Bill Cara's Blog for Dec 3, 2010 [See post-close report]

"However, putting aside the strength of equity prices for the past couple days, my sense is that prices are going higher, not just because money managers are chasing prices that add to year-end performance results, but simply because the US economy and, for that matter the global economy, is strengthening."

Bill,

I have to ask, "What evidence do you see which makes you feel the US and global economies are strengthening?" (Other than China.)

Grym

Funny, I remember last January at Davos when Papandreou was making the same vehement protestations as the Spanish Finance Minister is making now. It seems to me that the more vocal these folks are in declaring that they do not and will not need a Euro bailout, the more likely it is they are scared witless.

Spain is tethered to Portugal. If Portugal is in trouble, than Spain is in trouble as their banks have far too much exposure there.

As was predicted years (yes, its been YEARS already) in this blog by Bill...sovereign defaults will make Lehmann pale in comparison. It started on Wall Street, but its going to end on Main Street (somewhere in California). Spain is going to break the EU's back. American and German taxpayers aren't going to pony up to support welfare states too much longer.

Just like Bernanke, Trichet and friends have not been out in front of one trend yet. They are just reacting and have no real plan. This is going to run them over. The Hanseatic league nations (to use the NY Times clever historical reference from yesterday's blog) smell this coming and are posturing accordingly. These people know about endurance.

ALOHA!!

Grym-I cannot speak for Bill, but if you read the WTN article I posted metallurgical steel production is on the rise and Walter Energy who just bought WTN mentions the steel and coal forecast for 2011. I figure any "recovery" being lopsided at best ... It still depends on what governments will do and how much misallocated debt-capital is thrown in the monetary black hole this time. How big is a toss of the dice!

The headwinds I see for America is not so much the people of America and their desire to work or the entrepreneurs that reside here. The real barrier to America's chance for success is our own government, which most assuredly can be calculated and is reflected by the US Treasury's Statements. Right now those Statements tell me there will be no slow down in US government and by default, US Fed, intervention and that does not bode well. How can "value" or "wealth" ever be created when a BRK.B or an AAPL is printed every other day? Those political promises that were so welcomed by the "voting" masses in the 1940s and 1960s are the fiscal boat anchor of today ... The New Deal(FDR) and the Great Society(LBJ) are the same dominoes in the new "theory" ...

The way things are going at the US Treasury this week should be a doozy of VALUE DESTRUCTION ... I will report on that soon. The US Congress is now burning through our monetary future at unprecedented speed ...

The only protection for hapless US citizens, and global ones as well, will be to own "real assets" and "real money" and no debt. Yet the governments of the World will attack these moves by the masses as "unpatriotic" or "speculation" or "hoarding"! Somehow when government does the "speculating"(GM) or the "hoarding"(FDR gold) its brilliant and noble yet "free markets" are evil ... It's a one way street with these guys in power and it never benefits the masses. Why should a monopoly operate in any other manner? It's too bad we cannot bring "anti-trust" lawsuits against the US Congress and the US Fed like what happened to Standard Oil. You could say the days of the oil industry anti-trust was the pinnacle of America's oil independence so it has been a downhill road ever since. The free market works and it has been proven time after time in history. What does not work is government intervention and that has been proven all throughout human history as well. We must get back to US Constitutional values before "value" will be another "v" word ... vaporized ... Money needs to be a long term "store of value" again. There just is no other way. Then of course "long term value" is exactly what bankers and politicians despise, because there is no easy leverage ... "clickity-click"!!!

Professor Pettis gives great insight into what's going on in Europe. I've posted an excerpt, but Pettis is always worth reading for his clarity of thought and communication.

http://ronsen.blogspot.com/2010/12/we-hold-these-t...

CNQ - PT Lifted from $47 to $50 @ RBC. Outperform

NE - Noble Corporation initiated with a Buy at Duncan-Williams. Target $45

SLB - PT Lifted from $95 to $119 @ Dahlman Rose. Buy

Been there, done that. Next.

Thanks Kaimu,

I guess my problem with seeing an improving economy stems from:

• Living in Illinois (second only to CA for a depressed economy.

• Remembering we used to have a far better economy here when we made things.

• Letting my complete distrust of the "official" data (which is in direct conflict with what I see and experience daily) block out the possibilities of the continuing charade. Unemployment is an admitted 14+%, but I know the job quality is low and many have given up looking.

Locally we have short term, make-work projects taking priority, taxes rising and services being cut. Now laying off police and firemen while crime rate is going up.

The best news here recently is that our mayor is pushing to revise state law regarding existing, unfunded and unfundable government pensions.

Grym

CCL - Target upped at Goldman to $55, according to Goldman Sachs. Company should benefit from improving consumer demand. Buy rating.

DOW - Target raised at Goldman to $36, according to Goldman Sachs. Change is feedstock will likely cut costs. Neutral rating.

KSS - estimates, target boosted at Piper. Shares of KSS now seen reaching $62, according to Piper Jaffray. Estimates also upped, as the company is seeing higher sales. Overweight rating.

