Bill Cara's Blog for Nov 14, 2011

Nov 14 (Reuters) - The leader of Greece's main conservative group Antonis Samaras said on Monday his New Democracy party would not vote for any new austerity measures and said the mix of policies demanded by international lenders should be changed.

"We will not vote for any new measures," Samaras told a meeting of his own MPs.

He added that he would not sign any letter pledging a commitment to austerity measures, as has been demanded by EU Economic and Monetary Affairs Commissioner Olli Rehn, and that a verbal pledge should be sufficient.

Let the games resume!!!!!

Good morning.

PFE - Pfizer downgraded to Market Perform from Outperform at Leerink citing valuation and limited pipeline catalysts in 2012. The firm keeps a $21 price target for shares.

TEF - Telefonica downgraded to Neutral from Overweight at JP Morgan.

------

"I'm all in favor of keeping dangerous weapons out of the hands of fools. Let's start with typewriters." - Frank Lloyd Wright

Germany's constitution is highly respected, but it also obstructs the transfer of power from Berlin to Brussels -- a fact that has hindered the rescue of Europe's common currency. At the CDU's party conference this week, Angela Merkel may push for an overhaul of the Basic Law in order to hasten euro bailout efforts.

Sorry, should have been more clear. I meant it underperformed its PIIG counterparts at the end of last week.

No growth in Q3 GDP. Also, Spanish banks borrowed €76bn from ECB in Oct, up from €69.3bn in Sept

During the boom years, a lot of newly created Spanish jobs were in the construction industry. The question is: Where do the jobs which will be needed to replace those come from?

going long with a few Feb calls this morning. Bill said to pick 5 to follow and this is one of mine.

bclund
Green hammer on the 15 min on $AAPL. Will get long above the top of it at $383.40 w stop at LOD. First target $388.00

http://www.zerohedge.com/news/congressional-inside...

One word: WOW!

The system is more corrupt that I ever imagined.

Someone needs to notify the OWS folks.

60 Minutes did a great job on this last night. Nancy Pelosi & her husband have participated in 8 IPO's including VISA where they got ample stock. When Steve Kroft asked her a question about it at her press conference, she got visibly upset and essentially evaded answering (Read: LIED).

Simply put, these people are double-talking scum.

Here's an excerpt:

"Congressmen and senators also seem to have a special knack for land and real estate deals. When Illinois Congressman Dennis Hastert became speaker of the House in 1999, he was worth a few hundred thousand dollars. He left the job eight years later a multi-millionaire.

Jan Strasma: The road that Hastert wants to build will go through these farm fields right here.

In 2005, Speaker Hastert got a $207 million federal earmark to build the Prairie Parkway through these cornfields near his home. What Jan Strasma and his neighbors didn't know was that Hastert had also bought some land adjacent to where the highway is supposed to go.

Strasma: And five months after this earmark went through he sold that land and made a bundle of money.

Kroft: How much?

Strasma: Two million dollars.

Kroft: What do you think of it?

Strasma: It stinks."

It sure does...social inequity in action at the highest G-D levels.

Ie. placing the Obama trade on intrade?
I did (sold some shares).
It's about 50/50 now:
http://www.intrade.com/v4/markets/contract/?contra...

This line goes up almost nonstop today.

jack,
I must admit that I only recently found Intrade. Great concept as you can see what people are betting money on rather than just expressing opinions!

Oh boy, the ultimate Black Jack table Jack Black LOL. Why not!

sorry duplicate, PC hiccuped

OMG! that's just not good.

"Permanent EU Bailout Fund Off Limits Until 2013"

http://www.bloomberg.com/news/2011-11-14/permanent...

And everyone thinks WE are dysfunctional? I think it's a toss up.
We may win on corruption.

Hussman's latest is as always a great and sober take on the market. His comments on gold vis a vis USD appreciation are spot on imho.

I find no material support for his comments that gold miners are now attractive because of their historic low valuations to gold. But I believe at some point the situation will change, just not while the USD remains strong, I suspect that between hedging programs, options and other exotic share agreements in the miners, they will continue to disappoint relative to gold .

http://www.hussmanfunds.com/wmc/wmc111114.htm

As always, our hedging reflects the overall return/risk profile that we observe at any particular time. Presently, we do expect some potential for additional "flight to safety" movements toward the U.S. dollar, but not enough to hedge off all of our currency risk.

