Cara's Commentary & Community Chat, Fri., Mar. 6, 2009

What if we were free to watch the markets with absolutely no commentary whatsoever? Let the prices speak, and the equity values reflect independent and quiet reflection. In the absence of any outside influences, I just like the pricing of the market right now. I think it's a good time to buy.

This item from Bloomberg is morbidly hilarious.

Merrill Says It Discovered Trading ‘Irregularity’

Read this and try not cough up your coffee through your nose:

Merrill Lynch may have lost hundreds of millions of dollars on currency trading and credit derivatives last year, the New York Times reported earlier today. The losses did not “spill into plain view” until after Bank of America investors had approved the $33 billion takeover in December...

Omigod, this nonsense just doesn't ever want to stop.

"Merrill Lynch may have lost hundreds of millions of dollars on currency trading and credit derivatives last year, the New York Times reported earlier today."

Obviously the unexplained losses were OPM. Merrill engineers still received their multi-million/billion bonuses, right? Otherwise they might decide to go job hunting elsewhere, causing excessive loss to the very best talent pool in the industry.

Bill, thank you for recognizing conflict of interest as central to today's financial mess.
As far as Ag stocks, stay away from POT for the near term. Potash the fertilzer has not corrected in price like the other major nutrients. Fertilizer prices in general have fallen except for potash, so corn farmers will not be applying normal amounts. Lots of heartburn in the retail fertilizer trade from buying inventory when prices were high last summer and hoping someone will buy at multiples of current prices. Unfortunately those higher up the supply chain will gain a larger market share adding to market concentration--not good. Little fall application took place driving down wholesale prices. Farmers are looking for any way to cut costs to get to breakeven after grains price collapse taking most projections into the red for this coming year on a cash basis. US is third largest importer of fertilizer in the world behind China and India and the supply chains are long and in my view increasingly vulnerable. There may be spot shortages this spring due to plugged supply chains. Demand for grains is weakening so carryovers are projected to increase unless weather gets bad somewhere. Importing nations are being driven to other markets by the rising dollar and ethanol demand is shrinking. What a difference a year makes. To quote Kaimu...HA! Just had to get that in here.

Can't tell you how much I enjoy your comments, Bill, and admire your style. Keep up the excellent work.

I am still bearish on this market. However, it's very, very unlikely that you or anyone here will be buying the stocks that I am selling because none of my dogs could get within sniffing distance of the elite Cara 100.

I am getting ready to change my swing trade play. Instead of looking for the weakest stocks to short, I will soon be looking for the strongest stocks to buy, well bunkered with puts and tight stops.

gold.

Repost - the switch to Friday left this in the Thursday comments... I am concerned that there is so much presented as fact that is merely manipulation. How do we deal with this breakdown in trust?

The Labour Department said the economy shed 651,000 jobs last month - just slightly above expectations - while the unemployment rate rose to 8.1 per cent from 7.6 per cent in January. It also reported that jobless numbers for the two previous months were far bigger than expected.

December job losses totalled 681,000 against the original 577,000 figure while 655,000 jobs were lost in January, not the 598,000 originally reported.

Look at how nicely the numbers came in, slightly above expectations, yeah right, and the numbers for December and January have been adjusted, but since it all in the past anyway we can all just move on.

Does anyone still believe this crap? Who works the numbers, Pravda West?

and the Lord said, 'Let there be light' and you know what? you could see for bloody miles!

25%

NDX has broken 2 support levels this AM 1068.25 1053.50 The 3rd one is coming up 1035.00.

SP682 not holding.. hold on

accumulating...

Hi CP

I unloaded UCO and moved over to PBR - Glad to see UCO is coming back for all those who held on.

:))

bought some more WGW yesterday.

vb

What a Bozo.

He is reacting to the employment numbers. He just described all the millions that will be spent to hire people to build new affordable housing in Ohio and other states.

The problem is that there is a huge inventory of unsold houses houses there already. Digging and refilling holes might be more helpful. OR, maybe the government could hire people to do something we need right now. OR much better yet, reduce the cost of keeping employees and hiring new ones for existing businesses that are not yet broke as a way to improve employment.

I've got to quit listening to the news.

The typical CEO profile is that of a person who came up thru the sales organization, is a flashy dresser and a good speaker. What percentage have Master Degrees?, Doctorates? The majority do not contribute, in a technical way, to new development within a company.

Once you are in that inner circle, you are golden. There is no accountability. You can fail at one company and be chosen as CEO at another.

Most of the people that post on this blog could be CEO's!

Contrast that with the life of a medical doctor. After a lengthy education, there is a period of internship. What do they have to look forward to? Insurance companies telling them what they can prescribe for medication, what diagnostic tests can be done, what operations they can perform. They are on call 24/7 or have to arrange backup. They have to pay huge premiums for malpractice insurance. They don't get paid bonuses or stock options.

I think it's time for the shareholders to bring malpractice suits against CEO's.

The CEO pay scale in this country is totally out of control and is not commensurate with the level of education.

right behind you.

To avoid the embarrasment of having Madoff's lawyers put the SEC on trial, Madoff will, according to reports, be copping a plea. This deal should have Bernie back on the streets of the upper east side in fairly short order.

That may be just as bad as jail. That guy will be hounded by the media for the rest of his life and most of his now very angry former clients are probably ready to do some very nasty things to him.

QT,

on which stocks? I don't see anything unusual on those I watch.

Oh for heaven's sake, shark, stop mincing words and say what you really mean.

Who's the judge allowing this Madoff creep criminal to stay out of jail?

Jeez, shark. She's rigid and dogmatic, and always interrupts her guest when she doesn't like where he/she takes the subject, but libidinous? How could you know that?

Yes. I wrote earlier that the banks are the tell, but their master, GS is the one to watch. That and that rising VIX....

Maybe he knows her better than you think? ;)

Yeah, it sounded a little personal. LOL!

WFC up 6% at the moment, JPM/GS down -7/-6%. watching...

In the midst of all this remarkably cogent discussion, I can't help but wistfully dream of how powerful the discourse would be if we actually knew the whole truth of what we discuss. So much of what I read here contains a figurative head scratch, as if to say "It just doesn't make sense." Everything makes sense if you have all the information. Don't understand something? You don't have all the goods. Not being the sharpest knife in this drawer, there's a whole lot I don't understand.

Agreed PapaT and to wit the shareholders have been asleep at the wheel and/or willing passengers. What I might add is the issue over pay is quite inflammatory BUT as Paul Volcker just said,
“I don’t think this is just a technical problem, it’s a societal problem,” he said. He cited bankers on Wall Street receiving multimillion-dollar bonuses for engineering failed mergers.
“There’s something wrong with the system,” Volcker said. “What are the incentives, what’s going on here?”

QT,
I am still holding FAZ, planning to close it off today, thx for your tip last week

Now if the President were to put this old dog on the hunt the market would sit up and listen. I hope they are listening to him.

can someone with good charts skills chime in?

PapaT -

"In the 1950s, big-company CEOs in the U.S. earned about fifty times the pay of an average worker. But since then, CEO pay in the U.S. has skyrocketed in comparison to average salaries. By 1990, average CEO pay was about 100 times the average worker’s salary, and by 2000, it was more than 500 times that of the average worker."

Why did this happen? Were the CEOs back in the 1950s just deluded fools, vastly underpaid for what they provided?

There are very few boards that are willing to stand up to the CEO. Perhaps Warren Buffet is one of those leftists you refer to. He stood up to the CEOs when they foolishly put him on the comp committees, and pretty soon, not being foolish, they decided not to put him on any more comp committees any longer.

There is a problem here.

In many respects, society in America seems to be suffering from an excess of greed. This is just one of the symptoms.

I think legislating to fix the problem is just plain silly. But I don't have any constructive solutions to offer. Perhaps the problem will fix itself in the upcoming period of austerity, and the "overpaid CEOs" (whoever they might be) will feel some sense of duty to cut down a bit when their workers getting paid 100 times less are getting laid off.

I suspect that would do wonders for morale.

But these people can't get back their money. there was no investment. they were victims. What if your insurance company said oh sorry, you are no longer insured. thanks for your premiums but they are no longer available for repayment to you; your life, your house, your car are no longer insured. We used your money to spend. and the mastermind was copping a plea bargain?

He did break laws. every piece of paper claimed there were investment instruments and yet they made zero trades.

But i do agree the regulators also need to be prosecuted. thus my cynicism that we will be stuck with the same faces, same policies, same talking heads on tv, and same corruption on the way up on the next bubble.

davefairtex
Your comparisons of pay unfortunately are very accurate, the blame truly lays with Boards who are infected with a healthy self-interest, pension/institutional investors and shareholders. Owners and stewards of the Company need to be the ones to keep pay in a range that rewards good management and doesn't when absent. I guess the real issue, all small business owners know this, is skin in the game. I'm not talking about free stock and options but actual equity purchased in the market at the same price deck as everyone else. If a CEO had to buy the company stock and keep it at least 12 months beyond his departure I would suggest a lot of 'errors in judgement' would be avoided. Eat what you kill.
BTW Legislation will do nothing to solve the problem but provide another bad regulation for the rats to work around.

ALOHA !!

As far as the BLS is concerned ... any unemployment number published by PRAVDA WEST should be doubled ... 8.1% = 16.2%

BIRTH/DEATH? How about reality for a change?

The real tell is the US payroll tax revenues, then go to the US TREASURY DAILY STATEMENT ...

My God, there are TARP sized holes all over that STATEMENT every day!

You cannot clean up the WALL STREET garbage until you clean up the US government garbage and you cannot do that by continuously voting the same "two party aristocracy" criminals into office.

But the key is the MONEY ... This is where all corruption emanates ... The US FED has got to go along with its FRNs !!! That is the CURE!

I can't believe people will "stay the course" with the same failed policy and money ...

ALOHA !!

Barry ... then why don't you support Ron Paul's Bill HR 1207-Federal Reserve Transparency Act. Holy COW ... even Superior Court Judge, Andrew Napolitano is onboard with this and the Campaign For Liberty!

Where are you Barry?

