CTA Trading Desk Morning Report
[7:00am ET] Good morning. It took maybe five minutes this morning to see that the producers of Financial Entertainment TV linked yesterday’s rising prices to Obama’s proposed tax relief for the rich and then the late afternoon sell-off to the Democrat response. Didn’t hear much about another threatened tightening by People’s Bank of China or the threatening actions of North Korea, but then again the puppeteers behind the screen could not care less about the world we live in. It’s not about you and I, it’s about them.
Can you imagine how much concern there is today – or was yesterday -- in Shanghai, Hong Kong, Tokyo, Sydney and Singapore about whether or not America’s fat cats are going to have their extra tax relief program die off in a couple years? This is laughable, folks.
It’s amazing to see how Americans who think they “play” the market are themselves played. Yet the game plays over and over and over.
All through the day yesterday I could see evidence my small cap China and Hong Kong stocks were under pressure and that my US small caps were not – at least not until late in the session. So, I figured something was up in China.
The capital market is a global market. A much bigger problem than tax relief for America’s rich is the fiscal shortfall and need by the US Treasury to sell increasingly larger amounts of bonds, notes and bills. As Treasury yields lift, what is already a difficult problem worsens. Capital needed to drive the equity market is pulled out by the billions and sunk into increasingly attractive Treasury debt instruments, investors knowing that this Uncle Sam, unlike yours or mine, will never declare bankruptcy.
‘Crowding out’ is what this problem is known as. Unless and until the US economy picks up steam, resulting in greater tax revenues for Uncle Sam, he’ll be reaching into the pockets of equity players and taking their prices. That could get uncomfortable.
Here are the opening snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
Btw, in case you missed it, my first column article for the Nasdaq Community was published late in the day yesterday.
http://community.nasdaq.com/News/2010-12/bill-caras-mission-5x5.aspx?sto...
| Symbol | Name | Last Trade | Change | Related Info |
|---|---|---|---|---|
| ^ATX | ATX | 2,795.45 |
 31.88 (1.15%) |
Chart, More |
| ^BFX | BEL-20 | 2,618.57 |
 6.10 (0.23%) |
Components, Chart, More |
| ^FCHI | CAC 40 | 3,817.54 |
7.04 (0.18%) |
Components, Chart, More |
| ^GDAXI | DAX | 6,985.65 |
16.26 (0.23%) |
Components, Chart, More |
| ^AEX | AEX General | 346.51 |
0.30 (0.09%) |
Components, Chart, More |
| ^OSEAX | OSE All Share | 465.81 |
3.26 (0.70%) |
Components, Chart, More |
| ^SMSI | Madrid General | N/A | 0.00 (0.00%) | Chart, More |
| ^OMXSPI | Stockholm General | 361.43 |
0.79 (0.22%) |
Components, Chart, More |
| ^SSMI | Swiss Market | 6,482.81 |
20.28 (0.31%) |
Chart, More |
| ^FTSE | FTSE 100 | 5,801.82 |
6.63 (0.11%) |
Components, Chart, More |
http://finviz.com/futures.ashx
http://finviz.com/fut_chart.ashx?p=m5&t=ES
http://finviz.com/fut_chart.ashx?p=m5&t=ZB
http://finviz.com/fut_chart.ashx?p=m5&t=DX
http://finviz.com/fut_chart.ashx?p=m5&t=GC
http://finviz.com/fut_chart.ashx?p=m5&t=SI
http://finviz.com/fut_chart.ashx?p=m5&t=CL
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.
