Bill Cara’s Morning Call
Over my morning cuppa cubita, I see a stronger yankee dollar has been trading from about 3am ET, with significant weakness in the Pound and Loonie, and softness in the precious metals, crude oil, heating oil and gasoline, foods and fibers, grains and oilseeds.
Treasury bonds and notes are marginally down as are the futures for the DJIA and S&P 500.
Asia-Pacific equities are flat to marginally down. The Financials are dragging the European indexes a tad lower at 6:00am ET.
The Nikkei 225 slid through the day in Japan, pulled down by Financials, but the Industrials held their ground.
Shanghai was flat in the morning, but rallied into the close, as did Hong Kong, which was pulled up by HSBC shares.
India’s Sensex 30 slid during most of the day, but recovered sharply in the final 90 minutes, closing flat. InfoSys was up almost +2%.
Aussie All-Ords started weak and never recovered, but closed down just -0.5%
In Greece, the banks were goosed at the open, which lifted the Athex 20 index to a +1.7% higher open, followed by sideways action for the first two and a half hours.
On the contrary, the Irish banks and insurance companies took big hits off the open, causing the first two hours of trading to be weak. The general index was down just -0.4%, but the financial sector index had dropped -5.5% and that was after a bit of recovery in the past few minutes.
In UK, HSBC is down -1.5%, which shows the buying in Hong Kong and selling in UK is driving the Pound lower this morning. All of this of course helps push the Dollar higher. The index is down -0.4%, awaiting the US economic data, particularly PPI.
In France and Germany, the indexes were modestly lower, led by Financials, but the Industrials and Consumers were ok.
All in all, a stronger US Dollar may push equities lower a bit. Many of the commodity-price sensitive sectors and industry groups have reached short-term over-bought levels, so a stronger Dollar today might trim those and the Financials a tad. But the two economic reports to come could change the outlook.
At 8:30am ET the US Producer Price Index report is due for October, with expectations for a modest lift after being -0.6% in Aug. The softer bonds this morning are due to the anticipated increase, albeit modest, in PPI.
At 9:15am ET, the US Industrial Production report for October will be released, with the data expected to be mixed, although the recent trend has been positive.
That's it for the market comment today.
In the near future, the Bill Cara's Morning Call will be followed by Coaches Corner, which will be a continuously updating section of comments from Vad Graifer and I. That will be followed by the CTA Trading Desk Report, and then your Community Discourse.
The rating system will soon be dropped, but other measures are being put in place to ensure the blog rules are followed. In that regard, do not be surprised to see comments about CTA or Bill Cara or links to some outside blogs removed. This action must be taken in order that I can continue to take the risks I do to publish this blog.
Trust me, there is a fine line in what we do here and I will not be dragged down by people with personal agendas. It's fine with me if you do have them, but in that case I want you to take them elsewhere. As long as we are all here in this community to learn by sharing and make money at trading, and rant a bit about the unfairness of the current structure of capital markets, I'm happy.
Have a great day.
CTA Trading Desk Report
The S&P cash has a 20-day average range of 18.6 points, and the e-mini normally trades 2.4 million contracts; today’s range was 8.33 points, e-mini volume 1.6 million contracts. So roughly half the range, half the volume, as the S&P approaches the halfway retracement of the bear market -- strange coincidences. Tightest range in 71 trading days by our count, so expect Mr. Market to tip his hand in the next couple days, as volatility (and volume) should expand in the direction of the future short-term trend.
The only potential noteworthy development today was the action in gold (GLD +0.20%). With the US Dollar strong all session long (DXY +0.64%) and precious metal prices extremely extended, one would have expected gold and silver to come under pressure. The fact that prices closed up and at the best levels of the day, bears watching; shorts must be scratching their head, wondering what will be the catalyst to knock down the precious metals. The heat is about to be turned up as gold Bulls must be feeling pretty confident right about now....
Have a great evening.
Comments
Bill, How's your daughter doing?
You mentioned your daughter got the H1N1 after taking the shot. Hope she is recovering by now. You've had a series of very stressful events lately. It is times like this which give us perspective.
ICSC-Goldman Store Sales
Released on 11/17/2009 7:45:00 AM For wk11/14, 2009
Prior
Store Sales - W/W change -0.1 %
Store Sales - Y/Y 2.9 %
Actual
Store Sales - W/W change -0.1 %
Store Sales - Y/Y 2.4 %
Re: Bill, How's your daughter doing?
I hope that she fully recovers now.
Best wishes.
giasong
Cara 100 Ratings Changes
Good morning. Round 1 ......
XOM - Upgraded to Overweight @ Barclays. PT Raised from $90 to $92
------------
Other Stocks Of Possible Interest:
SPWRA - Downgraded to Neutral @ Piper Jaffray
SPWRA - Downgraded to Market Perform @ FBR Capital. PT Lowered from $38 to $30
Coaches Corner
Bill,
I like the choice of the name for the new section and I guess it is true what they say...."you can take the boy out of Canada but you can't take Canada out of the boy."
I am glad you didn't call it "Eh-men's Corner."
Looking forward to the new format.
Mortgage delinquencies hit another record in 3Q
How does the US recover when Bank lending has dried up and isn't going to increase anytime soon?
http://finance.yahoo.com/news/Mortgage-delinquenci...
The statistics, which are culled from TransUnion's database of 27 million consumer records, show that mortgage delinquencies remain highest in the four states where the crisis has hit the worst.
-- In Nevada, the rate reached 14.5 percent, up from 7.7 percent a year ago.
-- In Florida, the rate was 13.3 percent, up from 7.8 percent last year.
-- In Arizona, the rate hit 10.4 percent, up from 5.5 percent in 2008.
-- In California, the rate jumped to 10.2 percent, from 5.8 percent last year.
http://www.hussmanfunds.com/wmc/wmc091116.htm
"Since June of this year, outstanding bank credit (loans and leases) has plunged at the steepest rate observed in the available post-war history, while at the same time, bank cash reserves have soared. This surge in reserves is a mirror image of the Fed's balance sheet, which has taken on over a trillion dollars in new assets – primarily mortgage backed securities. The problem here is that the underlying quality of agency paper continues to deteriorate, which means that Fannie Mae, Freddie Mac and other agencies will likely sustain major additional losses – eventually footed by the public – because they accepted a negligible fee from mortgage lenders in return for slapping the government's Good Housekeeping Seal of Approval on these garbage loans."
"The big picture is this. There is most probably a second wave of mortgage defaults in the immediate future as a result of Alt-A and Option-ARM resets. Yet our capacity to deal with these losses has already been strained by the first round that largely ended in March. The Federal Reserve has taken a massive amount of mortgage-backed securities onto a balance sheet that used to be restricted to Treasury securities. The purchase of these securities is reflected by a surge in cash reserves held by banks. Not only are the banks not lending these funds, they are contracting their loan portfolios rapidly. Ultimately, in order to unwind the Fed's position in these securities, it will have to sell them back to the public and absorb those excess reserves, so to some extent, the banking system can count on losing the deposits created by the Fed's actions, and can't make long-term loans with these funds anyway."
Re: Mortgage delinquencies hit another record in 3Q
forgot to add this from the Hussman weekly:
"From my perspective, this is nothing short of an unconstitutional abuse of power, as the actions of the Fed (not to mention some of Geithner's actions at the Treasury) ultimately have the effect of diverting public funds to reimburse private losses, even though spending is the specifically enumerated power of the Congress alone.
Needless to say, I emphatically support recent Congressional proposals to vastly rein in the power (both statutory and newly usurped) of the Federal Reserve. Starting with the Bear Stearns deal, the Fed under Ben Bernanke has made a sharp and distinct departure from its historical role, in violation of its charter. As I noted when the bondholders of Bear Stearns were rescued, “The troubling aspect of the Fed's action was not that it lent to a non-bank entity. That ability is clearly authorized by Section 13(3) of the Federal Reserve Act. The problem is that it made its “loans” as “non-recourse” funding – meaning that it would not stand to be repaid if the collateral itself was to fail.” This is still what the Fed seems determined to accomplish. "
Adding to the big picture
John Mauldin reprints Eclectica November Fund Commentary
By Hugh Hendry, which is a brilliant piece of writing, and makes some good points. It makes a good argument for the deflationary scenario.
