholic, Mormon, Protestant, Eastern Orthodox, Pentecostal, Anglican, Monophysite, Seventh Day Adventist, Jehovah's Witness, LDS, Quaker, Unitarian...?

I doubt anyone will agree out of these groups and all of them have constitutional rights to *their* religion. Then there is a nearly equal size group of citizens (to Christians) that are Agnostic or Atheist that would potentially disagree with all of the above. Let alone those within the same general sect that don't agree with all aspects of their own chosen faith.
There are similar divisions and sects within all the other religions of the world found in the United States.

Clearly the only way to protect the Constitutional rights of everyone is to refrain from infringing on anyone by leaving religious teaching where it can be done best. That would be at home and the family's chosen church or synagogue, Mosque, etc.

I do believe Columbine was precisely and solely a parental problem. If those kids had a close relationship with their parents then the environment with parents around would have initially prevented it, if not then they would have known what their kids were doing and stopped it before it happened. None of those things would happen with parents present. Those boys had no parents around. You can't draw any causation to any other factor other than absent parental supervision. Surely you aren't suggesting that you, as a parent, would condone Goth lifestyle, bullying, young boys playing around unsupervised with firearms, bomb making, violent video games (Geez Kaimu!)or your kids on anti-depressant medications, are you? I would guess you would look into it if your kids were arrested for felonies, drugs, theft, violent web sites naming possible victims, or were being bullied at school. Am I right?

Just FYI: In May 2002 the Secret Service published a report that examined 37 US school shootings. They had the following findings:
Incidents of targeted violence at school were rarely sudden, impulsive acts.
Prior to most incidents, other people knew about the attacker’s idea and/or plan to attack.
Most attackers did not threaten their targets directly prior to advancing the attack.
There is no accurate or useful profile of students who engaged in targeted school violence.
Most attackers engaged in some behavior prior to the incident that caused others concern or indicated a need for help.
Most attackers had difficulty coping with significant losses or personal failures. Moreover, many had considered or attempted suicide.
Many attackers felt bullied, persecuted, or injured by others prior to the attack.
Most attackers had access to and had used weapons prior to the attack.
In many cases, other students were involved in some capacity.
Despite prompt law enforcement responses, most shooting incidents were stopped by means other than law enforcement intervention.

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

Kaimu -

Its not the nature of everything in tech. Microsoft has a moat on PC Operating systems. So does Intel, on PC CPUs. Its based on software compatibility. Disk drives, on the other hand, are swapped out without anyone noticing. No moat there.

I'm a reformed gamer. I dare not play these days because I know what will happen. I'll emerge from the game a year later - 1000 hours gone, none the wiser for all my effort, but an expert at the game. It has happened many times. But I have to say they're really beautiful. So now I watch them from afar, as one might watch a beautiful yet lethal tiger in the jungle.

Consoles rev every 6 years or so. Supposedly we're due for a refresh in 2012.

The consoles usually have better graphics initially than the PC, but after the consoles have been around for a while, the technology ages and the PCs catch up. When the xbox first came out it was so fast people were hacking it to run linux and using it as a cheap but fast PC. MSFT was not pleased. A linux xbox isn't making any console game license revenue. These days the consoles are seriously aging - xbox was released in 2005.

To quote wiki: "The Xbox is essentially a PC with a custom 733MHz Intel Mobile Celeron processor, a 10 GB hard drive (8 GB of which is accessible to the user), 64MB of RAM (although on all earlier boxes this is upgradable to 128MB), and 4 USB ports." My android phone (!) is substantially beefier: it has a dual core 1GHz processor, 512 MB of RAM and 8 GB of flash.

While ATVI has die-hard followers of Warcraft, doom & quake players were also very enthusiastic back in their day. Staying on top with the next hit, the latest graphics, the newest innovation, is a tough market to be in. At some point even with the best games, the players know everything and get bored and want to try something new. And the risk is that some new developer comes from nowhere and develops an awesome new approach to game play and basically eats the leader's lunch.