POT - estimates upped at UBS through 2011. Company should benefit from higher selling prices. Buy rating and $165 price target.

ea32da32,
I sympathize with your experience with HOG. I remember the early-mid 80's when Harley was on the ropes and Malcolm Forbes and his banker buds got congress to impose a really punitive tarrif on big CC foreign bikes. Somehow Harley has become an icon that cannot be allowed to die.

Ross

ea32... here is the real question: Does one want to

a)learn the underlying mechanics of the market workings and be able to utilize them

or

b)stay in the zone of psychological comfort by ranting about how manipulated everything is, thus justifying one's losses and rationalizing doing nothing?

It's a very practical question because what you call a manipulation is simply an element of the market - one of the moving forces that manifest and reveal their presence in a certain way. Understanding these ways, being able to read the footprints and exploit them while remaining emotionally detached is what makes a trader.

Hint: most people elect option b. For those who elect option a, I wrote A Taoist Trader course

GRYM,

Hussman's weekly pointed out some new economic strength as bill did but Hussman went into more detail and is questioning the strenght

The headline numbers aren't that bad (or that great) But shouldn't they be a whole lot better given that fact the gov't has printed Trillions and given it away for free(ZIRP)?

http://www.hussmanfunds.com/wmc/wmc101129.htm

"On the surface, the U.S. economy is gradually recovering. Based on mean reversion to potential GDP (which generally occurs over a 4-year horizon absent an intervening recession), we would expect GDP growth over the coming 4-year period to average 3.8%, with average monthly employment growth of 200,000 jobs. This would be my "benchmark" expectation if the U.S. and international banking systems were "clean." However, my concern is that the surface U.S. recovery is built over a foundation that is vulnerable to further strains. If our policy makers had made proper decisions over the past two years to clean up banks, restructure debt, and allow irresponsible lenders to take losses on bad loans, there is no doubt in my mind that we would be quickly on the course to a sustained recovery, regardless of the extent of the downturn we have experienced. Unfortunately, we have built our house on a ledge of ice.

Debt burdens have not been meaningfully reduced in the mortgage sector - they have only been extended. Home values are still well above their historical norm relative to incomes. Yet more than 20% of homeowners already have "negative equity" - mortgages that exceed the current prices of their homes. A few months ago, Deutsche Bank projected that the negative equity rate may rise to 48% in 2011. Yet even if we ignore the mortgages that have been "modified" by slapping delinquent payments onto the back of the obligation, one in seven U.S. homes is presently delinquent or in foreclosure. As much as we have done to make lenders whole, nothing apart from a major restructuring of mortgage obligations will ease the continuing vulnerability on the debtor side."

http://www.hussmanfunds.com/wmc/wmc101129.htm

Hard Money and Clean Banks

In 1998, MIT economist Rudi Dornbusch gave a set of lectures in Munich on "International Financial Crises." I've excerpted some of his remarks below. Much of what Dornbusch discussed is particularly relevant to the present credit strains in Europe and various small countries across the globe, but is also important with respect to how we continue to approach difficulties in the United States. Dornbusch highlighted three essential concerns: 1) the vulnerability of banking systems that are dependent primarily on short-term deposits and funding that can be withdrawn on demand, 2) the risk of having national liabilities denominated in a foreign currency (which is essentially the case with Ireland, Portugal, Greece and Spain, all of which are constrained by the European Monetary Union and cannot simply print their own money), and 3) the importance of restructuring bad debt and avoiding bank bailouts.

"So let me focus on these new financial crises and ask where do they come from? It's very easy to predict a crisis, but then you have to wait for two years until it happens. There is the issue of contamination. Why innocent bystanders get hit. And there is the last issue of the depth of crisis. Why are they so traumatic, leaving a crater that is unbelievably deep?

"The argument is that the national balance sheet is extremely vulnerable. You could live for years and years and years with a balance sheet like that, and nothing ever happens, and nobody ever talks about you, and you are a great story of success, with high growth and a miracle. In a very rich country you can afford to do bad things very, very long.

"And then something happens and then it turns out that that very vulnerability is such that it's a dramatic end of all success. Suddenly in the afternoon of an otherwise sunny day, the world financial system wants 50 billion dollars from a country, and the country doesn't have the 50 billion dollars, and the IMF cannot get there fast enough, and the next thing, the place blows up, and there is a massive depreciation of the currency, pervasive bankruptcy, and the fire spreads to the next country.

"A banking system is a very important part of how a country hangs together... Very, very large, very, very short term liabilities can in no time become a bankruptcy issue for an entire banking system, more so if it's unregulated. And that means people can want to get their money back tomorrow afternoon, and when someone wants their money back, they all want their money back. And if they all want their money back, there is no way for an economy to pay at short notice. And if I can't repay, then they'll be much more eager to get their money, and as the bank run occurs, of course the rest of the economy will collapse with it. Maturity is the first issue.

"The second issue is denomination. There is a very big risk for a country to denominate its liabilities in foreign exchange. Something that they cannot print, something that they cannot get their hands on, and therefore something that is very vulnerable if in fact the exchange moves, the burden of those liabilities increases and bankruptcy of the country and the underlying companies becomes a big issue. Because if that is seen to be happening, then of course, everybody wants their money before it happens, and as they try to get it, they provoke the very collapse that I'm describing.