Quit complaining and start talking about the very REAL solution ... ELIMINATE THE US FED, of which Goldman Sachs is a key member along with JP MORGAN!

Get outside the box for once Barry!

I am with you but how do we as people make them drop the Fed and back the currency? other than all of us quiting our jobs, taxes, etc, and camping out in DC until they do so?

they have no incentive to change. the Gnomes are the experts at wielding Fear as their tool to keep us in check, and they have more ammo today than ever before.

I guess if i am laid off and cant find another job, i will contemplate moving to the lawn of the white house with my protest sign and start the movement.

As you said Kaimu, if you count sales, fed, state, and all other taxes, i am already working more than 6 months of the yr to pay taxes, then live my life. i am losing sleep over it. i am sick of it.

ALOHA !!

I decided to short circuit the "garden growing in the backyard" and just move to the most undeveloped part of the State of Hawaii I could find!

But for the vast majority that is not a realistic choice so in that case your best bet is this ...

Link: http://www.pathtofreedom.com/

RESILIENT COMMUNITIES !!!

This is the future, not STIMULUS 22 ... The future is decidedly much more grassroots!

The real choice for REAL CHANGE is not with OBAMA and OPRAH it is with YOU! It always has been and always will be ... Teach your kids that instead!

IT IS WHAT IT IS!! You can either live with it and complain 25/8 or get going and CHANGE!

SKF is going parabolic

Will 670 hold? Anyone betting on it?

Vad

What I been able to find out is the attached pic is a copy of Level II and the white out areas are bids that are supposedly hidden so the big $$$ doesn't tip it hands. If this is true then something is in the making.

Make sense to you? I have zero experience with Level II

Forgot.. :-)

As we get close to Exit SP650 I will start to move in with my long picks. But be careful. These guys make want to go to the next exit the deeper part of HELL.

Understood. Thanks. I can be a bit impulsive.

Carl Jung spent a great deal of effort trying to point out that fascism occurs when the general population no longer acknowledges reality, all start swimming the same direction, headed for certain disaster.

But it must be noted that a means of communist recruiting for cadres in South American countries is to attract the downtrodden proletariat with an attractive female.

And I would say that a woman such as Cabrera represents the ideological component of CNBC, which is rife with a contorted sense of priviledge and political power.

Edit: And unabashedly so.

U.S. Capitol Police Officers' Ties Scrutinized Before Inauguration
http://tinyurl.com/bdkyg5

Actually, let me show the SPY's level and T&S as it looks on my platform. We will look at this in one of Bahamas conference sessions, so might just as well show it preliminary :)

On the left you can see Level II window with colored bids and offers. All market participants with their prices and order sizes displayed, true or hidden behind reserve.
On the right is T&S with prints colored in green if trade went at the ask price, red if at the bid and white if inbetween.
At the bottom is execution panel.

Given the market, wouldn't it be ironical if 666 was the low? :)
S
EDIT- sorry, should be ... ironic...

Even though we've had a strong day in both oil and gold, the miners & energy companies are being dragged down by the overall market sickness. Oh well, at least I'm not in Real Estate or Financials.

In my area there isn't all that much crime reported on the morning/evening news. So far this year there has been 3 bank robberies, can't remember when the last bank robbery was.
Just last night 2 different gas stations were robbed, and they are becoming more and more frequent as times get tougher in this economy. Another crime that is on the rise is called home invasion. People ring a door bell and when you open your door they force there way into your home. According to the news coverage it sounds like they are after cash and jewelry. We are getting assaults and murders all the time anymore, 2 years ago there wasn't a murder for years.
We are still lagging all the lay offs that were going on around the rest of the country last year till recently. Now every day another business is laying off workers or some small business is cosing the doors for good.
I'd hate to see the horrific crimes in places like Detroit where the numbers of unemployed is staggering compared to our area.
Obama is going to have to allocate funds to municipalities to increase the police forces or this whole country is going to be unsafe to live in pretty soon.

Eat or be eaten?

The Economist, March 5, 2009

'The finance, property and insurance industries (all getting huge bail-outs) were the largest source of campaign contributions to Mr Obama after lawyers.'

'Res ipse loquitor' - the matter speaks for itself.

Another thought...
Safehaven.com
'"You have to choose, as a voter, between trusting to the natural stability of gold and the natural stability and intelligence of the members of the government. And with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold."

It would seem that the above quotation from Irish philosopher and playwright, George Bernard Shaw, is ringing true during these uncertain and tumultuous financial times. '

Re: allocating funds to increase police

Pres. Obama was addressing a police graduation this morning and did announce DOJ funding for municipalities for police and training in different states. I believe this is a new program and not the @50,000 police position funding cut by Pres. Bush in 2001.

'The finance, property and insurance industries (all getting huge bail-outs) were the largest source of campaign contributions to Mr Obama after lawyers.'

Campaign contributions? www.opensecrets.org

:) excellent post my friend

I will add this two helpful hints

1) people don't make this leap for fear

(answer) Fear can be released (since fear is a projection and only real if you give it energy to be real) I literally teach this all the time, so I know and show as real as fears might feel... they always can be released.

2) People don't make this leap as they dont want to lose comforts or "things they think they need"

(answer) when you simply life to live in a more holistic manner, you actually then re-discover new comforts to replace the old ones. Comforts that also are healthier in the lifestyle. The increased benefits of joy and improved health more than make up for any comfort lost from living the typical standard western lifestyle.

This isn't what is sadly portrayed as being a hippie back in the woods...

It's just living in a more practical manner. In a style that is sustainable and healthier for you. It can be done anywhere, here in the Rain forests of Hawaii for Kaimu and myself... or even in LA or New York city...

It's a choice of lifestyle not location in the end. You don't have to run away anywhere, its just a choice on living now.

The real difference.. you dont have to think or act to live in the typical western lifestyle, since it has become automatic for most people... So switching the lifestyle at first is a learned activity which makes it hard up front. After living it for a year it then becomes automatic and comfortable.

So if you are interested in doing this... the real trick, the real secret...

Is just to have patience to live the change of lifestyle over a year.

Nothing more that that. People are doing this all around the country, just quietly dropping out and figuring out their versions of sustainable lifestyles. Just take small steps up front and over time the next thing you discover is your full life ... not a 9-5 treadmill to support a complicated infrastructure as a cog...

:)

Agreed, I cringe when Obama or his administration are singled out as socialists when practically all of DC are entwined in socializing debt and privatizing wealth. They're bought and paid for, simple as that until I see meaningful action as opposed to flowery language, smoke and mirrors. I've witnessed plenty of "mistakes", broken promises, special favors, loopholes and finger pointing over the years to confirm a pessimistic attitude. I find it quite insulting that DC continuously fools most of the people all of the time. WAKE UP PEOPLE!

It will never change, no matter if the FED were in the middle or not, let's stop kidding ourselves, unless the people demand change. Right now Obama is just one of the men/women the public should be critical of, so naturally I question any effort concentrated specifically on him as suspicious.

I too am worried about the lack of liquidity in UXG. Only reason i didnt buy under $1 several months ago. Need to ponder on it some more.

EDIT: Although it would have been a 4+ bagger in less than 6 months if i did.

seriously now

we all here know all the news is biased: left right, up , down etc...

All the name calling "socialism" etc etc... are being thrown about to muck up the issues, to stir up fear

Do we see facts any more in the news... No.. Its pretty much 80% opinion and spin.

1) Turn it off only leave enough on to support your trading needs as it helps identify social trends... but compost the rest.

2) If You get upset over a news item... then instead look at yourself... ask why you got upset... then personally and locally change your life so you don't get upset over the lies...

Ok an old Taoist trick:
Flip around the things or statements that bother us.

It's impossible to change the entire world to fix the news system or communication systems.

But

When something bothers us, then that tells us, deep inside there is a personal edge which can be looked at and examined. It becomes possible by recognizing this to release hidden anger, fear or pain... To grow from... at which point you just made yourself healither and you can laugh at the silly lies...

as a comedy show...

and all of the sudden

all the news is the daily show :)

In the end you can stew about it, or you can use that to look deep inside and personally instead make your life better in releasing that edge the news as lies exposes. We all have this, We all have edges to work against. Use the news as a way to polish the edges.

At least that way it is useful for something other than hot air.

The market has truly gone to Hell.

That's not the issue. Socialism has existed in the US since the Social Security Ponzi Scheme. That's not the big issue, the farther you go down that road, the larger the bureaucracies become the more they become entrenched, and where does government get it's money. Read Alexis de Tocqueville's "Democracy in America".

Best school's is a term of art. If you're a Keynesian you think the Austrian school is crap.

Freedom57, I can attest to the existence of these 'rig rockets', a true symbol of excess. As a field report, the mood in Edmonton seems to have hardly shifted given the global economic downturn and low oil price, much to my surprise.

House prices have only dropped something like 15% (despite going up 53% in one recent year alone), shopping malls are still busy, plenty of traffic on the streets, and I still got an above average raise this year. People I work with and talk to about such things really don't expect it to get much worse. I hope they are right, but I don't invest on hope...

To the cynical, you may want to take a pass.

http://tinyurl.com/dkyqgm

Colbert, not to be outdone by Stewart, pulled in Jim Cramer. (not as funny)

http://www.comedycentral.com/

night all.

Si02, I have been to your sight and have used the calculator. Really appreciate you providing the service for free. Here is one of many questions. because of volitility have you been able to make money on both the put and call side of your straddle. Is this common. Example You sell your put when you reach your profit goal, but hold the call. Market reverses and you are also able to sell your call for a profit.
Bob

What a great mathematical idea, what an unlucky execution (combined with a poor judgment of using initial positions that were too large)... Yesterday, almost all my buying power was eaten up by my FAZ and ERY, and today I closed about 80% of each position and bought the corresponding ultra-longs (FAS at $2.41 and ERX at $17.2) for about 3/4 of the total size of what my ultra-shorts used to be. This way, I'll be able to sleep better at night, knowing that my losses are limited.

Keeping ultra-longs does put me into a disadvantageous position which will decay over time on market fluctuations. However, I think a multi-week rally can start any day in the market, and in that case my ultra-longs can more than double, while the ultra-shorts will at most lose some fraction of their value. So if the multi-week rally does start on Monday, then the absolute gain on my ultra-long position can be bigger than the absolute gain from a similarly sized ultra-short position. Let's see how it works out...