I have seen so many awesome games come and go - never followed up by their designers. For some reason, creating a dynasty seems to be a difficult task. Once you get Quake 3, its likely getting close to the end of the run. Parallels in the movie biz abound: how many of you watched Rocky 6?

jock -

I saw this as well a few days back. I'm frankly appalled. I knew these smartphones were basically PCs and God only knows what the carriers had installed on them, but I didn't think they'd go this far.

I'm torn between loving having the power of a handheld computer and very irritated at being leashed and monitored by the carriers. I'm tech enough to go root my phone and poke around and see if I can disable it. There's a link I have saved that describes how to do this:

http://www.zdnet.com/blog/networking/finding-and-c...

ALOHA!!

"Its not the nature of everything in tech. Microsoft has a moat on PC Operating systems. So does Intel, on PC CPUs. Its based on software compatibility."

True enough to a degree but there have been lots of competitors biting off bits and pieces of those "empires"! Most of the QQQ is full of "non-moats"! Look at RIM now! So many past "darlings" that are now old hats or totally out of business.

It is definitely all about who is on top of innovation and trends. Just like in trading whether it is long term or short term the trends are there. Even the technology in mining and oil and gas has changed the landscape.

"Parallels in the movie biz abound: how many of you watched Rocky 6?"

You are right as I only saw Rocky 1 & 2, but I saw all of the Lord of the Rings and as I reported Harry Potter #9 is doing well at the box office, so there are some exceptions and then I just watched THE SOPRANOS season 5 and I have up to season 10 of the old HAWAII FIVE-O TV show. Great and timeless content always seems to have an audience, like songs from the 1970s and 1980s that even rappers and reggae cover today. Heck, then there is the old masters all the way back to Beethoven, etc.

Consumers are a fickled lot ... We what we want and we want it NOW!!

Bill - "There are so many cry-babies here"

Whoa. I haven't heard you talk like this before.

Dave, thank you for the link. I was able to follow the easy instructions and turn the tracking off my new IPhone.
Earl

Well stated Bill.

I think the central banks got what they expected out of the markers regarding their actions....

LOL, I could see that on one of those priceless commercials.

could be a consolidation "lets take a breather" day. but the weakness in the euro was cause of alarm for me on friday for the bull case.

technically a bull fart should have taken prices much higher.

For now i am going to trim number of contracts and the number of trades.

there is not much more room for a bounce rally. if prices can overcome 200 day then the bounce may begin a new direction.

Until we know what will happen to the euro, i am no touching gold/silver. as i think when masses flea euro if it fails, it will be to USD, for political reasons.

I am watching the Euro, Russell 2000, European banks, and that is about it.

As for what i have been reading here, i will be removing as much of my own bias/opinions from my comments as possible.

good luck everyone.

Bitching is a way of life. Every soldier, sailmaker, tinker and homemaker bitches when they perceive life as somehow unfair. These 'things' are only reflective of the natural cycles oftimes repeated over and over down through the generations. Rituals of nature seem to cause wars, revolutions and love-ins...I see OWS as an echo of the anti establishment protests of the 60's. Perhaps not but if we could get some music and drugs to those folks, then perhaps yes!

I had a somewhat good friend who was a Navy pilot who every time he went up assumed he was going to die. In his mind, he was going to get smoked, be the victuum of equipment failure or punch out only to be impailed by a tree limb and eaten by sloths. It was funny actually but he was the best pilot I ever knew. His mantra was 'there ain't no such thing as gravity. The earth just sucks...'

Today he is retired from a successful business career, has six grandkids and takes 4 fingers of Chevas before bed but still maintains his dour outlook on life and fully expects to be dead tomorrow. Someday he will be right! I also had a very dear friend and partner who was a dentist, a Mormon and family man who never drank a coke or smoked a Marlboro and died of stomach cancer at 57. Life is surely fickle.

"The optimist says that the glass is half full while the pessimist knows that it is half empty. The engineer rebukes them both by observing that the glass is too big by twice and all of them are correct from their own perspective.

