Bill Cara's Blog for Feb 4, 2011 [See post-close report]

If the employment situation is improving then higher wages are sure to follow and therefore higher commodity prices are sustainable. I don't know about other nations where there has been unrest, but in the case of Tunisia price-fixing had its part to play. We (the West) cannot be held responsible for locals who control markets and fix food prices, but we are accountable for causing inflation by printing money.

Interesting timing on this article... Where was it when gold was falling fast?

Gold and copper prices could surge to 30% in 2011
Gold and copper prices could surge to 30% in 2011

Gold for April delivery soared $20.90 to $1,353 an ounce at the Comex division of the New York Mercantile Exchange.
Rising oil and food prices are likely to have a significant impact on inflation outlook in 2011.

High global commodities prices are likely to have a significant impact on gold prices. The investors will by much more gold amid fears of inflation. As inflation fears rose to a record high in China, India and EU the price of metals, gold, oil , copper will rise. The investors will continue to buy safe assets. AlbanianMinerals President & CEO mr Mujaj said “We are positive on growing metal prices”. The price of metals should continue to be supported by demand driven by global economic growth a huge investment’s in infrastructure and energy sector worldwide.

Inventories of copper shrank this year as demand recovered, pushing prices to a record $10,000 a ton. Global demand will outstrip production. The inventories copper, aluminum, chrome ore, nickel , ferrochrome and iron ore are at the lowe’s level this year. Metal prices will rise sharply in 2011 do to the growing demand and higher energy costs.
AlbanianMinerals in New York is receiving a record new orders for row minerals, copper, nickel, chrome ore and iron ore for 2011

Copper prices hit $10,000 a tonne on Thursday for the first time as investors piled into the metal amid fears of a severe supply shortfall.
Copper is widely used in manufacturing , construction and energy, Copper is crucial to the global economy

CNNMONEY
Colin Barr

February 4, 2011 6:45 am

How do you say overpaid in German?

Put away your Google translator -- and your stereotypes about thrifty Teutonic types, for that matter. The answer for 2010 is Deutsche Bank (DB).

The big Frankfurt-based bank was Wall Street's most lavish check-writer last year, with the average employee at its New York-based investment banking unit receiving $514,332 in compensation. The number comes from Deutsche's fourth-quarter financials, released Thursday.

The average take at Deutsche Bank's corporate and investment banking business is up 5% from a year ago and is well above the numbers at the other big firms on the Street. The average worker at Goldman Sachs (GS), for instance, made $430,700, which is down 14% from a year ago.

Those at J.P. Morgan, the Wall Street unit of JPMorgan Chase (JPM), had to scrape by on $369,651, which is down 2% from a year earlier.

At Morgan Stanley (MS), average pay rose 8% from a year ago to $256,627, though that number isn't strictly comparable with the others because Morgan Stanley has 62,000-plus workers – roughly double the headcount at Goldman and JPMorgan and four times that of Deutsche.

All the banks are paying more in stock and deferring more payouts nowadays, in line with the wishes of regulators who would rather not see bonus-fueled risk-taking lead to another financial meltdown on their watch, thank you very much.

Even so, the funds showered on financial types last year hit $135 billion last year, up 6% from the previous year. No matter how the Fed and others might talk tough on pay, a bonus deferred is most definitely not to be confused with a bonus denied.

So if you happen to find yourself in Frankfurt, the word is uberzahlte.

Where does all those dollars come from? It all works until it doesn't!

By Greg Robb WASHINGTON (MarketWatch) -- The U.S. unemployment rate fell unexpectedly to 9.0% in January, a 21-month low as nonfarm payrolls rose by 36,000, the Labor Department estimated Friday. The 36,000 increase in payrolls was much lower than market expectations of a 140,000 gain but the decline in the unemployment rate was unexpected. Economists had expected the jobless rate to tick higher to 9.5%. The rate was 9.4% in December. The data was impacted by winter weather and annual benchmark revisions. But the labor market is improving. Since the recent low point last February, nonfarm payroll employment has increased by 1 million.

Basically, I think it's good news. The less-than-expected increase in payrolls may later be attributed to the harsh weather in January.

Getting a bit of whiplash this morning.
J

Thanks, jack.

Well, suffice to say that I found that if you want a home with a deepwater dock and nearby, no bridges access to Tampa Bay or the gulf in a secure, gated-type, nice area, it wasn't cheap at all.

For such a place with say 2800 sq ft heated/cooled, and 4150 sq ft total including screened area with hot tub, and decks and a dock big enough for 2 30 ft cruisers or 1 40 ft sailboat, you are looking at $350 to $360k minimum, I think.

Crappy homes in crappier neighborhoods with a deepwater dock could be had for $300k or $320k, maybe cheaper if a total disaster, but then you'd need $100k of work to make it nice.

but we've been there before. choose your outcome:

a) buy the dip
b) dog pile into the exits

just watching. Someone's piling into LEX this morn. nice little pop.

Acting to form, Cliffs announced today that they have chosen the location for the smelter that will refine production from the ROF. They say it will be in N.E. Ontario. They don't understand the political dynamics at play between N.E. And N.W. Ontario. They might as well have said they were shipping the ore to Quebec, or China. No apparent consultation with other players including government or aboriginals - just bullying ahead in a self-interested state of denial of the realities of doing business in the North in the 21st century. When news of this sort comes out it usually is a negative for NOT shareholders. On the other hand, it may be a buying opportunity if Cliffs intend to " do a Newmont " and offer a 39% premium for NOT. That would mean $1.10 for NOT. That would be steal for Cliffs and for the speculators but would take me out at a huge loss. I intend to wait until the natives and the Minister of Mines and Northern Affairs ( from N.W. Ontario ) speaks to the announcement. Meanwhile, the management of NOT should start to create some market buzz of their own and generate some shareholder value before they are left in the cold.

10-year has broken out. Just thought I'd mention it.

OK 21.87

by the SEC.

http://online.wsj.com/article/SB100014240527487043...?

I can't access WSJ anymore but another trader by the name of Adam Grime has elaborated a little. This is posted in the interest of continuing not the endless dogma of HFT/quant as good/bad depending on your attitude, but to illustrate some real world development in the sector:

A unit of French insurer AXA SA, AXA Rosenberg Group LLC, runs one of the largest quant programs out there, with $60+ billion under management as of last year. After a coding problem disabled risk controls on some of their accounts (oops?) and those accounts suffered sizable losses, investors pulled about half of that, leaving the unit with “only” $30B under management. Obviously, still a very significant pool of money. After the event, senior management at AXA took steps to cover up the error.

And here is the important part… the SEC charged AXA with a significant fine and demanded they repay losses to the investors’ portfolios. This is the first judgment of its kind against a quant firm, and could be the beginning of something interesting. I don’t fall into the camp of people who think that all HFT and algo trading is evil.

In reality, many of the HFT advances have resulted in a net positive to the individual investor who benefits from narrower spreads and better execution in orders done via algos. However, the field is full of abuses (for instance, much of the apparent liquidity in the book is not real liquidity, but what I think of as “predatory” liquidity. This is something that needs to be addressed.) and the arms race of faster execution with less human may have unintended consequences.

In general, I tend to think less regulation and more free markets is better. “Let the market itself work it out” is usually my attitude, and, in terms of economics, I tend to fall squarely in the Austrian camp. The issue in this case is not competition or normal evolution of markets and technology, it is potentially abusive and quasi-criminal practices that may well have an overall negative net impact on the market.

At any rate, better regulatory oversight from regulators that have deep insight into market structure and quant trading is needed, and quant shops need to be held accountable for errors that hurt investors. It is possible that yesterday’s AXA settlement may represent a new direction and commitment from the SEC to deal with some of these abuses.

LIkewise TLT is continuing downhill, currently hovering around 89. Next stop: support at 85, translating into a yield of around 4.6% or so. Breaking down below that would cause a huge move, in my opinion.

One wonders if this will eventually show up in the auctions.

I think the steady grind up in the market has taken its toll on Treasuries.

bigwad- If you keep money in the account for a week, you get a free toaster.

This is a situation that simply must be watched by all traders.