Cara on Trends & Cycles
Vad's Catch of the Day
Our working assumption for today has been continuation of selling, as I had hard time seeing yesterday's selloff as one day phenomenon. It has been too intense, thus must have instilled some fear in traders, leading to more ship-jumping. Based on that, we looked for short entries and most of them worked nicely. While LVS, our bread-and-butter stock of late, was a beautiful short at 47.70, SLW chart has more educational value. The idea of the trade is a bear flag - bounce on decreasing volume. Note how volume drops off as price bounces back up. Two candles, 9:59 and 10:00, establish the resistance to place a stop, and break of support serves as a trigger for short entry. Note also how price holds firmly under 20 MA, and after the breakdown doesn't even try to go above Bollinger Bands median. To reinforce the lesson, have a look at the bounce 10:08 - 10:10 to see how volume dried up once again and price got smacked down in the same manner as before.
Kaimu's Sound Money
CTA Trading Desk Mid-Day Report
CTA Trading Desk Post-Close Report
Good evening. Patrick here.
How do you think US Bonds (TLT-1.26%) have fared since QE II was formally announced on November 3? Survey says: horrendously, down around -9% from the intraday peak. Despite all the Fed slight-of-hand shenanigans, interest rates have ratcheted higher, public sector debt quickly becoming much more costly to finance by the day.
But have no fear, there is a silver lining behind every cloud; as the yield curve steepens major money center banks should theoretically see loan margins expand, borrowing from the government for next to nothing and now able to charge us suckers a higher interest rate on any new loans we may need. No wonder Bank of America (BAC+3.72%) – which held firm despite rumors of incriminating Wikileaks disclosures and lawsuits by the SEC – led the market higher today, investors happy to sift through the laggards and redeploy some idle cash. Other big banks attracting funds included US Bancorp (USB+3.26%), Wells Fargo (WFC+3.16%) and JP Morgan Chase (JPM+2.57%). Besides artificially driving up asset prices the Fed’s POMO campaign has inadvertently helped their very own – large banks – increase profitability. Way to go boys!
Precious metals (SLV-1.67%; GLD-1.25%) were scolded and told to go stand in the corner and take a time out. Silver has had a much steeper ascent holding the 20-day exponential moving average (SLV 26.97) since the latest up-leg began, gold chugging ahead more slowly already has tested its 20-day EMA (GLD 134.79) and may have a date with 50-day MA (132.92) in the near future. As long as the previous reaction area holds (128.5-129) the trend will remain up, Bulls in command calling the shots.
The S&P remains vulnerable to a minor pullback at a minimum, but thus far has stubbornly clung to recent gains. Minor support remains 1200ish, with key support down near the November lows of 1173. Seasonal patterns suggest any near-term weakness should give way to end-of-the-year strength so upper targets at 1260, 1275, and 1293 are achievable over the next three weeks.
On the 30th anniversary of John Lennon’s tragic death, let’s do ourselves a favor and give peace a chance.
Have a great evening.
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Comments
Re: Bill Cara's Blog for Dec 8, 2010
just put all your nasdaq stocks into candleglance form Bill. I couldn't help but note the number of US stocks in distribution while a number of the Chinese stocks are oversold at the moment. My imagination or some sort of sector rotation in action?
Stopped out on SLW at 38.80 overnight
set a stop a buck lower than where it was when I was walking out the door for Aikido last night. Didn't loosen it at EOD so had my shares taken off me overnight. fair enough. Will wait for it to come to me now. SLW 20EMA is about 36.
Earl
Thank you for the ' my ' work... I don't agree nor disagree with the projections... This is a long term investment, and I am just taking small amounts.. Wind power is the red-headed step child this year, but moves are underway for long term build-outs.. While not viewed as a ' fslr ', several countries other than the US ( although Mr. Pickens and pals in the earth extraction industries will eventually lose their grip ) are in the process of conversion. I am trying to go where the money will flow. My first buys ( as a trade ) were in the $ 9.70's and I sold in the low $ 12's ( last month, as posted in the blog ).. The underwriters will be cranking up the print ( re: JP ) when they have the right allocations. Till then, I will try to enter as prices (imhao) dictate. best to you.
Cara 100 Ratings Changes For POMO Wednesday
Good morning.
A mere 1 - 2 Billion Dollar POMO Injection Today.
