Bill Cara’s Morning Call
[6:50am ET] The S&P 500 volume yesterday totaled just 1.830 billion shares vs a 60-day average of 3.703 billion. Except for one person manning the trading desk, we are on vacation along with most of you.
After reading three John Grisham books in the past three days, I moved on to Dan Brown’s Angels and Demons yesterday and, frankly, unless the next 50 pages picks up, I’ll put it down. The movie, I understand, was terrific although I didn’t much care for Da Vinci Code (film).
Some best-selling authors I just don’t like. Tom Clancy is one. Love the movies (Clear and Present Danger, Patriot Games, Hunt for Red October, etc), but cannot sit through the excruciatingly detailed novels.
On the other hand, except for the infrequent need to take a vacation, I find the details of the capital market are never tiresome. Better than any spy thriller, market price data is something I could read non-stop.
This week, for instance, even while I have been immersed in Grisham, I have also had a keen eye on forex rates.
http://www.advfn.com/forex/rates
Should we have a stronger US Dollar here, a continuation of the move that began in early December, which is being discussed now around the world, the Mines & Metals and Energy stocks are likely to stumble.
http://online.wsj.com/video/heard-on-the-street-a-telling-move-in-hong-k...
In fact, in early December, just as the $USD started its bull move, the Goldminers ($XAU) stock index plunged -15.1% from a peak of 198.32 to a low of 168.37 in just 12 sessions. That’s a relatively small move so far. Should the $USD, which moved +5.6% during this two and a half week period from about 74.30 to 78.45, lift into the 80’s, there will be a lot more selling of Goldminers, and equities in general.
CTA Trading Desk Report
Being on vacation, this report will not be published.
Comments
Cara 100 Ratings Changes
Good morning. Greetings from Antarctica.
There are NO Cara 100 Ratings Changes to report at this time.
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The old Bull Hunter wishes you and yours a happy and prosperous New Year.
Bill.. some old tyme thriller
When I was in the service I got an Ian Fleming James Bond novel. I read that in a few days as it was hard to put down. From there I devoured every James Bond book that was available. Might be worth a look and what was high tech 50 years ago.
TBT
TBT has been moving in a relatively stable up channel lately. I've been following this closely, looking for a good entry, because I believe interest rates are going to start climbing higher.
Today we have this item from Bloomberg: Mortgage Bond Rally May End, Rates Rise as Fed Stops Purchases
For the second time, yesterday I missed the low on a pullback within the channel. And now it's running again.
Oh, and those who are playing SEED, FEED and GRO are getting water torture treatment now. After the huge run yesterday, it appears only the dumb money remains. The even dumber money (raises hand) sold too early yesterday. And today, ICXT was the fast trade (lost steam real fast and I wouldn't touch it).
Since this is a teaching blog..
..and, having qualified long ago for a membership in Densa, I would like anyone to explain to me what difference does it make? whether systemic financial failures lead us (or the world) into a severe deflationary environment or a severe inflationary environment.
In practical, day-to-day living standards for the average person such as myself, it seems to me that the results of either scenario are not that much different from one another, but rather just different ways of getting to the same exceeedingly stressful place.
From what I've read in historical examples, in a severe deflationary scenario there are acute shortages of consumer goods and services. (yes?)
Results are that our supply lines, say for instance energy and food production and distribution, breakdown. Nobody produces and grocery shelves soon become bare, gas lines form as they did in the 70s. "Stuff" is not available to consume.
In a severe inflationary scenario the prices rapidly become so high across the board that I (and a whole lot of other folks) soon run out of money and.. I'm still in the same fix in that there may be food and energy and other consumer goods but I no longer have enough cash with which to purchase such things. "Stuff" may be available but I have no means short of robbery, with which to acquire it.
So what is the difference?
Like bill, I don't necessarily believe that we will come to either of those scenarios but history does say it is possible and if so, is one situation really any better than the other?
If so I just don't see it.
In either case it appears that millions and millions of people would be in the same quicksand and sinking fast.. cold, hungry, angry, inclined to severe social protest along with a corresponding breakdown of law-and-order.
Well...anyway..
Hopefully in our coming new year, and ensuing years to come we will experience neither.