This crybaby malcontent only needs/wants a return of 2% over the Real inflation rate. Therefore I am forced into the casino to trade prices.

I know of no-one who does not talk their own book. Think of them all as politicians and vote 'none of the above.'

Who decides? You decide if you are able.

I go back and forth on the whole moodiness thing. Its hard, when I read about yet another bit of fraud by the masters of the universe not to be negative. Some days I feel like NYU who asked the other day "why bother trading minis when the world is coming to an end." Other days I feel that I have a handle on what is going on and I can make some trades that seem to make sense. I go back and forth.

The thing that keeps me going in the face of all the crap that goes on and the certain end of the current world is that I have a vision of a new world I'd like to help create. And honestly, who really wants to keep the world we're in now? Besides the casino bankers at the top, I mean?

Fortunately I believe it will all blow up, simply because it has to. It was poorly designed, it was not built for a finite world, it has reached its predatory limit, and so it simply can't continue as-is. None of the current people in charge have any interest in any sort of reform and they currently have the power to enforce their will, so once confidence evaporates entirely we're going to slam right into the wall at 60 miles per hour. We might get hurt in the crash, but they will be gone. The world is not kind to former masters of the universe that have been stripped of power.

Once that happens we'll get the chance to create something new. And I try to focus on what I want to create going forward so I can remain more positive. Its my dreams that keep me sane.

However, if all you can imagine is the current crappy world, and you project it forward ad infinitum, I can understand why some find it hard to have any hope for the future. And they end up finding never-ending bits of bad news to confirm their viewpoint. Its not a healthy place to be.

normxyz,

Once again I see we are on the same page. What I am reading from Rosenberg, Williams, Fleckenstein, Mish, all have a ring of truth as measured by what I have witnessed and still am.

Our "official" government numbers, and I have no reason to believe other countries are more honest, are so far from reality that it is criminal. We were told housing would never fall nationwide, unemployment would not go above 8%, new tech jobs would be better than "old manufacturing" — the spin is pervasive and too many have fallen for it.

Employment is up, but only as a percentage of an increase in population — hardly good news when we already have far too many people on food stamps and food kitchens. How much is Christmas temp hiring even then?

Anyone who drives can feel the deterioration of our streets and highways. Drive to the heart of any average city and see empty buildings and even vacant lots. The shopping malls are pock marked with large, empty stores that are a decade or two old. Nearly every block in my city of 150,000 has for sale signs — many have been there for a year, two and more.

To ignore this and pretend all is well is folly and perpetuating a myth that we are in a recovery. Individuals may be prospering, but the body is eroding at an increasing rate.

It is what it is and to fix it we must first admit there is a problem — then go after those who caused it and still are benefitting from it.

All has changed in a generation or less.

Grym

"I have been getting mail from people here who are getting ticked off with all the moodiness being shown day after day from some of you."

Are they aware they can use the ignore feature?

Since much of what I post is what I see (Last week I added a 74th name to the list of people I know who've lost a job, home or business.) i assume I am one of those "messengers" they want killed.

Not telling what I see won't change what is happening and, I hope, telling may help someone make a better investment choice.

I understand those who are skilled traders can use times like these to great advantage, but people I see are not in that situation. They are busy just trying to keep a job or find full time work, make a payment on an underwater house, pay tuition, or put food on the table. I have never seen anything like this in my 73 years and never thought I ever would.

It isn't just here in the rust belt, the 74th name is a 46-year-old carpenter in CA and a good friend of my youngest son. Others on my list are in Connecticut, Florida and Michigan.

This situation does make one a bit moody.

Grym

Give them Wall Street crook's enough rope and eventually they will hang themselves!
Start with Paulson, he's the one that orchestrated the bailout for the to-big-to-fail brokers.
The 1% get richer, and the working people's savings get smaller and smaller by the year.

http://dealbook.nytimes.com/2011/11/30/on-wall-str...