1. A reserve currency enables much larger faster economic growth. It has done its job in China.
2. China has built/is building infrastructure for an export market that is going to be smaller scale than anticipated.
3. Americans are in a deleveraging/saving mood and will gradually absorb bond inventory. Less consumption.
4. Japanese like GDP growth of 1%ish for 10-20 years.
5. Earlier this year he went to China and ascribes to the "ghost cities" view. http://www.zerohedge.com/article/other-side-chinas...
6. There is stockpiling of every commodity, held by speculators, and fiscal stimulus. Inventories are dangerously high.
Most likely outcome: deflation, strengthening dollar, rising US treasuries.
I recommend reading this. I will position half my portfolio to reflect this.
Re: Cara 100 Ratings Changes
Stronger $ maybe?
Re: Mortgage delinquencies hit another record in 3Q
"That ability is clearly authorized by Section 13(3) of the Federal Reserve Act."
Forgive me for asking, but were in the constitution does it mention Central Bank?
Re: Cara 100 Ratings Changes - SPWRA
SunPower Corporation(NasdaqGS: SPWRA)
Pre-market Real-Time: 23.40 3.83 (14.07%) 8:51am ET
It drops almost $4 pre-market because of accountant error probes.
* SunPower probes books after review of Philippine ops
* May have to restate past three quarters, 2008
* Shares drop after-hours (Adds analyst comment, updates share movement)
SAN FRANCISCO, Nov 16 (Reuters) - SunPower Corp (SPWRA.O) is investigating millions of dollars in accounting mistakes over the past three quarters, the U.S. solar module maker said on Monday, sending its stock down as much as 8 percent.
The Silicon Valley-based company said its audit committee had started an investigation after an internal review of its Philippine manufacturing operations found that there may have been unsubstantiated accounting entries.
U.S. companies across an array of industries have reported accounting problems in recent weeks, in a sign that the pressures of doing business in a recession are taking a toll on bookkeeping. [ID:nN28329348] [ID:nN14307036]
The SunPower audit committee's preliminary findings were $1 million of overstated expenses in the first-quarter costs of goods sold, along with understated expenses in costs of goods sold of $14 million in the second quarter and $2 million in the third quarter.
The company said it is looking at the impact of potential adjustments to 2009 results on the previous fiscal year, and estimates about $9 million of the identified accounting entries should have been made in 2008.
Whether restatements of the 2009 interim reports and 2008 annual report will be necessary has not yet been determined.
"Until the investigation is complete and such a determination is made, there can be no assurance that broader issues do not exist," SunPower said in a statement.
The company had third-quarter revenue of $466 million, more than double its first-quarter total, while it moved from a first-quarter loss of $2.5 million to a $34.6 million third-quarter profit. Operating income in 2008 was $167.5 million, on revenue of $1.43 billion.
Simmons and Co analyst Burt Chao said that SunPower has had increasingly complex accounting as the solar company has expanded.
"This shows the difficulty of having complex accounting and having a global footprint ... As the solar companies become more mature and more complex and have to diversify, accounting will be an increasingly important part of investing in the solar industry," Chao said.
Shares of the San Jose, California-based company fell as much as 8.2 percent in after-hours trading, and were last changing hands at $25.52, down 6.3 percent. (Reporting by Braden Reddall and Laura Isensee; Editing Bernard Orr)
http://www.reuters.com/article/marketsNews/idAFN16...
Producer Price Index - Increase Less Than Forecast
Released on 11/17/2009 8:30:00 AM For October, 2009
Prior
PPI - M/M change -0.6 %
PPI less food & energy - M/M change -0.1 %
Consensus
PPI - M/M change 0.5 %
PPI less food & energy - M/M change 0.1 %
Consensus Range l
PPI - M/M change -0.2 % to 1.0 %
PPI less food & energy - M/M change -0.1 % to 1.8 %
Actual
PPI - M/M change 0.3 %
PPI less food & energy - M/M change -0.6 %
Highlights
Higher oil prices boosted the headline PPI but the big story is a sharp decline in the core PPI. The overall PPI increased 0.3 percent in October after dropping 0.6 percent the month before. The rebound in October lower than the consensus forecast for a 0.5 percent boost. The increase in the latest month was led a 1.6 percent boost in energy and a 1.6 percent rise also for food. But at the core level, the PPI rate unexpectedly dropped 0.6, following a 0.1 percent dip in September. The market had expected a 0.1 percent gain for September. The fall at the core level was due mainly to declines in prices for light trucks and passenger cars. The Bureau of Labor Statistics indicated that the core would have been up 0.1 percent in October. Overall, inflation pressures are mixed with end demand keeping most prices soft but food, energy and commodities are maintaining upward pressures. Treasury yields eased on the news.
Re: Mortgage delinquencies hit another record in 3Q
In "the Federal Reserve Act" not constitution
By the Constitution the Fed is still an illegal central bank
"The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered." -Thomas Jefferson
http://www.phnet.fi/public/mamaa1/jefferson.htm
H1N1 hit our part of the world
some 30% of the kids missing from class last week on one or two days. slight fever, bit of a sniffle, but otherwise been and done - no vaccination required.
Do these guys have quotes?
9:16:49 AM
Palm, Inc Barclays Raised PALM to Equal Weight from Underweight, price target: $11
PALM trades above $12... so they upgrade it assigning the price below current? How does that work? And just how puzzled someone using their research should be about what to do next?
Cara 100 Update
BMY - price target, estimate boosted at Barclays. BMY price target increased by a dollar to $26. 2009 EPS maintained at $2.03, 2010 raised by 3 cents to $2.19. Reiterate Overweight rating.
DELL - Morgan Stanley Resumes Coverage with an Equal Weight.
Re: Cara 100 Ratings Changes - SPWRA
Ouch ... the stock price is off over 18% in early trading. People are running from the stock at full speed.
Is the reaction overblown? It's looking like it is. But it's hard to buy here given the following:
"Until the investigation is complete and such a determination is made, there can be no assurance that broader issues do not exist," SunPower said in a statement.
But there is no dispute the company is still the top U.S. manufacturer of PV solar panels.
Re: Mortgage delinquencies hit another record in 3Q
Thanks for the link to TJ.
The continental congress just convened recently. Many do not know about this...delegates were sent. Interesting stuff...do not know the validity of it regarding legal binding, but was well attended...everything is relative however...plus the major media was absent, figures.
Re: Do these guys have quotes?
I am shocked, does this happen often? Just kidding...we sheeple apparently take what we get and like it or else...that is why Bills and your contributions and others are so special and needed.
Love the intuitive and powerful new format...go Korvus and Vadym!
question for BSI87
Coming back to you post yesterday re: good entry for shorting.
You said you were waiting for a kangaroo tail. Having read Elder's books I know kangaroo tail marks a support and a reversal. So, are you waiting for a kangaroo tail in U$D?
This is an interesting juncture. A number of superb market gurus (Bill Cara, Mark Faber, and Carl Swenlin) have been saying that U$D will bounce significantly any time soon for the last couple of months now. I'm just venting the frustration (but mostly in cash).
Re: Adding to the big picture
westcoaster,
One thing to remember if considering China as an investment:
Their 8% GDP growth is "attained" as soon as the money is allocated. We have the inconvenience of waiting for any stimulus to actually leave he big banks only if it is loaned to someone for use.
I'm currently over 40% in US gov bonds (mostly GNMA) until inflation actually shows in more than a few categories. There is a tremendous over production in the US and elsewhere and I expect it to take years to unwind.
The worst problem, IMO, is the increasing number of available workers here which is driving down incomes.
AONE sinks back down to earth
For those who recall the excitement last month surrounding the IPO of A123 Systems (AONE), after surging to over $27 per share, the stock has gradually leaked air and is now back at its original IPO price of $14 and change.