------
7:00 - MBA Mortgage Apps (-0.9%)
10:30 - Crude Inventories
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Cara 100 Earnings - COST (.71 vs .69)
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AAPL - PT Lifted from $360 to $390 @ Stifel Nicolaus. Buy
TXN - Texas Instruments Downgraded to Neutral from Buy at Davenport.
TXN - PT Lifted from $30 to $41 @ Oppenheimer. Outperform
TXN - PT Lifted from $24 to $27 @ Auriga USA. Sell
------
"It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong."
~ George Soros
Re: Earl
Thank you Baz22 - wow, you even look at the underwriter... I learn something new every few minutes here (Bill, this is why your blog is so important to me). I'll keep tabs on 'MY' as well and glad to see you are looking long term - it's short term trading that kicked my tail over the past couple years. Bills comments this morning are of concern -
"As Treasury yields lift, what is already a difficult problem worsens."
have a great day
Earl
baz
congrats on the OREX!!
Cara 100 Update
CSCO - price target cut at BofA/Merrill to $24 from $28 on lower growth and gross margin outlook. Maintain Buy rating.
Re: Cara 100 Update
How sad is that to downgrade it a week or 2 after the news...
earl
The actual underwriters are: MS, CS and ( !! ) BAC/Mer... ( getting old.. was thinking MS and put JP.. better get with it ! ).. several pro and con articles...I had written several weeks ago, that, perhaps not being ' state-owned ' could be a negative in China.. doesn't seem to be the case.. here are some decent observations > http://seekingalpha.com/article/232912-china-ming-...
Re: earl
Thanks again Baz22; good article from a value invester. I liked the comment on the low peg ratio.
Cara 100 Update (Final)
TXN - target raised at Citigroup. Shares of TXN now seen reaching $38. Notebook sales appear to be bottoming. Buy rating.
Hackers looking for ways to fund Wiki post credit-card cut-off?
http://www.ornstein.org/2010/12/06/wikibank-open-s...
[At the same time, hundreds of volunteers have set up mirrors of the WikiLeaks website around the globe, and there are plenty of people, probably in the thousands, who would be willing to “do something” to help WikiLeaks survive. So, I was thinking, could that somehow be harnessed to construct a quick “open source” alternative to the financial predators who first plunge us all into crisis and then refuse us to donate money to journalism? In other words, can we build a WikiBank?]
Time will tell!
Pulled out the Wizards lesson book
to remind myself on options. Noting the selling in SLW this morning I wrote a naked call, which was covered for 35% gain as the price of silver crashed back to 28 support. Helps to recover a little of the overnight loss.
Hussman Slams The FED
In case you haven't read the latest Weekly Market Comment, IMHO, this is Hussman at his finest.
"With regard to Sunday's "60 Minutes" piece, I sometimes enjoy seeing Barbara Walters do a celebrity puff piece, but I expected more from a show on investigative journalism. Proper questions might have included, "Chairman Bernanke, how do you justify the fact that all of Bear Stearns' bondholders stand to get 100% of their money, plus interest, while at the same time, the Fed still holds $30 billion dollars worth of Bear Stearns' questionable MBS junk in an off-balance sheet shell company called Maiden Lane, which you justify by appealing Section 13-3 of the Federal Reserve Act, despite that this section deals explicitly with "discounting" - which everywhere else within the meaning of the Act allows nothing but a short-term check-cashing function, in nearly every case for paper of less than 90 days in maturity?" Nothing about Fannie or Freddie, or the fact that Treasury yields have increased since QE2 was announced."