As for precious metals, gold prices tend to be inversely correlated with the dollar provided that gold prices are relatively stable in foreign currency terms. At present, we observe continued upward pressure on gold prices in foreign currency terms, so even the prospect of a stronger dollar doesn't necessarily imply weakness in the dollar price of gold. Moreover, gold equities are near record lows relative to the metal, and combined with other factors, we continue to gauge the Market Climate in precious metals shares as very positive. Strategic Total Return continues to carry a duration of about 3 years in Treasury securities, with a few percent of assets in utility shares, and about 20% of assets in precious metals shares, which account for most of the day-to-day fluctuations in the Fund at present.

I knew about consultants and lobbyists. At least they have to work (ie make some phone calls to buddies).

Inside trading is very wrong and creates a whole slew of conflicts of interests. Like the example of the guy who wanted banks to fail as he shorted them.

Tell Congress to do something worthwhile....for a change!

"The U.S. House of Representatives: Tell Congress to Pass HR 1148 Stock Act Now!!"

http://www.change.org/petitions/the-us-house-of-re...

"... World production of wheat, the most-planted grain by area, will gain 5.3 percent to 683.3 million tons, the second-biggest crop ever, the USDA forecasts. The FAO predicts a 6.1 percent increase to a record 691 million tons. Global stockpiles at the end of this season will advance 3.6 percent to 202.6 million tons, the highest in a decade, the USDA estimates.

Prices that dropped 20 percent to $6.3675 a bushel (172 euros a ton) in Chicago this year will decline as low as $5.90 by the end of December, according to the median estimate of nine analysts and traders surveyed by Bloomberg earlier this month...."

http://www.bloomberg.com/news/2011-11-14/wheat-shi...

Hmm, tell that to Costco and the price on a loaf of bread

The USDA is as bad as the CBOE in the accuracy of their forecasts.

The current Thai flooding may do a number on the price of rice for a while, as they produce 12% of the world's supply. More food inflation for billions of hungry Asians who can't afford it.

"Why did it spread around the world? Monkey see monkey do."

Add historically low interest rates which encouraged real estate buying. In Canada though there was no orchestrated push for lending to everyone with a pulse and while standards certainly got relaxed a bit, they never went as low as in USA. As a result, while of course not immune to future shocks, Canada still had no appreciable housing price drop.

Sorry I did not get back with you ( dndn ).. she will have to wait on Q over Q, ut it ain't going away.. mdvn a good ways from production.. regenerative bio's and chemo medical delivery ... So very many things going on in their world.. 2012 and 2013 will be happening.. short list of favorites.. best to you, baz.

Looks to be at the 200Dma It looks like that line is a good level of support.
Time to Buy?

ALOHA!!

Yada ... Anyone who suffers from severe USD TUNNELVISION need only look at this chart to see just how well the US FED STRONG DOLLAR POLICY has worked out.

LINK: http://1.bp.blogspot.com/-Om0I7Ta8rS8/TmamLcW0ZBI/...

Looking at the TRADE WEIGHTED USDX I only see three currencies on that pie chart that should be there and I am counting the Euro as a half. The rest are what I would term "dead weight" or rigged to favor the USD. I am sure this weighting was calculated by Goldman Sachs.

Here is a list of the top ten countries where the USA has the largest trade deficit as of Sept 2011:

1-CHINA
2-MEXICO
3-JAPAN
4-GERMANY
5-CANADA
6-SAUDI ARABIA
7-VENEZUELA
8-NIGERIA
9-IRELAND
10-RUSSIA

Wow ... we hear all day long about China and Japan, but Mexico? Numero Dos? Yes, according to the source, the US Census on Foreign Trade. Nigeria ... really? Venezuela and that Chavez? We're still greasing his wheels? Look at those Saudis they love our Treasuries! Some of our largest deficits are with Communist countries! What happened to the dominoes?

Shouldn't the USDX be weighted more realistically reflecting the USD's more accurate market value. We have run trade deficits and budget deficits and revenue deficits and the biggest deficit, moral deficits, for as long as I have been alive. Seems as if most of those deficit countries involve a gooey black substance that is pumped out of the ground!

So even with this weighty advantage the USDX still can't rise above its long term support, even as all of the EU is defacto default. The only market tether the USD has any more is the reserve currency futures theater and a short term "lesser evil" perception.