"If a country has an extraordinary withdrawal of short-term credit and they made the mistake of having short-term credit positions, then they should have a debt restructuring. Then they should say, 'We are now going to default on our debt and we are very, very sorry and what you thought was an overnight loan actually isn't an overnight loan - it is a long-term stabilisation loan.' That makes an extraordinary important distinction between direct investment, which should be favoured at all times, and you should create a history of always treating direct investment extremely well, and short-term debt, which if things go bad may turn out to be long-term debt.

"If you have bad banks then you very urgently want to clean up your banks because bad banks go only one way: they get worse. In the end every bank is a fiscal problem. When you have bad banks, it is in a political environment where it is totally understood that the government is going to bail them out in the end. And that's why they are so bad, and that's why they get worse. So cleaning up the banks is an essential counterpart of any attempt to have a well functioning economy. It is a counterpart of any attempt to have a dull, uninteresting macroeconomy. And there is no excuse to do it slowly because it is very expensive to postpone the cleanup. There is no technical issue in doing the cleanup. It's mostly to decide to start to grow up and stop the mess.

"If you have a hard money and if you have clean banks then you don't have macroeconomics as a problem anymore. Yes, you have slowdowns in the economy and yes you have booms and the key macro problem, the government, has been taken out of it. That's very important to understand that in the economies we are talking about, the problem is the government. The government is not the solution. Hyperinflations are made by governments, debt defaults are made by governments, exchange rates crises are made by governments. And if they don't know how to do it well, and the assumption is: no they do not know how to do it well, then take them out of the business."

thanks Ilya,
Ron Paul forced the FED to release this information and I was shocked to find out what happened. I admit - I'm a bit new to this, only been trading my own account for a couple years, I can read a balance sheet, income statement - my wife is a small business owner... I can read T/A pretty well, can see where pressure both selling and buying is... (headed to starbucks LOL). How can you even 'invest' in this kind of climate - forces you to day trade and at the same time you're set up. this is only a comment of the ignoble system.
regards
Earl

I lived many years in Spain under Franco and lived through the transition to democracy. I still go back frequently. No matter how bad things there will not be another civil war. Things are not good now but, there is a very large underground "black" economy which no one talks about. As in any country going through hard times there will be outbursts of xenophobia. I don't think there is a country on earth where racism doesn't exist.

Bill's observation this morning got me thinking: back in the day (perhaps 1985) Japan, Inc was seen as the new paradigm, the nation that was going to own the world in short order. They were buying everything, their market was going up and up, they could do no wrong. Magazines printed articles evoking equal parts of fear and envy. They had a similar sort of command economy - government directed capitalism (whatever that means).

It ended badly. China is trying something similar, or so it seems to me. Will it end differently? I believe we will only know conclusively when one of their bubbles blows sky high and we can see how their system reacts to difficulty.

You only really know how well your roof works when you get a big rainstorm.

Duncan-Williams - I could call them liers but not sure of their time line - maybe 10 years. I'm looking at the P&F charts - most indicate 32 to 28 USD, continious selling, very little support. I don't know what their smoking...

"...last week a group of high school students in the Guizhou province started a riot in the school cafeteria over a $0.07 increase in the cost of a school meal; they shattered windows and destroyed tables, countertops, and chairs.

Chinese children don't receive any free lunches and most poor families in China spend approximately 50% of their income on food."

A disturbing report from the NIA:

http://tinyurl.com/39o9ybq

Kiyosaki appears to be adding new groupies every week in the Bay Area. Judging from the number of ads I see for his seminars. 'The Silver Prophet.'

17%
The Nov. 2010 seasonally adjusted U-6 number.
http://www.bls.gov/news.release/empsit.t15.htm

baz....thanks, will keep an eye on those ones. Still waiting it out in some SVNT and made a couple bucks bottom-fishing on ASTM earlier in the week. Watching SOMX which has been weak following a share offering and BDSI and MELA which are both getting dropkicked again. Taking a stepback as the small caps in general have been on a huge run relative to larger value stocks....been paring some positions and taking volatility out of the port. Not getting bearish, just cautious to protect some gains here goin into the weekend.

If you don't feel like holding all the way to mania, you can always sell out when you get itchy and re-buy on the 50 dma. That's been working (more or less) for me for the gold miners. Since silver's trendline slope is higher, you might need to use the 20 dma.

Milesquare, Bull Hunter, Davefairtex,

I'm a regular reader of Hussman and am probably even more cautious than he is. My biggest doubt is I see all those ratings, measurements and especially government data as at best unreliable and at worst outright lies.

What I am inclined to believe is what I know from friends and relatives. My son had his hours cut by 20% back in April. Since then the company has cut the work force by attrition and direct layoffs. He was already earning less than half of what his job paid in 1993.

My neighbor's daughter lost her job of 19 years, worked two years at a temp job and has had nothing for four years. We are cutting city workers. The push is to draw tourists! "We need to make it attractive to draw new businesses and new people."

