Blog for December 4, 2009 [See ADDENDUM]

Nonfarm payrolls -11,000., SPX +14.

Looks like end of day yesterday was a massive head fake down.
Today its gap up open day.

and the bull continues to roar

Another case where ADP was way off the mark. Remember they came in earlier this week with an estimate of 190K jobs lost in November.

And yep, this should provide for an interesting day of trading.

better than expected jobs report --> stronger than expected economy --> higher than expected interest rates possible --> stronger than expected currency

Olaf - you hit it. This is great news longer term for the bulls. Today is a different story. If the dollar gains more strength there will be some indigestion today/next few days. To me the inflation genie is coming out of the bottle and the fed needs to think about it more seriously.

The link here shows a map of the United States showing all counties. When you select play, it shows unemployment in early 2007, color coding each county and then progresses a month at a time to Sept 2009. Its like watching a plague spreading throughout the country. Not a pretty sight.

Grym--Watch Illinois as it quickly changes to severe conditions.

http://cohort11.americanobserver.net/latoyaegwuekw...

Be careful what you wish for, it just may come true:

I guess what I am saying is that quite often circumstances are not as they appear and gaps happen (were did I hear that before?).

I guess the work of Golden Slacks says so and well, how deep does that run?

I don't know, but when my feet get that wet; they start to burn under me.

I apologize in advance for what I am about to say because not everyone or some do not share my beliefs. I really don't think that it pays to try to devine the markets; how can we know it. I myself seem to only know what the truth is for me...now, is that such a bad thing?

Sounds like the employment issue was the last missing ingredient for a melt up a la 2003/2004 year change. To me, it sounds like coast clear for SPX ~1200 and short gold should also work (TOF, are you still short?). I guess silver and oil has a potential to go up relative to gold. After a couple of months, I'll be looking for a correction in SPX.

Not sure about U$D, if this is just a short blip due to unwinding of the massive gold trade or a beginning of an up trend?

I like your general concept jack black.

Except rather than silver (SLV:GLD isn't showing too dramatic a misalignment) I might pick oil, since USO:GLD is showing a big divergence right now - its just coming off an RSI of 20 (as of yesterday). And of course oil is +1.22 and gold is -26, which indicates things are heading in that direction you describe.

AND, I think this might be the catalyst for the dollar rebound. Once it gets rolling, the unwind should be pretty impressive.

Great link. The lone bright spot in my state is the capitol.
Gee, I wonder if that means government employment...

Perhaps they could add a second version of the map to reflect the U-6 numbers.
They would have to add to the palette of colors-
like white and pink, as in the weather maps for heavy snow bands.

I've always thought in the back of my mind, there needed to be a catalyst for the dollar rebound. COMEX defaults, failed auctions, I was thinking doom and gloom, yet what if its good news that enables the rebound?

The market has been going strictly up based on the dollar's decline. Now reverse the situation. Will the dollar climb, thus putting US exporters at a disadvantage, making our stocks look more expensive, and placing a headwind on the prices of US equities?

It's an odd thought, and one I didn't consider this morning when I read the jobs report.

Interesting story on Dubai, may make for interesting reading after market hours.

http://www.independent.co.uk/opinion/commentators/...

A snippet, "I think Dubai is like an oasis. It is an illusion, not real. You think you have seen water in the distance, but you get close and you only get a mouthful of sand."

I was able to see the top in gold in my sentiment indicators, too. Rydex PM allocation was close to 0.3% that has been the multiyear high (I posted that on this forum a few times). This is why I sold all my gold miners a few weeks ago (early, as usually). Also, google searches for "gold mutual fund" had a very recent spike in volume that was rather ominous.

I'm not shorting anything other than Gold. I'm making a list of companies I think will benefit in what could be a sideways market due to uncertainty regarding rate hikes. I don't see rates going up much but just a token amount eventually. In that scenario I think regional banks do well, which considering they have been crushed makes them pretty attractive. I'm almost done with my list of the FDIC takeover assisted deals and will share those with everyone. IBKC was a big winner, which is evident in their stock price.