SPWRA
In at $22.5
Re: question for BSI87
Bernanke sure didn't do the dollar any favors yesterday, saying the Fed will continue ZIRP while "keeping an eye" on the dollar. I mean, why bother saying anything at all?
Update: Apropos my comment, I just came upon this article charting the reaction in the market to Bernanke's remarks.
Re: Adding to the big picture
Hugh Hendry is truely one of the best European thinkers. It's a pity he is not more widely interviewed.
I concur with his biting comments about Alcoa. This may be one of the best short sale candidates for the next several years. A counter trend dollar rally would crush them. Even without a dollar rally, they are doomed in the long run. It is only a matter of time.
I have no position in the stock. Just my opinion.
Cara 100 Update (Final)
Well, that's it for the day other than everybody and their brother having a blanket party with SPWRA. Thank you for that, Captain Obvious.
Please be cautious about buying SPWRA here. It can sometimes take years (if ever) for stocks to recover from "accounting irregularities". Anyone remember Cendant?
Have a great trading day.
Regards,
BH
Re: Adding to the big picture
What I meant by my comment about positioning portfolio was increasing exposure to bonds. I favor corporate bonds. Banks are not lending to corps, which provides opportunities for us to lend to the good quality names at favorable rates of return...provided one can sidestep defaults.
photogrey
Are you still out there?
Re: SPWRA
BH
Thanks for the heads up.
I'm no accountant, but my take is this is incompetentcy, not fraud. Highly regarded company in a growth industry, at a price not seen for 6 months or better. I believe it will be ok. Small position. Tuck it away. Our energy challenges are not diminishing.
hmmmmm...
analyst and pundits are more fearful of being wrong than clamouring to be right.
listening to tv hosts call for cautious optimism and a "wait and see" approach is exactly what would have been needed a year or two ago, but now after the collapse we get a new and cautious analyst set that portrays themselves as "protectors" of our capital, of the war-tested, battle-wary veteran of the great 2008 bear market collapse that see's value and is optimistic that the recession will be over, but thinks the "market got ahead of itself"
these kinds of statements are the financial equivalent to passive-aggressive investing. it doesnt nothing to really guide people, its just a verbal hedging of bets. this seems fair enough that one shouldnt be expected to predict the future but does it really help anyone when a large cap analyst goes on TV to say "theres value out there but we need to be selective about what we invest in", yes of course we do because all those funds that exist to be selective cant seem to consistently ever beat the broad index.
most financial units of the big banks would go broke simply admitting "we see value but the entire concept of picking and choosing stocks from a broad index has never been proven to make more money than just buying the index, so dont bother with our 2.5% MER laden funds and just buy the SPX".
even if they truly believed it they could never say it. the financial industry is just that: an industry, there to sell you something, and very often that product is tied to things that have actual value like our dreams, our families and our future goals.
remember next time your advisor tells you something about how to invest that if they work for a large bank are likley making a moderate wage at best for peddling their wares and have little if any real understanding of whats happening. if they tell you to buy gold its because they saw it on TV or read some articles on 321gold.com.
lets get real,
virtually no one has called things with any real measure of accuracy and it would be equally absurd to expect people to predict the future. its not so much that the industry must change its facade of crystal ball gazing, its us that must change our idol-worshiping tendencies and not give in to soothsayers that cant make anyone but themselves money.
Re: hmmmmm...
rant,rant,rant,there you go again ruining it for the sell-side scoundrels...lol
edit: took out the "rest of us", because it seemed much clearer and relevant.
Spooky Market
Bottom was 666. Return from there to yesterdays close was 66.6%.
Re: Cara 100 Ratings Changes - SPWRA
Number2... there were a ton of puts at the $22.50 strike .....
Re: hmmm/Three things that are wrong about "financial advisors"
We all heard this mantra: "In a long run market always goes up so don't try to time it and stay fully invested, and contribute regularly". Many feel intuitively it's wrong (not even saying self-serving) but when they show those nice charts it starts looking true... So, what's wrong with that?
Three things (there may be more, feel free to add):
1. First is obvious - inflation. Adjust those good-looking charts, and they are not so good-looking anymore.
2. Second is less obvious but not too deeply hidden either. Sure, index charts look pretty but constant reshuffling of the companies of which they are composed is one big factor contributing to the prettiness. Underperforming ones are being dropped; better prospects are being shooed in. Invest in wrong ones, and your portfolio performance will be drastically different from the index.
3. Finally, even if you are invested in index itself, you are still not out of the woods. This third one is not immediately obvious but just like the second, not really hidden either. The trap here is possible mismatch of your investment cycle vs index cycle. In simple terms, if index makes a move from 10 to 30 in 40 years while dipping back to 10 on a year 20, and you happened to be invested in period from the year 1 to year 20... you get the picture.
Of course most readers here know all this. I just get this question about those charts demonstrated by cheerful advisors so often, I thought I'd post the compilation for you to point to when less sophisticated (read not beaten up yet) ask you about those merry charts.
I wonder
When the world will realize that the present system we are in can only work when those Americans get what they want with the weaker dollar eventually. Not saying dollar will not strengthen for "a while"(relative term)...am saying that we have developed market, not developing, and that when inflation(in other countries) causes people to give up, they will let the dollar slide...it will seem like the obvious answer. JMHO and notin more!
My opinion only, but I did like Whitney's emphasis on growing companies...I do like growth and so do many others.
DISCOUNT WINDOW
ALOHA !!
Fed to Cut Maximum Maturity of Discount Window Loans to 28 Days
Nov. 17 (Bloomberg) -- The Federal Reserve will reduce the maximum maturity on discount window loans to 28 days from 90 days in January, the Board of Governors announced today.(more)
Okay ... the "discount window" is being shut 2/3 down to a maturity of 28 days from 90 days starting Jan 14, 2010, just in time for the CTA Conference 2010! Bill did Ben discuss this with you?
I find it amazing that the US FED on one hand says this to its privileged member banks ...
"In light of the continued improvement in financial market conditions, the Federal Reserve Board on Tuesday announced that it approved a reduction in the maximum maturity of primary credit loans at the discount window for depository institutions to 28 days from 90 days effective January 14, 2010,"
Then in the same paragraph says this ...
“Primary credit loans will remain eligible for renewal upon request of the borrower.”
Why announce you are reducing the discount window maturity at all if the "borrower" can renew upon request? So after 28 days they just "renew" for another 28 days then another then another ... on and on ... Kind of like the JP MORGAN "Evergreen clause" on gold leases with Barrick whereby the leased gold could be renewed every 15 years without penalty. Where's the risk in these "insider deals"?
Why don't US Consumers with credit card rates of 16% and 25% get a discount window? Does this not speak to why Thomas Jefferson said what he said? Can anyone here now put the pieces of the puzzle together to see that the US FED should be illegal since the privileges of the discount window do not apply to WE THE PEOPLE? I think so ... The US FED is a blatant MONEY MONOPOLY and if we cannot close the US FED under US Anti-Trust laws then we should each qualify for legal action against our lenders under the cause of "discrimination".
When I first read the headlines I thought to myself that the US FED is pulling back the "free gambling money" so now market intervention will be of a lesser 28 day frequency, but if these discount window maturities are renewable upon request then its "GAME ON BEN" and this announcement turns into nothing more than fodder for a USDX goosing!
Still though ... WHERE'S MY DISCOUNT WINDOW? How do we get a level playing field when such MONOPOLISTIC monetary policy is in place such as the "discount window"? Who died and made banks God?
Re: SPWRA
Wrote some Jan 20 puts...IV is around 70, and if I get assigned I'm getting SPWRA at $18.55 - below the November low! I wanted to get some SPWR last week but something told me to wait...
Re: DISCOUNT WINDOW
Banks assumed we knew of their Godhead when they became our landlords.
Re: Do these guys have quotes?
The logic is simple, they upgraded it to equal weight, and target price assumes an 8.3% drop in share price. All this means is that they expect the whole sector to drop 8.3%, and PALM to do no worse, no?