Now that's a nice move up here at the end of the day. I'm guessing people don't want to be short going into the weekend. Either that, or the PPT got a budget increase.

About time. I was oh so close to max pain for my ultra-long trades. Thank you Monkey.

David,
I tried doing an ARB situation by owning the long and short of an ultra. What I thought would work on paper did not work in practice because you need to rebalance on a dollar basis daily. I know you are doing this more as a hedge, just want to share my failed stab at trying to exploit market inefficencies.
Good Luck,
Bob

thats why I "try" to use rules, and I am the worst for following them for sure but if a trendline gets established by getting three touches I have found it is not wise to chase new trendlines that may only be touches or attempts at fib levels or moving averages anyways.

This is looking much better now and perhaps others are watching judging by the buyers that appeared out of what seemed no where....

Until S&P can retrace back up to 850, its just broken, as well as the Dow and Nasdaq.

Looking at new highs, new lows, advancing, declining. Over 1,000 new lows today, just on NYSE and Nasdaq.
http://tinyurl.com/448sbq

I am focusing mostly on precious metals trades using time series indicators. this is bulk of my money. Any speculation money will go only to top companies who i dont think will go out of business ie Disney and McDonalds.

This weekend i am writing down symbols of companies and my stink bid price where i would be salivating to buy. Like Disney at $13-14. and move on from there. Also will be paying special attention to this week's WIR from Bill.

Also need to catch up on Pierre's analysis on MCD and IBM on http://caracommunity.com/blogs/pierre-brodeur

And will enjoy some friends and beer tonight as we watch the Cavs vs Celtics.

i don't know exactly why i did it, but i did. i bought USB at 8.82 today. it is the only bank that i know of that didn't report a loss in Q4 and i wanted a little exposure to the banking industry as a purely speculative pick.

While both ultra-shorts and ultra-longs evaporate on market fluctuations, an ultra-long position will gain MUCH more in absolute terms than the initially similarly sized ultra-short short position during a market rally. The reason is that the compounding effect works to the advantage of ultra-longs. For example, if FAS rises by 26% per day for 3 days, then it will *double*. At the same time, FAZ will decline by 26% each day and will end up declining by 60% over 3 days. So if you invest 10K into each position, the FAS long will give you a 10K gain while FAZ short will give you a 6K gain at the end of 3 days. So I am hopeful that I'll be able to make up the HUGE losses I took today by closing my FAZ and ERY short positions with my new FAS and ERX position.

PapaT,

I can certainly see why you may be offended to be lumped in with the worth of CEOs in general.

As with any human category — race, gender, age, or in this case occupational specialty — people are individuals and should be judged individually.

We have all seen so much outrageous rewarding of dishonest performance in the economic malaise that we need to be aware that not all CEOs, not all people on Wall St. and not all people in rating agencies knowingly or willingly took part in it.

I must disagree on a point or two, however. Unless a company is mainly owned by individuals, shareholders have very little chance of exerting any meaningful influence. Mutual funds and other institutional ownership will easily dominate.

What I saw in the companies with whom I worked was "incestuous" boards of directors with many serving on each others boards, setting benefit and pay packages for each other. Some managers were intent on increasing stock price at the expense of employees whose jobs they exported to boost the bottom line.

Today I saw a list of big corporations who are currently laying off Americans while keeping and, as in the case of Bill Gates, seeking additional H-1b visas to hire imported foreign workers.

IMO, a CEO has responsibilities other than simply making as much money as possible whether for himself or his company's shareholders.

If and when our troops come home from Iraq and Afghanistan I don't want them to be unable to find work due to greencard holders having taken the best spots.

:)

Chickenpookie: the easiest way to change the world is to change ourselves and let that reflect back out to change the world. Much less work, and often times achieves the very same thing.

I think part of my point is news and mass communication channels will always contain falseness and mistruth. While right now our system is tipping at an extreme end and yes we can change this to better. One aristocracy or another will always arise from ego and power bases to manipulate the communication channels. In 3,000 years of recorded history I cannot think of a time this hasn't been the case.

So it becomes a question of how to really to spend your personal energy and efforts. It's always most efficient, uses less energy to change what is closet to the center, right? The heart is always the center of every person. So helping yourself and those you love ironically always ends up being a simple and effective solution to countering larger social problems.

So yes

I agree with you , we all fight the fight, it's part of our very drive to live and live well. I was making the point, often times there is an inner fight going on, in each of us, it's part of being human. The pain we feel inside from the lies broadcasted from communication channels ironically can be a very very effective tool to truly self empower oneself also.

I see that angst occasionally in the posts here and wanted to make that point to help give members of the community another way to look at it from.

Its funny you say that. Late in the afternoon I was guessing that either PPT or short covering would cause a rally at the close. I was deciding where to put my bid, the market was hovering around 667, and bouncing around a point up and down. The logical place was at 666, but I just couldn't put the bid there, so I put it in at 665.75. I got a fill a minute later. That was very close to the low for the day. So from the futures standpoint, the low wasn't 666, it was 665 and change. Doesn't that make you feel better? :)

Unfortunately I bailed out at 672 on the way up when the rally retraced a few points. Stop was too tight, alas.

casey said: "the easiest way to change the world is to change ourselves and let that reflect back out to change the world. Much less work, and often times achieves the very same thing."

Taoists are always sooooo lazy. :) Just kidding casey.

A possibly important side note to casey's suggestion is the unspoken premise that changes within ourselves have an effect on the world, that everything is all connected. Uh is that right Casey?

Trying to change someone or something else takes a whole lot of work, and often doesn't succeed because of their natural resistance. But if you're just dealing with yourself, change is much more likely to happen. The only one you have to convince is you! So the energy you spend is much more likely to result in change we can believe in actually happening at the end of the process.

I think Casey's other point about using pain to empower oneself has to do with understanding why you get angry about things. When you get angry about something, it's usually because of some issue inside yourself that you haven't dealt with yet - or so the theory goes. So you can get angry, and choose to do something external (like write letters, or throw bombs). Or you can use the anger as a clue that something inside you might need attention. What is it about this that makes you angry? Addressing that will gradually let you live a more relaxed and happy existence. And happy is good, right?

Letting go of anger doesn't mean you stand by and do nothing. You can still choose to spend energy and take action when you see something external that you think needs adjustment. Its just that anger isn't required. And usually it's not even helpful. If someone is clear and reasonable sounding in their speech, a listener is more likely to receive what is said than if the speaker is angry and shouting.

Unless it's Kaimu. HA!

Maybe consider buying GERN, STEM or CYTX near the 8:00pm est after hours close today. The news of the lift on stem cell research federal dollars will be signed by Obama on Monday. The news came out late in after hours after the pros went home. Monday morning could be a good time to sell todays after hours buys.

David- You've done well pulling your plane out of nosedives, and I'm betting on you again this time. I'm trying to accumulate a position in the financial sector (along with trading around it), and FAS is a natural draw for me from a gambling perspective (if it's a casino, I'm going to call putting money on the table what it is). I can sense the panic in the sector. Once the hysteria subsides and investors relax, I think the financials recover, and it should be (looking back at a 6-12 month chart) more or less a steady climb. It's anathema to say this now (however, that's exactly why the opportunity exists), but FAS can easily return 10-15-20 fold over the next year or two, IF one is able to ignore the intervening volatility. The only way I can see someone holding through that kind of (emotional) turmoil is throwing a small position on a shelf in the garage and forgetting about it.

Just be careful with the price you pay, GERN has already moved up considerably. I grabbed $4.22 when they started moving and it already was up about 10%; right now you will be paying a dollar more. There is a room for a gap of course but the window of opportunity has narrowed and risk increased.

"FAS can easily return 10-15-20 fold over the next year or two, IF one is able to ignore the intervening volatility. The only way I can see someone holding through that kind of (emotional) turmoil is throwing a small position on a shelf in the garage and forgetting about it."

Or someone who took a HUGE loss on the other side of the trade (like myself), which will only recover if FAS doubles. :) So I will hold my current FAS position (purchased at $2.41) at least until it hits $4.82, in which case I would make up all my losses. FAS hitting $4.82 doesn't seem all that unrealistic.

If a major rally starts right now, then FAS can easily rise 5X, maybe even 10X. I did some spreadsheet modeling and found that if the underlying index rises from 100 to 200 points in a "two steps forward, one step back" fashion with the step size being 10 points, then FAS will increase from 100 to 545. In contrast, if the underlying index jumps from 100 to 200 in a single day, then FAS will rise from 100 to 400. So the positive effect of compounded growth overwhelms the negative effect of "evaporation on fluctuations" for FAS during an upward trend with a moderate amount of fluctuations ("two steps forward, one step back"). Looking at a 1 year chart of XLF, it can easily double if a month or two-month long rally were to start now.

At this point, even if S&P were to decline to 600 next week (taking it down 12%) and the corresponding loss in XLF would be about 25% (say 5% per day), this would translate into a total loss of about 56% for FAS. However, the strength and length of the next rally will be greater if it starts from the 600 level on S&P rather than 680 level (many people will think that it was THE BOTTOM), and so FAS could easily quadruple during that rally. So my FAS target of $4.82 might still be reached within the next month.

casey said: "the easiest way to change the world is to change ourselves and let that reflect back out to change the world. Much less work, and often times achieves the very same thing."

I for one am glad not everyone felt that way after Pearl Harbor, before the 1964 Civil Rights Act, and a good many other issues and events which were dealt with in a more direct and timely fashion.

When people were name calling as in "fascist" and "Nazi" or "Nigger" there were those who said it was nothing to be concerned about too. News then was no less ambiguous than it is today, just slower.

There may be a time for contemplation, but just as often there is a time to take action. Not to act allows the crazies to run wild.

Grym... Taoism doesn't call for inaction when faced with aggression and violence, just the opposite. In fact, ability to counter the violence with full force is one of major principles of Taoism. But I'll better leave it to Casey to expand.

http://www.thehindubusinessline.com/2009/03/07/sto...