Along with many thanks to Bill for making us think, for all of us I would lift a toast and a hope for good health and well-beingness for ourselves and our families in this new, and I suspect most interesting year to come.
See you all on the other side.
bill (in washington, dc)
Re: TBT
N2S,
I guess it depends on whose info is most believable.
Bloomberg: "The Fed has been buying at “way” narrower spreads than “where the private sector would be willing to” invest..."
or...
http://contraryinvestor.com/moprinter.htm
"As of the end of the second quarter of this year, total household allocation to equities as a percentage of total financial assets stood at 23.6%, just a hair above the near 65 year average of 22.3%. Reversion to the mean in action? You better believe it. Unfortunately most of this change in allocation came the hard way - declines in equity values.
But what households have been doing lately as opposed to potentially upping equity exposure is to pile into bond funds and bond oriented ETFs in literally record numbers."
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The question is whether individuals are truly feeling more confident, will go forgo their belief in the safety of bonds and jump to equities. Or, more basically, whether they have much of anything left to invest anywhere.
I see the jobs picture as dismal and a long time deterrent to small investors.
Disclosure: I personally have already left the Treasury bond and GNMA mutual funds I was in, but am playing TLT short term. I have not done well in TBT the past year.
Stiglitz Speaks
http://www.chinadaily.com.cn/opinion/2009-12/31/co...
Re: Bill.. some old tyme thriller
Will buy SDS at $34.00 with expectation to sell at $34.50+.
I like Connie Willis: Bellwether, Doomsday Book, To Say Nothing of the Dog, Passage.
Re: Since this is a teaching blog..
M R Ducks,
"From what I've read in historical examples, in a severe deflationary scenario there are acute shortages of consumer goods and services. (yes?)"
I don't think that is necessarily so. We have been over producing for years — cars, houses and shopping malls — everything. If the government stayed out of the act markets would naturally go back to a norm (deflate) as supply was used up. Instead they have been supporting prices (or trying to).
An over abundance of anything, commodities, workers, whatever brings prices down (a deflation effect), but it could be expected stores would not stock a normal inventory due to lack of demand. I have seen this at our neighborhood Ace Hardware. We have a 17+% unemployment and people are rushing to get $8/hr jobs with no benefits (deflated job market and wages).
I expect we will see this:
1. Lower prices on discretionary items — cars, TV, mattresses, wages
2. Rising prices on necessities — food, energy, medical care
3. Outrageously creative and high taxes — the Obama/Reid/Pelosi "revenue neutral" health care will be paid for in "revenue strangling" state taxes as an unfunded federal mandate.
We need to go back to being a Republic form of government and stop this trashing of the US Constitution by the Democratic Congress and The White House. Whatever happened to "States Rights"? (See Amendment X)
TrimTabs' Charles Biderman - Who is doing all this buying?
http://bit.ly/8qxFHZ
This seems logical to me, but here is a decent read on another person's point of view. In my opinion this timeframe from march has been a fake rally, possibly the biggest intervention rally ever. Mom and Pop were not buying. insider selling has been strong. Secondary offerings also strong.
Eventually natural market forces will return, not just this phantom buying.
Re: Since this is a teaching blog..
At the pace we are going, eventually everyone who can afford a living will work for the government. The govt is growing at a squid monster pace.
TREASURY TRENDS
ALOHA !!
END OF CALENDAR YEAR FOR THE US TREASURY
As we wrap up the calendar year 2009 lets see how that compares to past years.
I decided to look at two important line items on the US Treasury Daily Statement that reflects how debt flows have advanced over the past decade from FY1998 to FY2010. You can be guaranteed that if the debt flows for these two line items have increased then so have the other line items. In fact nothing ever goes down in cost at the US Treasury over the long term and perhaps that better explains how none of our basic costs of living never go down either.
The following numbers were taken at the end of each calendar year, December 31st. Certain "anomalies" occur but the trend speaks out.