Full article here:
http://tinyurl.com/34wavwr
Re: Bill Cara's Blog for Dec 8, 2010
Les,
This is the case, but bear in mind that I'm both using fundamental models for selections as well as actively trading. I am interested in Month over Month and Qtr over Qtr performance. The present market conditions are somewhat bearish, but I believe there will be a pick-up soon and the majority of these stocks will go over-bought. If a stock that is over-bought drops too far down the list of fundamental rankings, then I'll sell it outright and pick another from my candidates lists (total of almost 300) that is highly ranked but over-sold. Also, if the readers start sending cautionary letters and negative info, then I'll drill deeper into a company's prospects. As I wrote in the article, I don't have all the answers. We all need help!
a turning point, and not just for viewers of porn ...
Here's the first lawsuit I've seen against a website which extracts visitors' websurfing history and does lord-knows-what with it. (threatens to send it to wives unless they're paid big bux ? - LOL)
You guessed it: youporn.com
http://tinyurl.com/24j5fbj
Suit filed in Orange County, where I imagine many judges are "born again" and not sympathetic to the site's audience .... unless ... unless they're like those TV preachers! LOL
Still, I wish the first lawsuit had been against a childrens' site. Kids' sites are said to be the most egregious spies, and any judge would sympathize with THEIR audience.
Nasdaq column
One of the reasons I decided to do the Nasdaq column and to discuss it here was my belief that trading communities generally spend far too much time discussing issues that do not relate to prices. Yes, I want to cover off the important social equity concerns we all have, but it's more important to me to apply our knowledge and skills in making money. I simply want to crank up that effort.
MY via earl,baz22
first..congrats on the OREX, I had all of 100 shares (color me chicken) but wanted to mention that MY has options and they would be a conservative (ha) way to slowly get the stock. Next fri 10 puts are currently bid .4 which is pretty neat for 7 trading days.........DYOD obviously
Re: Hussman Slams The FED
Similar from David Rosenberg today.
"Bond yields continue on their rising trend with the yield on the U.S. 10-year T- note now at 3.2%. They were up nearly 20 basis points (bps) since that rotten payroll report last Friday and now up about 60bps since the FOMC meeting that ushered in QE2 – nice call by the Fed to try and bring long-term rates lower."
I thought they would drop also, luckily I moved fast to exit when it didn't work out that way.
(I'm beginning to lose faith in the Bernanke wisdom ;-)
Northern Otoko assistance
thanks for the quick response on the chinese portfolio. For what it is worth I have been selling the SEED 9 puts for the last few months....reasonable return. If you have the thread to his metals portfolio from a few weeks ago I woud love that too.........thanks toby
Re: MY via earl,baz22
thanks Tobyt, I took a little different approach - I like the stock, and like the fact it's not state owned - there seems to be some 'democratic' support for some specific companies in china. What I did was purchase 200 shares just to capture some up-move potential later, and I sold 7 of the mar 10 puts for $1.5 each, so if I'm put it will be at $8.5 - I've really become quite a fan of selling puts on positions I like. I did very well the last two weeks on KBH and bought back at a nice profit and am holding puts sold on EXM, GNK. I'm really happy Bill has shared his list and I can work on that.
best regards,
Earl
Re: Hussman Slams The FED
ALOHA!!
... questionable MBS junk in an off-balance sheet shell company called Maiden Lane,
Finally some mainstream analyst has picked up on my MAIDEN LANE rant that I have been doing ever since it was created.
What HUSSMAN fails to point out is that all three MAIDEN LANEs have MBS JUNK only by ratings. He also misses that there are huge amounts of not only MBS JUNK but CMBS too! The manager of all the US Fed's MAIDEN LANEs, Blackrock, somehow uses accounting magic to keep the "fair value" close to par while 98% of the "toxic assets" are rated at or below investment grade, high risk. I am not sure how such low ratings can generate such high fair values. It must be MAGIC! Yet nobody mentions that FED anomaly at all ...
So what does Hussman and Rosenberg propose to do with such a fraudulent monetary entity as the US FED? Hello you two ... they control our money! If the US FED is corrupt then what does that make our monetary system? They all stop short of eliminating the US FED and starting a new monetary system that employs a long term "store of value".