Next big project — a river walk beautification project to take advantage of the geographical feature which established the city in 1852. Hey, wake up folks — the river was a power source for manufacturing back then. New people came because we had jobs here for them.

We are also trying to bribe (my word — theirs is incentivize) a company to come by offering to build them a facility which they can lease. (Leaving them with no real dog in the fight.)

While MCD and 29 others got waivers on the Health Care Monster, small and medium sized business are gong to need to lay off workers to avoid the added expense.

While politicians talk of tax cuts to create jobs (no profit = no tax is beyond their pay grade) our homes with declining value are facing higher real estate taxes.

There can be no real recovery without real jobs. Temp or seasonal stuff is no answer. China is a problem of our own creation. We auctioned off our manufacturing and after Taiwan and India they gave the best quality for the lowest price — like being the smartest kid in the dumbest class.

My biggest fear is that those in power nationally will come to their senses until our debt and their "solutions" strangle the entire country.

ALOHA!!

"And if they don't know how to do it well, and the assumption is: no they do not know how to do it well, then take them out of the business."

This is what Hussman and all others fail to understand, which I believe that the Founding Fathers did understand. It matters not one bit whether politicians know how to do "macroeconomics" well at all. As I have stated many times before we have a monetary system based on the "human condition". Like Vad talks about "emotions" in relation to traders and their trade executions I must say the same about "money". We need to take the "human condition" out of our monetary system, because right now our money is made up of all the greed and fear that drives corruption. Hand anyone a blank check and they will put as many nines on the $$amount space as possible, especially a politician who wants to stay in Congress for over fifty years! Hello, Inouye!!!!!

The entire posted section from the Hussman article wreaks of the LIABILITY BUBBLE, because I see no "assets" mentioned, only debts and debt derivatives, then again that is all a USD is ...

I know it's Friday, but even so, the VIX collapsed and hasn't been able to take out the reflex bounce. Hard to make money being bearish on that...

Dr. S -

I agree, if you are going for the home run, you may miss it if you're trading in and out. Vad called that Scalper's Regret. In exchange for a lower risk profile, you also give up the crazy manic upside moves. It all boils down to what sort of trader you want to be.

I might suggest, however, that upcoming events (such as the CFTC's decision) are most likely priced into the market, and we may well have a sell-the-news event. I'll go out on a limb and claim the traders at the bullion banks are not unaware of what may happen there.

My personal strategy is, I trade in and out of the miners but hold a core position in PM, which I buy puts for whenever things look particularly toppy. That has worked out relatively well so far. I did sell off some of my PM once and re-bought on a bounce. That worked out pretty well too.

Hi Vadym,

I stopped day-trading after heavy losses more than a year ago. I still follow the markets but I do not trade, although I still find trading the most fascinating thing. Nothing I did in my life taught me more about myself.

The reason I stopped trading is because I realized that I do not know mentally how to handle a loss or a gain. To give you an idea, I always used stops while trading, but when I did get stopped out of a trade at a loss, I used to force another trade to recover the loss, which almost 80% of the time resulted in much bigger losses. I realized that what I was doing while trading was almost always related to responding to my loss or gain, not responding to the tape.

I focused on trying to overcome this mental weakness, restudied my mistakes religiously and for almost three months, I traded quite successfully, always waiting for the right set-up, not forcing any trades just because I took a loss or because I made some money.

But the correct mental state is also a very difficult thing to maintain while you are winning. As I made some money, I again started taking undue risks and old problems re-emerged. I lost all the money I made in those 3 months in less than 2 weeks and more. Discouraged and disgusted with myself, I stopped trading all together.

What fascinates me about trading is that you know what you need to do, but it is so difficult to make yourself do it, and one small mistake can become a very big mistake if you are not in the right mental state.

dble entry

Amazing, isn't it Jock?

What it really illustrates is what lengths the powers that be will go to to control the populace and flaunt free speech and the constitution.

People that 'claim' to be leaders of "The Tea Party" that miss the whole point of a Tea Party and what it really stands for. They are more than willing to destroy the Constitution in their short sightedness.

IMO, it simply proves who they REALLY work for. Hint: It isn't "the people".

These folks, the top few percent running the world, HATE to be embarrassed.
Just imagine what they will do when the REAL people have had enough and take to the streets. What will Little Napoleon Sarkozy and Tricky Barack Onixon do then? I suspect it will make Kent State look like a picnic.

So far the only intelligent response I've seen from a U.S. Government official, who should know better than anyone, is from Secretary of Defense Gates. Maybe everyone else should have him send them a clue?

Is there any wonder some of these governments and individuals (Lil Kim and Ahmadinijihad) are trying to get their hands on equal (nuclear) weapons? And WE wonder why?
When you are in a gun fight with ruthless thugs, it helps to have the same weapons. As I see my rights flushed down Sarah Palin's toilet, I am acquiring a new understanding of the entire picture.
These people make the Mob look like pre-school children. God help us if she ever gets close to the Whitehouse. I mean, we have an idiot savant that claimed to represent change there now, and he's as bad as I've ever seen.
Maybe the posters were mis-spelled and he meant "Chains"?