DEFENSE
(in billions)
FY1998 = $43.9
FY1999 = $28.6
FY2000 = $36.1
FY2001 = $36.5
FY2002 = $42.1
FY2003 = $57.7
FY2005 = $64.8
FY2009 = $96.1
FY2010 = $97.4
UNEMPLOYMENT
(in billions)
FY1998 = $10.4
FY1999 = $4.5
FY2000 = $4.53
FY2001 = $4.9
FY2002 = $9.1
FY2003 = $12.5
FY2005 = $17.1
FY2009 = $16.4
FY2010 = $37.3
Obviously when you look at these numbers across the past decade the one thing that jumps out, to me, is that it really did not matter what political party you voted for as spending and debt only increased every year. It did not matter if America was at War or at Peace, each administration whether Republican or Democrat, spent more on Defense. It also did not matter where the unemployment rate was as each administration spent more on unemployment each year as well.
What am I to conclude from this exercise?
DEFENSE-While we talk a lot about bank bailouts it is obvious that the Defense sector has its own "built-in" bailout every year. Given that the US government is "billed" for Defense related pensions I doubt we ever see Lockheed on the Pension Benefit Guarantee Fund's list any time soon, not like United Airlines and other fiscally floundering private corporations without Congressional clout. It also bodes well for Defense stocks as there is a guaranteed profit margin that never abates, not even during peace time and when war time arrives the profits go even higher. I have always recommended LMT in this sector, as it would be a decent hedge against just about any downturn and it pays dividends. Recently, over the past months, I have noticed a big increase in average Defense line item outlays from a $1-$1.5BIL per day outlay average to a $1.8-$2.5BIL per day average outlay. Why the increase, especially from a President who made a campaign promise to bring troops home? He is spending more than George Bush and Dick Cheney. By that one measure he and the Dems are more of a "war monger" than the Republicans were. I am nervous about these Defense outlay line items building up as there is usually a reason for such a build up. One way to create jobs and take heat off your political party is to get in a War. FDR knew that all too well and if he didn't then his cabinet and the Pentagon surely pointed that fact out. The Iraq War started in March 2003, so it will soon be a seven year War, that never seems to end and is always expanding. The Vietnam War lasted for 16 years and millions died, but Defense contractors profited and so did the Congressmen who served them. I wonder when the next 9-11 happens.
UNEMPLOYMENT-Part of why unemployment outlays rise is that the population has increased and so have jobs and wages. As wages rise unemployment benefits must rise also to compensate. I recall back in the early 1980s my brother told me he was getting $140 per week benefits. Now I know friends who are getting paid $470 per week. Who could survive on $140 now as that is a weeks worth of groceries? Where the private sector has lost jobs to outsourcing overseas the government jobs at the Federal and State levels have increased. This is a PRICE FIXING event. More recently the economic downturn has caused unemployment outlays to increase at a significant pace, but to add to that velocity the US Congress, out of fear from reprisals at the voting booth and in the streets keeps extending benefits, otherwise there would be ever growing angry mobs of unemployed workers in the streets like there is in other countries now. I am sure that for every unemployed worker they know at least ten other voters. There is a significant debt burden to be paid for that, but it won't be Congress or Obama that pays it. After all any real career politician's only concern is re-election. Both political parties have increased unemployment outlays in order to retain their power at the expense of the employed and the unemployed workers future generations. This line item is highly politicized and always has been.
There is a moral dilemma here that involves your vote. Right now every American votes for whichever party promises the least amount of pain. Then you have to ask yourself what are campaign promises worth? Not much is the answer.
HOPE?
CHANGE?
The US Treasury Daily Statement line items speak the truth not the politicians.
More bulls now than prior to 1987 crash
http://bit.ly/83Dd0H
There are fewer bears now than there were when the Dow was over 14,000!
Buckle up your seat belts, remove all jewelery, and please keep you hands in the car.
Re: TrimTabs' Charles Biderman - Who is doing all this buying?
Ron Paul wants to audit the FED...
Now NYG wants to audit the Wall Street ponzi scheme????????
On a lighter note............Happy new year to all!
http://www.youtube.com/watch?v=Dn5-Vw9Do0g&feature...
Re: Since this is a teaching blog..
Whether it's more inflationary or deflationary, I think Bill hit it on the head with the dollar and exchange rates. That's the dance to watch, as it's the least manipulated and most liquid. Thank you to all the community and especially Bill for sharing your insights, and good health and happiness to all for the coming year.
Go where there is growth
and tax advantages.