EDIT:
I'm not going to short anything unless a good setup exists...most likely one where the stock is showing weakness, is below it's 50 day MA/200 Day MA and where you can use the 50/200 DMA as a stop loss.

Eagleone,

Cool way to show it.

I assume that those commenting on the jobs data today are thinking in terms of the short term trading effect and not being conned into thinking this BS report is reality.

This illustration shows it is far more reaching than Illinois. We just got a head start in the rust belt.

Coming soon to a community near you.

For those of you who haven't felt in personally yet, you will. No one will escape untouched. Oh, except the anointed few in what's "too big to fail".

The USD's 50 dma is 75.74. Currently, I show USD trading at 75.45. If we close about the DMA - and that hasn't happened since - well since before my chart has data (back to May), I'm guessing that will cause a bit of a change in sentiment towards the buck.

This market is not behaving as if happy days are here again. Now I'm just guessing, but that's because most of the rise in the market really was USD-based, not fundamentals based.

Here we had surprising, unexpected fundamental good news, and the market is clearly off its highs. However, at the same time we have a big move in the buck - also clearly unexpected, and apparently from the market's point of view, unwelcome.

And gold equities, the last one off the dance floor, is the big loser on the day at -5.25%. I gotta say, it feels like we go down from here. I feel like Muhammad Ali saying, "is that all you got?" to George Foreman's body blows.

Yes. We go down from here.

I went long this morning seeing the dollar jump (thanks TOF for hand holding).
Now eying the RSI(7) on weekly (capitulation at 10) and daily (coming from the capitulation at 10 and rising fast) makes me feel good on this trade.

I also went long FAZ this AM and so far so good and it's charts look also good, bullish divergence on RSI and flattening MA for several months now.

The trades are ST only.

Is it finally here? Much coveted reversal?

Like shooting fish in a barrel today... Can this be IT?

What an orderly market heh...

Re: "interesting where a full blown sell off in the POG is not matched by a collapse in my usual jr. miners (TRE,USG, MAD.V) a sign of things changing or just a blip in the cascading radar of gold prices..."

My above link explains the GLD/GDX vs junior dissonance.

I'd be sceptical about explaing $USD rally on impending FED tightening due to today's jobs number. Does anyone really believe it won't be revised ?

What I see is a sharp sell-off in treasuries, just a few days after BOJ threatened to intervene to save their export market. If Japan is selling US Treasuries to weaken the Yen, then it would strengthen the dollar.

ALOHA !!

This always ... A-L-W-A-Y-S ... happens on NY Time. Any major POG or POS sell off occurs sometime between 8am and 11am EST 90% of the time.

Go to this chart and see what I am talking about, right at 9am EST.

LINK: http://www.kitco.com/charts/popup/au24hr3day.html

What banks sit on the largest gold and silver shorts? NYC banks do.

I have been following these charts for many years and this has been accepted as "normal" for the rest of the World. If these same tactics were to be employed against Goldman Sachs or JP Morgan stock charts there would be people sitting in jail over this "blatant manipulation" of the US banking industry. Instead US banks when they are vulnerable get "short protection". Where was the POG and POS short protection against the US mining industry for 20 years in the 1980s and 1990s? In fact COMEX rules changed to encourage selling gold and silver back in 1980. Add that in with the Volcker Fix and you have the entire World against gold and silver. None of this has ever happened to "zinc" or "coffee" or "pork bellies" or "GS" or "JPM". Both GS and JPM have enjoyed super privileges for nearly 100 years now. How hard is it to make a profit when you control everything right down to the money in every Americans wallet? GS isn't doing "Gods Work" they ARE GOD!

In my mind it is a waste of time to criticize and blame newsletter writers and analysts and GATA and 321 or any myriad of public prognosticators for failing to be a fly on the wall at the US FED. If you do not sit inside those FOMC meetings then you know nothing! PERIOD! Its a MONOPOLY.