Under/Equal/Overweight is just a relative rating, not an absolute (i.e. not like sell/buy), probably just a way for them to seem kinder to their corp. banking clients...
The TARP Inspector's silly explanation for the AIG bailout
http://www.bloomberg.com/apps/news?pid=20601087&si...
Neil Barofsky, special inspector for the Troubled Asset Relief Program, attempts to justify paying AIG's counter parties full value, as follows:
"The French bank regulator, overseer for Societe Generale and Credit Agricole SA’s Calyon, “forcefully asserted” that the banks couldn’t accept less than full value on swaps unless AIG went bankrupt, Barofsky said. Because the Fed had already committed to preventing an AIG collapse, regulators had reduced leverage in negotiations, he said. Other counterparties included Merrill Lynch & Co., Barclays Plc and Bank of America Corp."
"In a letter to Barofsky included in his report, the Fed said it “would not have been appropriate to use our supervisory authority on behalf of AIG to obtain concessions from domestic counterparties.” Doing so would have been a “misuse” of power that would have given an advantage to non-U.S. banks, the Fed said."
Barofsky's justification is without merit. Its incredulous that any counter party facing the total loss of its entire AIG investment and maybe even its own financial collapse would insist on the full value of its swaps from a third party (the US taxapayer) against whom it had no enforceable legal claim.
Forcing AIG into bankruptcy would have resulted in substantial if not total swap loss and was never a viable alternative for any counter party. Blaming full value payment on the French is a weak excuse for paying US counter parties and foreign counter parties full value. I'll bet any of them would have taken half to one third value if it had been offered in an arms length deal.
Barofsky not attempt to justify the unjustifiable. I think most people believe the full value bailout is nothing less than an illegal payout to the banks and that the Fed and Treasury represent banking interests not taxpayer interests.
WATCH OUT... THE FFTF IS COMING
Attorney General Holder was just on the news, announcing the activation of the FFTF or Financial Fraud Task Force.
The executive branch posse is going to ferret out all the Wall Street crooks and provide justice for mom and pop. HA
Time for all the crooks to max out their contributions to the politicians or face the wrath of the FFTF. Ironically, Holder mentioned ponzi schemes in his speech.. The US government balance sheet is the biggest ponzi scheme ever.
Big GLD call buyer
i just saw at http://www.goldalert.com/gold-price-blog.php that someone just bought 13,000 Jan 2012 $130 GLD calls
While I am still bullish on gold in the longer term, I do not think now is a particularly good time to be getting long gold. I bet the smart money is whoever sold these calls, considering how much gold has run up recently; that person is probably hedging their long position.
Re: What actions do you see as rendering 'them' powerless?
Grym - The action is "Just Say No". No! I'm NOT going to pay attention to you, re-elect you, buy your overpriced stuff I don't really need, buy your story, believe your propaganda, or give you my valuable time . . . because I don't need you. You need me.
You see 'they' are only empowered to extent we recognize and empower 'them'. Without the public, 'they' are nothing but ordinary. It is only by our attention that 'they' get elevated to celebrity status and empowered with 'their' agenda.
The Big 3 (Gov't, Corp, Media) recognize this and 'they' continually direct 'their' efforts to keeping our attention where 'they' want it. (For reference see movie: Century of Self about Sigmund Freud's cousin who helped create the US consumer using the same tactic)
A good example that comes to mind is overpaid professional athletes. The fans may complain about 'their' pay or the price of games or goods but their complaining changes very little. And while the fan is complaining they are giving the overpaid athlete their undivided attention and paying exorbitant sums for game tickets and overpriced merchandise. By doing this, the fan empowers 'them' (overpaid athletes and corporate sports) to continue to test the boundary by asking for more. It is why there is a whole cottage industry around sports entertainment. Talk radio, Cable TV programs, advertisements, etc . . . And the pay and prices will continue to go up until the fan decides to act like 'they' really don't matter. If people were to stop attending these games and buying 'their' goods, I believe you'd see some very fast change in pricing, pay and attitude and no doubt every action available to get your attention back onto 'them'.
I believe the same applies to politics and the market. That in order to render the 'meddlers' powerless, we need to turn 'them' off, become more independent and more responsible stewards of our assets.
It seems to me that in life, like trading, a little bit of common sense, due diligence and emotional control goes a long way. And that the best way to gain more sense and emotional stability, in my opinion, is to un-empower the people who desire most to transfer my assets into their balance sheet.
Re: photogrey
Monitoring quietly. Moving slowly back to cash. Whats up, Tn_?
dollar up, but...
THe dollar is +0.83%, but surprisingly, this does not seem to have materially affected SPX today.
What's more silver and gold are close to breaking above their highs from yesterday.
Is something new going on?
Re: Cara 100 Update (Final)
Thanks for reminding me CD. I was one of its victim.
With "accounting irregularities", I wouldn't touch it, either buy or short.
@BH, What do you think about ARO?
I have followed it for a while. This is a very good fundamental retailed company. The price drops from around 44 in 10/22 to 32.56 now because it missed the October store sale estimate, although it raised the earning in this quarter to $0.90.
It will report the earning on 12/02 and just like CSCO, it always beat the estimate 1 cent in the past 4 quarters.
Thanks and have a good day.
Best Regards,
giasong
Re: What actions do you see as rendering 'them' powerless?
nicely stated, Bert.
Re: photogrey
Hey, was up? Not my shorts lately, lol
I wanted to alert you to some action in IWEB...it has sold off some. To me, it has stabilized around .14...me, being a little greedy, but not too much have loaded up again for a hoped for visit to the trough.
Good luck hunting.
SLV
Silver looks really strong right here...
trades for today
The buy stop order I placed for SRS got triggered today at $8.61, increasing my current position by 25%.
The MON I purchased yesterday at $74.07 is doing pretty well. It might be time to take profit now. However, I like to start, once again, selling options as much as possible, since this is a slow-winning strategy, but with great odds (relative to outright stock purchases). So I just sold for $3.10 January 2010 $80 covered calls against my shares. This way, either MON is taken away from me at $83.10 (a decent return in 2 months relative to the cost basis of $74) or I lower my cost basis to $71, which is a bargain entry price based on its 1-year chart and the fact that in 2012 the company expects to make $8.5B in gross profit vs $6.75B in 2009 and $6B in 2010. The one-time expected decrease in MON profit (due to a slowing down of their chemical business) is already incorporated into its stock price, and from here the stock should should already start looking forward to renewed growth (due to expansion of their seeds and genomics business). However, if the broad market sinks from here, so will MON, and so I felt that selling out-of-the-money covered calls against my shares (that are already showing a decent profit) is the best thing to do.
Re: Jefferson
I spent a day recently trying to track down the origins of that quote and came to the conclusion that it wasn't by Jefferson. I went through all his published letters at Univ of VA and others trying to find it, and did find the letter that it supposedly was quoted from, but it wasnt there. Evidently the term "deflation" originated in the 1930s from what I read.
"Paper is poverty, it is but the ghost of money..." is truly a Jeffereson quote from when the London banks were going broke around 1788, and there was lots of paper money floating about, but little coin to back it.
John Mack on 2008 Crisis
Forgive me if this has been posted. Interesting account from John Mack on the fateful weekend.
http://www.youtube.com/watch?v=R9sQtmPAYO0
Re: dollar up, but...
Noticed the same thing.
U$D went up back to Thursday levels with SPX not budging. Dumb money buying on a "dip"?
sold some SLV
A short-covering rally in $USD can happen at any time now and S&P is at its high for the year (implying that it is ready to go down, only if to make another higher low). The $USD, to my surprise, did not follow through on its brief dip below 75 and has instead rallied up, so its 3-month chart shows what might be a defended support at 75:
http://quotes.ino.com/chart/?s=NYBOT_DX&v=d3
Putting it all together, I just sold at $18.08 1/6 of my long-term SLV position, so as to reload it on the next weakness in S&P.
Re: SLV
I see SLV bumping against it's upper trendline that has seen multiple touches and an oversold RSI. MACD looks favourable, volume has been jumpy. Unless you expect a breakout, not sure this would be the place to open positions...