If the 10 year keeps marching up like this, the Fed is forced, at a minimum to stop any further QE (Tom Honig wins) and then has to start to think about raising rates before the market takes options away from them. In the meantime, it does appear that money is finally thawing out of bonds and beginning to chase equity prices, which, to me, is a little scary.

The Fed is still very constrained by the housing and employment metrics. Housing still rots and rising rates will only make that situation far worse given all the ARM's that have yet to reset (2012) is THE big year for ARM resets (all the people who bought in 2005 at the top, using 7 Year ARM loans).

Its really tough to see the Fed raising with unemployment still sitting at 9%ish, but the bond vigilantes are quickly taking the market away from them and they'll be forced to raise to catch up if this gets too much farther.

FD: Still long VIBSX, but not buying the dips anymore...just letting the divvy's reinvest monthly. I just don't feel its time to throw in the towel on bonds yet....equity market is going to have to take a serious blow at some point in 2011 before the seemingly inexorable march north continues. Patience, patience, patience...

The sentiments are so bearish on bonds, they should rebound short time ... or alternatively crash big time. Don't know which. I liquidated most bond positions but small one.

my EEM and USO puts and UUP calls are working, UNG calls are struggling.

I'm not sure where it will go, or what the sentiment is. I'm just watching what the chart does, and assuming when it breaks through support, it's bad news.

under radar play, big connection to FN (NYSE)

Is it really Ron Paul's website? This article has all signs of an Internet hoax, so I wondered... here is what Contact page says:

1) The Daily Paul is NOT officially affiliated in any way with Ron Paul, or the Campaign for Liberty.

Running up today 2.47 +0.22 (9.78%)something may be up.

Lesson well learned, this is what happens when one takes things for granted; like in this case, the face value of a highly respected person, verify the source first.

Thanks Vad and Bill.

It's true Kris, I got fooled yesterday what turned out to be a blogger looking for his 15min of fame or whatever.
Regards
Earl

Halted??

Same ol'....same ol'

http://dealbook.nytimes.com/2011/02/03/s-e-c-charg...

ex Lysander minerals. ECX close to breaking out to new multi year highs. I'll be adding to this investment Monday/Tuesday if vol. price action continues. GIX coming back to life too, which is nice to see. $GOLD futures somewhat sluggish.

http://bpp.mit.edu/

from the website..."The Billion Prices Project is an academic initiative that collects prices from hundreds of online retailers around the world on a daily basis to conduct economic research. We currently monitor daily price fluctuations of ~5 million items sold by ~300 online retailers in more than 70 countries."

probably more reliable than the BLS data

Food for thought; my two favorites in those beat down shippers are EXM & PRGN.

Your TLR is kicking like CRG.

CALM, an egg play put in a double bottom. I just sold more puts on it.

Watching BCON for sub .28

Best regards
Earl

Have you ever tried to create a New Year's Resolution by telling yourself you will start some new behavior or reach a new goal? How often did you succeed? If not, do you know what's holding you back?

According to energy field theorists, we are held in a state of habitual stasis by our subconscious programming or 'field'. This is very hard to shift as we cannot speak directly to the subconscious mind. It is however running the show 95% of the time!

If you don't believe me just try changing your morning routine and you will notice you just 'do' things like stumble down to breakfast or reach for your running shoes without even thinking. These behaviors are habits, well imprinted in your own subconscious. How hard is it to shift to a different morning ritual? Our resolutions often fail because are too goal oriented. The goals seem too far away...there is no joy of living them in the moment.

Intentions are more useful than goals: They are more open to the possibilities of how we might achieve them. Intentions allow us to live in the now. Now is all we have. I can think or act now. I can intend a new story of my life as actually very purposeful right now...I don't have to wait to 'Make a Million Dollars' to be living a purposeful, abundant life.

We know our personal habits well: leaping too quickly to a conclusion, waiting too long to get out of a situation going nowhere, berating ourselves for missed opportunities. What a waste of energy and precious life!

Bruce Lipton, noted Quantum Physics scientist and philosopher, quotes Albert Einstein: "the field is the sole governing agency of the particle". What he is getting at is how strongly our programming and our environments matter. They literally hold our particles in place like a magnet holding iron filings in a pattern around it. Of course this runs counter to allopathic scientific thought that our structures are determined by our DNA-protein. Lipton quotes the well known and accepted Placebo Effect of positive thought. It is very powerful. He also says we operate on a "Nocebo Effect" which is the exact opposite or negative thoughts.

These three persons have somehow arrived in my life simultaneously as I go about creating new intentions. I intend to create a more fruitful and peaceful way to live in harmony on this planet. We've all see enough war and strife and agony. Charity starts at home, after all.

I hope you will find this at least thought provoking as you go about your day observing your thoughts, actions and results. As the great philosophers say: "we always have choice!"

Jean Houston: http://www.jeanhouston.org
Bruce Lipton: http://www.brucelipton.com
Peg Donahue: http://www.fengshuiconnections.com/about.html

Thank You.
Earl

Doctor doctor!

What I lament is the disarray, the confusion, the consumers caught in the middle and the muddling our way out of this morass. GS and pals making all that money from their hedge funds and insurance policies will certainly engineer new opportunities in this newly de-frocked world. I will kinda miss Fan and Fred after 9 years of learning their everloving guidelines which I can recite in my sleep. However...onward and upward (or outward as the case may be)!!!!!

On eggs (CALM) feed prices are eating margins in our neck of the woods, If DBA drops,though, CALM may be a good play.

Just giving Vad my predictions.

I'll throw Adrianna out there: ADI.V. Big iron ore deposit about 170k up the line from Shefferville. Also have an interest to build a port in Brazil for iron ore. Lots of iron there, no way to get it out at the moment. With China sov wealth fund setting up shop in Toronto, I think they'll kick in to extend the railway in Quebec and get that deposit moving.

http://www.adrianaresources.com/s/Management.asp

I notice the stock is consolidating recent gain around $1.30-$1.40
Alan Palmiere as I mentioned before is a seasoned CEO. Interesting looking company. Not much attention paid to iron around here.

Mr. Palmiere brings over 35 years of extensive experience in senior executive and leadership roles in the mining industry. Prior to joining Adriana, Mr. Palmiere held the positions of Chairman and also President and CEO of HudBay Minerals Inc. Mr. Palmiere also previously served as Treasurer of Northgate Exploration Ltd., Chief Executive Officer and Chief Financial Officer of Breakwater Resources Ltd., Chief Financial Officer of Zemex Corporation, and Executive Chairman of Barplats Investments Limited.

No Position in ADI

Hi Barry, you are right! I'm thinking chicken lifecycle. That's some automatic leverage. It's not looking like feed prices are going to be the ticket anytime soon. I've been watching this one for a couple months, sold some puts (long position) at the first bottom ~Jan 20ish, sold 5 more today. It simply has to hang here for my return; for R/R I'm ok with this.
Regards
Earl

LOL- Enjoy the game on Sunday, Vad.

hi Earl... long week... lot of reflection.. yes, ' tlr ' was smacked pretty hard for a few weeks.. still will see.. was adding like I said ( +/- .05 either way ).. discontent with some major holders over mr. Hardy's allocation of capital.. still reminds meof mini-UXG of 2 years ago ( odd- almost to the week of UXG's massive move off the bottom's in 09' ).. added to ' arry ' as Blackrock took about 7% interest last month.. best to you...

For pick of the year. Closed at $0.92? My first triple!!!!

Dave and Les,

Got this from David Rosenberg today...

2-4-11 Rosenberg

(Following his view on a mixed employment report)

"Either way, this is not something for the bond market to get ‘fussed’ about and a nice buying opportunity seems to be opening up right now — shades of March-April 2010."

I checked and the 10Y was at 3.97 Apr 6,2010.

ALOHA!!

Right Les ... Looks like another new high, up 31%+ to $0.92CDN and a intraday high of $1.00CDN today on over 2.1 mil volume, that is 10 times average daily volume.

Still this valuation does not take into account the 35% ownership in the private North Sea Oil & Gas company ELKO, which is engaged in a JV with the Danish government to drill their blocks P1 & P2 this year.

LINK: http://www.lysanderminerals.com/s/NewsReleases.asp...