Out of all the investments one could chose worldwide none have ever been threatened and beat up and abused as much as gold and silver have since 1913. I never saw FDR write an Executive Order to confiscate "corn"! What would happen to Obama if suddenly tomorrow we wake up and find out that overnight he has signed an Executive Order to confiscate all of Goldman Sachs and JP Morgan shares and property and declared both of those companies illegal and the "hoarders" of said shares as anti-American? That is exactly what happened to Americans who held gold in 1933. Suddenly you were declared "illegal and anti-American". Yet the US Constitution neither mentions or permits the US Federal Reserve.

We've given the two party POLITICAL MONOPOLY and the MONEY MONOPOLY practically 100 years of power and we sit here "trading" the last 4% of what's left while the US FED and its member banks like GS and JPM count up the 96% they have. Markets and lives are destroyed and yet I am sure Bernanke will get re-confirmed. I mean why CHANGE?

Only Americans can CHANGE America ... Obama can't. He never could as he is head and Commander and Chief of the POLITICAL MONOPOLY right now.

ALOHA !!

What about "FARM PAYROLLS"? Why is it those numbers never get any mention? As a "farmer" I can tell you they are not going to be pretty, at least from where I sit.

Kaimu -

"I left out a few more but essentially you get the gist ..."

Certainly Gordon Brown's own bottom deserves honorable mention.

Bill I read with interest your take on US banks and their dropping values. What is your opinion in regards to our Canadian banks. The financial index has been dropping since Sept 18 and there is quite large swings in daily values for the two banks I follow (BMO and BNS). They have exceeded the analysts expectations but I still see them as vastly overvalued.

Your take would be greatly appreciated for those of us shoveling a foot of fresh snow today and thinking of you on the beach. Would you have a spare bedroom for about six months?

Tony

I think I posted a couple of days ago that since I already have a decent position in ultrashorts, I decided to acquire new shares via put selling (so as to get much better prices or pocket the premium) as opposed to rushing in and buying the shares outright. This morning, a sell limit order was hit for 3 TWM January $27 puts at $2 each.

Thanks David! The sale was a little early but I'll take the gains!

Covered at $9.46. I guess I'm too nervous about a pullback in the dollar for a little while.

Went long GS at $165.15. GS is looking like it's bottoming out. It has been quite strong today.

Kaimu said:

"In my mind it is a waste of time to criticize and blame newsletter writers and analysts and GATA and 321 or any myriad of public prognosticators for failing to be a fly on the wall at the US FED. If you do not sit inside those FOMC meetings then you know nothing! PERIOD! Its a MONOPOLY."

ha!! i take that personal,

personally i believe its not a waste time to criticize newsletter writers and/or the 321gold pushers as i believe they prey on people's fears with their false prophecies while fishing for people's money. no different than predatory lenders imho. not all but some, and i believe ive made a reasoned case for that before.

w/ respect to GATA, i would argue that they in fact do claim to have a fly on the wall of gold's inner sanctum when they refuse to reveal sources who provide their so-called valueable and shocking information from deepening inside the gold world where most never go... its a very time-honored tactic to claim inside knowledge, and it is the knee jerk reaction to believe that somehow gold's movements are purposefully manipulated beyond what we already know by a global cabal hell-bent on destroying hard assets in favour of fiat currency. even more spectacular is the idea that some individual is so deeply involved and privy to such secret information would only reveal it to GATA for dissemination.

so no, its not a blame game, but it is about keeping people honest in the finance game, and that applies to groups who seemingly have similar view to us gold bugs. the enemy lurks within!!!!

much respect mr. kaimu, i hope you can appreciate where im coming from.

J

I guess I'm paranoid, but doesn't it feel like big boys decided to suddenly sell gold and other inflation assets at once and buy dollars?

I feels almost like march 14, 2008 when he had a huge intraday sell off in gold with all the gains moved to stocks. Now, we are seeing stocks sold as well.