Re: Adding to the big picture / Alcoa
Ross, do you have a link to Hugh Hendry's comments about Alcoa? Thanks...
Thanks Tn_
Is/was on my "want to watch" list. Thats the list that life gets in the way of! I would rather be here watching my shorts get whupped but I am off to have dental work done. oh joy!
FD, have small pos in IWEB basis at breakeven right now
Re: Adding to the big picture / Alcoa
Per your request. I have no clue if this is against the rules.
Re: What actions do you see as rendering 'them' powerless?
Bert,
I understand your theory, but...
I haven't been to a big league game in at least twenty years. Still they get huge contracts. I have voted for independent candidates in three national elections, but the two parties still rule in tandem.
I have been and still am outnumbered. They don't need me.
As Einstein said, "In theory practice and theory are the same. In practice they are different.
There is so little common sense in our politics, government or economics that I am convinced our nation is committing suicide.
Political correctness has determined the terrorists deserve Constitutional rights while at the same time the Constitution is being trampled regarding the rights off US citizens. We are not even supposed to call them terrorists anymore — it causes hard feelings.
The new health care (House) bill would force citizens to purchase insurance or face fines and imprisonment while not requiring illegals to buy. My kids would have paid a premium to go to school in another state, but illegals get residential privileges.
They HAVE the power and they know it.
Re: Mortgage delinquencies hit another record in 3Q
The better question might be "when does the citizen recover?"
Mortgage defaults are being forced by the Stimulus Bill. How? Most people who are underwater on their home value find out quickly if the have not missed a payment they get denied when they request modification. So months go by in their honest attempt to get help traipsing from counseling agency to debt mitigation and back.
Then the light goes on: their neighbor who defaulted months ago got their loan modified to a sweet low payment. Naturally this proud homeowner winces as they miss their first payment. They trash their credit in the process and are living in constant fear of foreclosure while anxiously waiting for an answer. They are in an even worse predicament as they wait: their default balance grows and the threatening letters escalate. Lenders have tightened guidelnes beyond expectations of the Federal Reserve (while taking our tax dollars). If anyone did qualify for a refinance through last month, their chances of getting out of any kind of ARM are dwindling by the day. The tease is super low rates --but who qualifies? The net effect is a great deal of heartache and loss of health and hope. Hope for Homeowners indeed.
Re: question for BSI87
I'm eying the daily U$D chart and looks like 75 was a support after all.
While not shorting much, I'm planning to shed the rest of GDX I hold at the close of the day. The gold sentiment looks too high and topish to me. Rydex PM assets are very near multiyear records (in absolute terms, but not in % terms though).
Can't sell 1 ounce Canadian gold coin for $20, or even give away
http://bit.ly/l6fP0
Anemic redefined
Market Internals update at 3:30pmET
- NYSE volume 690M shares, about 25% below its three-month average; decliners lead advancers by 1.4:1.
- NASDAQ volume 1.58B shares, about 15% below its three-month average; decliners lead advancers by 1.2:1.
- VIX index -2% to just under 22.50
bought some HNU.TO
I just bought some HNU.TO at $9.80, for 2.5% of my portfolio. It recently switched to tracking the January futures, and the chart of these futures shows what seems like a double bottom at $4.8:
http://tinyurl.com/yaxamzf
The contango spread between January and February futures is only 1% now, so we can once again trade NG rather safely without worrying about the horrendous contango erosion.
Re: Can't sell 1 ounce Canadian gold coin for $20, or even ...
I saw that...interesting the ignorance of true money these days!
Re: Mortgage delinquencies hit another record in 3Q
Hi Loannet - I just got word the world is changing as far as higher ratio files. Fannie Mae (Freddie to follow likely) will institute new rules for all files that will require stricter ratio tests which will take effect on 12/12/09. For what it is worth I am putting a fire under borrowers considering a purchase to pick a property and let me get the file to underwriting before the 12th. Just thought I would pass this along for any of you with kids etc. wanting to purchase/refinance in the near future. Happy Trading
Palladium looking weak today
Quick notice that it sold off today...silver mixed...well, could this be a tell?
Do not know if this is the correct relationship, but $gold:gdx was negative this session...is this a tell?
Re: dollar up, but...
ALOHA!!
If I were Obama and Geithner I would not want to be in China negotiating PR with my biggest creditor and have the POG rising $20USD every day. That's not a good image for Tim's STRONG DOLLAR POLICY!
BNN talks about the Mobile App market segment
http://bit.ly/d2TJ8
CHINA PR
ALOHA !!
Holy Guacamole ... que pasa Senor Tim?
Jeez, the largest one day outlay for interest payment on US Treasuries happened on Monday, Nov 16th of $21.4BIL USD. And to celebrate the US Treasury issued another $73.1BIL in US Treasury Notes and $17.1BIL in US Treasury Bonds. That's $90.2BIL worth of "marketable"(external) US DEBT and the US Treasury added in another $191BIL in "non-marketable"(internal) US DEBT. Redemptions failed on Monday so this DEBT extravaganza added another $40BIL onto the US PUBLIC DEBT subject to limits, sitting at $11.975TRIL USD. The US PUBLIC DEBT ceiling is still at $12.1TRIL USD. I think Obama and Timmy will wait until their China trip is over before they announce they will raise the US DEBT ceiling to $14TRIL USD. I honestly don't know why they bother with a debt "ceiling". Since when has debt ever been capped? This is the 70th year of debt ceilings. Isn't it obvious yet? HA!! Hummmm, wait, I hear Chinese students laughing ...
Hurry and grab those "safe haven" debt derivatives, oopps, I mean Treasuries!
UNREAL-L-L ...
preparing to take profits on my ultrashorts
In order to make it easier for me to overcome my greed and actually take some profits on my current ultrashort positions in the event of a market pullback, I have just placed a sell limit order at $12 for 1/6 of my TZA and another one at $12.50, for another 1/6. Also, I have just placed a sell limit order at $9.50 for 1/5 of my SRS and another one at $10, for another 1/5.
As the recent experience shows, HOPE in the market always gets trumped by reality, and so I'll try not to forget to ALWAYS take SOME part of the position off the table when that position shows profit. There is a reason why the price is where it is -- while we hope for it to move one way, someone else hopes for it to move another way, and we shouldn't be so arrogant to think that we know better.
NSM - Northern Star Mining - phone update "ready to pour"
Per Jonathan Awde, VP Corporate Finance, Northern Star Mining plans to pour gold this month, and to produce 60-75K oz next year. Because of a delay in financing and in building a “vent raise” in their mine in Val D’Or, Quebec, NSM stock has been flat the past 4 months. (Previous delays had already left investors in a “show me” mind-set.
Awde maintains that financing is in place, recent drilling has resulted in two new zones, and extended two existing zones. Dumas, a major contract miner, will handle most of NSM’s production work.
NSM now sells at C$0.47, and has a market cap of C$51M. They have 880K oz of gold (all 3 categories) and believe resources can be greatly expanded. They are close neighbors of OSK (8.5M oz M&I; market cap C$2.4B) and of all AEM’s major mines. If multi-million ounce reserves appear likely, NSM would quickly become an excellent acquisition candidate for a mid-tier or even a senior (esp. AEM).
To gauge potential, Awde refers to an (unnamed) Quebec comparable with reserves of under 500K oz, and 2009 production of 80K oz. with a mkt. cap of $230M - over 4x NSM's!. He told me he recently purchased an additional 300K shares from his own funds. I met Awde face-to-face in June, and was mightily impressed. So was the market, as NSM’s share price nearly doubled in the month during and after his tour.
If things proceed as planned over the next two months, the market response could be even stronger this time. My rule of thumb: the 2nd biggest bounce a junior can enjoy is when achieving commercial production (the 1st being when proving up a major discovery). When either happens in Quebec (one of the very most mining-friendly jurisdictions in the world) the market’s response tends to be quite enthusiastic.