ChickenPookie, the corn crop in the US uses NPK in generous amounts. With the squeeze on, inputs will be minimized. Ag bankers have ratcheded up budget minimums. Ag is excruciatingly capital intensive at every turn so all companies that sell to farmers will contract, i.e. John Deere, Potash, etc. Maybe ADM (record profits) or Cargill might be okay(oops looks like Chavez got their first)if they buy ethanol plants on the cheap from stupid Verasun who bought futures on the way up last year at this time and then contracted corn at the top. For the first time in a bankruptcy, contracts let to farmers for their grain will not be honored. Another travesty!
If you want to trade weather, you need to watch the weather charts like a hawk, know the monsoon season in India, winterkill concerns in Russia, China, and the US, Australia El Nino effects, Argentina and Brazil rain squalls, EU patterns and the Canadian spring. All before Chicago opens and now with around the clock futures you will need to watch those too. Drought in California is tragic, but in the overall picture not that important. With projections to build stocks of wheat, corn, and soybeans the world will have enough grains, but with synchronized weather problems like we saw in 2007 all bets would be off. Does it really make sense to treat food like an industrial commodity with just in time inventory management? I guess that's somewhat rhetorical. Bon Apetitt

If I’m not mistaken, Sun Tzu’s “ The Art of War” uses taoist principles in combat scenarios and is considered one of the greatest works on military strategy.

http://www.sonshi.com/learn.html

good point papa....gloomy, big L recession in the making.

how can spending bill's laden with pork really put people to work anyway

Trade the rally's....I'm look at Bill's good company,s......

protect capital, and hope for no middle east / world event....

bad time to be in debt

There is quite a bit of electronic scrap that is going to provide some recovered precious metals.

http://www.youtube.com/watch?v=6SYijcoq23w&feature...

"When a employee is laid off, his pc/laptop and other equipment goes to storage and from there Newer one are swapped out with old one and rest goes to salvage. I can say these from working in this field over 25 years. So, there are around 4 million of this equipment from US going to salvage and lot more from rest of the world because of this down turn."

vinod- That's a lot of (presumably) still usable equipment going to waste. School districts are hard up right now. Donating them might make sense.

Big Sky, Did you catch the Canadian news (Global National) interviewing Robert Kennedy, Jr. about a new chemical process that separates out the toxic phosphates from sewage and produces neat pellets to use as fertilizer? I think Kennedy and Riverkeepers are in a co-venture. Started in Ottowa. Can't recall the name...Osphora or sounds like it. BIG news is that the cost to clean the water and produce the pellets is less than the profit on resale.

You know, I saw Linda Sims on the streetcar one day, and she's so petite and ginger with a very porcelain skin. I'm sure Dr. Faber feels a little guilty about calling for doom and gloom. Sure makes a difference from the buxom tanned sorority sistery type with the big hair that will repeat the company cool aid ad nauseaum and boss Dr. Faber around. A lightly asburdly comic moment that.

I have my reservations about any strengthening in the Canadian dollar soon, the appreciating U.S. dollar is a loose cannon on the decks. A strong dollar may just cause a decline in rates in Canada, so I don't see an appreciation in the loonie in this situation unless the $USB price appreciates strongly. Pretty much a catch 22.

big chart here

charts in linear scale

Vad said: "Taoism doesn't call for inaction when faced with aggression and violence, just the opposite."

There is an entire branch of martial arts that is substantially based on the Tao. The same moves you see being practiced slowly in the park for health can be sped up and used in combat - or so I'm told anyway. Soft martial arts may sound like an oxymoron, but I sure wouldn't want to face a motivated Tai Chi Master (see the movie "Tai Chi Master", its excellent). I'm trained in a very hard style, but I have great respect for the internal styles.

Which is more terrifying - dealing with someone who is very angry, and ready to do you violence, or dealing with someone who is relaxed, aware, and ready to do you violence? The one who is relaxed and mindful cannot easily be led, or fooled, or redirected. They are not likely to overcommit in some anger-driven attempt to do maximum damage in minimum time.

Something to think about anyway.

"The Taoist trader...Vad is as close as it gets from a daytrading perspective."

Thank you, that's quite a compliment. The more I learn about Taoism the more analogies I see... which should not really be surprising since Tao is the law that governs everything. The most amazing thing about this philosophy to me is how practical and pragmatic it is.

A teacher of mine once said that as you get further along (after some success in detecting, and working through your personal "edges" that casey talked about earlier) its not that you feel no emotion from the issues that crop up from day to day. You feel the same things everyone else does, but you move through the feelings much faster, and the actions you take are often different. Emotions are not bad things to be suppressed, or rejected, they're useful indicators that Something Is Up - like the little indicator lights on your dashboard. So the action you end up taking may be triggered by the emotion, but you are not wallowing in the throes of the emotion when you take action. I don't know if that's Taoist, but the technique (when I can do it) sure works for me.

I aspire to having this manifest in my trading in the following way: "wow, the market just crushed my position for the tenth time this week. I notice I'm feeling a substantial amount of frustration right about now." And once I notice, and accept, and then release that emotion and move through it (as opposed to rejecting or denying or "toughing it out") hopefully my head will be clear enough to notice that all of my trades have been against the current trend - and I will refrain from rushing off to make trade #11...

How many trades did I make against this week's gold downtrend? I don't want to say!

Hi Grym :)

OK lots of responses got generated by this.

Some clarification: Yes Sun Tzu’s “ The Art of War” can be considered as a Taoist handbook on how to fight war.

We prefer not to fight, as fighting is a waste of resources more times than not. I have had many years of hard martial arts training. Many Taoists I know have, and enjoy sparring. Many of the martial arts out of China have heavy Taoist influence in the styles. Almost every Taoist Master I know owns and knows how to use a sword. I have been in the streets, in many cities in what others would label bad situations, Yet never once did I need to use my fighting skills, since in kindness, even when a knife was at me I have always have found more efficient solutions to turn it back around to kindness.

But at times when decisive action must be taken. A Taoist will act quickly, early and efficiently to minimize damage.

Lets see: For The Taoist trader

Bill, Vadym and 2nd all show patience and wisdom that I would associate towards a Taoist style. I respect them very much for that. Taoism teaches that life itself is the best teacher and all three of these honored members show how they release into their own styles of Trading.

Davefairtex mentions

Which is more terrifying - dealing with someone who is very angry, and ready to do you violence, or dealing with someone who is relaxed, aware, and ready to do you violence? The one who is relaxed and mindful cannot easily be led, or fooled, or redirected. They are not likely to overcommit in some anger-driven attempt to do maximum damage in minimum time.

He is right. Its amazing to watch. Yet when all is said and done... a bullet to the head kills you no matter how good you are and any idiot can fire a gun (history has shown this point too often. ) Again, wisdom teaches how to redirect conflict when possible since conflict is the last option. (but if you use force, do so quickly and before anyone realizes what happen. You can pick the mess later... again refer to Sun Tzu)

The truth is this: conflict is part of human nature, at times it will arise and you use it when you must. But it isn't the preferred option. It lacks grace of action.

Peace and conflict are two sides of the same coin. The two go hand in hand... That is why instead of talking about peace, Taoist's talk about virtue, acceptance or kindness in Taoist Practice. Since these concepts go beyond peace to find a place that actually skips over conflict to get a resolution that works to many. Is it easy? Hell no. If Taoist methods worked perfectly then we wouldn't have war today... Taoism has been around for over 3,000 years, so it obvious we don't have the perfect solution... But then again no one has the perfect solution and since when is life easy? Life is never about perfect solutions, it's simply about living as yourself as well as you can.

The fact that life is a challenge, and that very challenge is why we have fun in life.

We try not to define answers in our practice, since conditions in the now vary so greatly. Instead we act to what is required in the moment, tempering it to heart as best we can. Moment to moment. No guide book ever will have a perfect set of answers to how to deal with everything in life. So instead we teach how to be flexible, adjusting to the conditions in moment, knowing we explore our abilities, always learning, always releasing into undefinable whimsy we call our life.

Ironically A Taoist always takes action, but action without effort, action that flows in a way to use all the potential and surrounding mixture flowing actions to minimize problems and issues. As Davefairtex said earlier, we are lazy, we prefer time in the sun over cleaning messes from delayed actions or too much forceful action. So many misunderstand how we perform actions or don't see how our actions really did make a difference... since it can't easily be traced back to us.

Thanks Grym and all I enjoyed your responses.

>Because of the current M2M rule,
many AAA pools of mortgages are selling for 50 cents
on the dollar now even though their expected losses
are only 5 cents on a dollar.

Heck, where can I buy one these packages?

Marc Faber is for sure a smart analyst, and often I like and agree about his concepts. But let's see the buy-a-farm suggestion from a trading point of view. Already one year ago Mr Faber suggested this investment, as we can see here:
http://xrl.us/bein5m
He even mentioned two companies. Let's see the results.

First Farms
It's a company investing in farming companies in Eastern Europe.
After 12 months the stock has lost 61% (in Danish Krone) or 68% in USD
http://xrl.us/bein8c

Black Earth Farming
It's a company investing in farming and farmland in Russia.
After 12 months the stock has lost 76% (in Swedish Krona) or 84% in USD
http://xrl.us/bein5h

I can say at least that the suggestions had no sense of timing. After all the S&P500 lost "only" 48%. Will it be better now on? Maybe yes, it will, I think. But do your homework...

sounds like massive rally gun powder..... :-)

Dave,

I've worked on something I call a "more transparent self in trading".

A few years ago I lost MANY thousands of dollars being a novice and ignorant of the conflicts within me as I traded. Looking back, I was behaving like an obsessive gambler let loose with lots of money in a huge friendly casino.

After several months of some visits to tradereducation.com, a lot of time reading billcara, and watching more than trading, I have began a constructive ability to wait out the impulse and move more with principled decision making. Simply knowing enough to set up a plan as the market speaks has been a big shift. Bill continues to help me learn this.

The "honesty within", oe self transparency has helped me identify the destructive impulses to "do something" with my buying power. I remind myself to look at the Cara 100 companies and buy them when the risk is lower. I ask myself why am I putting capital at risk? I've never placed a bet in a casino in my life. But I've gambled lots in equities and the house is just as greedy in that arena.....