I understand that gold was overbought but I'm surprised by the suddenness of the reversal.

Thanks Bill I value your opinion. As far as the US banks go I am afraid I have stopped following them and the rest of the US market. I have enough trouble tracking Canadian stocks, the US ups and downs combined with the Forex is more than I can handle.

Don't worry about the spare bedroom thing, the winds are kicking up to 30 mph with the snow still coming down so I doubt I could get a plane out of here anyhow.

Tony

David - I think you can use the 200 DMA as a stop loss on ETH. It's at $12.54..so maybe around $12.2 just in case they stop out people?

test

not in a wildest dream... but for the first time since he took the position I agree with Tim Geithner:

http://www.bloomberg.com/apps/news?pid=20601087&si...

2) I just want to pass on the torrent of rumors that came flooding back to me inspired by my GOLD SPECIAL ISSUE two days ago (click herefor the full report). The major gold producers, led by Peter Munk’sBarrick Gold (ABX), very publicly and with great fanfare took off theirhedges and ceased all forward sales, turning themselves instantly intoleveraged long gold funds. Now they are deliberately withholding spotsupplies from the market in a brazen move to squeeze prices higher.

Then the black swan flew in from Dubai (click herefor the full story), confirming everyone’s worst fears about theincompetence of all governments, and delivering the parabolic move thattook the barbaric relic up a gob smacking $80 in a week to an all timehigh of $1,220. Whether this is actually true is anybody’s guess, butthe market certainly buys it.

The yellow metal is starting to lookoverheated by me, but I’m just an old fart looking forward to his firstsocial security check. I like buying the steak and selling the sizzle,after I’ve ripped a few chunks of red meat out for myself, of course.But who knows, gold could keep flying until year end, and my governmentcheck will probably bounce anyway.

http://blog.madhedgefundtrader.com/

As an intellectual exercise, I'm curious to know trader's position on their gold holdings or their theoretical play now. Partial selling, or all out of the barbaric metal for the time being?

Actually, we made some good money on this trade, but I missed my own alert. There was alot to this trade, so I thought I would post it.

I had identified 83.65 as a crucial support level on the 5 minute chart for an FCX short and missed it because of the morning moves from the (fake?) jobs report. (FCX1)

I was able to pull the trigger at the 82.50 level (well 82.47), and made a second entry at the 81.50 level exiting just above the next support level at 81. Well, too early obviously.

Shortly thereafter, Vad made the comment in the trading room that it was ready to bounce soon (around 80.50 at the time), and I shot off my mouth (as I often do)that it would bounce at 79.65 (see support line on previous chart).

Amazingly, it did what I thought it would, but you have to go to the 15 minute chart to find the reason. In the circled area at the left hand bottom of the chart, you can see where FCX gapped up. Well, those of you who are candlestick afficianados know that gaps are considered areas of support and resistance.

and here people were crucifying me for referring to the 60 and 15 min charts. It was a good trade though. Now if only Vad had made the call official... ;)

No...that's not true Les. Those timeframes are useful for planning trade frameworks and you'll hear Vad reference higher timeframes on trades, they are, however, not useful for entries and exits on the type of trading Vad does.

Those aggressive entries I describe on the short side wouldn't hav been visible on the 5 minute chart never mind higher time frames

Vad would never make an official call on a bounce play of FCX because of the inherent volatility of: 1) the stock, and 2) capitulation plays in general. Those are always situations where he lets you know what he's thinking and will tell you a level to watch, but it then requires tape reading skills for entries.

That's knife catching, and Vad's been doing it a loooooong time.

http://www.thehindubusinessline.com/iw/2009/12/06/...