Bond market - true north
This auction should be interesting today. I think the bearded one really has to keep that 10 year note under 3.30%. If that coupon gets up over and stays there (which could easily happen this afternoon) because the auction is poorly received, you could see money come out of equities and back into bonds (irony?). The Chinese are buying Japanese paper now (per Bloomberg last night), and the Korean Won for diversification out of $'s. This auction could be a horror show...and a real buying opportunity for the monied and risk averse.
The Bond market is pricing in future inflation now and the yield curve is steepening. The bond market seems to agree with the Dems - rich guy tax extensions ain't where its at.
Fascinating what you have in play here: (1) US is concerned with deflation and full on stimulus; (2) China is concerned with inflation and soaking up liquidity; and (3) Europe is bailing out but laying down crippling austerity measures in exchange. Who has it right?
FD: Long SPXU calls
Subprime Economy
Kaimu wrote yesterday:
"Interest on the debt could rise to nearly $1 trillion by 2020. These mandatory payments – which buy absolutely no goods or services – will squeeze out funding for all other priorities."
So it appears our handlers have opted for Subprime interest only terms on an exploding negative amortizing arm in the face of lowered income (liar loan ring a bell?). A sure recipe for foreclosure. The question is only how long it takes to foreclose upon a bankrupt demoralized nation.
Bill points out the contnued fiscal shortfall ratcheting up. Must we come to the brink before we take appropriate action? What is the solution? Tiny cob houses with grass roofs and solar power may be a great way to get back to fiscal basics for individuals. Sane people get real when their options become limited.
How do you propose we dismantle the federal debt machine? What will it take to restore fiscal sanity? When congress starts getting IOU's instead of paychecks?
We created it. We can uncreate it.
See Vad's Catch of the Day
In the commentary at the top of the page.
Re: Bond market - true north
TLT has knifed through 93 support and is continuing down. Yet another in a series of lower lows made today in bonds. One wonders what Bernanke thinks when the bond market fails to respond to his encouragement.
As nebish noted, we have a 10 year auction today at 1pm - less than 20 minutes from now.
Re: Bond market - true north
yesterday's $ust10y finished 3.15%. Today's auction brought 3.34%.
http://fidweek.econoday.com/byshoweventfull.asp?fi...
David Stockman on Obama-GOP Tax Deal
Here's an article (and a video interview) with David Stockman who was the OMB director during part of the Reagan administration. He flat doesn't like the deal and says that taxes will have to go up at some point. He also says that the entire bond market is being propped up by POMO.
Here's the link.....
http://finance.yahoo.com/tech-ticker/article/53568...
Pres. Barack O'buckle; Chancellor Angele Muscle!
Tax cuts extended for the fattest, Estates tax-free to $5M, even crumbs for the rest of us. Deficit be damned! Roll the presses!
Then there's Chancellor Angela Muscle! - Teresa Lo points out there's another European bank stress test in Feb. She expects Angela will insist on a REAL test this time, identify "where the bodies are buried", then exact a haircut from the (bank) bondholders (even Deutsche Bank) before agreeing to any more ECB/IMF bailouts.
Were the PIIGS to default or exit the euro, mortgage holding piiggies across Europe would be plunged way under water (on their euro denominated loans) thus destroying markets for German exports.
Re: Pres. Barack O'buckle; Chancellor Angele Muscle!
http://www.spiegel.de/international/europe/0,1518,...
default increasingly a question of when, not if...
99ers Will Still Lose Unemployment Checks
Smoke and Mirrors CNBC LINK --- http://www.cnbc.com/id/40567982
wiki-wars
Mastercard under denial of service attack - payback from wiki friends.
Bloomberg timidly asks exec at the Chertoff Group (former "homeland security" honcho) whether it's right for Mastercard, Amazon, etc. to deny service to Wiki-leaks.