2009 Best Performing Cities - 200 Largest Metros
By Milken Institute
The components include job, wage and salary and technology growth.
http://bit.ly/4nWw6z
"Texas, it turns out, accounted for four of the top five cities in the report. The study's authors suggested that the Texas metropolitan areas ranked so well due to their resources and technology sector, in addition to the "state's favorable business climate and its ability to attract jobs and corporations away from higher-cost states"
http://bit.ly/6D4ML6
I have a property in #6. Selling in NJ asap 1st. next step might be to look into relocating and paying cash for a small home in Dallas area. Then longer term plan of setting up shop outside U.S. Maybe Australia?
Re: TrimTabs' Charles Biderman - Who is doing all this buying?
NYUGrad,
As you know, I believe the buying is coming from the FOMC trading desk. I believe they are into equities up to their neck, and every time it looks like they are going to drown along comes the taxpayer to increase the Fed's balance sheet. As there is no end to this, it's just a phony market -- until, like Credit Default Swaps, real traders decide not to go along. So, the end result will be a huge crash or else the Fed's balance sheet will grow to $50 trillion and they, and the other central banks of the world, can own all the stocks, and they can keep interest rates at zero and own all the bonds, mortgages, etc, too.
http://www.dailymarkets.com/stocks/2009/11/09/the-...
What GATA is doing is suing the Fed. We'd like to see the books. Then we'd all know for sure how corrupt the market has become.
How they can call America a democracy and pull stunts like this incredible build up of the Fed and it's equity trading desk is beyond belief.
Re: GATA lawsuit filed Dec. 30 against the Fed
We need to support GATA. The Fed's records must be opened to the taxpayer. This isn't just about Gold, but about all the Fed's trading in capital markets. We simply need to know otherwise the capital market in the US has lost all credibility.
GATA Sues Federal Reserve to Disclose
Gold Market Intervention Records
Wednesday, December 30, 2009
http://www.businesswire.com/portal/site/home/perma......
The Gold Anti-Trust Action Committee Inc. today brought suit against the U.S. Federal Reserve Board, seeking a court order for disclosure of the central bank's records of its surreptitious market intervention to suppress the monetary metal's price.
The suit was filed in U.S. District Court for the District of Columbia and targets Fed records involving gold swaps, exchanges of gold with foreign financial institutions. In a letter dated September 17 this year to GATA's law firm, William J. Olson P.C. of Vienna, Virginia, (http://www.lawandfreedom.com) Fed Board of Governors member Kevin M. Warsh acknowledged that the Fed has gold swap agreements with foreign banks but insisted that such documents remain secret:
http://www.gata.org/files/GATAFedResponse-09-17-20...
The lawsuit follows two years of GATA's efforts to obtain from the Federal Reserve and the U.S. Treasury Department a candid accounting of the U.S. government's involvement in the gold market. These efforts parallel those of U.S. Rep. Ron Paul, R-Texas, who long has been proposing legislation to audit the Fed. The Fed has been criticized for secrecy in its massive intervention in the markets over the last year, and Paul's legislation recently was approved by the U.S. House of Representatives.
In correspondence with GATA's lawyers, the Fed has claimed that its gold swap records involve "trade secrets" exempt from disclosure under the U.S. Freedom of Information Act.
GATA Secretary/Treasurer Chris Powell said:
"While GATA has produced many U.S. government records showing both open and surreptitious intervention in the gold market in recent decades (see http://www.gata.org/node/8052), Fed Governor Warsh's letter is confirmation that the government is surreptitiously operating in the gold market in the present as well. That intervention constitutes a huge deception of financial markets as well as expropriation of precious metals miners and investors particularly. This deception and expropriation are what GATA was established in 1999 to expose and oppose.
"Of course GATA's lawsuit against the Fed will take months if not years to resolve. We think we have a good chance of winning it in court. But we can win it outside court, and much sooner, if the suit can gain enough publicity from the financial news media and market analysts and prompt enough inquiry from them and from the public, the mining industry, and members of Congress.
"So GATA urges its friends to publicize the suit and to urge journalists, market analysts, mining companies, and members of Congress to join us in seeking disclosure of the Fed's gold market intervention records. If enough clamor is directed at the Fed about these records, the gold price suppression scheme will lose its surreptitiousness and fail.