In terms of end users, as in the citizenry, heck the cost of a Thanksgiving dinner went up 13% this year. Or was it that STRONG DOLLAR POLICY that never was? Who do we thank for that? Truly there are no Pilgrims left and we are extremely short on real live "patriots" too! What we are full of in this country is NIMBY and PC up the yazoo! Only a ponzified debt based Nation has the time and the hubris to tell the rest of the World they need to up their PC quota and then say, "NIMBY you Pinko Commie Chinks!" Which is pretty much what Obama was saying over here in Hawaii when he was doing his "stand-up act"! Lets get one thing straight Obama. The Chinese invented gunpowder-the US Congress invented manipulation and they all have to have an Ivy League PhD in it just to get elected! The Pinko Commies got nothing on the US Congress when it comes to innovative, manipulative, moral and fiscal corruption. Is Congress down to a 5% approval rating yet?

Hummm ... only a $544.2BIL YTD trade deficit. Not bad for a days work!

LINK: http://www.census.gov/foreign-trade/Press-Release/...

Hi DB, I'm going to try again but I'm going to wait for ~360 area or a very sure sign of support. the candle sticks were not in my favor today that's for sure.
Earl

Anonymous dumped some into my .37 stink bid last week. Hopefully I can 'luck' into some more.

Thanks Bill for digging this up and passing it along. No position at the moment but have won and lost on holding it in the past.

http://www.colbertnation.com/the-colbert-report-vi...

A big deal, as most houses have refused to go above the 4 1,200 level, thus setting expected PE's and P/S way to low... its a game of catch-up now, all in the time honored ' beat the number ' game...

Crain's (Chicago):

Forget all that tut-tutting coming from the Beltway's smart set. A deal to cut the federal deficit by more than $1 trillion and avoid devastating cuts is on the way.

So say Illinois' two U.S. senators. (Note: 1 Dem and 1 Rep)

http://tinyurl.com/72gbhkn

Yeah, know where you are coming from.. What I'm thinking, the more ' houses ' on board, the better. For various reasons, most # crunchers are still at 2010 levels per oz. This is keeping a lid on equity values. Even with adjusted costs for this quarter, Newmont is still producing gold at around $ 900/oz, and others are doing it cheaper. Something will give, probably when the price rises above $ 2,000... I don't know anyone, personally, that has more than 3 ounces of gold stashed away, and most people are catching on to the high taxes ETF holdings bring.

normxyz,

While I tend to agree with the gloomy picture, the question which has haunted me for over a decade is "when?"

My first client began to export manufacturing jobs in the mid 1980s and it took 15 years for my city to really see the effect as a real problem.

Official data is still masking unemployment with a phony 9% figure. Housing crashed three years ago and nothing has been done to honestly value bank holdings and Fannie & Freddie guys just got bonuses. OWS protesters are being tarred as left-wing malcontents by much of the media and their complaints disregarded.

Inflation or deflation?
Good economy or bad economy?
Up stock market or down stock market?

All are time frame dependent. It's like comparing weather and climate.

This article is talking long haul outcome and most things take far longer than I ever expect.

Grym

Hi All - How about this clip - even a progressive State may find this a blessing. Seems to me CHK entered a j.v. lately with the Chinese to fund development acreage held by CHK in this play. Driving through the countryside of Weld County, Colorado is a treat these days as a demonstration of reasonable resource development. Happy Trading

Based on the results of 11 test wells, Anadarko estimates that its share of the Horizontal Niobrara formation in the Wattenberg field holds 500m-1.5bn barrels.

http://news.investors.com/APOnline/Article/298399/...

Rosenberg says we’re just 4 years into a depression that will likely last 7-10 years. He says the economy is likely to begin contracting again in 2012 and that the employment situation is going to deteriorate further. He calls the MF Global bankruptcy the Bear Stearns of 2011.

http://pragcap.com/are-we-in-a-depression

Earl,

It's a historical mess getting much worse in time, IMHO. Remember the Golden Rule: "Them that has the gold rules". That is the situation many of us are in.

Who needs GS's advice and guidance when honest men like Bill Cara still contribute to the common good.

You don’t understand, Congressman Pete Olson will be getting on this list of sponsors – to start with. We worked to get him elected. Anyway, that process has begun. We’ll let the hoi poli take care of this…
H.R. 1148: Stop Trading on Congressional Knowledge Act http://www.govtrack.us/congress/bill.xpd?bill=h112...
BILL OVERVIEW
Co-sponsors: Hide Cosponsors
Cosponsors:
Earl Blumenauer [D-OR3]
Steve Cohen [D-TN9]
Raul Grijalva [D-AZ7]
Kathleen Hochul [D-NY26]
Walter Jones [R-NC3]
Dennis Kucinich [D-OH10]
David Loebsack [D-IA2]
Louise Slaughter [D-NY28]
Niki Tsongas [D-MA5]

Hi Luggie, I was communicating with a friend on exactly this. Not only are we dissing Canada on this, their production will crank up – it will generate long term relationships and the entire issue will take on a new life, a new way and Americans will be left out of who knows what may have developed. How much are the others involved (china…) paying to have it their way? I trust no one on this, believe no one on this. There is no ‘safety’ issue – all lies. Hey Canadians, I’d rather be standing with you, I’d rather this pipeline relationship develop. But there’s something out there that would have it another way.