Those that often present theories of manipulation and corruption on this site?
Maybe tin foil hats are in vogue, maybe they are really necessary. As someone said, "just because you are paranoid doesn't mean they aren't out to get you".

I wonder how unsettled the Guardian and the NY Times are right now?

Now, Vad is likely to say that regardless of whether it is suppressed or not it is accurate as the external forces influencing it are market forces,

Correct, or as we say in trading room famous for butchering English is the most unimaginable ways, korreqt

but the simple point is: did the VIX really warn anyone ahead of the October 1987 crash....or even the recent flash crash?

Not sure I understand why it would - VIX is not designed to be a forewarning (leading)indicator. It's a lagging indicator by its nature.

"dble entry"
Are you referencing to Double Eagle Petroleum Company (DBLE) If so is the average volume actually around 3000 shares! Could be a problem with stop orders.

Jennings Capital has raise the target on NGD to $14.00/share

Vadym, yes they they sound way too familiar. Thanks for your reply and the links.

Thank you Vad,
I can tell you the truth that 'noise' (talking heads) and my belief that the FED printing money to 'use against me personally, at the very least by devaluing what I have left and own' has me pretty darn angry. And you're right, I'm letting my emotions get in the way of my trading, not so much with my investing. Example of gov. garbage is the pushing of wind turbines, high maintenance waste of time that will go forward regardless what I or anyone else that disagree with this garbage believes. So I have a personal bias against GE, or that communistic union owned GM. I know I need to dump this passion before making another trade. I've read your links and yep, I'm going to take a step back and chill for a few weeks, do some reading, enjoy the holidays coming up with my family. I've gotten out of anything that can do my account any harm for the time being.
regards

sounds like a plan davef thanks.

Yeh Doc the palms get a bit sweaty and the handcuffs slip off.

Not sure how to handle GIX.TO. Now +30%. Would like to bank it too but at what point does a small explorer like that pass from accumulation stage to a point where we trade it more actively?

Bill, may I ask you how do you handle such a rapid rise in such a small stock? Is it something still too small to be thinking of profit taking?

I guess that's a question I can answer myself. Such strong price/vol. actions suggests hold.

GRR.V the only laggard in this crowd. Even Ukrainian coal interests catching a bid. LYM consolidating for maybe another break. Any chartists here can tell me if that's a flag and pennant or whatever that LYM has formed? thanks. Starting to learn a bit of swing and trend trading.

Glad to hear you liked that paragraph... funny to think back now and see how naive I was, but then again, it's fairly typical for many beginners.

Actually, not much of my work is devoted to day trading. Video course is certainly not for you, that one is fully day trading... the rest though is not - even if examples and illustrations are taken from intraday charts. Those same Catch of the Day samples for instance - these chart reading principles and setups will be absolutely the same for any time frame. It's only method of risk control that differs, since holding overnight is involved, thus straightforward stop loss can be of no use in case of adverse gap. A Taoist Trader is not intended for any particular time frame at all, and in part directed at those who make transition from old-styled "investor" type of thinking to trader's world view. Finally, online course helping put together one's trading plan, whatever time frame and trading vehicle is, should go online before Christmas as a part of Cara Community - it will be the first of our courses offered by the educational wing of CTA.

long MELA at $3.20

sold out 80% of the position at $3.47, letting the rest ride into next week. Woohoo!

Its finally time for Men with Spine to Unite to Defend what is Right and Truth.
http://read.bi/i2XLL3

Media always makes an issue about freedom of speech in China, Russia, and Human Rights everywhere else, but what the always Gospel preaching blind-pigs of Big Media and Washington lack is A SOUL.

Fallout from stupid remarks!

http://tiny.cc/dnfni

Kaimu,

As I sit watching my rates zoom back off the chart and book my place in the foodbank line as my clients pull back, I wonder aloud:

Why can't we lodge ""anti-trust" lawsuits against the US Congress and the US Fed"? They have clearly failed, lied, and cheated their way into our pockets.

I was asked today how I can fund loans with the likes of BOA when I also know they are one of the biggest criminals in this scenario, illegally foreclosing while using our zero interest tax money to pay themselves huge bonuses and hire illegal legals to put people out of their homes. My answer: "When you borrow money you are dancing with the devil and my job is to get you on and off that dance floor safely". End quote.

http://www.rawstory.com/rs/2010/12/ron-paul-what-w...

That is why I have been building in MY ... their technology is tops, and as a pure play ( along with offshore wind $$ being rounded up in the US Congress ) company bidding all over the globe ( and winning recent bids in the homeland ), I like the odds. Plus, their revenue growth has been strong and is growing.

http://market-ticker.org/akcs-www?post=173938

"The prospect has Wall Street, Fed officials, and even Republican House leaders worried that Paul's agenda could roil the markets and make a mockery of the U.S. financial system."

who else knew the problem in 2007

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

"The whole system is subprime"

No matter waht the remaining month brings, this has been, to me, one of the wildest trading years in a long time. I don't know if 2009 can be classified as the same, when one pretty much just bought and watched it go up. Either way, its been a blast. Got to know several people here ( Thanks for all, Toby ), and that in itself is a blessing. Thanks to everyone for the input, the ideas, and the fellowship.