Last year it was Susan Boyle that was the surprise star. This year an 18 year old young man is stealing the show.

http://tinyurl.com/yzzah7l

Well, given the great close that we had for ETH, I think we can use another rule now: "Do not let a profit turn into a loss." Hence, I have just moved up my stop to my entry price at $12.67.

for the year, but....... China has a population of 1,334,510,000...
India has a population of 1,173,440,000.......
The United States has a population of 308,086,000.....
Now, China's government has a keen interest in the ' cultavation ' of its populous, keeping its working citizens doing just that... working. More and more of China's citizens are moving to cities to work. The same is happening in India... We all know about the lower wages that their workers make... But, once again, look at the population numbers... China has over 4 x the people than the USA does... India has almost 4 x the USA... Although these two countries workers are ' making less ' than their counterparts in the USA, the Total Amounts paid to the workers in China and India is almost equal to the Total Amounts paid to the USA workers, and China, in paticular, is invoking great amounts of stimulas money directly to their citizens... China HAS to keep its workers employed to keep inflation at bay and the citizens content.. So my question is... Does China ( and India ) really have a leg-up on the USA, or, in sum-total reality, is the favored trade/production status turning in favor toward the USA.. ( I have not looked hard at the China and India health care/benefits programs in relation to % of GDP and average wages... I had posted a few months ago on India's ' average inddustry wages ' and will do so again, along with China's if available )....

Himin. Makes solar water heaters. The show I was watching said they produce more than the US and Canada combined. I'm guessing that must be in units, because they only do $300 million in sales. The show also said their solar water heaters cost $300 each.

Ok, here's the point. They have 60,000 employees. I said to myself, that's a lot of people for a small-midsize company like that. Calc it out, its $5,000 in SALES per employee.

How much does the dollar need to (or yuan rise) drop for us to be able to compete?

I'm not seeing those jobs coming to the US anytime soon.

ALOHA !!

Illini posted - " ... China wants on, their talk of a gold bubble not withstanding."

If I were China and I wanted to buy gold cheaper I would say its in a "bubble" also! Its a nine year bubble now!

baz22,

Your questions on China vs US are interesting and I wish I had some definitive answers.

Information abounds, but my biggest problem these days is finding verifiable information. I discount most of the US economic data we hear in the MSM. It often conflicts with the US Census Bureau and Bureau of Labor Statistics websites and certainly with what I am seeing here.

China is something else. We need to remember they are an even more top down controlled society. Here are a few comments I have gathered about China. How reliable? I don't know. The most memorable and believable are these two videos.

http://tiny.cc/PjUXe

http://tiny.cc/K6974

---------------------------------------
From Cara Community, Submitted by alberio 8/17/2009

"I was in China last year and had the opportunity to travel in the countryside.
It was a little surreal. Like you said, an hour outside the city and they were literally using plows pulled by cows etc.

In a country which is growing so fast and can't provide enough of its own food I was amazed that it wouldn't try to speed up its agricultural processes. They face some very complex problems."
---------------------------------------
I recently listened to the author of "Economics Don't Lie" Guy Sorman on the BookTV Channel. His comments on China's risk were as follows:

China has categorized their population as "useful" (40%) and "useless" 960%) — only the useful are participating in entering the rest of the world.

He sees three main risks to their economy.
1. The unknown as to what the 60% may eventually do.
2. China has little innovation (only about 5%) All of the new building and manufacturing is dependent on foreigners. Architects and engineers from Europe, the US and other countries were brought in to create their new infrastructure. Nearly all factories were started by foreigners.
3. China has and export dependent economy — the US is the biggest buyer, but there are several others — all are slowing now. When Wal-Mart reported bad numbers, China closed two factories in two days.
----------------------------------------
The Associated Press, 8-22-09
China's top employment official said even if the country achieved this year's 8 percent economic growth target, only about half the 24 million jobseekers in the country would likely find work, the China Daily said.
Thirty-million migrants lost jobs when factories closed as global demand for exports collapsed last year, said the government, which has given no details of overall unemployment or how many new jobs have been created.
------------------------------------------
Kevin Hamlin in Beijing at khamlin@bloomberg.net