Hey you west coasters – I smell an Exxon Valdez…

Of course we are in a depression. Until governments allow markets to CLEAR via foreclosures, bank seizures, and debt write offs, economies worldwide will continue to contract. At least the Western economies will.

In the meantime, fortunes can be made trading with and against volitility.

The statistical sugar coated pabulum being force fed to the electorate smacks of the desparation that is being felt in the marbled halls of POWER. The only way to cover-up a lie is with an even bigger bolder lie.

Sorry to say but when you expand the franchise to allow dole takers to vote, systems collapse. Working the votes is as simple as hiring Mad-Men using corporate or NGO dollars. If these guys can sell you bottled tap water, selling political solutions is a no-brainer.

Well, if Rosie is correct, we only need endure another 3 to 6 years of this comedia economicus. I tend to look on our current malaise as a belly laughable farce! I mean really! If you can winnow the grain from the chaff, every day presents another Moliere moment although the Three Stooges more probably reflect our current times...

We need GS and the other big analysts to a) up their gold forecasts and b) then up their guidance on the guys digging the stuff up, but I imagine you guys know that already.

I note GS is pretty conservative in its estimates, only upping gold prices to an area already anticipated by Bill. Its silver call is for lower prices.

This suggests to me gold holding its own as an asset class (GS's forecast for gold prices only 10% higher than present futures) but precious metals will not yet enjoy an inflationary impulse as when $silver:$gold turns 'risk on' - see attached weekly chart.

"Support from the ongoing euro-zone financial crisis" would appear not to include the inflationary expectations of the ECB serving as lender of last resort. I would expect new guidance with target prices upped following such a policy change, as the ECB move would be mirrored by the Fed who has an excuse to continue their 'strong dollar' policy.

But Monti, a 68-year-old economics professor, made clear that he intends to serve until spring 2013 elections, calling it counterproductive to say when he'd step down.

"If a date before (2013) is set, this haste would take away credibility from the government's actions," Monti said at his brief news conference. "I won't accept" such a condition, he said.

Right. The EU just got their man in place. No letting these two-bit Italian voters rig their cart to a new horse any time soon. Stability is the new EU catchword. Perhaps he should tell the electorate who the "I" is in as "I won't accept" - that should make them more amenable to austerity - not.

NYPD Clearing Zuccotti Park, Tearing Down Protestors' Tents (story developing)

I hear helicopters circling, which is rare for 2am for the wall st area.

You can watch live
http://occupywallst.org/

EDIT:

Subways not stopping near Wall St.
Big garbage trucks moving in, cops throwing piles of belongings in.
Helicopter still circling
Apparently police handed out letter stating Brookfield Properties is no longer allowing the protest to be based in this privately owned park.

CONSUMER PRICE INDEX (YOY) UK for October - marginally contracts
Actual: 5.0% Cons.: 5.1% Previous: 5.2%

RETAIL PRICE INDEX (YOY) UK for October - marginally contracts
Actual: 5.4% Cons.: 5.5% Previous: 5.6%

DCLG HOUSE PRICE INDEX (YOY) UK for September - in contraction since June
Actual: -1.4% Cons.: 1.7% Previous: -1.3%

ZEW SURVEY - ECONOMIC SENTIMENT - Germany for November
Actual: -55.2 Cons.: -55.3 Previous: -48.3
for the EU: Actual: -59.1 Cons.: -52.5 Previous: -51.2

TRADE BALANCE N.S.A. - European Union for September
Actual: €2.9B Cons.: €2.0B Previous: €-4.4B Revised from €-3.4B

GROSS DOMESTIC PRODUCT S.A. (YOY) (Q3) - European Union - marginally contracts
Actual: 1.4% Cons.: 1.4% Previous: 1.6% Revised from 1.6%

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

These figures can be viewed in graphical form by looking in the "History" column, when you click on the particular statistic you're interested in.