Also not part of the coal valuation is the JV with AMARC on the PINCHI copper gold porphry property at the Quesnel Trough. AMARC is a Hunter Dickinson(HD GROUP) company. These properties, plus the Lorraine Copper spin off from 2008 are all part of the exploration efforts of Don Mustard, a veteran Canadian geologist. I am not sure if he is still alive. The last I spoke with him on the phone was a few years ago. Quite a character who some of you may have met at some of the PDACs in the past.

LINK: http://www.lysanderminerals.com/s/PinchiProject.asp

The focus for this company is anthracite coal. I am sure all the Western Coal investors either have or will be moving some of their profits into the East Coal venture.

This is one of my top three TSX holdings where I have spent the past three years building positions through private placements.
FD: 600,000 shares

Bill Here is my take on it longer term. This stock has followed Tom DeMark Sequential rules very well.
First at the 10/19/09 highs, then at the retest of the lows on 6/28/10 (red 3)
Then on 11/22/10 it retested the previous closing high and failed to breach.
DeMark Sequential shows it needs to get a red 13 buy countdown
where a buy could initiate for long term traders.
Also a new Setup buy (pink 2 of 9) was confirmed with today's drop.

http://screencast.com/t/3sExQ4M1aJFJ

I have done my own Muddy Waters Research. Believe me this is the REAL DEAL!
http://www.youtube.com/watch?v=w5IOou6qN1o&feature...
http://www.youtube.com/watch?v=Unf2S8zJMoQ&feature...
http://www.youtube.com/watch?v=ERJ3rre99i0&feature...

managed by Dundee Wealth in Canada ...

Remember how Mr. Bernanke told us in 2002 how the Fed could influence long-term yields? I thought it might be time to see how he is getting on with that project. Things like this sometimes benefit from a long-term view and when I am looking long term I find it helpful to emphasise the 20dma which sort of filters out the noise.

Well, here we are. To me it looks like make or break time. http://www.screencast.com/t/foB2LChbdRU

This year, rather than making New year's resolutions I am simply trying to make it a year of resolution.

Kung Hei Fat Choi!

From Thomas Kida's book 'Don't Believe Everything You Think:'

What causes us to dismiss the possibility the SPX can run from 1040 to 1350 with barely a pullback?

It can happen.

For the sake of argument, let's say a run similar to the one we've had since last August might happen once in a hundred 6-month time periods. Then it's not impossible. Just implausible.

Who's to say we're not in the midst of an outlier event? Kida's point (he uses roulette in his example) is that we homo sapiens love to believe there's a reason for everything. Sometimes, it's just chance or coincidence.

This current rally, IMO, is not so extraordinary as to necessarily attribute it to market manipulation. It's just an extraordinary rally.

Hi Bill - Here is a picture of the promised land from the typical New Yorker's perspective. Further, an example of the administration's ineptness; aided and abetted by the moron running Interior: Shell Alaska has dropped plans to drill in the Arctic waters of the Beaufort Sea this year and will concentrate on obtaining permits for the 2012 season. The recent remand of air permits issued by the Environmental Protection Agency was the final driver behind the decision. Lots of air in AK. Happy Trading
http://www.adambaumgoldgallery.com/steinberg/poste...

This link for SEC CAST filings might help this inquiry: http://www.nasdaq.com/asp/quotes_sec.asp?symbol=CA....

As an aside, I had stock in a Chinese fertilizer company that I though was promising (a lot of favorable press at the time I bought it,) and I happened to see that a large 10%+ owner of the stock sold (SEC report) a large number of shares at a market high--I luckily sold too (because of the insider's sale)--and the stock plummeted shortly thereafter and after over one year the stock has not recovered to its pre-insider sale price I bought at 15 and sold at 18. The stock is now aroung $8.27. Coincidence or reality?

The Cowboys win by $500,000,000.

You're welcome Bill – I’m privileged to be here and read all these great opinions. I have a Stratfor.com subscription but for this board don’t have time to read it anymore – and thanks to Kaimu's Sound Money I’ll spend the rest of the weekend at work reading your blog LOL. Take care.
Earl

Hi 2nd; I think so. I can say I believe the market was going up, making a positive move but couldn't really allow myself to feel it until Patricks post on Feb 3rd CTA Trading Desk Post-Close Report. You say there's this chance or coincidence and to that I can add within this 'circumstance'. Here is what I took Patrick to say is circumsance;

"The world according to POMO has forced otherwise analytical portfolio managers to throw caution to the wind and chase performance simply because prices are rising.

Regardless of your philosophical outlook, if early morning selloffs are bought and prices end up closing near their session highs, buyers have the upper hand and will remain in control until the price action tells us otherwise."

I'd say it's human nature to think big - and why not. I'm looking to break the 1500 and test a new high. I just hope I can stop trading long enough to let some winners ride. Trading can be a grind sometimes - I'm hoping for a bit of a break from it myself...

best regards,
Earl

Grym,

The matter of intention is to identify the why. Then the how will come. Did you decide to stop smoking for your family? The moment you tossed out your last pack the choice was in your hand. Intentions work to help us shift from now to what's next. As our reality changes we can shift to better choices as we go.

"Male smokers lost an average of 13.2 years of life"

Imagine not being here right now. How you would be missed! I'm sure the twinge of temptation pales by comparison now but those first months were challenging...then you found your 'hows'. My dad stopped smoking in his 40's when his 5 year old baby girl, after being asked to go to the corner store for his afternoon pack of Pall Malls, looked up at him with her big blue eyes and said, "No, Daddy, cigarettes are bad for you." He's still here at 86.

Private investors reportedly put £1.72 billion into UK shares in December, the most for a single month since the height of the dotcom madness in April 2000.
http://www.morningstar.co.uk/uk/news/article.aspx?...

FTSE chart here: http://www.screencast.com/t/7xOQNoQMRBjE

The date of the Irish general election is Friday, 25 February. The British banking system and government presumably await the result with more than a passing interest.

Meanwhile the government's half-hearted public expenditure cuts have reached my locality. They are proposing to offload the UK's national heritage forests on to a collection of existing and new charities, and I live in one of those forests. Privatisation of the Forests is an unpopular measure. Our MP who is a junior government minister addressed a public meeting about this issue in my town last night at which the crowd vastly exceeded the capacity of the venue. Those who could not get in stood in the rain and the wind for 2 hours and when the meeting ended a phalanx of 12 uniformed policemen decided to bring the MP out of the back door, frog-march him to a personnel carrier, bundle him in and drive him away. The crowd was predominantly grey-haired and respectable but clearly the police made the judgement that they could not ensure the MP's personal safety if they let him walk through the crowd to his own car. I think the police were wrong, but it was interesting to see the effect of their actions on the crowd. I do not think the MP's personal standing was improved. I saw all this with my own eyes. If George Friedman had been there I think he would have thought it was a significant event. The mood here is changing. No doubt about that.

ALOHA!!

My 27 year old nephew flew in from San Diego,CA to visit here for ten days. He works as a district manager for a pool supply company, which pays well and has good benefits, so he is one of the lucky few of America's youth.

He announced over dinner that this month he will be paying off his car loan on his Nissan XTerra. YAH! In the same breath he also mentioned he has another $19,000 left to go before he pays off his student loan. How did he get this loan? About five years ago he decided he wanted to be a lawyer and go to law school so he got a student loan. Almost a year into it he saw that it was not working out for him and he would also have to take out more student loans and figured it would eventually cost him nearly $200,000 to get a law degree. He dropped out and instead went for a Business degree at Michigan State and got his degree. So for that mistake of "changing his mind" he still owes on his loan.

I found this bit with regards to his situation from another article I read on student loans.

"My name is Luther Callahan and I am one of the many many students who believed in the dream of being highly educated in order to provide a good life for my family. Well...my wife and I believed believed in this. I can not find gainful employment. My wife has been furloughed on her job and has not received a raise in five years.

We don't expect anyone to give us anything this is why we went out and got educated. However, everyone is more than willing to take what we do not have (money). Student loans are due and we can not pay them all. We are receiving the standard threats and are at our wits end as to what to do. Where are the solutions? What is in the works that will alleviate student stress?