May 12, 2009 (Bloomberg) -- China’s investment in factories and property surged by more than economists forecast in response to the government’s 4 trillion yuan ($586 billion) stimulus package, countering a deepening slump in exports .
“Clearly the economy is rebounding but the improvement is driven by domestic demand and domestic monetary and fiscal policy,” said Isaac Meng , a senior economist at BNP Paribas SA in Beijing. “It is still way too early to expect a sharp turnaround in global demand.”
--------------------------------------
By Simon Rabinovitch 12-30-08
CHENGDU, China, Dec 30 (Reuters) - The biggest migration in human history has gone into reverse.
China's ocean of blue-collar workers is streaming back to the country's farming hinterland, bringing thwarted aspirations and rising discontent in tow as their city jobs, their paths out of poverty, fall victim to the global economic crisis.
----------------------------------------

Cheapy,

"I don't make money trading because I'm always wrong short term and get shaken out before I am proven right."

Me too.

I have been making a steady 3 to 4% this year by sitting with most of my cash in GNMA and other bond funds. The only really impressive part of my holdings has been gold and I'm also planning to add during the present pullback.

Jobs are key and the "good report" this week certainly spiked the market.

Unless I missed something, the report was simply not as many jobs lost as expected. But somehow this additional reported loss, even though small, made the total unemployed figure drop. It was just in time for Obama to make an uplifting speech in PA too.

Too bad we can't take talk to the bank. He'd make us all rich!

I'm only an artist, but I did successfully run my business for over forty years. Think what I could have done if I could figure how to make my math work for me like that! (Or at least make people believe it was meaningful.)

Life gets curiouser and curiouser ;-)

I for one, hope you do not take that step. A "step" to the side to catch your breath maybe? But, you do not strike me as the type of person who would ever let anyone keep you from continuing down the path you have chosen. And you do not need to apologize, I learned along time ago where the "Ignore" button is.
For all you do, "Thank You".

ALOHA !!

When it comes to dictatorships and mob rule dictatorships and monarchies and the likes there are NO GUARANTEES. My strategy has always been to cover my bases and diversify into the stratosphere. Once that's done you have done the best you can.

HIGH PP&E STOCKS WILL BE MONEY!

As the US Dollar travels the assigned historical destiny of all fiat money people will come to understand that INDUSTRIAL SHARES will once again be money, a "store of value". At that point you will see a gazillion pundits and the likes calling it a "bubble". As I scan the vast financial and economic horizon the biggest most excessive bubble I have ever seen my entire life is the current LIABILITY BUBBLE. But instead our media prefers to focus on a "gold bubble" or an "oil bubble" or a "commodity bubble", yet those three are in reality "money". As time goes by and the US DEBT progresses to infinity you will see that. I will guarantee you this that the same banks that created this corrupt monetary system in the end will be the same one who will be holding those three "monies" in the end, even though they are the KING SHORTS now. These same banks have something no other trader in America or the World has ... a WORLD RESERVE CURRENCY PRINTING PRESS! Politicians and bankers are in the business of theft. They may call it "trading" or "leverage" or "reserve banking" or "taxes" but its none of those ... its wholesale theft. That's where you take what never belonged to you. Isn't that what 2 year olds are taught not to do?

Truly back in 1933 had FDR been a true patriot an American he would have written his Executive Order to confiscate, not the people's gold, but JP Morgans assets and then declare the US FED illegal and cease all fiat bank assets, but instead he "attacked" not only the US CONSTITUTION but WE THE PEOPLE! On that day he declared a "coup" in Washington DC whereby Americans were relegated to second class citizenship, one step up from an illegal, just like their gold. If I were the Congressional historian FDR would have gone down as the worst American President just for that one Executive Order. It has all been downhill ever since for our money and our Freedoms.

DUBAI, United Arab Emirates (AP) -- Kuwait's sovereign wealth fund said Sunday it booked a profit of $1.1 billion by selling the stake it took in Citigroup Inc. less than two years ago when the banking giant was strapped for cash.