Percent of companies trading above their 50 day.....looks bullish for a rally

http://seekingalpha.com/article/124627-percentage-...

ALOHA !!

I have commented here many times that I prefer the British Gold Sovereign (Full Sovereign=.2396 ounce) coin over all others, especially those dated prior to 1933.

From another coin dealer based in London this info came today: "He said yesterday(5/3/2009)was the third busiest day of his 37 year bullion/coin selling career. In two hours alone he sold $3 million dollars worth of gold.

He also says it is very difficult to find gold coins to sell (Maple Leafs can be had), but the British Sovereigns are IMPOSSIBLE to find. The last time he had some, the premium over spot was $110USD per coin."(end)

I admit I have not been hunting for coins for a couple years now so I have been out of circulation, so to speak, on coins.

The British Gold Sovereign isn't even a collectors coin, its a bullion coin. I have never bought one with a date older than 1911 and most were in the 1800s.

A friend asked me last week where he could buy British Gold Sovereigns and I told him to look at APMEX or CNI, but then he sent this link! Holy cow ... I used to buy these a few years ago by the tube full(40 per tube)and nobody wanted them at all. Everyone was instead infatuated with Maple Leafs. I have never paid more than $160USD with ZERO premium for a full British Gold Sovereign ... Now I see a lot of the coins I was buying are up over 500%(some 825%)in a couple years. What happened did the US Air Force buy them all up? These coins have been minted ever since 1520 ...

APMEX link: http://www.apmex.com/Category/902/Gold_Sovereign_C...

I am astounded to see these prices, but even more, I am astounded to see the quantities available are all just "one"! WOW ... Sovereigns have just gone wild in price and supply has vaporized! Amazing ... I did not expect that to happen so fast!

As an aside, last year(Jan 2008)I was buying assayed natural gold nuggets direct from the Perth Mint. I see now those have vanished completely. You can find gold nuggets on EBay, but I would caution buying any without reputable assays. Last year gold nugget prices were running between $1100 - $1500USD per ounce.

COMEX who? Only Orange County Housewives(OCH) would be selling now ... That's called DEBT ATTRITION!

ALOHA !!

As you guys know I keep tabs on the US TREASURY DAILY STATEMENT ... This shows daily cash flow in and out of the US TREASURY, like a checkbook ledger!

ON MARCH 5, 2009
The US government spent $138bilUSD that day. They were short $1.33bil USD.

The two line items listed as "unclassified" and "other" withdrawals have a combined total for the FY 2009 of $1.129tril USD, that's running at $225bil per month so far! Those two line items account for more than three times what the US TREASURY claims we have spent on TARP1 ... or are those line items secret TARP payments? What would the IRS do to me if I had that much on my 1040 Sch F listed as "unclassified" expenses? Hummmmm???

ENRON ... is that you?

TARP only cost us $250mil for 3/5/2009 ...

We paid out another $1.5bil USD to Defense Contractors. Total for the year so far is $157.2bilUSD, that's half of TARP so far, yet nobody even questions the Pentagon or any of the defense contractors.

We spent $2.8bil USD on Medicare and Medicade on Thursday, 3/5/2009.

Here's a blast from the past! The FSLIC Resolution Fund. Recall lately our leaders considering reinstating the Resolution Trust Corp, because it worked so well on the Savings And Loan crisis in the 1980s? Well, we're still paying for that, in fact this past Thursday we spent another $55milUSD and so far this year we have spent close to $100mil USD on the Savings And Loan crisis of the 1980s!

Here is some FSLIC Resolution Fund info: "FSLIC Resolution Fund -- a fund established by the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) to assume all the assets and liabilities of the Federal Savings and Loan Insurance Corporation (FSLIC), which FIRREA abolished. The FSLIC Resolution Fund is managed by the Resolution Trust Corporation (RTC). FIRREA required the fund to be dissolved upon the satisfaction of all FSLIC debt and liabilities and the sale of all FSLIC assets assumed by the fund."(end)

On 3/5/2009 we spent $404 mil USD on unemployment benefits. We also spent $130mil on federal government salaries for the day, but we spent more, $167mil USD, on those same employees healthcare insurance benefits. Food stamps only got $14mil that same day ...

AND SO IT GOES ...

http://ronsen.blogspot.com/2009/03/saturday-mornin...

Thanks Casey, and all the rest who took the time to enlighten me on Taoism. Obviously I know little or nothing on this subject. The wide ranging discussions and insights of the Cara Community are my main reason for coming here regularly.

I'm a bit long in the tooth to take up hand to hand defense and am still a good shot, so I'll be the idiot behind the gun if ever (I hope never) the need for self defense arises :-)

Kaimu,
You can buy gold from any Bank of Nova Scotia Branch in Canada. Cheers
http://www.scotiamocatta.com/products/buy.htm

If not now, when?

2nd_ave,

I feel a bit guilty recommending patience, (Not easy for me.) but I truly feel this is a time for such — now more than ever. Since my thinking is mostly longer term (5 to 10 years) and larger commitments (gold and bonds), I may be misreading your strategy, but for what it's worth...

Vinod's computer purchasing volume looks like what may be a good signal along with others such as a sustained period of slowing job loss followed by a shift to continuing job gains.

The outlook presented by dberryclan seems very likely to me — a repeat of what took place when I first began my retirement investing in the 1960-1970 doldrums.

A long time horizon may make a long term investment pay off with several stocks I can think of, but time is the major factor. I have long been a reader of Sir John's wisdom, but what you quoted is too general and vague when applied to present conditions, IMO.

He was young when he made a major investment using that approach. Later, like Warren Buffet, his holdings were so large that he could afford to make a misjudgment (Buffett appears to have done so now.) without any disruption in his lifestyle. Most of us can't do that.

Better to miss this first of a long term reversal than to be too early, I think. Right now the entire global trend is definitely downward. Personally, short term I'm going with the flow and shorting the indexes.

Making a major (long term) investment and watching it fall or languish will guaranty pessimism, skepticism and a death of optimism. However, if you can afford to wait ten years or more like I could in 35 or 40 years ago, just average in slowly over the time it may take to turn around.

Revealing article about Main Street's plight while bankers live in luxury...

With America's economy in freefall and its housing market in crisis, California's state capital has become home to a tented city for the dispossessed.

Those who have lost their jobs and homes and have nowhere else to go are constructing makeshift shelters on the site, which covers several acres. As many as 50 people a week are turning up and the authorities estimate that the tent city is now home to more than 1,200 people.

http://tinyurl.com/atw6lw

http://www.ritholtz.com/blog/2009/03/ibanks-grabbe...

no time to discuss.... I just feel disgusted..

Who is sharpening a pitch fork?

davefairtex
Little that I know about
“Thai gold is 96.5% pure, the same as what they use in their jewelry.” I don’t think jewelry is made of 96.5 pure gold, it will be too soft, and most jewelry is made of 22 or 18 or 14 carat. 100 pure is 24 carat. It is not particle to make most jewelry of 24 carat gold
“If you bought me some chains, it would certainly delight me). And you can sell them back for spot - $3.”
If you brought a chain which is just say 22 carat and when it is melted it may become 20 carat pure from 22 (around this area) and they going to pay according that purity not at spot -3.
So, if one wants to buy gold it is better to buy 100% pure gold coin, jewelry buying for investment is a sucker’s game. Most of my family and now distance relative are in jewelry business through generation retail and whole sale. When I visit them I spend most of time with them.

Precious, Lelik, thank you for that post!

vinod said - "I don’t think jewelry is made of 96.5 pure gold, it will be too soft, and most jewelry is made of 22 or 18 or 14 carat. 100 pure is 24 carat. It is not particle to make most jewelry of 24 carat gold "

The shops I have seen all post "96.5%" on all their displays. It seems to be the standard purity here. Some displays have "90%" for some items, like little coins or other amulets. I'm prepared to believe them, based on my research. These guys sell primarily to locals. I can understand your family's experience is different. Perhaps you can ask them about thai gold next time you stay with them and see what they've heard?

The buy and sell price assumes a purity of 96.5% - i.e. they weigh the piece, multiply by 96.5%, then multiply by that day's spot price bid. Most chains come in standard weights. Thai gold is sold by the "baht" - 1 baht weight is about half an ounce - 15.13 grams weight, or about 14.6 grams of gold content. Chains are 1 baht, 2 baht, 5 baht. Bars come in 5 baht and 10 baht sizes. To add to the confusion, the local currency is also called "the baht." So it's 15950 bid/16050 baht (currency) ask per baht (weight) of gold. :) The math works out, I did it several times.

"So, if one wants to buy gold it is better to buy 100% pure gold coin"

Certainly, buying jewelry for investment is not as good as buying bar gold. But I suggested that you could do so if you were worried about confiscation.

Boy I sound like I'm selling something. I'm not. I'm just explaining my thought processes. If you're buying physical gold, and storing it yourself, you're preparing for a - world of unpleasantness. Gold in a "legal" form might well be worth more in such a world. Some people might not want to risk the 10 years in prison to hold pure gold - or to risk being caught exchanging it on a black market - and they might be willing to pay a premium. Then again, maybe not. I certainly wouldn't place a massive bet on either outcome.

Note that Krugerrands and US Eagles are not pure gold. I believe they're 22kt. Maples are pure.

It would be an interesting experiment to take a thai gold chain to San Francisco chinatown and see what they'll give me for it. Is "chinese gold" the same purity as "thai gold"? The last time I bought gold in chinatown, I think it was around 22kt but that was a while ago.

Interesting times.

ALOHA !!

Info from WSJ on AIG counterparties that US TAXPAYERS are funding with the TRAPS. Not surprising to see GOLDMAN SACHS on the list, but are US TAXPAYERS suppose to BAILOUT foreign banks like DEUTSCHE BANK and SOCIETE GENERALE and ROYAL BANK OF SCOTLAND and BARCLAYS ... oh and look there's LLOYDS and many other foreign banks! Why don't those foreign taxpayers BAILOUT their own banks? Or is this part of the US FOREIGN POLICY?