Some of the heartless employees of these banks ask outlandish questions like "what was your plan for paying the money back?" I would tell them I did not plan for there to be a global financial meltdown. I had no idea that this would occur. I did not plan for there to be employment freezes and massive layoffs and cuts within my state. We are at a loss and these banks are poised to take everything."

WOW ... so it looks like from what I am reading lately that we are headed for a SubPrime in Student Loans. I did not realize the student loans in America were so large. Here ...

Debt is held by 62 percent of students enrolled at public colleges and universities, 72 percent at private non-profit schools and 96 percent at private, for-profit ("proprietary") schools. It was announced last summer that total student loan debt, at $830 billion, now exceeds total US credit card debt, which is itself bloated to the bubble level of $827 billion. And student loan debt is growing at the rate of $90 billion a year. So we're not talking small change.

Essentially another $1TRIL USD SUbPrime 2 for students ... So what about default rates? I already know the national average on 60-day delinquencies is around 11%. But read this ...

In September 2008, then-Secretary of Education Margaret Spellings announced in a news release that default rates on federal loans were "historically low": only 5.2 percent of recent grads were in trouble. Spellings used the cohort-default rate to arrive at this figure. But the Department's Inspector General Office employed a more realistic method in its 2003 audit, which calculated lifetime risk. It estimated that over their lifetime between 19 and 31 percent of college freshmen and sophomores would default on their loans (depending on the type of loan and when it was taken on). For community college students, the prospects were grimmer still: between 30 and 42 percent were expected to default. And the future was most discouraging for students at for-profits: between 38 and 51 percent were anticipated to default.

Hummmm ... The youth of America will riot. We have the US Congress to thank directly for that since they are the ones who laid the ground work for banks to become predators of our youth. Most kids just want a good educations so they can find a good paying job with benefits, but with a $100,000 loan hanging over your head going into a "Hamburger Economy" it makes for a disastrous start to a lifetime of financial stress.

My nephew has to live at home with his parents so he can pay off his loans and he even has a good paying job for a 20 something! That's amazing! In my 20's I decided to camp out at the beach to save money. I lived out of my 1968 VW bug. I did not view it as being "homeless" at the time, but that's what it was. I just viewed it all as a "surfin' safari"! HA!! Hey, I like the beach, I like camping, I like surfing ... add it up ... hey, I can save some serious cash dude and have fun at the same time! In a Spiccoli sort of way ... I'M THERE! Makes me wonder how many other jobless recent grads are camped out at the beach right now ...

Read this article to get some perspective on how the banks go after the military personnel as well. There is little to no recourse for student loans that go into default. No bankruptcy allowed. Yet for any other consumer loan you can file bankruptcy. This is discriminatory to the core. Just like Income Tax brackets and tax law discriminates against higher income producers. Is there not a more fair way to pay taxes and to engage in loans to our youth who are the future of our country? Any Nation that does not value its youth is doomed to die. A kid gets a loan so he can get a degree so he can get a good job and then when he graduates there is no "good job". Then without any means to produce a decent income how can a student loan be repaid? More SubPrime from Congress.

It is amazing that the US Congress essentially has created a loan shark industry for the same banks we US Taxpayers just bailed out. Its time for true monetary reform, but from a grassroots movement. It's way past time to eliminate the US FED and get rid of the banker-politician monopoly. To expect a top-down reform of anything regarding money and banking is the same as expecting the Sun to rise in the West. The corruption is just too extensive and the conflict of interest is rampant beyond repair.

The abuses of WE THE PEOPLE has to end and it seems Egyptians are showing us the way. Do not despair though because that is exactly what our Declaration Of Independence wants us to do. It is written there that we Americans not only should riot but it is our Right to riot. Go read it ... Read the part about "long train of abuses ..."!!! The US FED was hatched in 1913. That's 98 years ago. I think 98 years qualifies as a "long train of abuses" ... IT IS WHAT IT IS ...

LINK: http://www.counterpunch.org/whitney02042011.html

ALOHA!!

ECX.V's name change appears to be gathering it some market attention.

Les, I doubt the name change moved the share price. The only news out was the new PR firm that was going to be engaged for investor relations. For all we know some Russian investors just bought in the market. What caused the share price move? Who knows! I'll look into it on Monday though or maybe one of my Vancouver mining pals will offer something up this weekend. Not all gold is yellow! In fact most of it is "black" ... So it is interesting that here we have a company with feet in both of the "black gold" plays. On that note I will venture over to the ELKO website and see if there is any earth-shattering news on the North Sea venture. Or maybe AMARC ... Hummmm???

I do agree that these sorts of jumps attract attention, but they also tend to correct substantially as well. I have seen this happen with Lysander(now East Coal) in the past, as well as with many other juniors. Its a 500%+ gain for me over three years time, with most of those gains within the past six months.

My top three TSX junior holdings compared to GLD over a two year period during which the POG has risen substantially, but even at that GLD underperforms ...
LINK: http://tinyurl.com/6grlt23

If the long term gold investors recall when GLD was started(2004) it was touted as a convenient way to own gold and a way to eliminate risk from investing in the risky gold stocks(including juniors). Yet as my chart shows "more risk" is clearly rewarded "more". I would say diversify "yes", but be cautious with the junior sector. Maybe a CARA 50 for juniors would be a good start ...

ALOHA!!

Finally, the government has succeeded in making home prices affordable. All we needed was a once-in-3-generation credit bust to do it.

Dave I agree to a degree, but when you indebt the youth who are now supposed to buy those "baby-boomer" homes how can there ever be a "greater fool"? Every industrialized country in the World is suffering from epidemic levels of the "geezer virus"! Old people just live too long! HA!!

How can house prices rise when there are no buyers? Like my nephew. He wants to buy a house but he says they are still too expensive in San Diego and he won't be buying any home until he first pays off his student loan, which he admits could take a few years. If he could not live at home, where he pays no rent, he could not have paid off his car loan and student loan as fast. Where is all that data in housing inventories? I am sure my nephew is not the only one forced to live at home and pay off debt first prior to entering the real estate market.

Debt is killing every credit and financial sector in America and in turn has killed off the AMERICAN DREAM for good. Every generation since WW2 has accumulated more and more debt and this massive debt accumulation has been facilitated by the US FED, who sets rates. Thanks to the US Congress for greasing those skids!

Same thing in the UK. Huge student loans. Bankruptcy prohibited. Many worthless degrees. Inflation of higher education costs. Exactly the same mess.

I asked one of my staff about her student loan. An intelligent girl, age 21, good degree in human biology, looking at Ph.D "courses" (never knew a doctorate was a course; I thought you locked yourself in a lab for a few years and came out with a thesis)... anyway, I asked, "How much is your student loan?".
"Don't know."
"What are the terms; how long do you have to pay it off?"
"Don't know."
"What's the rate of interest?"
"Don't know."

Turns out she had only one idea in her mind. Keep her salary below the trigger for repaying her student loan as long as possible, her whole life if necessary.

Oh boy, what an incentive. And what a good copy of the subprime disaster.

The Egyptian Economy, China, Davos, Millionaire Squatters and QE To Infinity star in this week's video:

http://tinyurl.com/c2m34v

You know things are tough when... http://www.youtube.com/watch?v=lm06GowX3gU&feature...

MPG office trust is up over 41% from January 5th 30 days ago. MPG closed Friday up 3.24% with a Volume to Average of 1.98M/935,085.00 on Friday up 26% from Thursday’s volume. In the last five trading sessions, the 50-day MA has climbed 4.43% while the 200-day MA has remained constant. Zack’s has reported Maguire Properties (NYSE:MPG) with a Price To Last Quarter Annualized Sales of 0.37x the lowest in the Office REITs industry with the lowest Price To Last Quarter Annualized (LQA) Sales ratios. MPG Office Trust, Inc. is the largest owner and operator of Class A office properties in the Los Angeles central business district.

Shameless I know but I would like my picks to win as I have money riding on this :0

Have a great weekend where ever you are it's sunny and 60 today in Central California where we are about to kick off the blossom trail for the year showcasing all the variety of fruit and nut tree we grow here in colorful bloom.