SURE says the man who brought us those full-body scanners, they're private companies. Bloomberg asks whether Mastercard might deny service to NY Times depending upon NYT editorial policy. answer: wobble, wobble .... (don't upset a potential client!)
Just another day in the "land of the brave; home of the free!"
http://www.bloomberg.com/video/65102970/
comic relief: Jon Stewart does Bernanke !
http://www.thedailyshow.com/watch/tue-december-7-2...
$110B have committed suicide!
To Bill re the Nasdaq column and this blog
Sorry for the double post.
To Bill re the Nasdaq column and this blog
Congrats Bill on the column. Those of us who (feel we) know you will not read it as too blunt. The blunt will come to light when you back up your intentions with actions as we have seen here on the blog. I see you opening yourself to more work and more exposure and maybe that's a good thing. I commend you for the effort.
I do know that although I stopped trading on tax day April 15th of this year due to my own poor performance I have learned so much here that I chalk up my losses as tuition. I have become more risk adverse and I see my ending my swing trading to be a obvious result of what I have learned here. When I did close my IB account I kept some of my fav miners in another account. I will attach the results of that portion of my portfolio below.
To sum up. Thank you. I am sure there are many who, like I, used to be more active but who who still come to read and follow the links towards deeper understanding. You provide a great service to others. The blog continues to get better and you include others who's voices and sometime rants are golden.
peace from North Puget Sound
Gray
Re: comic relief: Jon Stewart does Bernanke !
Wonderful!
I'm too old to cry, but I find I'm not too old to laugh.
When I watched the actual 60 Minutes interview I was surprised Bernanke would try even to pass this off as "We're not printing money," but to get no comment from the interviewer and then seeing his earlier comment explaining the way they did print for the banks was a classic, GOTCHA!
The Fed must go. (Too bad Bernanke doesn't have the class of Socrates.)
....
Hi Toby... thank you, Billy, for the good wishes... I made the final decision to be involved after the FDA/AGN related news ( can't look to strigent in the public eye !! ), and the new panel members that were not involved in the VVUS/ARNA decisions). Its by no means a given for approval, thus, as I wrote you last night, I trimed 2/3 of the position ah, and an additional 50% of remaining 1/3, first thing this morning ( the ah. volume was just not strong enough to support a solid rise/squeeze .. seems it was more retail than institutional.. like I wrote you last week, I believe the big players used Thursdays Bloomberg options report to unload at the $ 5.60 area, and reload in the $ 10.00 Tuesday range ).. MY looks like a ho-hum equity, but just that late October/first week November move ( whether repositioning or for real ) shows how fast it can be taken. Anyway, good to hear ya'.. take care.,
Re: Pres. Barack O'buckle; Chancellor Angele Muscle!
Thanks Les, those are the numbers I was looking for in yesterday's discussion with TOF and Dave M.
Specifically:
"If Ireland fully exhausts the EU bailout then it will double the national debt to €175 billion by 2014, he calculates, and the interest on that would come to €8.5 billion a year -- more than even the thriftiest of governments could afford.
To make sure that the state does not drown in its debts, the annual rate of growth has to be significantly higher than the interest due on the national debt, McWilliams argues. If the Irish economy does not grow by 8-10 percent, then the country will end in a debt-deflationary spiral. And even the most optimistic government projections are just below 4 percent"
Basically, they're doomed. No austerity will rescue them from this. Spending 10% of their GDP on interest payments to rescue German and French banks seems - unfortunate to say the least.
See the Post-Close Report
In the commentary at the top of the page.
billy,
will look to rebuild if $ 7.90 is breached tomorrow or in the next 3 days..
Patrick Said.....
"How do you think US Bonds (TLT-1.26%) have fared since QE II was formally announced on November 3? Survey says: horrendously, down around -9% from the intraday peak. Despite all the Fed slight-of-hand shenanigans, interest rates have ratcheted higher, public sector debt quickly becoming much more costly to finance by the day."
Yikes! You have hit on a big trend. Is this the beginning of the endgame?