"Unfortunately the World Gold Council, which each year collects tens of millions of dollars in membership fees from mining companies in the name of representing them and gold investors, refuses to question governments about their surreptitious interventions in the gold market. These interventions powerfully influence not only gold's price but the prices of government bonds and currencies, as well as interest rates generally and the value of all capital and labor in the world. There is no more important issue in the world economy than gold price suppression.
"So what should have been the World Gold Council's work has fallen to GATA, a non-profit educational and civil rights organization that operates from month to month on donations from people who share its objective -- free and transparent markets in the precious metals and fair dealing among nations generally. As we prosecute our lawsuit against the Fed, we'll be grateful for your support. We promise to do something with it."
For information about supporting GATA, please visit:
http://www.gata.org/node/16
GATA's lawsuit against the Fed is listed in federal court records as civil case No. 09-2436 ESH, the letters being the initials of the district court judge assigned to it, Ellen S. Huvelle.
The lawsuit can be found here:
http://www.gata.org/files/GATALawsuitVs.Fed-12-30-...
Contacts:
Gold Anti-Trust Action Committee Inc.
Chris Powell, 860-646-0500 x 307
Secretary/Treasurer
CPowell@GATA.org
Re: TREASURY TRENDS
kaimu -
In regards to Defense spending, fiat currency and the Forex are a game changer for U.S. war mongering. Historically up through WWII, the victor reaped all the rewards: gold/silver/art/jewels to vast conquered territories to debt reparations. That was how a victorious sovereign's wealth base was expanded and off-set the staggering costs to wage war for five millenium until Vietnam and the removal of the gold standard. (As an aside, the debt crises of the Roman Empire and the British Empire are also excellent historic examples of currency debasement due to over expansion of empire.)
Due to the final onset of global fiat currency by 1972 via Nixon, a sovereign's wealth base can be confiscated not by war but by the massive electronic carry trade and currency manipulation/hyperinflation: China/U.S., U.S./Japan, Greece/EU, Israel/U.S. Why fight when you can manipulatem, even hyperinflate, a floating currency (China peg; U.S. African aid). It appears that war now only serves to bankrupt superpowers (USSR) and confederations (EU?). Hell, the U.S. doesn't even have first digs on Iraqi oil and at what cost is that opportunity lost just to make the Saudis/OPEC think our intentions are altruistic?!
Obama's border crossing into Afganistan may keep the Military-Industrial Complex (MIC) rolling but for what? Afgan has no resources and U.S. won't take it anyway.
LMT may be a benefactor today but look what happened to the Soviet military complex and the Russian ruble (scroll down to History in the link).
http://www.answers.com/topic/russian-ruble
Tech production within MIC like stealth is just a modern equivalent of Hadrian's Wall.
WAR IS NO LONGER PROFITABLE IN A GLOBAL FIAT MONETARY SYSTEM! Please tell Washington.
Disclosure: Holding BA but will bail on heightened dollar weakness.
Re: TrimTabs' Charles Biderman - Who is doing all this buying?
Bill & NYUGrad,
In the first report I heard from Elizabeth Warren she said Paulson had not come up with an explanation for a large chunk of the TARP money. I believe she said $85 billion was unaccounted for.
If the government is willing to let that go unexplained is there any limit to what they will do to give the appearance of an improving economy and stock market?
Most of the optimistic projections are based on government data.
Those lies are so blatant and so seldom challenged, I have stopped watching TV news almost totally. This applies for financial and terrorist reports to stuff like Tiger Woods' love life and Obama's latest poll numbers.
Better info is available for anyone who is willing to search, read and compare.
Thanks to all who contribute here at Cara community and especially to you, Bill. Happy New Year and hope for better times ahead.
Jan product releases. Apple and google.
Both appl and goog have announced product releases and have invited reporters. No suprise on Google as it prob involves the sale of it's new new phone, sold without carrier ties and unlocked.
For appl I suspect it to be tablet related.
Both should provide the spin masters to push the NASDAQ and prob everything else to new near term highs.
Happy new yrs
Happy New Year All
Great discussions here all year long. Thanks to contributors for keeping important issues in front of the us, they otherwise are so easily buried and forgotten. I've learned lots. I'm left with the lingering question: How can this charade continue? Thanks all, and see you in the next decade.