Hey kaimu,

dunno man, someone was quietly accumulating while the price was doing sideway action. Was that you in 2010? :)

(I wish so many times that I'd caught these accumulation divergences and other signals but I am simply not up to the study discipline required)

But the weekly chart points to bullish action as the market climbed late 2010 and a second bout of action around the name change.

But as you point out it could be just one individual and it is just noise, albeit bullish noise.

I choose to buy more now on the basis of recent buying vol/price action, we're in 3rd year Presidential Cycle, we're in a commodities bull market despite central banker denial and the indexes refuse to roll over.

It's my only holding of black gold and I especially like their placement, outside of the EU's increasingly ridiculous regulatory borders and in a country noted for volatile energy relations with Russia.

If they should move in on other projects, well that's icing...

cheers

davefairtex,

To clarify: the 103.5% (actually you can finance your 3.5% funding fee!) USDA rural housing loans are for primary residences. You can buy a fourplex and rent out the other three units, however you have to qualify with real income like any bank loan. NO Monthly mortgage insurance. These are available in neighborhoods where income is insufficient to buy the average home as in our rural areas.

Check out the requirements here and search zip codes for addresses that qualify:
http://eligibility.sc.egov.usda.gov/eligibility/we...

his last assessment is quite sobering. Based on that I may want to try shorting TCK or FCX.

http://www.321gold.com/editorials/hoye/hoye012211....

Edit: his track record has been not so strong lately http://www.cxoadvisory.com/individual-gurus/bob-hoye/

Zaydac, Kaimu,

Incentive to earn less — spend less - live a simpler life...

Sounds like it will give new definition to "reversion to the mean". Mean as in Neanderthal, perhaps?

We probably have more to work with than any other time in history and this is our direction?

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

Someone here, I'm sure, can give chapter and verse to the question, "What doth it profit a man to gain the whole world and lose his own soul?"

A skywriter over Wall St. and D.C may work. (I remember reading a book in another life in which this method was chosen to proselytize religion. Sort of like the Loni Anderson's character of WRKP in Cincinnati — "I'd like to help without really getting involved" ;-)

-- "President Hosni Mubarak has resigned as the head of Egypt ruling party"

Next he'll give back his honorary degree from GWU, resign from the Kiwanis Club, and cancel his gym membership. The only position anyone cares about is the one where he runs the country!

Interesting, news on QE3 coincided with intermediate low in dollar on 2/1/11. Bonds seem to lag behind dollar.

http://www.reuters.com/article/2011/02/01/usa-fed-...

Grym, I think this TLT move is less about QE and more about inflation expectations - though trying to guess why any market does anything is a bit of a fools errand. I've been thinking all along that TLT would rebound, but it just hasn't. Every time it tried, it just got sold. I've held my short all through the move down, but haven't increased it the way I probably should have.

Last QE inflation was nowhere in sight. Now with QE2, commodity inflation seems to be raging around the world, taking down governments left and right and making poor people starve. Although Bernanke is working hard to pretend it has nothing to do with him, it is hard to ignore. He wanted inflation, he got inflation, and now he's trying to act as if it doesn't exist. One wonders how long everyone will put up with it.

I could even see a treasury sell-off used as a not so subtle foreign policy tool by one of our creditors. Perhaps that's happening even now.

Equities could continue just grinding up until May. Imagine what commodity inflation will look like with another 300B of printed money floating around?

The really amusing thing is, we haven't seen even a whiff of inflation in Real Estate - the place where Bernanke most wants it to appear. Casino Banking isn't interested in buying SFH inventory, I guess. Its hard to blow a bubble in the same place twice - once burned, twice shy.

I think its time for a new system. I'm tired of this one.

It's added California Kid. I did this off my iPhone a couple times; just wish it had java...
http://stockcharts.com/def/servlet/Favorites.CServ...
Couple good picks, will create a perfchart so all of the list can be instantly compared on one chart.
Earl

The big question going in is whether it will buy them a foot in the door to get an opportunity to show what they can do when they get out.

Without knowing that, its pretty difficult to judge whether it will be money well spent or not. So far, that hasn't gone well at all. My daughter graduated Magna Cum Laude with her BA, and couldn't get anything, so went on to grad school and got her masters, also Magna Cum Laude, I think, and even did her internship at the Smithsonian, and STILL no opportunities except non-paying internships and part time jobs with no benefits. And that degree was from a top echelon state school, not a shabby school at all.

But I think it was right to give her that chance, and not have her starting out behind the 8-ball. She will make good in the world, I'm sure. I think she has now realized that you need to use the internship time not only to display your ability and skill, but also to network yourself into a position.

Things are rough out there...

I recall reading a fun fiction book where the presence of a certain creature caused all sorts of unlikely but possible situations to start happening. One such situation involved all the air molecules in the room to suddenly move (through random brownian motion) to the right side leaving the left side of the room a vacuum.

Possible? Yes. Likely? I forget how many lifetimes of the universe have to go by before such a thing has a decent chance of happening if "normal odds" remained in play. Let's call that unlikely too, but not impossible.

dave-

The 1929-33 bear market was punctuated by several explosive rallies. That's not fiction.

The odds that we're experiencing one now? Pretty good. The odds that we're due to retest and/or exceed the 2008 lows? I don't know. Does it really matter?

The point is to make money during this rally. That's all I'm trying to do. Sitting on the sidelines waiting for the indexes to turn over doesn't do it for me. Trying to short the rally certainly didn't work well. Now that I'm playing the long side, I'm making money.

We're programmed to look for associations/reasons/causes. The problem starts when we 'find' one- as soon as we come up with one that makes sense, we become biased. And if our bias is based on faulty premises, it gets in the way of trading prices.

Each rally during 1929-33 was followed by sell-offs that took the DJIA lower than the previous low. Anyone who shorted and held on was ultimately vindicated. Anyone who sat out the market was vindicated. But it was also possible to make money during each of the rallies- a lot of money. And there's no guarantee that 2008-12 plays out the same way. What if the low was printed in 2009, and the market never looks back? What if we in fact see GS's predicted SPX 1500 by December? It's more fun to make money while waiting to see what unfolds, no?

Kinda like 1920's Germany except we all use digital wheelbarrows and nobody gets raises (because we pretend inflation isn't real), so standards of livings fall precipitously.

I don't know whether I should be wearing a tin hat or not, but this is an interesting conference call. IF you do a lot of research or just bored listen, the Fed is going to be eliminated, the Federal Reserve will be gone. Money will be Treasury Notes instead of Federal Reserve Notes. China is pressing the administration for a level playing field and does not want the currency of USA to collapse.

https://app.freeconferencecallhd.com/playback.html...

But we can't keep borrowing, and there is no way the money can be repaid in real value terms.

Its all hopeless as long as we produce less than we consume.

Is this like the 50s radio war of the worlds?

That happened last year. They called it the Flash Crash ;)

2nd -

Yes we all know about the explosive rallies during the 30s. This rally isn't explosive. And, the Fed didn't print money back in the 30s - well at least not until FDR confiscated gold, that is.

Now then, your points about going long, making money, not shorting, etc are very well taken, and I have to say, I'm in agreement with you.

To trade this market I've had to become comfortable remaining in a state of cognitive dissonance.

I can't help but notice that you too seem to be "looking for reasons/causes" rather than just trading prices. The answer you have found that "this rally is real, not manipulated" is something that makes you feel better, I'm guessing. I on the other hand say "this rally is not real", and yet my actions are quite similar to yours. (Yet the answer I found does not make me feel better, sadly...)

Looking at Cameron apologise that no tax cuts will be forthcoming because:

"when you're borrowing 11 per cent of your GDP, it's not possible to make significant net tax cuts. It just isn't."...

http://www.telegraph.co.uk/news/newstopics/politic...

...I took a look at the FTSE 100. It is as attached and has its outcomes developing as the macro outlook deteriorates and legislative and monetary authorities respond with their own policy prescription. As you can see it has mirrored the DJIA but its strength is weakening in the face of deteriorating economic conditions that are not being fluffed up by politicians.