Re: Patrick Said.....
ALOHA!!
... Fed slight-of-hand shenanigans, interest rates have ratcheted higher, public sector debt quickly becoming much more costly to finance by the day."
Now mix that in with what MISH has published about "jobs". Jobs are the number one factor in tax revenue growth. In other words as the cost to service the ever rising debt burden at the US Treasury increases the net tax revenues are steadily decreasing. This is REVENUE BREAKDOWN ...
MISH LINK: http://globaleconomicanalysis.blogspot.com/2010/12...
As the MISH charts point out the gap between population growth in America and unemployed is growing much wider in the last three years since 1970. That "gap" is being papered over with US Treasuries. As I keep pointing out it makes no difference if income tax rates are raised any more.
Now combine all this with yet another MISH article on FOOD STAMPS ...
MISH LINK: http://globaleconomicanalysis.blogspot.com/2010/12...
Food stamp usage is up 16% in one year, which now means nearly 43 million Americans cannot afford to eat. Then if you look at the States separately Washington DC has more than 1-in-5(21.5%) people on food stamps. What a disparity in the rich and the poor at our Nation's capital. That's the same ratio as we have here on the Big Island of Hawaii, actually its a little more. The only difference is that food does not grow wild year round in DC ... Americans are heading to food pantries and standing in food stamp lines at the rate of way over one Denmark per year now.
Calculations:
One month SNAP increase = 521,428 Americans x 12 months = 6,257,136 million
I find the SNAP charts posted by MISH interesting because the number of Americans on food stamps since 1970 has increased dramatically. The same as US Debt has since Nixon closed the gold standard down in 1971. Do debt and poverty have a correlation? I think so ... I think debt impoverishes not only people but Nations as well. That is by "design" ... We need a real CHANGE for a CHANGE!
I have a quiz for people here: What are the top three most populated countries in the World?
If you answered China as #1 then you would be right. China has 1.341 billion people. Who was #2? If you answered India then you would be right again. India has 1.19 billion people. Who is #3? If you answered the USA you would be correct. As of Sept 2010 the USA has 310.9 million people. The USA population accounts for about 4.51% of total global population and out of those nearly 311 million people some 14% cannot eat. Imagine what sort of chaos would happen in the event food stamps and unemployment benefits and social security benefits were cut off. Just having 43 million hungry Americans rioting would be more than enough to grind the entire country to a screeching halt. Keep these facts in mind as you listen to both the REPS and DEMS debate debt issues and spending over the next few years.
While most of us Americans tend to think of China and India as corrupt and over crowded Third World countries where population control is non-existent we tend to overlook how close America is to those two countries compared to the rest of the World. We always think of ourselves as the "guiding light" to the rest of the World. Just exactly what have we guided the rest of the World to? Will DEBT and POVERTY be our global legacy? Certainly the main reason all past Empires have collapsed was due to excessive debt.
Where do you find the #1 DEBTOR in the World? Timmy, can you answer that?
Time For Natural Gas to Make a Move?
I've been building a substantial position in ECA ( I lack the nerve to buy HNU ) anticipating a snap back in commodity price to the 7 to 8 dollar range based on weather effect on demand. Although last week's reported drawdown of reserves was less than anticipated, recent futures price action would suggest that due to cold weather it may be catch-up time tomorrow morning when the weekly report comes out. I have been tracking the ratio between Jan '11 ( coldest month ) and Apr '11 ( lowest demand as neither coolest or warmest month? ) futures and the spread is now over 2%. Is there anyone out there that has a more sophisticated way to measure near-term demand, and am I being much too simplistic?
wiki-wars
"the sense of an Internet war was reinforced when Netcraft, a British Internet monitoring firm, reported that the Web site being used by the hackers to distribute denial-of-service software had been suspended by a Dutch hosting firm, Leaseweb." John Burns, NYTimes
Maybe this will help people realize what tight control western gov'ts have over the internet. No more naive idealism, pls.