The Kuwait Investment Authority said in a statement it sold the preferred shares after converting them to common stock for $4.1 billion. That works out to a gain of nearly 37 percent on its $3 billion investment.

Calls to the Kuwait fund for further details went unanswered. A Citi spokesman declined to comment.

Gulf Arab nations' sovereign wealth funds have been heavy investors in U.S. and European companies, using their oil wealth to buy large stakes in companies ranging from Citi to Germany's Volkswagen AG and Mercedes-Benz parent Daimler AG.

http://finance.yahoo.com/news/Kuwait-sells-Citigro...

haha, if I had to guess, I'd say Kuwait retains the industrial capacity of various manufacturers as Kaimu points outs, as a tangible asset, and see the writing on the wall with the investment in HB&B. Rats abandoning a sinking ship?

Gary, the U.S. solar industry provides a textbook case study in how structural discrepancies are killing a manufacturing sector in the U.S. while still in its cradle.

Simply, China can manufacture solar panels more cheaply because it has lower labor costs and laxer regulation. The U.S. cannot compete without sacrificing core principles.

Evergreen Solar, a manufacturer based in Devens, MA, is a great example. They built a state-of-the-art manufacturing plant in 2008, but it has yet to reach operational profitability. Originally, the company management said they would be profitable by this time, but that was before average selling prices (ASPs) decline by over 30%. Much of that decline is directly attributable to Chinese manufacturers dumping product on the market. One Chinese solar executive (in a moment of rare frankness) said they were dumping.

What has Evergreen done to combat this unfair trade advantage? They have formed a joint manufacturing agreement with a Chinese partner. While this serves a critical strategic goal of gaining a foothold in the Chinese market, it was equally critical for the company to lower its production costs. This agreement, once fully implemented, will provide Evergreen with sustained operational profitability.

And what will happen to their Devens facility? For now, the company says it will continue to manufacture key components of their solar panels. But make no mistake, they will be off-shoring a large number of jobs from the U.S. to China.

Lots of big industrials in the FTSE 100 ,75% of their earnings come from overseas.Its a pity the government has wrecked UK plc's finances.
Must go back to bed ,got flu.

Robert Reich, former Secretary of Labor under Clinton outlines a future for the US which we here in the rust belt have already been experiencing.

----------

Worrisome Thoughts on the Way to the Jobs Summit

"But here's the real worry. The basic assumption that jobs will eventually return when the economy recovers is probably wrong. Some jobs will come back, of course. But the reality that no one wants to talk about is a structural change in the economy that's been going on for years but which the Great Recession has dramatically accelerated.

Under the pressure of this awful recession, many companies have found ways to cut their payrolls for good. They’ve discovered that new software and computer technologies have made workers in Asia and Latin America just about as productive as Americans, and that the Internet allows far more work to be efficiently outsourced abroad.

This means many Americans won’t be rehired unless they’re willing to settle for much lower wages and benefits. Today's official unemployment numbers hide the extent to which Americans are already on this path. Among those with jobs, a large and growing number have had to accept lower pay as a condition for keeping them. Or they've lost higher-paying jobs and are now in a new ones that pays less."

http://robertreich.blogspot.com/

Hi All - Early trading in Asia has Au off a bit at $1148 down from the close ~$1161. Looks like the powers-that-be have decided to send the huddled masses to the sideline for a bit. My Australian stuff is holding steady though. Happy Trading

Just wanted to say thanks for a very poignant, straight foward WIR. It is one of my favorite reads of the week.

I know you are probably familiar with Ritholtz's blog. That structure seems to have freed up his time. Just a thought.

capitulation play. (RSI 7 day below 10)

buy limit 7.25 good for the day.