YOUR TAX DOLLARS AT WORK!!

READ ON:
Top U.S., European Banks Got $50 Billion in AIG Aid

By SERENA NG and CARRICK MOLLENKAMP

The beneficiaries of the government's bailout of American International Group Inc. include at least two dozen U.S. and foreign financial institutions that have been paid roughly $50 billion since the Federal Reserve first extended aid to the insurance giant.

Among those institutions are Goldman Sachs Group Inc. and Germany's Deutsche Bank AG, each of which received roughly $6 billion in payments between mid-September and December 2008, according to a confidential document and people familiar with the matter.
Covered Counterparties

Some banks that were paid by AIG after it was bailed out by the government

* Goldman Sachs
* Deutsche Bank
* Merrill Lynch
* Société Générale
* Calyon
* Barclays
* Rabobank
* Danske
* HSBC
* Royal Bank of Scotland
* Banco Santander
* Morgan Stanley
* Wachovia
* Bank of America
* Lloyds Banking Group

Source: WSJ research

Other banks that received large payouts from AIG late last year include Merrill Lynch, now part of Bank of America Corp., and French bank Société Générale SA.

More than a dozen firms with smaller exposures to AIG also received payouts, including Morgan Stanley, Royal Bank of Scotland Group PLC and HSBC Holdings PLC, according to the confidential document.

The names of all of AIG's derivative counterparties and the money they have received from taxpayers still isn't known, but The Wall Street Journal has identified some of them and is publishing others here for the first time.(end)

Where is JP MORGAN?

I used to buy sovereigns, too, at spot from Continental Coin in Los Angeles.

Unfortunately, I had to sell my last ones for dollars just over a year ago.
And though the POG has been back at the same levels, the availability of sovereigns has dried up, as pointed out. I would be interested to know what the bid for these coins is rather than the ask.

Some years back, the Russian gold coin, the Nikolai used to sell at a discount from spot.

As for Thai gold, it is indeed 22 carat (.965) and very soft. Thai jewelery looks quite "generous" in proportions as the gold is hollowed out during manufacturing. This gold is not available from Thai banks; it is sold at bright Red coloured shops throughout the country. Outside Bangkok, there's not much of a market for gold "biscuits" that Dave favours.

The Gold itself is measured in units of baht (not to be confused with fiat monetary also known as baht). 1 baht gold is just under half an ounce pure gold. You can buy gold thusly beginning at 1/4 baht and 1/2 baht increments and the shops encourage trading up in baht weight.

Currently, I only have a 1 baht neck chain.

Considering the relative strength of the Thai currency, the POG has been a giveaway lately and has been reflected in steady buying on the dips by Thais.
During my 5 months in Thailand last year, I never saw any consumer selling.

ALOHA !!

I am not as enamored with any management spun off from ABX ... Its the culture of BIG and ARROGANT!

I will bet a British Gold Sovereign that the $105mil USD non-recourse loan with the forward selling locked in at $801USD was quite a stumbling block for WGI management in negotiations with New Gold. How to value the future losses from that? Its been a drag on earnings for most of 2008 and now it will be a drag on earnings probably 99% of 2009, until they're totally "de-hedged"!

Why did WGI post a profit last quarter? The POG was below $801USD from Sept to Dec 2008 ... From Oct to Nov gold was below $730USD ... What a coincidence!!

Sorry mate, but I never have liked those "non-recourse loans" ... How many loans does Microsoft get from the same banks that limit the price they can sell Windows for in the future? If Microsoft had to announce a financing deal like that their share price would drop to $5 the next day!

I would say we need to employ the same tactics as US TAXPAYERS on the banks that we BAILOUT. How many US Banks would have loaned to WGI if there was the same level of "ZERO transparency" the US FED offers US TAXPAYERS?

N-O-N-E !!!

99.999%

Consider the effect of deflation on the price of diamonds and the diamond market as of late.

Hey Fransix, interesting comment about the effect of deflation on cut and polished diamond prices. I'm close to the prices closer to the mining end of the diamond value chain. It would be curious to know what the community has experienced in the past few months on the price at the cut and polished end.

Any young bucks out there just about to make the plunge and have kept an eye on the prices the past few months?

>I will bet a British Gold Sovereign that the $105mil USD non-recourse loan with the forward selling locked in at $801USD was quite a stumbling block for WGI management in negotiations with New Gold. How to value the future losses from that?

Good point, thanks for the heads up.

"Heck, where can I buy one these packages?"

John Mauldin says that his friends at hedge funds are buying these mortgage pools from banks, which are *forced* to sell them because of the M2M rule. He says that we are shoveling the taxpayers money in the front door of these banks, while hedge funds are taking this money out of the back door in the form of very good assets (not toxic derivatives such as CDS's, but plain good mortgage pools, which have been rated as CCC according to the current standards, even though expected losses on each pool can be as little as 1%!).

It bemuses me somewhat that the same banks whose blood the majority are howling for will benefit from potentially 100% increases in any near-future rally.

Which made me think.

How do we see smart money preparing the ground on future bank rallies? The volume indicator on smartcharts for BAC indicates heavy buying and selling volume these last six weeks. Where can I go to see the present tally of smart money investment?

Someone recently showed a smart/dumb money chart for cameco. Does anyone have a useful free link for accessing such a chart?

Or is one required to monitor level 2 charts on a daily basis? As Vad pointed out though, they can spread their purchases to hide their activity.

How does one monitor what they're doing?

"the $105mil USD non-recourse loan with the forward selling locked in at $801USD was quite a stumbling block for WGI management in negotiations with New Gold. How to value the future losses from that?"

I don't see a problem with that. WGW has 1/3 of their production hedged at $801 -- so what? For any hypothetical POG of $X, take the difference between $X and $450 (the production cost for WGW) and multiply it by 100000oz/year unhedged. Add to that (801-450) multiplied by 50000oz/year hedged. That's it.

That's why I was such an avid WGW trader in the past few months -- they had a crystal clear business model, which had a reasonably good leverage on the upside AND some protection on the downside in the form of the $801/oz hedge. Now the asset-backed debt of NewGold is a big IF for me. I would need to study in more detail the NewGold business model...

>In addition to lying about not laying off, they are gradually switching to imported foreign workers. If any of you have kids in college — these are their jobs which are disappearing.

It will be very interesting to see how generous US policy towards foreign visas will be in the near future.

"Or is one required to monitor level 2 charts on a daily basis? As Vad pointed out though, they can spread their purchases to hide their activity.

How does one monitor what they're doing?"

Let me elaborate a bit to avoid misunderstanding. Little history first.

The idea that Level II can provide information into what big boys are doing was floated around in 1990s. Level II was touted as a formerly for pros only, now accessible by trading masses and leveling the playing field tool. To a degree (not too big though) it was true at that point. With big spreads, lack of ECNs and with market makers often showing their true orders, Level II often allowed to judge the direction of a few next ticks - and with prices in fractions, a few ticks sized in 1/8 - 1/4 each meant fairly nice profit for a day trader.

Then a lot of things changed as Level II became a common tool. ECNs allowed market makers to becomes anonymous, to show just part of the order while keeping the rest in reserve or even to hide their orders altogether (to be fair, private traders had the same capabilities). It became hard to tell who it was you saw on the level 2 as ARCA, ISLD etc. You could run into situation where GSCO appeared at the offer with intimidating order size while ARCA sat at the bid with lousy 100 shares absorbing a lot of selling by those who knew how scary GSCO's selling intention were - and the next thing you knew, GSCO would suddenly switch to the bid and stock run up, GSCO's bid chased it for a while, then ARCA offer appeared and took in all the buying. Now, who do you think was buying and then selling via ARCA?? :) Switch from fractions to decimals and reduced spreads greatly decreased the value of a tick - instead of hundreds and thousands dollars made on 1000 shares after a few ticks, it became rather tens of dollars. Level II lost what little value it had as a directional tool and remained what it was and had to be in a first place - a tool for liquidity and risk evaluation and for entry/exit price fine-tuning. Sometimes it's possible to spot certain strategy being implemented by some big player but it's a rare case and you'll waste disproportional time looking for those situation.

Now you can see the ways big boys use to hide their actions on Level II. I wouldn't qualify it as "spreading their purchases" - this is ancient technique, even Jesse Livermore did it by placing his orders in parts with many brokers, and it has little to do with Level II. Hiding behind anonymous ECN is one way. Using reserve order is another - that's when you see 100 shares shown while thousands are being absorbed.

Overall, there is no clearcut way to tell smart money from the crowd in real time at any moment. It would be too easy, wouldn't it? As data accumulates, watching price and volume you get more and more idea of which side is doling what.

Repealing the whistle-blower laws would help make goobermint operate with transparency. Now, they hide behind this cloak of protection. It would be nice if those in-the-know could help us "See"...

http://www.youtube.com/watch?v=ALWCiWxlOJo

Geitner gone by June.
Video from a link on Ritholtz site, went and got the source site, interesting dude.
http://tinyurl.com/bfdhwa

Doomed by the Myths of Free Trade
How the Economy was Lost By PAUL CRAIG ROBERTS

http://tiny.cc/NbkeO

What this guy describes is precisely what I saw happening here. Our newspaper and TV reports followed the script right down the line. As all of our "old economy" companies gradually fell away, we gave tax incentives to telecom marketers to move in. Their empty facilities are now here along with the empty factories.

One on McCain's often repeated campaign promises was to "retrain" people to replace the good jobs which have been exported. He never said to what and that is still an open question. The nearby Chrysler plant will probably be the next big job loser for us.

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He is coauthor of The Tyranny of Good Intentions.He can be reached at: PaulCraigRoberts@yahoo.com

I enjoy the chat actually. People often make the mistake that Taoism would cause a person to let bad things happen for the sake of passiveness...

The bigger thing is we respect another person's freedom of choice. We try not to butt in unless necessary... But what defines necessary? There is the rub, everyone's line of where necessary is different. In the end that line is measured by your heart and your actions must be measured and taken from there.

So we don't publish or write down that line of when a person should act, instead we teach tools of how to act in an efficient and simple manner to minimize side problems. We also teach each person how to understand and accept their heart/center so there is as little internal conflict towards their own personal choice of how and when to act. If a Taoist shoots you, they mean it ;) fully from the heart.