Put 10% of liq assets into DGP yesterday and today
Don't trust stocks, don't trust the dollar, and DGP has taken a bad hit along with gold recently. I really don't think the Fed can even consider stopping the printing if they want the economy to continue to pretend to recover.
A real recovery would at least have total taxes on wages increasing, but they are not. I don't see how there is any way someone could describe the current situation as a recovery, and if more people aren't earning more (and paying those taxes), I don't see how they can possibly be buying more if outstanding credit is shrinking and credit card defaults are rising, and therefore I think that any published GDP numbers showing growth are just lies produced by money printing, not real economic growth.
One could argue that the recovery in stocks will allow for increased spending, but I don't see it. Most people have just been making back losses and their retirement nest eggs have been decimated at minimum.
Thus, I see what is currently being called a recovery is actually a sugar high caused by Fed printing (admitted and lied about), as well as government borrow/spend tactics, and will end as soon as the stimulus does.
We will see, I guess, how much lower they can take gold, and whether or not I can hang on to see the DGP significantly profitable. My thought is that there is no way gold is lower 2 to 3 years out, regardless its price today.
Re: TREASURY TRENDS
ALOHA!!
I truly believe you have to look at government like you look at the market and our motto of trading prices. If I look at the fundamentals of the US Treasury as a multi-trillion dollar market like the DOW or the NASDAQ or the FTSE or the NIKKEI then the trends in debt flows speak volumes. Really the US Treasury looked at as its own "stock market" is even as diverse as the DOW if you look at each line item as a sector and within each sector are Fortune 500 companies with "real" contracts that actually keep Americans employed. All the US Treasury does is take tax revenues from profitable entities,whether they are corporations or individuals, and redistribute those profits with printed debt used as leverage. Just like margin(debt) leverages the DOW, Treasuries and Government Account securities leverage the US Treasury market.
LINE ITEM SECTORS
DEFENSE = LMT GD XOM
MEDICARE = PFE BMY JNJ
FOOD STAMPS/NUTRITION = SEED ADM
EDUCATION = MSFT APPL
SOCIAL SECURITY = PGE RRI DUK CVX XOM
TRANSPORTATION = BNI GM
GSA = CBG GBE
I mean billions and billions of dollars worth of "contracts" are lobbied for and negotiated at the US Treasury on a daily basis. On an annual basis the numbers on those contracts run into the trillions of dollars.
This is why I say that as long as the US Treasury grows then US corporations listed on the Fortune 500 will grow. The politicians sell out for campaign financial support and the US corporations lobby for numerous huge contracts. As I have experienced through my own involvement in Public Works projects the profit margins can be staggering. On top of that 9 out of 10 times I am dealing with inept and "clockwatching 9 to 5er" government employees tasked to oversee contractors that work 25/8 and have a vast array of "tools" to out maneuver the US taxpayer representatives. Without these government contracts the Fortune 500 would be the Fortune 5!
I think that everybody in America and on CNBC underestimates the power of the "printing press" when it is in the hands of desperate politicians(monopolies) trying to save their power base and celebrity. It has to be one of the most intoxicating head trips on the planet to be able to control the lives of 306 million people who dote on your every word. Certainly those in charge over at the US FED are worshiped as conquering heroes when they visit the offices of the big US banks. Then God only knows all the myriad of highly paid speaking engagements and social functions these elitist enjoy every weekend. Now please explain to me why in God's name would any of those at the top want to give that up? For what ... anonymity and upper middle class wages? Please-e-e-e-e ...
What I see at the US Treasury is spending and debt being leveraged to retain power, which to me is all about the human condition, the ego. For God's sake you've got a publicly admitted tax evader running the US Treasury! C'mon these people do not care what they have to do or how low they have to stoop or how many laws they must break to keep their HIGH POWER & PRIVILEGED lifestyle going. They did not spend an entire lifetime to get where they are to just quit and let WE THE PEOPLE win. So, YES, all of this is illegal by US CONSTITUTION standards but since WE THE PEOPLE are asleep at the wheel then anything goes. All we need is a few Gandhis and this whole DEBT EMPIRE would end. Once WE THE PEOPLE decide that we will not participate its over. They cannot imprison or murder 306 million people.