Re: Adding to the big picture / Alcoa
Thank you for the Hugh Hendry link, Telestar3d. If you contact me via this site, I'll send you another interesting link in return. :)
Re: Kangaroo tail
A "kangaroo tail" is a candlestick pattern per Elder that shows a rejection of a high or low, usually an indicator of a trend reversal. Buying halfway on a downward pointing tail or selling longs or even shorting halfway on an upward pointing tail is a lower risk entry on the former and a good exit point/shorting point on the latter. Toss some risk analysis in the mix reduces the number of trades I put on. The RSI screens also reduce the number of stocks/etf's I look at.
I don't really follow the dollar but my indicators say gold and miners appear to be topping out.
FD:long DROOY, long DZZ
GL
Economics 101
Two important econ reports will be published tomorrow morning. What you need to do is read the expectations, then read the report, and watch (i) the spin at Tout TV -- it may be positive or it may be negative depending on who is paying the financial network to spin it their way -- and (ii) the market reaction to the report, which may be aligned to the spin or otherwise.
US Consumer Price Inflation
http://tinyurl.com/yj9s63a
US Housing Starts
http://tinyurl.com/yj9s63a
This is Bill Cara's Econ 100, not the stuff taught at Wharton School or Harvard.
Every week there are about ten such reports. Over the period of a month there are maybe 40. Of these 40, about half are useful to the spin masters. By following my protocol, it should not take you too many months to catch onto the market's game.
Interpreting the bold faced lies
Ask yourself a question, what are we protecting ourselves from when we need officials telling us the truth in a web of obfuscated lies.
When Ben says this:
"Our central objective is and always has been the domestic purchasing power of the U.S. currency," he said. "The dollar plays some role in that, but to some extent it's a bit tangential to that."
He is really saying this:
"We are going to try to MAINTAIN STICKER PRICES of assets in the US (ie real estate) at whatever they were in 2007 when the housing bubble was on. The foreign currency purchasing power and commodity purchasing power of a US dollar is COMPLETELY TANGENTIAL TO THAT."
ANYONE with a modicum of cunning and schooled in the lies of the state knows what he is saying in plain english. It isn't hidden! Why do they need to talk in obfuscation and lies?
Anyone?
Re: Kangaroo tail
BSI I've been trying to get a handle on these things. Would it be possible to post an example in a chart when you see one? TIA
Re: Can't sell 1 ounce Canadian gold coin for $20, or even ...
I wonder if it wasn't simply that they thought it was a scam. I wouldn't buy for $50 without getting verification the coin was...
A. Genuine
B. Not hot
At $5 I would risk it.
Re: dollar up, but...
davefairtex -
"THe dollar is +0.83%, but surprisingly, this does not seem to have materially affected SPX today.
What's more silver and gold are close to breaking above their highs from yesterday.
Is something new going on?"
Well, gold and silver hold steady instead of dropping when the $USD goes up and, as Martha Stewart would say with a smile and a piece of holiday cake, "That's a good thing."
Re: dollar up, but...
PM strength given dollar strength tells me (since the buck is *still* in a long, long descending triangle, and it is still respecting the 50dma) maybe I should buy a breakout in silver.
Something Ain't Right with Japan
I'm beginning to fear a big problem on the horizon with Japan. I fear that something is definitely not right there. Their debt is out of control, they have had a low level of GDP growth and near 0 interest rates for 20 years now. Meanwhile their stock market has gone down about 75% from it's peak. And recently I have seen a lot of weakness in the Nikkei. Previously I was thinking that they might be a good investment given how far down it is from it's 20 year old peaks and that might still be the case, but the weakness in their markets in the face of worldwide strength is probably something we shouldn't ignore...
Re: trades for today
David,
When MON broke down dramatically on Oct. 26, I took a hard look at it. I decided it might find some support just under $70 (see the long-term chart attachment). When it fell through and then regained $70 on Nov. 9, I acted on Nov. 10 at the open (see the short-term chart); undoubtedly more of the dumb luck of 2009. I just sold 1/2 the long position today (massive resistance ahead) and set an obvious stop on the remainder (I see a chance for $85 - see long-term chart).
What's more interesting is what has happened in my options "paper-trading" account (I've given myself 1 year to try and understand this vehicle). FWIW, I bought some Jan 16 $85 Calls at $0.60 which today traded at $1.61.
I very much enjoy the detailed accounts of your option's moves; thank you.
Re: dollar up, but...
daviefairtex -
Holding SLW here with a tight stop.
Upon deposit of a Tiger homer into the stands, Detroit Tiger's announcer Ernie Harwell used to say "He stood theeeeere like a house on the side of the roooad watchin' that one go by."
Re: Something Ain't Right with Japan
I hear ya, teamfuego. Take a gander at EWJ...bouncing along the edge of the precipice...completely flat on the year. This will definitely bear watching in the next week or so for, as Bill says, the "market" to show its preference in direction.
Let's just hope it doesn't turn out like Kuwait (see attachment)
Re: Kangaroo tail
Westcoaster, BSI can probably give you a better explanation but I'll through in my ideas.
First Stockcharts has a pretty good explanation of candles in their chart school section, see the link below, in particular the sections on Dragon Fly and Gravestone Doji's along with the sections on Long Shadow Reversals.
http://stockcharts.com/school/doku.php?id=chart_sc...
Now as for some charts, I put together a quick scan in the Stockcharts advanced scan engine as follows and included an image of the charts the scan returned.
[type = stock]
and [Close > 5]
and [SMA(20,close) * SMA(20,volume) > 500000]
and [volume > SMA(20,volume)* 1.25]
and [[Hammer is true] or [Shooting Star is true] or [Gravestone Doji is true] or [Dragonfly Doji is true]]
Basically the scan is looking for any of those types of candles, bearish or bullish. I also included my standard liquidity requirement of trading Min $500k per day average and I wanted todays volume to be 25% more than the SMA 20 average volume, as I find that also helps to validate the long tail reversal. You could also tweak it a bit by specifying a min tail length in percentage terms.
Just some other ideas to think about.
Re: Mortgage delinquencies hit another record in 3Q
Luggie, What a surprise? The failure of refinancing and loan mods is lenders expecting a borrower under stress to meet 33% DTI when they are already proving they can't handle where they are at like 50%. We got the word some time back that 45% DTI is pushing it now with most of our lenders. What are you hearing the new standard will be? Back to the future at 25%? That should kill a lot of sales!
Re: Economics 101
Hi Bill,
you asked if there was anything we could add to your automated reports. In the ideal world, we could see the live data scrubbed from various sources and placed in a table...then we could see the trend of these 40 variables over the course of the weeks/months.
Just a thought.
Re: What actions do you see as rendering 'them' powerless?
Grym - For me it is not theory but practice and it has improved my quality of life considerably. So what that the athletes, their corporate managers, financial management and the politicians have become richer at the expense of their followers.
We are outnumbered and may always be, but to me that does not matter. I do what I do because it is the right thing to do, my conscience is clear and I know that I am who I decide to be.
Perhaps my example will appeal to others and cause them to ask questions and seek answers for themselves. Then again maybe it won’t. It does not matter. I cannot control others and everybody has their own experience that makes them who they are. What matters to me is that I am able to improvise, adapt and overcome and hopefully lead my family successfully in doing the same no matter what happens.
In my opinion, we are here to make this world a better place for the following generations to the extent we can. We can constructively contribute our knowledge and collaborate with others who are willing to do the same but we cannot force change onto those whose minds are closed.
Re: hmmm/Three things that are wrong about "financial advisors"
I agree with your take and I am a financial advisor. Michael Jon Byers Lubbock Texas
Re: Kangaroo tail
excellent post.
Suggest googling the term "kangaroo tail candlestick" and read
Also "Elder Kangaroo tail"
DIVORCE WALL STREET STYLE
ALOHA !!
It looks as if the C WORD is hitting Wall Street and the US Congress in ways it never has in the past. If you burn citizens and investors long enough pretty soon all credibility and CONFIDENCE is gone and what were once considered "free markets" turn into roaming bands of outlaw traders and pirate hedge funds battling it out with what's left of the unsuspecting Middle Class and Upper Class wealth. Who here can barely choke down a laugh when they see some ad on TV like Dennis Hopper, the original Easy Rider "outlaw" of the 60s, pushing retirement planning to sofa dwellers over 40?