There are two new funds to play Risk

THE "RISK ON/RISK OFF" DYNAMIC in markets has been predominant the past few years, with macro cues and policy whisperings dictating a herd-like rush either toward or away from riskier assets. Ned Davis Research this year devised an index to gauge this effect as a market-handicapping tool.

Yet there wasn't any easy way to play this concept until last week, with the advent of the ETRACS Fisher-Gartman Risk On (ONN) and ETRACS Fisher-Gartman Risk Off (OFF) exchange-traded notes. They aren't based on the Ned Davis index, but they address the same issue that it does.

Ken.

"Since much of what I post is what I see (Last week I added a 74th name to the list of people I know who've lost a job, home or business.)"
"Not telling what I see won't change what is happening and, I hope, telling may help someone make a better investment choice."
Grym,

So all you see is the unemployed? How many employed people do you know? One sided perception is always right.

When I was very young (about 9) I used to love to count; one rainy day I sat by my window and counted cars going by.. I don't remember right now the exact figure, but lets say it was 350 going north and 500 going south. I then went to my father and asked him: "I counted 350 cars going north and 500 going south? there are 150 cars missing, should I call the Police?..."

Bill,

"It's only a minor procedure."

Glad to hear that.

To me surgery is always a big deal. Being a type A and total control freak where my own life is concerned, I hate being so out of control and in the hands of others.

I hate to fly commercial for those same reasons, but being "knocked out" is the ultimate disagreeable trip. I was happy to be awake during my two cataract surgeries and talking with the Dr. to be sure he stayed alert ;-)

Grym

Bill-

So many good points- pro and con.

First, WRT "...but as I start the WIR this weekend with surgery coming up Monday morning, I have to say this bluntly: I don't know why I do this."

Good health is, of course, for ourself and our loved ones, number one... and I say that as a 79 year old who has survived a few close calls. I wish you only great good luck on that front.

But, second only to that is the knowledge that- in some small way or other- we are 'paying back' for this miracle that is this life we have been given. And, in that regard, I believe firmly- with many others on this site- that you have majorly contributed to the rest of us, and hope that you will be inspired to continue to do so for many long years.

While I agree with you that David seems to have slipped into something of a permabear role, nevertheless, I also believe that on the brief span of the next several years, things do look bad (though, of course, and thank God, they rarely match our worst fears). As you may have noted from some of my earlier posts, I am a cyclical theorist who believes that the current secular bear market we are in is likely to dominate for another 5 to 10 years (bad/tumultuous times for the next 5 - 10 years are also the gist of what the "The Fourth Turning" predicts. http://www.google.com/search?q=fourth+turning&rls=... And the world seems to be following that paradigm since the 1990s when that was published.) Fortunately, we can look forward to a new dawn in a few years and hopefully, as in the past (and as I noted in my reference to how far to the good we've progressed since the time of Chas. Dickens, despite all of the intervening bad times), we will come out much the better for it.

"But the final blow was his telling everybody this week that there was going to be a top-three French bank bankruptcy in 24 hours. Another fear mongerer I don't want in my life." Well, the best indication is that it was true and that it was the reason for the concerted action of the CBs- especially the Fed- since it was short term paper from the U.S. money market funds that the bank couldn't turn over. And, by their arcane rules, the ECB couldn't intervene alone, even though this was strictly a liquidity problem. (See "Did A Large European Bank Almost Fail Last Night?" http://www.zerohedge.com/news/did-large-european-b... )

"...but it's just not true that the data is a forgery and part of a conspiracy to suck us all into bad decisions." Of course not! There is simply too much of it nowadays to fake any important part of it- most attempts at fakery are in the purported 'unbiased' interpretation of that data- and, so far, you have been doing a yeoman's job of correctly interpreting the data for us!

Actually, the hardest part is separating the signal from the noise, and for your excellent ability in that regard, I thank you.

"I don't think some of you even read these WIR's, except of course to look for info you think matches up with your view of life." Too true, too true. But then, that's human nature!
Anyways, get well and keep a positive outlook. Remember, the optimists outlive the pessimists!