Hackers will act up more, and gov'ts will tighten more. Then China will buy the new software which western gov'ts have procured !
Re: Patrick Said.....
I am loving QE-dos. The idiot that thought that one up needs to double up on his Thorazine intake! These beltway bobbleheads all have Howdy Doody faces. If Bennie shaved his beard, allowed his mustache to grow and waxed and twisted it, he could be the Cantinflas for Norte Americana!
My basic premise has been.......would you loan your bankrupt government 10 or 30 year money to yield 3 to 4%??? I realize there are 'trading' gimmicks and stop loss exit points such that none are locked in but the HERD IS LOCKED IN! Think pension funds and other wealth destroying 'boards of directors.'
I talk my book. My super chunky holdings of TBT has so far been an easier lay up than when I was in the 8th grade with 8 foot baskets. Another 2 or 3 bucks and I'll sell two thirds of my position and play with only house money. I have not given up the trend trade because I'll get even chunkier at pullbacks. El Stupidos assumed that QE 2 would per force drive down rates. The fact that T-Rates have gone against the grain works both ways for El Fedo. The banks (are they still an asset class?) yup, will benefit again from a higher yield curve. No matter that they use FASB gimmics to mask their insolvency. Kaimu's Maiden Lane rants are a perfect endorsement for non see thru bras. And there are many many more Maiden Lanes that most of us will never be aware of.
As much as I hate to admit it, 2011 may be the year of the banks as they play ketchup from turning red to green in a real sense. I hate the bastards but even El Diablo will have his due.
Reason? The funding crisis is beginning to bite. Don't look at the TED spread so much as the blowout in PIIG spreads vs. even bankrupt D-Notes. Frog notes are a no brainer. They will be boiled and fried with butter and garlic. Germany won the the right to dictate terms to Europe because they are smart and industrious SOB's. One German journeyman machinist can take a block of Krupp Stahl and create a machine tool that can be used to enrobe chocolates for a Russell Stover factory.
I ask, what is sound money? To my mind it isn't some metallic shiney hoard but rather a definitive descipline against the vote buying politicos that can deliver on near term promises for the lazy hords that exist on the dole.
No one really cares about the unemployed. Most by defination are out of work because they will not accept a lower wage. And why should they when government benis give them the rights NOT TO WORK!
Everything is upside down. We raise minimum wage and price people out of the markets. We fund banks and pretend that they are solvent. We screw pensioners by telling them to eat dog food.
Charades can last a long long time. Reality bites hard and when it does, protect your crotch with both hands.
Kaimu reply to Patrick
live and learn.....flew in that area for years and thought Indonesia had more people than top 3 but it is #4 although the island of Java (size of Greece) is one of the densest populated places in the world w/ a population of 130mil......seen their ETF recommended recently tho
Is the BONDs Market DYING HERE??
http://classic.abnormalreturns.com/wp-content/uplo...
http://www.finviz.com/quote.ashx?t=tlt&ty=c&ta=1&p=d
Bulls Not Paying Price So Far
If overbought markets get worked off by price or time, so far, bulls aren't paying.
Cara RSI7 data, breadth oscillator, and one chart looking shaky. No positions in above.
http://tinyurl.com/2db3b7s
Paul not Going Away
http://tinyurl.com/3xyjbqf
Re: Patrick Said.....
Kaimu,
What you pointed out here is exactly why my blood pressure rises whenever anyone talks about a possible halt to our "economic recovery".
Such talk is nonsense!
Government data ignores all the drugs keeping the population standing stuff which was not there in the 1930s: unemployment insurance, Social Security (expanded to total retirement income status), Aid to Dependent Children, food stamps, reverse taxes (direct welfare) the list is long and growing in number and duration.
All these "free" things may be necessary in emergencies, but emergencies have become the normal and continual.
Nothing is more expensive than the things viewed as FREE.