The first step in "not participating" is to recognize the MONOPOLY that is in play. It is obvious to me that the political MONOPOLY in control is the REPS and DEMS, so in order to not participate in their "monopoly" then you have to quit voting for their candidates on all levels of government, even locally.
The MONEY MONOPOLY is the most powerful of all monopolies operating in America. What Bill says about GATA is one step in "not participating". Exposing the US FED to the truth weakens its grip on all of our financial futures. The RON PAUL Audit The Fed is yet another step in "not participating". Another step is to own gold and silver coins and shun US "FRN" Dollars. Perhaps the greatest step is to vote out the same political MONOPOLY that gave the US FED its powers way back in the early 1900s with the Federal Reserve Act. The US FED could not exist without the approval of the US CONGRESS ... period! Each time a modern US Congressmen or President and Vice President takes the Oath Of Office to uphold the US CONSTITUTION they are committing treason as long as they allow the US FED to exist and as long as they refuse to repeal the Federal Reserve Act. Its that simple. Those in power are banking on the fact that WE THE PEOPLE will remain docile servants to them as long as they can keep us sedated with welfare. So far they have succeeded.
The power of irredeemable currency has been demonstrated right before our very eyes for decades and decades now. Through this currency government and banking grows but the Middle Class shrinks along with all the stored capital wealth of America. The current monetary system is exempt from fiscal morality.
HAPPY NEW YEAR
ALOHA !!
HAPPY NEW YEAR !!
I hope we all have a more prosperous year in 2010. I do not specifically mean "prosperous" by monetary standards, but by health and happiness standards. In the end that is all you really have that has any true value. You can't take it with you and nobody gets out alive.
My wife and I will do nothing for NEW YEAR here in the Hawaiian jungles other than take in the tropical beauty. No Dick Clark ... no BALL ... no TIMES SQUARE ... no CELEBS ... just a hammock in Hawaii under the stars. Most of the time the simplest things in life are the most exquisite and memorable.
Thanks to Bill and all those who post here from newbies to oldies ... Whether you can see it or not this blog is the definition of a "resilient community".
Capital Markets and Social Equity; Perspective and Discussion
Re: TBT
Be careful with TBT now, number2son.
"Jaws of death is a term coined by trader Larry Williams that describes when a situation when equities are rising while bonds are weakening. According to him the disparity (which he calls the jaws) between the two tends to snap shut, hence he called the entire phenomenon the jaws of death. Usually the snapping shut action is achieved by a rapid and sharp drop in stock prices according to his model."
If equities sell off now, then treasuries will most likely get bought (since they had a nice pullback already), and so TBT will go down.
the meanest way to start the sell-off?
I recall how everyone expected the market to go up after the October-November 2008 sell-off had settled down. S&P stayed between 800 and 850 for a while. Then, S&P broke out above and went up to 875, and all the pundits concluded that the move up has begun. We all know what happened then -- S&P returned back below 850 and then proceeded to plunge down to 666. So if the market is now indeed destined to sell-off, the *meanest* (and hence the most natural way for it to happen) was first for S&P to pop above 1120 and THEN to actually sell-off. The drop below 1120 today is quite ominous in that respect.
Happy New Year, everyone, and hopefully the lessons learned in 2009 will help your trading and your life in 2010!
the meanest way to start the sell-off?
I recall how everyone expected the market to go up after the October-November 2008 sell-off had settled down. S&P stayed between 800 and 850 for a while. Then, S&P broke out above and went up to 875, and all the pundits concluded that the move up has begun. We all know what happened then -- S&P returned back below 850 and then proceeded to plunge down to 666. So if the market is now indeed destined to sell-off, the *meanest* (and hence the most natural way for it to happen) was first for S&P to pop above 1120 and THEN to actually sell-off. The drop below 1120 today is quite ominous in that respect.
Happy New Year, everyone, and hopefully the lessons learned in 2009 will help your trading and your life in 2010!
Pulp Fiction Icon - Travis McGee
Don't see how you can go wrong with John D. McDonald's "Travis McGee" Detective Series while beaching it.....
Best wishes to all in the New Year!
Here's to better days....