So the Dow is a reflection of Econoday's improved business conditions, the awful fiscal condition of the US (note improving private asset conditions vs. deteriorating public assets) and the Fed's unnatural but long-standing policy of keeping rates too low too long.

"Only price pays" is a maxim I'm trying to ingrain, regardless of the intellectual exercise I enjoy engaging in pertaining to all that surrounds price. The phrase 'variant perception'had me looking up the internet. I found the following. Food for thought:

Maybe the most intriguing aspect of their commentary though is the list of consensus views they've compiled. They've outlined 10 areas where there are currently consensus views in the market; areas where East Coast has strafed away from the crowd and into an opportunity with a perceived edge. They see these variant opportunities as a means to mitigate risk away from the consensus. This is a topic we've very briefly touched on in our piece where we examined the hedge fund herd mentality.

Below is East Coast Asset Management's list of 10 consensus views and their corresponding variant perception:

1. Consensus: Everyone is a macro-economist. Variant Perception: Fundamental/value investing and focusing on micro themes is the key.

2. Consensus: Binary extreme outcomes of inflation/deflation. Variant Perception: Individual investment merits based on expected return.

3. Consensus: Flood to fixed income as individual investors chase yield. Variant Perception: Bond bubble. Attractive equity total return expectations.

4. Consensus: Inflation protection via TIPS. Variant Perception: Owning businesses with pricing power.

5. Consensus: Gold - speculators are weak holders. Variant Perception: Own gold for mid-long term as paper currencies are debased. John Paulson started his gold fund for the exact same reason: as a bet against the US dollar.

6. Consensus: Overly bearish. Variant Perception: Bullish on fundamentals.

7. Consensus: Short-term time horizons. Variant Perception: Mid-to-Long term time horizons.

8. Consensus: Low rates will be the norm. Variant Perception: Interest rates will dramatically rise across the curve. (Legendary hedge fund manager Julian Robertson had previously placed a bet on sharply rising interest rates).

9. Consensus: Inferior companies can thrive. Variant Perception: High quality companies have a competitive advantage. East Coast specifically highlights Nestle (NSRGY), Waste Management (WM), Colgate (CL), Coca Cola (KO), Novartis (NVS), and Express Scripts (ESRX). We've seen numerous hedge funds become bullish on high quality companies as well. In particular, Andreas Halvorsen's hedge fund Viking Global favors ESRX. Additionally, we earlier today highlighted East Coast's bullish stance on Beckton Dickinson (BDX).

10. Consensus: Complexity. Variant Perception: Simplicity.

Read more: http://www.marketfolly.com/2010/07/consensus-versu...

And once there, he tries to ferret out the history of the Irish banking troubles. Its a fascinating study of culture, banking, history, and story-telling. The Irish story is not like the US story, it is its own home-grown trouble, more innocent in a way. Worth reading.

http://www.vanityfair.com/business/features/2011/0...

Dave,

I really have no definitive opinion on overall inflation or deflation. Well, not quite true. I can see price increases in those things which we are supposed to ignore like eating, fueling my car and heating my home, but all around me are houses which are unsold at ridiculous prices, unemployed and many more underemployed people. I'm trying to avoid using my business experiences in this weird and senseless era.

(I did however take gains on PFE when they cut R&D — old thinking won out.)

I'm just watching the TLT chart and its past reactions to market sentiment and the confidence/fear factors.

Waiting for a change is a real problem for me. Forty+ years of investing tends to trap me into cause and effect thinking and choices. I suspect TLT yields look less tempting than high yielding stocks and the market rise in general right now — mass hype and the herd effect can keep momentum up for unbelievable periods. The economy has been blessed by the White House, brokers and media as "on the mend, but just a little slower than usual."

Nothing does what it "should" anymore. (Even Bernanke found this out when anticipation of QE2 drove Ts up in yield instead of his expectations. It cost me some gains, but I loved seeing him faked out.) But big money seems to now be dragging some individuals into the tar pit and keeping the indexes edging upward.

Think of watching the game today while letting individual officials make unheard of calls on the plays — allowing extra players on one team while hobbling the other. Then, finally giving the trophy to the biggest ever loser and pronouncing it the "Best Ever Bowl Game".

Even my old "stable" GNMA fund (VFIIX) where I've often parked large sums to draw a 3% yield has taken what is an extreme downturn for it.

If QE ends on schedule we may see a "Sell in May" episode, but what happens if we have endless QEs?

I ended 2010 with a respectable gain even with half my money in cash, but have lost about 1% YTD and have been tempted to go to cash (except for my bullion insurance position) for the fifth time in a decade.

"The really amusing thing is, we haven't seen even a whiff of inflation in Real Estate - the place where Bernanke most wants it to appear. Casino Banking isn't interested in buying SFH inventory, I guess. Its hard to blow a bubble in the same place twice - once burned, twice shy."

Our biggest problems: too many houses underwater, too many people earning far less, too few good jobs in the US, too many grads without prospects and too many old guys like me hanging around.

My present opinion overall is: Bernanke still fears deflation and in fact has not yet been able to create enough inflation to "cure" the debt. Our 70% consumer led economy is far to short on earnings to sustain itself. Only the high-end earners are doing well and the peons are getting increasingly wise to what has been going on for at least three decades. Real data shows median household income has fallen since the 1970s and has reached a point where not only retirees are faced with basic choices (food or meds?) — a large younger segment is too (food or mortgage?).

"I think its time for a new system. I'm tired of this one."

In a rational society we'd borrow a guillotine and be done with these elitist jerks.

Nice observations - similar to what I've been thinking, in some respects, for quite a while; but as a trader / investor whose [secondary] purpose is to grow my wealth, i.e. "make money"; my primary purpose being one of earning a salary to support my family.

These past few years have been marked by poor returns on traditional investments, cash in MM or other cash accounts; fairly low bond yields with above-average interest-rate risk; a stock market that certainly must be considered "inflated", nevertheless possessing momentum to go higher; I had to ask myself, as I'm sure many others have: 'what do I do today'?

Hence I took on more risk with equities; not 'all in' but with a portion of what I have; since "trading", for me, is out of the question; I have to spend a lot of time in research, buy and hold, and hope.

In response to some of your statements, I would say that most of the world does not want to see the US "go out of business" - it's simply too important of a market, and politically, well, the world needs us; much as many of our neighbors with whom we share this planet state and think otherwise. Regardless of internal fragmentation.

And I for one, don't see hyper-inflation; although, inflation is certainly a probability from here; but that also can create opportunities, no? How about long-term USTs from 1980 that paid 12-14% for the life of the bonds? How well will PMs do from here if inflation really gets going? Not that that paints a rosy picture either...but we can't solve nor address all of the problems all of the time either.

Don't see the world starving; there's still plenty of arable land; thinking Ukraine, Canada, the mid-West of the USA, etc etc; on a side note, in the 1930s Depression, a lot of US produce was left to rot, rather than try to get it to market.

Quite interesting situation, as you stated.

financialsense and kingworldnews are two websites I follow.

both of them are bullish on silver. but financial sense just had a silver round table and have Jeff from CPM claim that there is no silver shortage. how could he be bullish on silver? I recall he has been bullish on gold/silver for a long time. he also has a core physical holding. I just don't understand his logic. he is contradicting himself.

on the other hand, Ben Davis on Kingworld news said there is a possibility to come to silver money. I see that possible as well. if that happens, it will have the silver shortage.

From the latest Vanity Fair publication:

For a few hours the Merrill Lynch report was the hottest read in the London financial markets, until Merrill Lynch retracted it. Merrill had been a lead underwriter of Anglo Irish’s bonds and the corporate broker to A.I.B.: they’d earned huge sums of money off the growth of Irish banking. Moments after Phil Ingram hit the Send button on his report, the Irish banks called their Merrill Lynch bankers and threatened to take their business elsewhere.

The same executive from Anglo Irish who had called to scream at Morgan Kelly called a Merrill research analyst to scream some more. Ingram’s superiors at Merrill Lynch hauled him into meetings with in-house lawyers, who toned down the report’s pointed language and purged it of its damning quotes from market insiders, including its many references to Irish banks. And from that moment everything Ingram wrote about Irish banks was edited, and bowdlerized by Merrill Lynch’s lawyers. At the end of 2008, Merrill fired him.