Thanks Grym!

If "fall back" defined the last few months, hoping "spring forward" will apply to the next few...

Kaimu, I actually enjoy taking the other side of the arguement with you, simply because I learn so much from you. You really do add serious value to this discourse. Thanks.

Your passion and absolute confidence in your concepts are very motivating for the rest of us.

I do not know Oliphant or Gallagher but I do know some of the 'mine management' from most of the major miners including Barrick. One of which is the most resected mining professional I have ever dealt with. From that management elevation, I would have to say you are dead wrong. These are fine men with principles and values that are equal to most on this blog. HOWEVER I have no idea what goes on in the 'inner circle', at that lofty height.

Thanks for leading me by the nose to that glowing fact. Ignorance is only ignorance if you ignore what you choose to ignore.

It is minus 43 degrees celcius (with wind) outside my office window right now. What a beautiful day.

I guess if it is true that the employer needs to have a match on the new COBRA laws (yet to see it sited other places), then it will screw a lot of businesses........I can't see our gubermint actually doing something like that, can you? :-) More redistribution to come, stay tuned....

Bill -

Owens-Corning (OC-NYSE) currently trading at $5.33 ... emerged from Ch 11 in 2006 after the asbestos lobby took control of its board room. Founder invented fiberglass and introduced American's to the concept of energy efficiency. Was a money machine prior to the liability whipeout. Monopoly on fiberglass insulation (think green building subsidy) and produces something like 70% of U.S. roofing materals (can't put off a leaking roof) and has a large asphalt division (think highway projects). Bought its chief European competitor in composite materials in 2007. Q4 saw more losses but a 69% increase in roof and asphalt divisions and a 17% loss in composite and insulation divisions.

OC purchased Saint-Gobain's reinforcements and composite fabrics assets in 2007 and is now a very global footprint.

Last Value Line report was on January 2, 2009, when the stock was quoted at $17.17 with a projected book value of $27 for 2009 and a Timeliness of 2. It ain't pretty but looks rather oversold down here near the 5 handle. Debt, cash burn, board membership (?), short financial history (fresh-start accounting), new CEO, and housing crash are, admittedly, reasons to doubt but positives are being overlooked.

No position at this time.

[Edit: As far as I know, OC is not a derivitives trader and it stopped making fiberglass Corvette bodies for GM a long long time ago.]

"if not now, When?"

Grym,

Bill is a great teacher. He must be a wonderful man. This site is the best there is. I hope Bill becomes a billionaire. Personally I cannot devote enough time to get as good as these guys and gals are at "active trading". I am better. I will miss some rallies, maybe jump in a few late and suffer a bit.

But the solid companies that Bill looks at I want real cheap. I hope to see more blood (maybe sooner, maybe later?) and cheaper prices. Til then, I want to learn to read the market and catch the rally (I hope one happens soon, I'm ready). Maybe I'm being to ideal and wishful in my thinking. Trading makes me be a realist! Talk on this blog is easy, losses aren't.

However, I may be wrong, but I think I will make my best money most likely when I can buy the good one's when it looks like the shy is falling. I mean people dirtying their pants.....right now, around me in mid america, the sky ain't falling yet. Sagging yes, but not coming apart at the seams. My current place of employment has a state retirement plan. When people start despairing over that bunch of obligations it could be a real blood bath.

I read the other day that this market looks like it has "resolved" to go short and that partially explains how it can keep going lower with a VIX that is not at record levels. At some point (when, I don't know, gotta be patient), it "may" trigger the "straw that broke the camels back" and the selling might exhibit the big wash out people hope for.

I agree that this ship is big and will take awhile to turn. I think the average age on this blog is under 50 (guessing). As a result I can sense the optimism and hope for a quick turn around. HMMM, we'll see.

Love'n cash, but want more! :-)

til then happy hunting to you all....DB

My AUY leaps are green 20%....Sell?

WGI-NGD now have 4 mines, one already producing, two producing soon, and because of WGI's mine, there is no need to raise money. What's not to like?

In the senate hearing (i think it was) with Bernanke, he was asked by one senator about the use of AIG money, and why the counterparties are getting this bailout money. Bernanke's response was you can't let all the life insurance holders take a haircut. Senator agreed, but what about institutions who bought CDS's or whatever only to boost their own credit rating.

That pretty much sums up what I've been saying all along: use the trillions to guarantee deposits, bailout peoples pensions and insurance policies to whatever extent possible, and give not a dime to the companies that are responsible for this mess.

I can think of a couple of reasons this hasn't and won't happen:
1. HB&B has politicians in their pockets (this is the prevailing opinion I think)
2. The crisis is so systemic that letting AIG, GS, C, etc. fail actually would have unacceptable consequences, and by that I mean unacceptable to politicians like global blow back in the form of no more debt financing or worse.
3. The amount required would be too large ($20 trillion? I have no idea), and they actually think that blowing a mere $10 trillion on the banks will solve the problem.

At any rate, I'm surprised anybody is surprised by this news anymore. Hasn't TARP just been a HB&B bailout from day 1?

Grym often talks about the effects of outsourcing, today mentioning empty factories which sparked a memory of a website I once came across. It's a collection of pictures and sometimes stories of abandoned buildings across the US and from other parts of the world.

It was a real eye opener and I couldn't stop sifting through the pictures...

http://www.abandonedbutnotforgotten.com/

Madeline Gerwick enews:

"....a Congressional Committee held a hearing recently with the Federal Reserve chairman, Ben Bernanke. It turns out that while Congress was debating a bailout for $787 billion, the Fed spent $10 TRILLION on the bailout without any approval from Congress. They don’t even have to ask permission to do this. This means we’re printing a LOT more money than even Congress was authorizing.....with this kind of printing of money going on, we could see at least 10-20% inflation this year."

She suggests a 'humdinger of a full Full Moon' on the 10th (+Sun conjunct Uranus) would create energy for Citigroup to delist. Similar pattern existed when Lehman Brothers, AIG, Washington Mutual, and Merrill Lynch tanked in September. Just sayin! I notice ALL my clients get edgy on the full moon upswing and a few days after with the tidal swells.

It sounds like gubermint-aholic at full throttle....100 proof in the bottle....I heard 40 trillion needed to be unwound.....we are hyperinflation bound...... the rap goes on

Maybe we should pay close attention to the dollar cost of commodities the next couple years and not the relative strength of the dollar...

Who has the balls to go long commodities now? They may be tomorrow's richest....

Thanks for the link, i went to abondoned in Canada and i couldnt believe my eyes when i saw my grade 7 and 8 school on there just before it was demolished, brought back some fond old memories of Prince of Wales emementary school.

"Commodities do not generally perform as a store of value."

The height of understatement. Alex Elder says even his commodity investor friends admit when pressed they profit the least from commodities. I gather what one profits from depends entirely on the kind of market you are in?

So--what KIND of market are we in?

ALOHA!!

"The height of understatement. Alex Elder says even his commodity investor friends admit when pressed they profit the least from commodities. I gather what one profits from depends entirely on the kind of market you are in?"

Thanks for the "contrarian indicator" validation ...

As soon as all the "experts" agree that commodities are the last place to make a profit that is where the profit will be!

What kind of market are we in? A MONETARY COLLAPSE!

In such conditions the only safe places to store wealth is where the least liabilities reside.

Here is an article talking about the demise of the British pound sterling. Down towards the middle one of the financial experts interviewed said that the USDX and the CHF will benefit as "safe haven" currency plays. That is what trained rats will tell you when they scurry from one sinking ship to the next. The problem with that strategy is that the USDX and CHF are also on the ropes fundamentally. What these people are all seeking is "real money", yet after decades on decades of brainwashing by statist schools and banks and business they have lost touch with reality. The reality is that there is no such thing as safe FIAT ...

THREE STOOGES BAILOUT
Did anyone here ever see the Three Stooges episode where they are all three in a rowboat in a lake and they discover a leak? Recall that one? Ben Bernanke is like Curly who decides to drill a hole in the boat to let the water out ... Well, after that does not work then they start BAILING OUT the boat only they throw the water from the guy in front of the boat to the guy in the middle of the boat, to the guy in back of the boat and the water never gets bailed out and eventually they sink ...

Man, does that episode look like KEYNESIAN ECONOMICS 101 ... This is exactly what our leaders are doing and this is exactly what global investors are doing in search of BAILING OUT the RMS TITANIC ...

If you look at the boat that the Three Stooges are in as the global FIAT monetary system we now call MONEY then the CURE becomes very obvious ... YOU GET A NEW BOAT! BEN is Curly, Geitner is MOE and Summers is Larry ... Wait a minute ... isn't Summers already Larry? HA ... he is!!! Larry Summers ... PERFECT ... Now if we can get Tim to change his name to Moe Geitner and Ben to change his name to Curly Bernanke then we got a perfect metaphor! HA!!! I love it ...

I thought about Obama as MOE(leader role), but since OBAMA knows nothing about money or economics then the other three "experts" are a better solution. Recall OBAMA has never claimed to be an "expert" at anything, except getting elected! So best stick to the self acclaimed monetary experts!

Anyway I got off track ...

Here is the UK article on the demise of the pound and the "silent" bank run on Britain by foreign investors ...

READ ON:
'Run on UK' sees foreign investors pull $1 trillion out of the City

Banking crisis undermines Britain's reputation as a safe place to hold funds
By Sean O'Grady, Economics correspondent

Saturday, 7 March 2009

A silent $1 trillion "Run on Britain" by foreign investors was revealed yesterday in the latest statistical releases from the Bank of England. The external liabilities of banks operating in the UK – that is monies held in the UK on behalf of foreign investors – fell by $1 trillion (£700bn) between the spring and the end of 2008, representing a huge loss of funds and of confidence in the City of London.

Some $597.5bn was lost to the banks in the last quarter of last year alone, after a modest positive inflow in the summer, but a massive $682.5bn haemorrhaged in the second quarter of 2008 – a record. About 15 per cent of the monies held by foreigners in the UK were withdrawn over the period, leaving about $6 trillion. This is by far the largest withdrawal of foreign funds from the UK in recent decades – about 10 times what might flow out during a "normal" quarter.