Never heard his name or knew about The Pentagon Papers till Ron Paul mentioned it when talking about the wiki leaks recently.

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

Ellsberg served in the Pentagon from August 1964[3] under Secretary of Defense Robert McNamara (and, in fact, was on duty on the evening of the Gulf of Tonkin incident, reporting the incident to McNamara). He then served for two years in Vietnam working for General Edward Lansdale as a civilian in the State Department.

After serving in Vietnam, Ellsberg resumed working at RAND. In 1967, he contributed to a top-secret study of classified documents regarding the conduct of the Vietnam War that had been commissioned by Defense Secretary McNamara.[4] These documents, completed in 1968, later became known collectively as the Pentagon Papers. It was because Ellsberg held an extremely high-level security clearance and desired to create a further synthesis from this research effort that he was one of very few individuals who had access to the complete set of documents.[5]

http://www.youtube.com/watch?v=G8K5B7jDHas

Ah, mentioned it a few days ago here: Note the link. Some of us geezers lived it, so Wikileaks isn't entirely new. People had the same silly reactions to Daniel Ellsberg. Interesting how quickly we slip into fascism and forget the Constitution.

A little history
Submitted by Craig (1473 comments) on Tue, 11/30/2010 - 17:40 #75126

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

A 1996 article in the New York Times said that the Pentagon Papers "demonstrated, among other things, that the Johnson Administration had systematically lied, not only to the public but also to Congress, about a subject of transcendent national interest and significance".

Who is it that said history doesn't necessarily repeat, but it rhymes?

The Obama administration is looking, unfortunately and foolishly, like the Nixon administration. When are we going to learn?

My even money bet is that Ron Paul will be marginalized. Anyone who is a sycophant of Ayn Rand to the point that he names his son RAND Paul suffers from a somewhat severe case of myopia however laudable his single minded cause celebre may be.

Of course we should have a FED audit. My great aunt Wilma was once audited by the IRS when she feeble mindedly claimed her calico cat 'Toots' as a family dependent. She lost.. Why should the FED be exempt from marking to market all those 'assets' that they took in kind in exchange for good Yankee Dollar credits that allowed the scum banksters to pretend and extend and kick the can down the road to perdition! Or worse, destruction...

Make no mistake my friends. The liquidity crisis of 08-09 will be seen historically as child's play. Sovereign debt defaults will be the big Kahuna of the next five years. Fortunes will be made and pensions destroyed as the pond scum is wafted away and we see a true reflection of ourselves, as debt. The Ponzi scheme of debt requires that ever more debt be created, now at 10 times one to get a modest 1 percent of growth in an activity based measure of GDP. And GDP is WHAT? Today it is carrions devoured by hawks.

Our masters are good at convincing you that your watered porridge is the same as a thick beef stew with carrots and onions. It is simply a lie or rather a half lie that is worse than a blatant one. According to the BLS, a new Chevy or Ford costs you only around $13,000 because they have hedonically adjusted down the price of all the gee gaws that you are by law forced to purchase and of course they are cheaper this year than prior. Hubris loves productivity and the Boskin commission..........COLAS are deminished and my 89 year old Dad benefits?? from the increase in computer power even though he has never owned one??

Numbers from your oppressors ( Clowns in suits )cannot be believed by anyone with more than a 9th grade education. Or maybe they can if you are needy and vote!

Ron Paul is a refreshing scented candle who will burn out in the course of time. More's the pity...

Westcoaster,

Could it be that the lack of apparent innovation in China is due to the lack of intellectual property law and the general lack of and enforcement of rights and freedoms of the individual? There is widespread corruption compared to other industrializes economies where the rule of law has a hand over business. Why innovate when you can steal and counterfeit the innovations of others?

There are some niches where business is being done without the forementioned occuring, but it is only a matter of time before they figure out how to replicate these technologies and processes that are leading edge. Not an environment for long-term investing, IMO, but certainly a place for speculation.

I have no problem with a lot of the topics exposed, but most of us already knew government cannot be taken at its word. All governments lie and always have...always will.

We've often discussed here the spin on data and news. The government TARP program has taken Bernie Madoff's tactics to unmatched levels on a global level.

However, what damage may have been done to national security should in my view be prosecuted to the limit.

We can't know the possible repercussions of the military fallout.

Charles Krauthammer touches on some of it in this Washington Post article.

----------
"First, quite specific damage to our war-fighting capacity. Take just one revelation among hundreds: The Yemeni president and deputy prime minister are quoted as saying that they're letting the United States bomb al-Qaeda in their country, while claiming that the bombing is the government's doing. Well, that cover is pretty well blown. And given the unpopularity of the Sanaa government's tenuous cooperation with us in the war against al-Qaeda, this will undoubtedly limit our freedom of action against its Yemeni branch, identified by the CIA as the most urgent terrorist threat to U.S. security.