My view is, and will remain, an alternative one until government policies change to a realistic and constructive direction. The fact is that nothing substantive has changed since the export of middle class jobs (1980s), the tech bubble (1990s), or the housing scam (2000s) and I see no reason to change my view. I see this as relating to the markets as well as the economy, others may not.

As I have often stated, so as not to unduly influence those with a trading stance, my concerns are of a broader and longer type — both looking back and forward.

Obviously people will continue to have differing ideas of what is "truth" due to differing time horizons. It is not important to me whether we all agree or not.

I have been making an effort to limit my comments primarily to weekends or after markets close, but at times I have failed to do so. For that I apologize.

These are my views and according to my dictionary they are an alternative to others. The fact that I haven't seen any cause for changing them is not because of those expressed here, but due to conditions as I see them:

• The job situation is still mired by the same conditions which have been building for decades.

• The housing market is still carried "off balance sheet".

• Bankers are being allowed to plead "no contest" and pay penalties which a minute in regard to their ill-gotten gains. (

• The media is still largely parroting false data, IMO — Job increases as a percentage of increased population, car sales increased based on deliveries to dealers, and a whole list of misleading BS.

As long as this is so, why would anyone expect me to change my story?

It is probably best I take it elsewhere as Vad suggests.
Grym

My two top quotes for those who whine:

I have been through some terrible things in my life, some of which actually happened. - Mark Twain

As my best friend Wes often says, it's not the hashing that bothers me so much as the REHASHING.

May you emerge tomorrow without a perforated colon, Bill. Best of luck.

From Doug Short: Market Valuation Indicators: Overvaluation Remains High "Here is a summary of the four market valuation indicators I updated at the beginning of the month."

http://advisorperspectives.com/dshort/updates/Mark...

"..., these indicators aren't useful as short-term signals of market direction. Periods of over- and under-valuation can last for years. But they can play a role in framing longer-term expectations of investment returns. At present they continue to suggest a cautious long-term outlook and guarded expectations."

...

A more cheerful David Rosenberg?

2 December 2011: While Rosenberg notes that conditions remain perilous, he also notes “... we are blown away by the solid tone of the incoming U.S. data. If this persists into Q1, then the recession call is off the table and we will acknowledge that the U.S. economy has somehow become Teflon-like ... in managing to avoid any fallout from Europe’s slowdown."

"Peak (cheap) oil will ensure this outcome since it will act as a limit to growth."

You can forget about "peak oil!" Thanks to shale oil and gas, the world has just gotten another reprieve from technology. With any luck, the U.S. will once again be exporting oil within a few short years. Natural gas is already so plentiful, that they have run out of all storage capacity and have once again resorted to just burning off the excess!

Stripped to essentials, America is once again having to rescue Europe from itself.

http://www.telegraph.co.uk/finance/financialcrisis...

By Ambrose Evans-Pritchard, International business editor, Telegraph, UK

"The joint offer of currency swap lines by the central banks of the US, Britain, Japan, Canada, Switzerland and the ECB preserves the polite fiction that this was to "ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit". [In fact,] the US Federal Reserve has been forced to take emergency action, acting as global 'lender of last resort' to shore up Europe's banking system."

Not sure what happened with this iPhone but it post twice. Maybe it was fat fingers...

http://tradinglog.realitytrader.com/2011/12/nemos-...

Norm...

You are totally right on both oil and gas. I'm involved in two specific projects in the oil, not gas, arena.

One is taken a totally abandoned oil field that produced over 10 million barrels of oil in the late 1960's and early 70's. Our current output from that totally abandoned field is currently at 200 bbls per day and waiting on a compressor to take that up to something around 500 bbls per day. Drilling more wells there and we hope to be at 2500 bbls per day by this time next year. We project to get a total of another 8 million bbls from this project.

Now the shale play is expanding into oil and if it continues as it is going, it will be HUGE. Here is a recent article about the shale play in the Louisiana/Mississippi area...

http://www.businessreport.com/article/20111128/BUS...