Wall Street is busy divorcing the masses.
I like this guy over at the Cunning Realist because he is a Wall Street insider who refuses to divulge the name of the company he works for yet he posts articles like this one on his blog. He also occasionally writes articles for the ECONOMIST.
I especially like the last sentence that includes historical perspective.
READ ON:
Tuesday, November 17, 2009
Stolen
As the financial crisis fades and yet another Fed-induced bubble inflates, we're starting to see some of the enduring social effects of the past year. One of these is what I call "the heist meme." This is the belief -- correct, in my view -- that the various bailouts of the financial sector essentially constitute the largest theft in history. This idea is everywhere; do a Google search for combined terms like "Wall Street" and "robbery." It seems to get traction as the public gets perspective on past events via news reports like this. Bloomberg's Susan Antilla on the upshot:
“I want these swine prosecuted,” wrote Robert Carlini of Richmond, Michigan, an auto-industry executive who says he is a “staunch conservative.”
In the 14 years I’ve written columns for Bloomberg News, I’ve had plenty of feedback from investors who said they lost money at the hands of corrupt brokers, plus a steady stream of vitriol from financial executives who say I’m clueless, stupid, and deserve to lose my job.
I have never, though, been bombarded with anything like the fury and frustration expressed this time by people far removed from Wall Street, ranging from computer programmers to administrative assistants to the caretaker of an estate. ...
Off Wall Street, the rage is palpable. Several readers said they were so enraged that acts of violence were called for against figures in finance.
The heist meme has associated psychological effects. One of these is a developing disconnect between the stock market and the public. During the Reagan years the public became invested in the stock market, both financially and psychologically; what was good for the market and Wall Street was good for Main Street. That connection got exponentially stronger in the mid and late 1990s. The bailouts severed it. Now the public -- again, correctly in my view -- seems to resent every stock market advance as benefiting the same individuals and institutions that got bailed out. Has there ever been a 60% gain in the Dow that's been more hated? This is a sea change in the public's perception of the financial markets, one that I think will last for years and possibly decades. (Side note: One might think Obama and the Democrats, by failing to resolve the ongoing outrage of "too big to fail," ignore the anger at their peril. As the "staunch conservative" shows in the Bloomberg article above, this issue would be an opportunity for Republicans if they weren't in the financial industry's pocket. But they are, and they would rather rant about ACORN anyway.)
One of Wall Street's greatest self-serving achievements since the mid 1990s, with the help of policymakers especially at the Fed, was to make the stock market an institution in American life. When people have basic institutions yanked from them or discredited, whether it's through the destruction of their retirement savings or government-facilitated mass theft, they don't forget it easily. That doesn't mean they get in the streets, as the strangely serene sidewalks in front of the Fed and Wall Street firms demonstrate. But this is the sort of thing that festers. A couple of months ago I saw a clip of a show that Oprah Winfrey did on the economy. One of her guests was a minister from the Midwest who was either retired or close to it. He was despondent. What struck me was his loss of faith in institutions and ideas he had believed in his entire life: the stock market, banks, government, policymakers, regulators, prudence, playing by the rules, the system. One got the sense that even his faith in religion, the main institution in his life, had weakened. He seemed completely adrift.
Losing fundamental institutions can mean different things for different people. Individuals can turn to religion, family, hobbies, or alcohol and drugs. As a nation it can be harder, especially when the institutions represented something as basic as economic security and there's a widespread perception that unpunished -- indeed, rewarded -- impropriety played a role in their loss. As the heist meme spreads, I keep remembering something Thomas Mann said about the lasting impact of early-1920s economic events in his country: "Having been robbed, the Germans became a nation of robbers."
posted by The Cunning Realist
Re: DIVORCE WALL STREET STYLE
I had to look this up. The Greeks were already dealing with hubris 3000 years ago. Here we go again. Listening to Ideas tonite, the South African guest related how amazing it was that the intractable tyrrany of apartheid suddenly and unexpectedly fell apart. Ditto Rumania, Germany, Russia. Copping to their crimes via truth and reconciliation saved them from a bloody end. Tyrants who are not loved or trusted by their subjects stand on shaky ground. The jig may be up on Wall Street sooner than we think. They could help themselves by right now acknowledging that their bad behaviour.
http://en.wikipedia.org/wiki/Hubris
Hubris (/hjuːbrɪs/) (ancient Greek ὕβρις) is a term used in modern English to indicate overweening pride, haughtiness, or arrogance, often resulting in fatal retribution or Nemesis. In ancient Greece, hubris referred to actions which, intentionally or not, shamed and humiliated the victim, and frequently the perpetrator as well. It was most evident in the public and private actions of the powerful and rich. The word was also used to describe actions of those who challenged the gods or their laws, especially in Greek tragedy, resulting in the protagonist's downfall.
Hubris, though not specifically defined, was a legal term and was considered a crime in classical Athens. It was also considered the greatest sin of the ancient Greek world. That was so because it was not only proof of excessive pride, but also resulted in violent acts by or to those involved. The category of acts constituting hubris for the ancient Greeks apparently broadened from the original specific reference to mutilation of a corpse, or a humiliation of a defeated foe, or irreverent "outrageous treatment" in general.
The meaning was eventually further generalized in its modern English usage to apply to any outrageous act or exhibition of pride or disregard for basic moral laws. Such an act may be referred to as an "act of hubris", or the person committing the act may be said to be hubristic. Ate|Atë, ancient Greek for "ruin, folly, delusion," is the action performed by the hero, usually because of his/her hubris, or great pride, that leads to his/her death or downfall.
ASX PLUS ECU
ALOHA !!
ECU SILVER
I have been selling ECU SILVER(ECU:TSX) into the rally and buying SLR and SAU on the ASX.
A near par trade for SLR considering exchange rates and a leveraged 8:1 arbitrage for SAU at a $0.11AUD buy in. As spot silver prices rise so will companies like ECU, but I prefer to align my "high risk" portfolio into less debt and less dilution as well as less base metals equivalents. I like SLR and have mentioned them for a year now, but I have been following SAU and they have no debt and way less dilution and some heavy Aussie(DOM) and Japanese JV hitters. Recent drill results have been impressive on the Kalgoorlie project which is in the vicinity of SLR and then I know their Lachlan Fold Belt projects in NSW from Straits Resources(SRL) as well. Their foray into Cambodia is on the back of a major Japanese $2BIL commodities conglomerate, but I am discounting those projects in Cambodia for now as they still require more exploration. I also see a spin off coming in their Olympic Dam geothermal project for early 2010. Plus they have a couple former WMC guys on the management team and Olympic Dam is BHP/WMC play from 2005, so the link is there. I like those former WMC guys as they have also done a bang up job over at SLR creating shareholder value in a rather short time period. I am building a position at SAU now but I still need to keep an eye on milestones as they are yet to be a producer. My top holding is still SLR on the ASX.
ASX
The ASX faded into the close again up about 4780(+45 points) at the height and then falling back down closing up 9 points or so at 4755 ... but all three ASX companies listed above were up for the day. SAU was up around 8% on 1.2mil shares.
A look at the POG/AUD and it is still holding at $1225AUD, not much change on the AUD. The USDX is down slightly and so is the POG/USD. I imagine the POG will be kept in check until Obama's China trip is over. Fundamentally based on the US Tax Revenue Breakdown as well as the various US States Revenue Breakdown coupled with the incredibly huge US DEBT issuance as reported at the US Treasury Daily Statement(see post above for 11/16) the USD fundamentals are non-existent. The US Treasury's fiscal house has been reduced to a pup tent and it seems the US Congress and Obama only have one objective and that is "expansion" in a truly empirical way. Expansion of regulation, taxes, spending and debt.
As Ludwig Von Mises said many decades ago, "Government is essentially the negation of Liberty."