One of Ingram’s colleagues, a fellow named Ed Allchin, was also made to apologize to Merrill’s investment bankers individually for the trouble he’d caused them by suggesting there was still money to be made on shorting Irish banks.

Read More http://www.vanityfair.com/business/features/2011/0...

ALOHA!!

Bill-Now that you brought "Wall Street" into it I guess I would have to define "junior" as it seems to me that Wall Street, the same Wall Street that created the GDXJ, has no clue what I mean by the word "junior". I took this from a Seeking Alpha article on the GDXJ ...

The top holdings in GDXJ at its launch are:

* Coeur d’Alene Mines (CDE), 6.6%
* New Gold (NGD), 5.6%
* Silver Standard Resources (SSRI), 5.4%
* Hecla Mining (HL), 5.2%
* Gammon Gold (GRS), 4.7%
* Alamos Gold (AGIGF.PK), 4.3%
* Semafo (SEMFF.PK), 3.8%
* Silvercorp Metals (SVM), 3.7%
* European Goldfields (EGFDF.PK), 3.4%
* Golden Star Resources (GSS), 3.34%

None of the above fit into my classification of what a true "junior" is. In my mind and the way I operate those companies in the GDXJ are not even "risky", even though the article says they are "notoriously risky".

Perhaps we should have a different CARA 50 JUNIOR based on the stages of operations. For instance the highest risk would be the CARA 50 JUNIOR HR(High Risk) which would be all "explorers" based on certain rated criteria that would include:

-Management
-People Tree
-Cash
-Burn Rate
-Dilution
-Property
-JV
-Coverage
-Currency

These would be all "juniors" who were pure exploration companies who were either still exploring or have announced at least one PEA/PFS and who traded at a share price less than $1. These could be on any exchange where we had strongest junior support, mainly TSX and ASX. I do not think the OTCBB in the USA is worthy.

The next CARA 50 JUNIOR MR(Medium Risk) would be those "juniors" who are one year or less (development stage) from production and already have a feasibility study complete and are stating mine construction within one or two years.

The next CARA 50 JUNIOR LR(Low Risk) would be those companies who have at least one year of production under their belt. Not just any production but production that met or exceeded their stated goals, both in terms of ounces produced and in terms of economics/profit.

Now that would be truly JUNIOR in my book. Who the hell here calls SSRI a "junior"? Or Alamos? Or CDE? Heck CDE has been producing for 100 years now! To me those companies are about as "junior" as NEWMONT! In my mind that's like calling MSFT a "start-up"! But hey, that's Wall Street, right? Anything for a quick buck!

The way I work a junior is to buy SUPER LOW and in large blocks of shares, mainly through private placements. You may ask yourself. Holy Cow that's really risky!!! HECK YEAH!! I would reply, but in a backwards logic ... NO! See if I buy say 100,000 shares of LYM-Lysander in a private placement(PP) for $0.10 per share my exposure is $10,000CDN. It is actually less than $10,000CDN if I used a USD to buy. Back then I would have only paid $7,5000USD or $0.075USD per share due to the currency exchange rate a few years ago. If my gamble did not pan out I would have only lost $7,500USD, but look now what happens when you have at least "one" success. The Friday intraday on ECX was $1.00CDN so that's a 1000% return on that PP. That $7500USD PP is now worth $101,000USD if I convert to USD at IB. Add in the fact that the PP I participated in a year ago I can now buy a one share warrant for $0.15CDN, so now I have 200,000 shares of LYM with an average buy-in of $0.09USD($0.10+$0.15/2), with the exchange rate it ends up being less than or equal to the original PP price. This is the value of currency arbitrage. Add that factor into the bottom line and now I have a stock worth $202,000USD that I bought for $19,000USD. Spread over a three year hold that earns me over $67,000USD per year and all I did was make two trades to buy and one trade to sell or over three years one trade per year. Now that is what I call "low maintenance". But remember without exercising the warrant my total loss would have only been $7,500USD. After making some $200,000USD each on past junior trades like NDM and UXG I could afford about ten $7,500 losses, especially since I am carrying no debt(no mortgage). Like a shotgun approach I buy into numerous PPs. Or if I see extraordinary success coming on one then I load up on the next PP the company offers. So when you see me with FDs of 600,000 or 1.9 mil shares now you know how little I have at risk thanks to PPs and currency arbitrage. To the novice they are looking at 600,000 shares of ECX and thinking I put up at least $300,000USD or more. Do the math. In my example, 200,000 shares cost $19,000USD so what did 600,000 shares cost? This is how the BIG GUYS like the Sprotts and the Maquaries make their BIG BUCKS!

Such a Fund could pool investors funds in a way so that even a small investor who could have never bought a PP can now participate through the CARA 50 JUNIOR(HR)Fund. There is an "accredited investor" restriction on all PPs that would restrict small investors from participation($1/$2mil net worth minus house). Also many small investors do not have a large enough network to get in or get invited to a PP even if they met accredited investor rules. Some PPs are closed unless you are on the Presidents List or know someone. The idea for a PP from the junior company's perspective is to have as many deep pocket investors buy in to the PP so that there is a minimal shareholder list and a continuous flow of funds with strong hands for future PPs. Of course I am referring to "non-brokered" PPs.

Stocks like Pinetree-PNP do this but they do not offer three risk levels.

Just my two dingos worth!

Dr.,

Thanks for the Jimmy Rogers link.

I've read two of his books. Before he went on a three year global tour he put all his money in a commodity fund of his own making because none of the mutual funds were purely commodities. He tripled his net worth while driving around the world investigating world economies.

I remember when he used to be on CNBC quite often and at one point when someone was disagreeing with him and citing his reasons Rogers replied, "Well, if you are going to offer government data as the basis of anything, we have nothing to discuss."

In this interview all CNBC people are trying to argue him out of his stance on commodities and he simply says OK if you believe you are right invest there. He is far more tolerant and patient with these shills than I could ever manage and I commend him on his simple reply.

I believe for the long haul he is still right. If he were in the movie "The Graduate," he'd be saying "Commodities" rather than "Plastic".

Not sure I will live long enough to profit from taking a large position, but my kids may. On the other hand I remember thinking, "I'll never need to own a computer, but I just get one to see what they are all about." That was 13 computers, 5 printers, 3 scanners and countless software upgrades ago way back in 1990 ;-) I would have been out of business a dozen years sooner if I hadn't been curious.

FD: I haven't done well shorting TBT, but have made money on TLT — just not a dedicated trader, I guess.

ALOHA!!

Boy, if the Swiss want to lynch you then where can you hide out? Hummmmm??? Dallas ...

Bush cancels Switzerland visit under threat of protests, efforts to arrest him
By Bridget Johnson - 02/05/11 09:59 AM ET

President George W. Bush has canceled an event in the famously neutral country Switzerland because of expected protests to his presence there.

Bush was supposed to give the keynote address at a Jewish group's charity gala on Feb. 12 in Geneva.

Leftist groups had planned to protest the visit, according to news agencies. But several human rights groups had also filed criminal complaints against Bush, demanding that he be taken into custody if he stepped on Swiss soil and investigated for allegations of ordering torture.

A right-wing member of the Swiss parliament also demanded last week Bush's arrest on war crimes allegations if he came to the country, according to Reuters.

Swiss officials countered that, as a former head of state, Bush would be protected with a level of diplomatic immunity, and Keren Hayesod, the group that had invited Bush, said the court actions against the former president did not play into the decision to go forward with the dinner without him.

"We didn't want to put people and property in Geneva at risk. The gala is maintained but George Bush will not take part," the group's lawyer, Robert Equey told the Tribune de Geneve. "The (criminal) complaints did not weigh in the decision."

He noted protests against the G8 summit just across the border in France in 2003 that ended up rampaging through Geneva.END

LINK: http://thehill.com/blogs/blog-briefing-room/news/1...

If you're looking for community support I love this idea as I'm sure everyone else does. Back to reading; great weekend on this board.
Best Regards All
Earl

And loannetter - the really fun fact is, you are one of the cogs in the inflation machine. Money only is created when people willingly take on debt. More debt = more slavery. And more debt = debased currency. Imagine, in your career, how much money have you helped to print? Hundreds of millions? More?