Angels and Demons movie - IMO, stupid
Full of contrived plot twists and car chases through Rome, the movie was, IMO, frantic, superficial, and completely uninteresting. FWIW.
Are Federal Reserve and U.S. Government Rigging Stock Market?
Charles Biderman of Trim Tabs posing the question at Zero Hedge.
So, if the call becomes public enough and widely known enough, what does the Fed do? Continue the charade?
"We cannot identify the source of the new money that pushed stock prices up so far so fast. For the most part, the money did not from the traditional players that provided money in the past": (details available on the following link)
"If we were involved in a scheme to manipulate the stock market, we would want to keep it in place until after the “wealth effect” put a floor under the economy of, say, three quarters of positive GDP growth. Assuming the economy were performing better, then ending the support for stock prices would be justified because a stock market decline would not be so painful."
Biderman appears to have a longer time frame for this charade than Bill.
"We plan to stay neutral (0% long) on U.S. equities in our model portfolio. As we discussed Tuesday, real-time income tax data shows no sign of a recovery in the U.S. economy.
But we do not want to be short mostly because investment demand is favorable. The TrimTabs Demand Index (TTDI), which uses 21 flow and sentiment variables to assess overall investment demand was 58.9 on Tuesday, December 29. While this reading is well below the interim high of 77.1 on Friday, December 18, it is still above the neutrality line of 50. The index is so bullish mostly because indicators that tend to be leading—notably excess margin debt and the cash balance of equity mutual funds—are indicative of greed."
http://www.zerohedge.com/article/trimtabs-asks-who...
Is pumping market futures and an imbalance in liquidity in the market causing an imbalance? Investors like Biderman are not prepared to short the market while his indicators show greed dominating. Saluzzi suggests that liquidity is being directed to large caps at the expense of small and medium caps - how does this end?:
http://jessescrossroadscafe.blogspot.com/2009/12/g...
I'm just happy to be learning to trade the market either way, although I'll definitely be happier to see some volume return next week.
Waiting for that bell to ring Monday...
oil may be saying something...
So there's a divergence in the performance of oil vs the dollar since Dec 10th. Currently, even on days when the buck does well, oil still goes up. Oil-bearish news-driven dips are being bought. I know this because of the number of times I've been stopped out on my oil shorts lately - trades based on dollar activity that (unfortunately) no longer seems to drive oil price movements. :)
Is oil telling us something about international politics? I read an article which noted a recent unprecedented conclave of Israeli Ambassadors in Jerusalem scheduled for the week following Dec 24th:
http://tinyurl.com/y9z5zof
"This is the first time a conference for all of Israel’s Heads of Missions has been held. The idea is to facilitate direct dialogue with the country’s leaders, mutual updates on major diplomatic issues, and a discussion of action plans to deal with the challenges awaiting the State of Israel in the international arena in the coming year, including the Iranian threat."
Perhaps oil's recent behavior is just the market pricing in an increase in persian gulf geopolitical risk, as opposed to someone possessing true "inside information" of a strike - although if I were Israel attempting to finance the government during a perilous time, it might be a nice way to help fund my government using some judicious oil futures or options trades. Israel is well known for using unconventional approaches, also.
Whatever is going on, the disconnect in the classic behavior where oil falls when the dollar rises has my attention for reasons that go beyond oil.
What does it mean for the markets overall if oil prices continue to rise - in the face of a dollar rally? What does it mean for the world economy at large? Nothing good. Look what happened last year when oil hit 140.
And of course, if there is an attack, how will the markets react? How will the actions of the PPT affect this reaction? Which sectors or markets will they protect, and which markets will they ignore?
Oil may be saying something here. Are we listening?
Re: Angels and Demons movie - IMO, stupid
Jock,
This seems to be the new usual for adventure movies.
"Valkyrie" was cluttered with sound effects with no reason for being. Explosive noise to punctuate statements. High pitched whining (to suggest tension or suspense?)
Tom Cruise is not my idea of good acting, just a pretty face. (Ricky Nelson reincarnate? At least he didn't sing Wagner.) Can't anyone write or direct anymore?
Re: oil may be saying something...
davefairtex,
You may be interested to know Israel now has an ETF.
http://tiny.cc/E1IAy