Second, we've suffered a major blow to our ability to collect information. Talking candidly to a U.S. diplomat can now earn you headlines around the world, reprisals at home, or worse. Success in the war on terror depends on being trusted with other countries' secrets. Who's going to trust us now?"

http://tiny.cc/j06gu
----------

While the media and many others seem more interested "Dancing With the Stars" our troops are dancing with the devil and IMO faulty info mainly built on technical rather than HUMIT (human intelligence gathering) is what got us into Iraq.

The success of D-Day 1944 was largely dependent on individuals willing to work with us. Such knowledge as wikileaks just told to the world will hardly encourage cooperation in the future.

The administration should investigate and measures must be taken to develop genuine security. Technology has now exceeded the capability of many individuals in high places. I saw CEOs passing info by fax in the late 1990s which would never have been left unguarded on a desk in 1960. Now the same guys pass anything at all through the internet or on flash cards. I expect the same is true of Generals. It must be stopped.

I have too many friends with sons and daughters in the Middle East to accept this as "good thing".

Craig, Grym, et. al.

Now, DNS services have been denied, Amazon pressured to drop Wiki, Paypal stopped paying wiki. Does the US really want to drive today's "Pengagon Papers" underground?

Assange is a non-American operating outside America. Sure he's creepy and self-centered, but what has he done that's illegal? that's wrong? Is publishing content he doesn't own illegal? Are US gov't emails copyrighted? Has the US pursued copyright infringement through the courts?

NO, and Assange hasn't even been charged in the trumped-up rape case. Rape of his volunteers in Sweden? Shades of Stig Larsen!

Hackers can no doubt find underground ways to collect money, host servers, and get DNS address routing. But does Uncle Sam REALLY want to criminalize embarassing free speech? Should Uncle have made secret files available to 3 MILLION gov't workers? including 19 year old, confused, conflicted PFC's?

If Uncle drives the most free-spirited hackers underground, he'll get more than he bargained for, IMO. At least we the people would get new software and services to protect our smartphones and PC's from pervasive NSA spying !

Jock,

"Hackers can no doubt find underground ways to collect money, host servers, and get DNS address routing. But does Uncle Sam REALLY want to criminalize embarassing free speech? Should Uncle have made secret files available to 3 MILLION gov't workers? including 19 year old, confused, conflicted PFC's?"

There is more than embarrassment at risk here. Lives could be at risk.

• First and foremost the government is a fault for a lack of security. Critical info should not be so loosely handled.

• The prior examples of hacking into large lists should have given a clue. But the US is accustomed to acting irresponsibly. Condoleezza Rice never thought a plane could be used as a weapon (think Kamikaze, Duh!). LBJ announced a bombing run which tipped off the North Vietnamese and cost US pilots to be killed and captured.

• Just because the info was accessible doesn't excuse the PFC releasing (stealing) it anymore than if I leave my door unlocked makes it OK for someone to enter and walk away with my property. He should be court-martialed, but is probably safe due to the obvious stupidity of high ranking people which would come out in testimony.

• There are necessary limits to free speech — shouting fire in a public place for example. The same holds true for the endangering of others such as giving out details such as is apparently a part of the 151,000 messages.

Grym -

I completely agree. Bradley Manning had legal and moral obligations to maintain confidentiality of the secret information to which he was (wrongly, stupidly, INCREDIBLY) given access. No doubt, he will pay big-time for his transgression.

Also, no doubt, third parties have been put (wrongly, unnecessarily) at risk.

BUT, I don't see how (weird, egotistical, self-absorbed) Assange has broken any law to which he is subject. He's NOT a US citizen; he operates outside the US. He has no obligation to cover for US stupidity!

Maybe there's a lawyer in the caracommunity who can explain how.

US policy will now turn "white hat" hackers into "black hats" - and, IMO, that's ominous !

for me the bottom line is availability vs credibility. I can make the decisision once given the info.Leave it to me to decide on the credibility after having been given all the facts or thoughts...

That's what free speech is all about imho. Not being force fed the data to fit whatever agenda.

According to a recent Gallup poll: Nurses are the only truly trustworthy people in America. (Bankers have actually moved up the list!)

"Americans consider car salespeople and members of Congress to be the least ethical. Only 9% of those surveyed say the members of Congress have high ethical standards, down from 12% two years ago, and just 7% say they trust car salespeople."

DailyFinance: http://srph.it/gYBveo

gotta wonder what the FIFA cup will cost Russia taxpayers in 2018. It's not China, but it makes it clearer to see why US can still remain top dog economically if congress and the unions pull their finger out.

tbar,

"for me the bottom line is availability vs credibility"

Yes, for most things I agree. I read as much as possible from a wide variety of sources. I tend to give more weight to individuals I know and to my own experiences. Often the official data is in conflict with observations.

I began to see the job losses we've had as far back as 1985. However, it happened far faster and more extreme than I ever thought possible once NAFTA was passed. Remember how we would only lose the "low-end jobs"? My letter to my congressman in 1993 asked if our low-end people would go to Mexico find to work. The poorest among us always get the shaft first and worst.