Don't take that as a knock. I used to design and build trading room systems for HB&B. It was fun! Would I do it again? Probably not after all that has gone down.

The current system is a set-up. From beginning to end, its a setup, organized to entice us all into slavery, preferably for life. The good thing is, you already know this.

As far as I can tell, the only time debt is your friend is when there is a sea change from a low inflation environment into a high inflation environment. Its at that moment you can stick it to the system - paying them back with highly inflated dollars, at a (relatively) low interest rate.

We may be entering one of these times now - or maybe not. I'm watching the bond market for my clues.

I have to ask, davefairtex:

What do you consider yourself now as a trader? Funding the efforts of HB&B and other industries with your own cash?

No role is pure, no intention perfect. We all do what we can with what we have. Many times I talk people OUT of debt; but I doubt you will believe that coming from a 'money changer'. Responsible debt management (my legal role as a fiduciary by the way) runs counter to making more debt for the sake of a commission. I train people to make the best advantage of our monetary systems. Are we not all cogs in our ecosystem of interwoven supply and demand? What I am making is a life.

PS I'd love to see YOUR trading room :)

Hi Davefairtex: "money creation" those value added items, where you take wood and create something someone else wants; you may not have to take on debt but use other forms of remuneration as an exchange, or barter which should not in that case create anything other then satisfaction and well being. I agree fully that participating in the current 'normal' FRN (federal reserve note) system is as you say, debt creation.
Regards
Earl

ALOHA!!

loanetter - Thanks ... I find it interesting that in NOV 2010 there were 400,000 new "subscribers" to the EBT program(food stamps) yet how many "real" jobs were added that month? 40,000? Look at that SNAP chart. If only the BLS jobs chart looked that good! Holy Cow!!!! 43.6million Americans!!! Thats a lot of Egyptian riot insurance!!!

I know a couple here in Hawaii where one is earning a paltry salary, but is only working for the benefits and the other is filing for all the welfare like food stamps and section 8 etc. In effect the US Treasury has a net loss, because the tax revenues from the one working is completely offset by the welfare benefits paid to the other. Yet this is what people have to do to get by in a manner they are accustomed to. All this "lifestyle financing" via welfare benefits and unemployment benefits is all financed by US DEBT. There are not enough tax revenues in America to even keep up with line item outlays from Congress. Its a sham ... They put Madoff and Martha Stewart in jail for less. Its out and out fraud on a massive scale yet everyone acts like a deer in the headlights! Remember what David Walker said, ex head of the GAO, on 60 Minutes? How many times has that speech been repeated and its even being repeated now by Bernanke, Geithner and Obama! If the top leaders of the monopoly have no plans to intervene on taxpayers behalf then who does? Congress? These guys are all riding this out to the end and they are all buying property in Uruguay and opening bank accounts in the Caymans as they keep voting themselves raises and more perks and benefits. Where's NERO?

Yes, I was very much aware of the end of year selling... I think this is what threw many for a loop, including myself ( the 1/20/2011 Form 4 Filings )...> http://www.nasdaq.com/asp/quotes_sec.asp?symbol=OR... posted this to Earl 3 days before the FDA decision/// The 180,000,000 share day on Feb. 1 just shows the power of computerized trading.. OREX will need additional cash, IF they continue with Contrave. I am no longer in, nor plan on it. One possible scene is approval in Japan/Asia, and/or buyout by their partner in Japan.. I have weighed the odds from months ago ( when I bought, heavy, before the 13 - 7 FDA panel decision, due to reasons I posted then ). This time I only went in for 1/3 as much, but still got hit hard.. I was wrong and will be the first to admit it. This really wasn't about whether the drug worked or not ( re: DNDN ).. it was the odds of the approval.

loannetter -

Most definitely my trading activity helps to fund HB&B with commissions, at the very least. Participation in the system overall lends it support as well. I think Kaimu is probably doing it best - buying with PPMS, giving his money directly to organizations he believes in which is used to actually fund activity.

I want a new system. Preferably one where each unit of currency in existence isn't backed by slavery.

The market's failure to give me satisfaction on my short entries, when viewed with TLT's end of week drop, finally made me understand what was going on and why this market won't easily roll over. Thank you for your continued assistance in aiding this understanding. Illustrating the $trannie divergence with $indu as you did makes for a couple of setups to watch this week.

http://www.abc.net.au/news/stories/2011/02/07/3131...

Tony Blair will continue to support a dictator in power in order to avoid the possibility that the Muslim Brotherhood will be elected into power. A quick look at the Wiki history of Mubarak's former boss Sadat suggests that taking the strategic decision to maintain peace with Israel is fraught with many dangers, especially from hardliners with religious political leanings.

The US has been arming Egypt for decades, possibly to bolster that peace on Israel's southern front as Jordan has kept the peace on Israel's eastern front, although Carnegie suggest internal control as well, which no doubt has an element of truth to it (although the big ticket Pentagon poodle programs are not arms useful to control internal strife).

http://www.carnegieendowment.org/publications/inde...

The canal obviously has a strategic imperative as well, but interestingly a hedge fund trader remarked that US oil doesn't travel through the canal anymore as the ships are too large. Closure of that canal apparently remains a European problem.

The Fed and Congress are responsible for this mess as unwavering support for the maintenance of the status quo in the region is backed up by inflated money. We've talked about welfare programs in the US that must be dealt with if the books are ever going to be remotely balanced, which probably won't happen, but whole swaths of political equilibriums must be rebalanced or will disintegrate as the US $ becomes more worthless and hard choices are made about how places like Egypt define their economic, political and social fabric.

Obviously US politicians and the Pentagon aren't particularly pleased of the prospect of putting 1000 Abrams tanks and 300 F-16's in the hands of democratically elected religious fundamentalists, which could well be the case IF democracy were to function anytime soon in Egypt, which I suggest it will not be allowed to.

US military aid is no longer sufficient to maintain a functioning state while that inflated US dollar creates hardship for the people of these puppet states. Either violence will be used in order to maintain the status quo for as long as possible or the US and Europe must accept a potential sea change in politics and most likely not for the better. All that adds up to additional market volatility to come in the years ahead. The 'Great Moderation' we've witnessed these last 20 years may well prove more costly than we would wish.

http://www.spiegel.de/international/world/0,1518,7...

"More than 40 percent of the government bonds the Fed bought in January for its so-called quantitative easing were auctioned in the previous 90 days, up from 20 percent in December and 15 percent in November, according to Bank of America Merrill Lynch. The central bank is concentrating on newer securities as its $600 billion program depletes primary dealers’ holdings of Treasuries to the lowest since November 2009."

I believe that's called monetizing debt.

"Quantitative easing has boosted demand for Treasuries as President Barack Obama’s budget deficits exceed $1 trillion, adding to the nation’s $8.96 trillion in marketable debt. Investors bid $3.04 for each dollar of bonds sold in the government’s $178 billion of auctions last month, the most since September, according to data compiled by Bloomberg."

?? let me add a few more question marks here.... ??

“They’re getting all the bang for their buck that they can” by purchasing so-called on-the-run bonds, said Mitchell Stapley, the Grand Rapids, Michigan-based chief fixed-income officer for Fifth Third Asset Management, which oversees $22 billion. “When you’re the largest buyer out there, when you replace China in terms of the size of your holdings of Treasury securities, that will happen.”

This I understand. America is now the largest holder of its own debt.

"Creating more demand for newer bonds gives Wall Street an added incentive to buy at government sales, helping keep benchmark yields in check. Dealers are more likely to bid more aggressively at Treasury auctions if they can sell to the Fed in the not-so- distant future,” strategists at Bank of America Merrill Lynch said in a Jan. 31 note to investors."

So if I understand correctly the only game in town is Wall St and the Fed. And they don't call this a Ponzi scheme?

"“The Fed has monopoly control over front-end rates,” Dyer said. “But in bringing down long-term interest rates, the Fed is having a much tougher time.”"

great, so home owners are screwed. This is nuts.

http://www.bloomberg.com/news/2011-02-07/fed-spend...