Re: Kangaroo tail
thanks quasi and bsi. you've given me plenty to chew on here. I appreciate the help.
Re: DIVORCE WALL STREET STYLE
Kiamu, Thanks for sharing this:
"The heist meme has associated psychological effects. One of these is a developing disconnect between the stock market and the public."
I believe the outrageous and egregious acts committed by Wall Street and our CONgressional colluders have so numbed the masses that we have created a populace of injured peons just trying to get through their day intact.
I see it on the faces of people who have never missed a mortgage payment in 26 years and after a year of attempting to refinance or negotiate a lower loan payment they get a one page denial letter. After being told they did qualify then they didn't then a new program was going to save them..woops sorry that one doesn't work for you...it's all so demeaning.
Our congressional representatives are busy enacting a bunch of new laws to protect their turf (Christopher Dodd, Barney Frank) and you can bet the raft of concessions beong stitched into bills with titles like: "Anti-predatory Lending and Consumer Protection" are designed solely to serve their cronies on the Federal Reserve (and get re-elected).
Americans deserve better. WE have to demand better! We have become a nation of robber barons --revolt is not far off. www.congress.org
Re: Can't sell 1 ounce Canadian gold coin for $20, or even ...
discipline and punish NY, discipline and punish...
"A distinctive feature of modern power (disciplinary control) is its concern with what people have not done (nonobservence), with, that is, a person's failure to reach required standards. This concern illustrates the primary function of modern disciplinary systems: to correct deviant behavior. The goal is not revenge (as in the case of the tortures of premodern punishment) but reform, where, of course, reform means coming to live by society's standards or norms.
Discipline through imposing precise norms (“normalization”) is quite different from the older system of judicial punishment, which merely judges each action as allowed by the law or not allowed by the law and does not say that those judged are “normal” or “abnormal”. This idea of normalization is pervasive in our society: e.g., national standards for educational programs, for medical practice, for industrial processes and products."
http://plato.stanford.edu/entries/foucault/
When did the state system teach these people that gold had superior monetary value or was even legitimate? (rhetorical question - we know the answer). I guess if you're old enough, the answer would differ from the generation viewed in the vid.
Re: DIVORCE WALL STREET STYLE
ALOHA !!
Wow ... a one page denial letter! I recall the bailout application form for GS and JPM was only one page. KISS!
As the heist meme spreads, I keep remembering something Thomas Mann said about the lasting impact of early-1920s economic events in his country: "Having been robbed, the Germans became a nation of robbers."
Some of the most sophisticated, educated and most civilized countries in the World have broken down into monetary chaos. Not only Germany but the British defaulted many times and as to the British Empire ... where is it? Throw in much of Asia and South America and Africa ... There are still a few people alive who lived through the collapse of Germany and Britain. I am always amazed that many people I come into contact with still believe that America is immune from "failure"! As if we will be the only EMPIRE in 10,000 years of human history to be a success! I just wish all the data I research for my weekly articles on REVENUE BREAKDOWN, even from the US Treasury, said that, but it does not. It says the opposite of success. It says we are no different from any other past EMPIRE.
Truly I believe a return to the US CONSTITUTION and a minimal government will be our only viable salvation. It should be obvious to everyone except Bernanke and the US Congress that the current path we are on is not viable. Nationalizing massive DEBT and insolvency is no solution.
GLOBALIZATION OF AMERICA
ALOHA !!
One of the main reasons real estate is a long way off from a complete recovery and why the "true" deficit(outlays + debt - tax revenues) will only grow as jobs shrink is at this link.
LINK: http://tinyurl.com/mlmd4x
So far I have written over 30 weekly REVENUE BREAKDOWN articles and when I started this chart was around the 14,000 level. Now it is almost back to where it was in 1939.
THE GS STIMULUS
ALOHA !!
Is it guilt or is it trying to win back public opinion? Remember GS has set aside $23BIL for bonuses this year! GS is even dragging out "Grandpa Buffett" to join in on the spin.
What's next JP Morgan food banks and Wells Fargo homeless shelters?
Goldman Sachs, Buffett to help small businesses
Goldman Sachs teams with Warren Buffett on $500 million effort to help small businesses
NEW YORK (AP) -- Goldman Sachs Group Inc. is teaming with billionaire investor Warren Buffett to invest $500 million to provide thousands of small business owners across America with college scholarships and boost their access to capital.
The move comes as the company has been criticized for setting aside billions for employee paychecks despite the continuing weak economy.
Goldman's philanthropic effort, called "10,000 Small Businesses," includes a $200 million contribution to community colleges, universities and other institutions to give grants to small business owners to further their education.
The New York-based bank also will invest $300 million through a combination of lending and charitable support. Goldman said the money will be funneled through community development financial institutions to boost lending and technical assistance available to small businesses in underserved communities.
In addition, Goldman Sachs executives, in partnership with national and local business organizations, will aid small businesses with advice, technical assistance and professional networking opportunities.
An advisory council co-chaired by Goldman Sachs CEO Lloyd Blankfein will oversee the program. Legendary investor and Goldman's largest shareholder, Warren Buffett, and Harvard Business School Professor Michael Porter will serve as co-chairs as well.(more)
Re: THE GS STIMULUS
We used to have a saying in the corporate world that PR was better than bribery. Good deeds by villains are still suspect! Are Goldman and Uncle Warren intending to proliferate their 'bad seed' with 'seed capital!?
After decimating credit for small business the new white knight is carrying the GS black flag? Who cooks up this stuff? They had better watch out... Enough people are onto this scam now that they may be surprised who shows up to collect on their generosity.
Define normal
Normalization is an ominous term, Les.
Thank you for the Foucault link. I liked this bit:
" In short, Foucault argued that what was presented as an objective, incontrovertible scientific discovery (that madness is mental illness) was in fact the product of eminently questionable social and ethical commitments."
Certainly rings a few bells!
Re: What actions do you see as rendering 'them' powerless?
Bert,
OK, I get your point and I agree with what you state. I guess my problem is that I want to see our country united in these goals you list and others.
As individuals we can influence a few or perhaps a few hundred, but the goals listed in the Preamble to the U.S. Constitution which were put there to direct our government and protect our entire population need more than your and my examples.
For me it is not enough that my conscience is clear — those who are plundering our nation and putting the future of posterity at risk must be called to account and replaced by people whose goals are those so stated in the Preamble — provide for the common defense and promote the general welfare,etc.
I am fed up with the pile of lies were are being fed 24/7 — phony stats of job growth, the need to save those "too big to fail", the apologies to the world, the bowing to other governments, the big promises on top of all those unfulfilled...
To do this, IMO, we need to limit the power they have amassed over decades and restore it to the people as Lincoln envisioned it.
This is the crux of the matter as I see it.
Re: DIVORCE WALL STREET STYLE
Kaimu, Loannetter,
I had already responded to Bert (#52605/#52622) when I read your "heist meme" post.
While I don't expect perfection in government I do expect an honest attempt at the goals expressed in our Constitution.
The minister described on Oprah's show pretty much matches my own feelings. Over the past 10 or 15 years I have seen too many good people lose there jobs, their retirement income and now some also their homes. We used to be a vital manufacturing center with good jobs and a growing economy.
That is all gone. I live in the fourth worst state economy, in a city which is among the worst off in that state. Everyone who can sell is leaving town. Whole sections of the downtown and being leveled to avoid the property taxes. Shopping centers have gaping holes. (One whole mall is now a church.) Our largest bank is on the edge of bankruptcy. (AMFI) http://tiny.cc/6W7uY
My feelings as the Dow rises are just what was outlined — more of OUR money going to the crooks who designed this fraud. I want to see heads roll, but instead the rhetoric continues to roll from the forked tongues in D.C. and Wall St.
My great uncle served under Teddy Roosevelt an was instrumental in breaking the meat processing trust in the Chicago stockyards a century ago. What is going on now makes that a minor infraction of the public trust, but the causes and techniques are the same.
Yes, Americans deserve better. We've had better and I hope enough people will rebel against this outrage to make things better for future generations.