Jan max pain 12.5.

do your own homework. No position

http://bit.ly/6E0NF2

I love youtube

I agree entirely. Versus the Himin solar water heater example from last night, when your competitors have SALES of $5,000 per employee, it means that production costs must be much less than that, say $4,000 each, allowing for 20% overhead and margin, but then we are off even worse, by at least a factor of 10 or 20 vs costs to produce the same goods here, because I don't think you could survive here in the states without averages sales of at least $40,000 or $50,000 per employee, because obviously there would be no way you could even afford to pay minimum wages, plus labor taxes and healthcare, let alone buy any materials for them to assemble.

It doesn't bode well for those left trying to make things here, even if the dollar is debased another 50% from here. It just buys the dinosaur another week or two of agony before it dies.

How come we can see this and our government and all its economists cannot?

This came in an email. Might be worth it. Then again, might just be bladder evacuation into a headwind.

THIS SHOULD BE AS IMPORTANT TO DEMOCRATS AS IT IS TO REPUBLICANS. AND YOU ARE SIGNING ON THE CONGRESSMAN'S WEBSITE -- NOT SOME RANDOM LIST -- NOTHING TO PASS ON INTO LIMBO.PLEASE PASS THIS FAR AND WIDE, THIS WILL BE TAKEN INTO ACCOUNT

Please read and act, only takes a minute! On Tuesday, the Senate health committee voted 12-11 in favor of a two-page amendment courtesy of
Republican Tom Coburn that would require all Members and their staffs to enroll in any new government-run health plan. It took me less than a minute to sign
up to require our congressmen and senators to drink at the same
trough!

Three cheers for Congressman John Fleming of Louisiana!

Congressman John Fleming ( Louisiana physician) has proposed an ammendment that would require congressmen and senators to take the same
healthcare plan they force on us (under recently passed
legislation they are curiously exempt).

Congressman Fleming is encouraging people to go on his Website
and sign his petition (very simple - just first, last and email and
click one yes or no). I have immediately done just that at:
http://fleming.house.gov/index.cfm?sectionid=55&se...

Please urge as many people as you can to do the same!
If Congress forces this on the American people, the Congressmen should
have to accept the same level of health care for themselves and
their families. To do otherwise is the height of hypocrisy!

Please pass this on!!

Bill,

I'll add my voice to those expressing thanks. Your guidance in this confused market rings true in contrast to the self-serving mainstream financial media. Please don't let the aggravation of a few rogues cloud the fact that you are helping many in their trading.

As a small business owner, I do not need them increasing my unemployment insurance which is slated to go up 1000%. It will become 5% to 10% of the cost of doing a project, is that sick or what?

So if they quit, I would fight them on the claim.

It really is. So many things there I agree with.

My wife wanted me to put all her money into gold middle of last week. I told her it was too high and to wait, but it went higher still. Thankfully she gave me the benefit of the doubt, and its now well below $1180 where it was at the time she asked me to move it. I agree that if you look at previous gold runs, they go zoom, but then pull back at least for a few weeks, and that would be sufficient to have those who bought the top, like my wife asked me to do, crying in their beer and selling as the losses mounted. For me, I think $1060 will be where I want to start moving that way again, figuring if it gets much cheaper than that, some of this loose money that seems to be going everywhere but into real investment of the type that employs Americans or produces anything to export or replace imports, will rather be holding metal than paper promises.

"All I am trying to do in this blog is keep the People from blowing up their own capital. So my message is always the same: plan the trade, trade the plan, respect the tape. Don’t listen to stories and don’t accept the govt data as gospel."

And thanks for that comment. The 1st part is one I need to learn better, and the 2nd was one I have. Poor KRY! I'm sorry, but isn't there some problem for them in VZ? Namely with a fellow named Hugo who takes whatever he wants? I can't imagine, knowing that, having any respect at all for anyone that would pump it, or assist with same, and I really don't see, given the NAME of your blog, that you would be a good candidate for them to try to enlist. Your reaction was exactly what I would have hoped for.

Thank you Bill for another superb WIR. Seems markets world wide have reached an inflection point or are approaching exhaustion. And thank you for all you do.