A careful reading of the Census Bureau and Bureau of Labor Statistics websites explains how easy it is to distort through media sound bites and anyone who thinks about human nature knows people always want to look good and make their boss look good.

Still, there are topics which I don't need to know in detail if it can in any way endanger others. AND there are things I wish to remain private as well. The TSA security is stupid and intrusive and government has become far to nosy under the guise of "security". If nothing else, Wikileaks has shown those in charge have no idea of what security is all about.

putting together a global market index in candleglance format. Those candleglance charts you gave us for monitoring are much easier to visualise than % gains or losses, especially for this maths and memory deficient person.

Singapore and Sydney are both linked to Switzerland's $SMI. Just a typo. Anyone who looks at the adjacent yahoo index can quickly find the stockchart symbol.

Grym -

Interesting post on RFID sniffing. Thanks. "Fortunately" the US is behind in credit cards, and RFID chips were only in 20% of the credit cards scanned on the street! Why, one asks, don't the credit card cartels (VISA & Mastercard) build encryption into their new technology?

RE hackers going underground post-wiki-leak-down-the-leg, here is a new system for getting around US gov't arbitrary shut-downs of websites:

http://torrentfreak.com/bittorrent-based-dns-to-co...

Although i don't understabd the details, it uses peer-to-peer sharing to distribute a DNS (domain site routing) over thousands of user PC's.

I'm not saying hackers are "good" or "bad" they're both - just saying that driving them underground creates more danger and instability. Its rather safer for such changes to be in the open. But if gov't wants to use its "big boot", the response will be underground, IMO.

1st surprise - Ben (Bernanke's) quivering lip. I think he's a decent and a book-learned man; the1st half of his interview, his upper lip wouldn't stop quivering. I think he's frightened! and WAY over his head.

2nd surprise - Facebook CEO: Mark played CBS for a Zucker! He danced away from the real issues surrounding his company, and got a Hollywood introduction for Facebook's newest means of slurping and selling more information from their "customers". Neither frightened, nor over his smirky smiley head.

http://www.screencast.com/users/Telestar3d/folders...

by williambanzai7

http://i.imgur.com/C35Ty.png

from the hacker group "Anonymous"

Meanwhile, the NYTimes reports there are now 208 wikileaks "mirror sites", and that the US ambassador to Switzerland saying the Swiss “should very carefully consider whether to provide shelter to someone who is on the run from the law.”

As far as I know, Asange hasn't been charged with breaking ANY law, not even the trumped-up "sex case" from Sweden. His lawyer says he has offered to be interrogated by Swedish authorities.

Maybe next, the US will declare Asange a terrorist, and hit him in the Southeastern UK with a drone!

so we are in the global index section of your report Bill, screenshot attached.

Sydney all ords is linked to the following URL (should be $AORD I think)

http://stockcharts.com/charts/gallery.html?$SMI

Singapore straits time index is also linked to the same index (should be $STI)

http://stockcharts.com/charts/gallery.html?$SMI

cheers

Jock, a webcast I listened to pointed out the interview was done on nov. 30, insider trading info released to the market and the reason for last weeks gains. http://caracommunity.com/content/bill-caras-blog-d...
Regards

not sure if its just agriculture (DBA) or the whole shebang (DBC).

The article I posted the other day on JPM buying up much of the copper in LME's warehouses in order to appease investors with ETF's backed up by more than just paper:

http://www.telegraph.co.uk/finance/newsbysector/in...

Switzerland is starting to thaw a little following a 50 year historic freeze, which touched much of Europe. I'm interested in knowing what happened to Europe's winter wheat crop.

http://www.finviz.com/futures_charts.ashx?t=ZW

Australia is being punished for failing to look after one of their own - Julian Assange - and following the breakout of locusts earlier in the year are now being drenched in rain (which will permit the locusts to breed like er... locusts). I'd like more info from the local rags as to what's happening with food production over there. My guess is that the golden harvest anticipated earlier in the year is starting to look a little waterlogged. La Nina in action. If I hear of frogs falling out of the sky I'll renounce my citizenship.

Can't forget China can we! Price hikes causing kiddy riots. A government trying to force price controls. Releasing strategic food reserves (I recall China already being a net importer of corn).

So watching DBA more closely know and prepared to open a small position if we get some follow thru on these prices that are gapping up.

Global warming's a bummer.

yeh, not defending bond holders to the exception of the false assurances provided by those in power. That they should stop with the bull is something we can all agree. Let the market do what it should do. Caveat Emptor remains the regle du jour but heaven help those in Brussels who cling to their fantasies as this all goes down.

The S&P deflated by the $POG tell the story of these falsehoods and interventions:

http://jessescrossroadscafe.blogspot.com/2010/12/s...

"I continue to view Bernanke's apparent objective for QE2 - to create a "wealth effect" by encouraging speculation in risk assets - to be dangerously misguided."

"Bernanke is not thinking as an economist in this regard. He is thinking as a witch doctor (ooh, eee, ooh-aah-aah, ting, tang, walla-walla bing-bang)."