The FSU seemed from my perspective to be a hermetically sealed world. When it expired, there was a big boom, but it was almost entirely contained within the iron curtain and mostly nothing was felt outside by the western powers. As a member of the west looking in, let me tell you, we didn't feel much. I remember what surprised me most was the insistence of the SU of leaving troops in Germany simply because they couldn't handle or support them back home. That brought the reality of the collapse home to me.

I agree that, for the people inside the FSU, the explosion was worse than anything that will happen in europe. But for the western powers, europe and the US are tightly interlocked, and the european economy is quite a bit larger than that of the FSU and as such it will make a massive boom here when europe goes up. Banking there will pretty much go under. And the boom won't be contained. And given the precarious state of the US economy (a debt-fueled recovery from a debt bubble explosion - sure to end well) and an astonishing number of credit default swaps written by clever US bankers the boom is sure to tip us right back into difficulty.

My concern is that banking everywhere (europe and the US, that is) will simply seize up and stop functioning due to loss or massive capital flight. This nearly happened in 2008, and one can argue the losses from real estate were not as significant or sure as the potential from sovereign debt failure in europe. What's more, the wholesale money market system guarantees the Treasury provided are now supposedly illegal due to Dodd-Frank. Although if a swing trader makes the right move, I suppose it will result in possibly a good result, assuming the exchange doesn't invalidate the trades on a whim to support the insiders.

I can definitely agree we won't be back in the caves burning furniture. And given your definition, I can certainly be constructive, so thanks for the explanation. :)

So moving from the meta discussion down to the "constructive" particulars - how does one trade a bank holiday? Or a financial system failure where your trading sweep account breaks the buck? Any thoughts?

We can leave the peak oil discussion for another time. That's bound to be interesting, but one thing at a time.

Bill wants to see a weakening dollar, and Yen weakening relative to the dollar if I understood correctly, in order to see a commodity bull market.

I notice USD/JPY weekly developing a base. If that holds and trend reverses, you've got one of two currency requirements. See attached.

In wondering if the $ has topped out here, I pulled out to the monthly chart. One can see the loss for those holding dollars from 2002 until now. Kaimu said it - what was once major support is now resistance. When you look at the rallies in the dollar since 2008 one can get a sense of how weak this currency is.

Now we can see from Jesse's how the Fed is flooding the global market with dollars in order to keep the world on the greenback standard and keep this fiat game of musical chairs playing. This brings some perspective to the monthly dollar chart attached.

No doubt Uncle Sugar flooded non-US markets with more last week as the so-called currency swap deal was announced. One just needs to find out how much money was dropped from the helicopter. How long before gold priced in dollars catches up to the new level of Eurodollars? See attached chart from Jesse's.

The banks - "which bank?", to quote an old Australian bank ad. Euro banks and the NY gang. Europe is about to open and I see S&P futures are up 1%. Looks like a green opening for Euro banks again. Look at the attached JPM weekly chart. It is a copy of C, GS, BAC & XLF. It is a double bounce with a bullish divergence in stochastics and MACD. Someone decided that the banks stop bleeding here. This in conjunction with a flooding of dollars to ease liquidity and credit seizure in the Euro zone.

At a guess I'd say we're good for a christmas rally. And after that? This view can of course change at any time while the markets remain news driven. But $silver:$gold in the weekly time frame remains a db with bullish divergence. Can those currency trends line up like Bill is looking for in order to give us the bullish impetus for a "risk on" precious metals trade? We know that fiat money is likely flooding the market once again. How long before hard assets play catch up? Something to watch.

agreed, there are so many if, buts etc that one must watch daily for further indications. However, note the various momentum indicators in Twiggs latest. They're all at decisive inflection points:

http://www.incrediblecharts.com/tradingdiary/2011-...

Reminds me of Jennifer Connerly in Labyrinth and those helping hands. "which way? Up or Down?"

http://www.youtube.com/watch?v=AQUeK7nYxBQ

I wonder if those talking doors got their script from a Fed FOMC meeting?