The revelation will fuel fears that the UK's reputation as a safe place to hold funds is being fatally comp-romised by the acute crisis in the banking system and a general trend to financial protectionism internat- ionally. This week, Lloyds became the latest bank to approach the Government for more assistance. A deal was agreed last night for the Government to insure about £260bn of assets in return for a stake of up to 75 per cent in the bank. The slide in sterling – it has shed a quarter of its value since mid-2007 – has been both cause and effect of the run on London, seemingly becoming a self-fulfilling phenomenon. The danger is that the heavy depreciation of the pound could become a rout if confidence completely evaporates.

Colin Ellis, an economist at Daiwa Securities, commented: "The outflow of overseas banks' UK holdings is not surprising – indeed foreign investors in general will still be smarting from the sharp fall in the exchange rate last year, as many UK liabilities are priced in sterling terms. That raises the question of what could possibly tempt overseas investors to return to the UK. Further heavy outflows of funds are probably a given."

The Bank of England said that there had been a large fall in deposits from the United States, Switzerland, offshore centres such as Jersey and the Cayman Islands, and from Russia.

Paranoia that the UK could follow Iceland into effective national insolvency and jibes about "Reykjavik on Thames" will find an unwelcome substantiation in these statistics – which also show that stricken British banks are having to repatriate similar sums back to Britain. This is scant consolation for the authorities, however, as it means the UK and sterling are, like some emerging markets and currencies, suffering from a flight of capital. By contrast some financial centres and currencies – notably the US dollar and the Swiss franc – are enjoying a boost as "safe havens" in a troubled world.

The sudden international trend towards financial deglobalisation and the flight of money to "home" bases has nonetheless been dramatic. The Prime Minister has already warned about this drift to "financial protectionism" – even though UK banks brought back almost $600bn in the last months of 2008, as they attempted to repair fragile balance sheets. Mr Ellis added: "These data are consistent with UK banks reducing their overseas holdings, at the same time as overseas banks scale back their presence in the UK. That is not surprising, given that governments around the world are having to prop up their banking sectors, and in turn demanding that national institutions focus on domestic markets. But it does run the risk of being financial protectionism by the back door."

Investment from the West into developing countries has fallen from the level of about $1 trillion a year seen earlier this decade to about $150bn last year. Economies in eastern Europe such as Hungary and the Baltic republics, some in Asia such as Pakistan and developed nations such as Iceland have been severely hit by the collapse in foreign investment.

Like Iceland, the UK has an unusually large banking sector in relation to her national income, with liabilities four times GDP. Should the UK taxpayer have to assume these debts it will represent, in relation to GDP, about double the national debt the nation bore at the end of the Second World War, a near unsustainable burden.(end)

ALOHA !!

Finally someone larger than me is talking the C WORD ...

He mentions the word "receipt" in the context of a money contract, which in my mind is what money was originally, a "warehouse receipt". Back then the "warehouse" actually held real wealth, usually in the form of gold. What happened in 1913 when the US FED was created and in 1971 when Nixon closed the gold window was the FIAT KINGS essentially took the word "warehouse" out of "warehouse receipt". Now all we have left is just a bunch of paper "receipts" no warehouse and no real wealth! Here we stand homeless in the country of our ancestors. We elect banks not representatives in this country!

Milton Friedman was wrong in the Donahue interview. He does not see a "two party aristocracy" and both he and Donahue actually sit there thinking they live in CAPITALISM ... I can document so many currency manipulations prior to that interview done by the FOMC(US FED)going back to 1974 that it makes your head spin. When government intervenes in markets they are not free markets! Mass government intervention in markets here in the USA can be documented back to 1974 and especially during the Reagan administration where his Executive Orders gave a new meaning to "intervention"! How can you have CAPITALISM when government is controlling markets and writing huge spending contracts that strangle CAPITAL ... What is CAPITALISM without CAPITAL? Its the USSA!

Go to this link and read UNDERSTANDING THE CONTRACT OF MONEY ...

LINK: http://tinyurl.com/2qtd8

My only dissent is with his confidence in Volcker. I have no such confidence!

ELIMINATE THE US FED!

Thanks. That is a must see video. I am still laughing.

Have done well this year, both would've been great plays. Maybe still?

Citi-Gov now on the dollar menu....

Bill

I can understand why GE is out but why is Manulife Financial (MFC) out of the CARA 100.

Did I miss a post earlier in the week?

If anyone can post the link, I would appreciate it.

This outlines a comp plan that is certainly worthy of immediate implementation.
http://tinyurl.com/ckca2q

loannetter, FranSix, dberryclan, Ron Sen,

If I truly believed we were likely to get 10 to 20% inflation this year I would definitely be buying commodities denominated in dollars.

However, does it really matter how much the money supply is increased — unless people borrow?

The velocity of money has been falling.

The best analogy I've seen is this:
Suppose you are able to counterfeit US currency perfectly. A one $trillion, two $trillion ad infinitum. After shutting down the press you bury it in your back yard. Inflationary? No.

Only when you put it into circulation does it have any effect.

My wife and I just got back from the supermarket. A year ago Hills Brothers coffee was selling at just below $10 a can — today same size can is $5.99. Gas is creeping up again, but still below $2. We keep hearing about the presses running overtime and mouse click dollars, but...? The Fed has been trying to relate, but so far they have had less than wild success.

Remember when Greenspan stopped (finally) lowering rates? The 10-year Treasuries went to 5.5% and then way down — hardly a panic to bond holders like me.

Bernanke is apparently a true believer that the Fed can control the economy by tinkering.

A side note: Several years ago Ben had an op-ed piece in the WSJ in which he scoffed at the idea that exporting manufacturing jobs were really hurting the U.S. I know several dozen people who would have argued the idea then and more are added to the unemployed line daily.

We don't make enough things other people want to buy anymore. Try going to the supermarket and offering a Wal-Mart greeting in exchange for coffee at any price.

Things are always worse than the government numbers tell us, the "experts" estimates are usually lowered and the TV cheerleaders keep trying to fool us. Ron Sen suggested Shadow Stats — Excellent, clear picture of a basic problem to keep in mind.

I recommend Contrary Investor monthly commentary as food for thought and the Northern Trust economist Paul Kasriel's articles.

I suggest watching and waiting until enough people lose their fear and we see a sustained spending increase, job gains, and ISM increase give a us clear signal before investing (trading excluded).

I think it's entirely too nice. If they *must* pay them, then payment in toxic assets seems fair. They might actually pay-off someday.

I say we compensate the existing crowd by letting them live, but in prison.

Then we can compensate the *new* bankers according to the "skin in the game" model, but also on the "too small to matter" scale. We should NEVER allow "too big to fail" or too interconnected/conflicted, to occur again.

I'm agreeing with you.

Food prices are starting to decline. Hospitals are laying off (including doctors).

Everyone here has probably seen the Jon Stewart Comedy Central video of all the talking heads at CNBC being absurdly wrong on their calls...and yet people still watch.

Sentiment is minimally bearish (by some parameters http://www.sentimentrader.com) and I still sense (VIX anyway) that traders are still worried more about missing the next 5 percent move up than having gotten smacked on the way down.

It's ugly out there.

ALOHA !!

Yes, I did read that article by Catherine Austin-Fitts, "Dillon-Read And The Aristocracy Of Stock Profits" ... back when it first came out in 2006. It is as relevant today and even more so! I recommend people here read it completely. It is quite lengthy, but explains from an insider perspective the corruption we face.

Since I was heavily involved with one part of that process ... building prisons ... I understand the grand plan of POLIT-BANKS. I think Catherine Austin-Fitts is one of the leading proponents of RESILIENT COMMUNITIES in the World via her Solari Group. She, as I, recognize that just "going green" is only part of the overall solution. In order to get BIG GOVERNMENT and TOO BIG TO FAIL off our backs forever we need to dismantle the system that allows these behemoths of fraud and crime to exist.

ELIMINATE INCOME TAX
ELIMINATE THE US FED

Just changing tax code and adding some new SEC regs will never truly cure the CANCER ... The CANCER is the entire monetary system! You have to take that HUGE leap of faith and start there-cut them off at the pass, in order to have a lasting chance for REAL CHANGE!

Look at all the regulations that came from the Great Depression and the 1929 Stock Market Crash ... What we have now is an entire country ON THE TAKE!

This is why I say ... Take away US government contracts and see what corporations survive. My guess is that 95% of the DOW would be decimated under such conditions, certainly every defense contractor and car manufacturer would!

These are the charades of the elite that make people like Ron Paul, Catherine Austin-Fits, Bill Murphy(GATA), Bill Cara and even "me" look like "tin-hatters" to society at large. To me, as an anti-statist, that is when you know you are on the right track, when so many people consider your proposals irrational or conspiratorial at best.

I see BIG GOVERNMENT and its pal the US FED's FRNs as UNAMERICAN and a threat to my future and the future of all US citizens, especially those who have NO RIGHT to vote now! Who has NO RIGHT to vote? The babies and children and teenagers who are below voting age and who will inherit our bad decisions and abysmal, two party, voting record. Who is voting for their benefit ... for the youth? They are our future ... not you and I ... As far as I can see the parents of America have squandered their kids future for a "handful of beans" at the voting booth ...

What's my crime? To be FREE ... Free from the "long train of abuses ..." that the Declaration Of Independence speaks of when government becomes TOO BIG TO FAIL!

Link: http://www.dunwalke.com/

OUR MONEY IS ONLY AS HONEST AS OUR GOVERNMENT ...

Yeow! I watched all the morning news shows,FOX,NBC,ABC,CBS,PBS,the local stations all have some financial disaster special on.... and topped it off with a dose of Bloomberg. It appears that everyone has the same dire predictions, everyone, everywhere. The opinion seems ubiquitous.
Forget C word, we're moving to D word. Enter the boiled frog.
So far we've gone from slight pull back in housing, no worries it won't affect anything else, no worries, it's a soft landing, no worries it's a soft landing with mild recession, to no worries goldilocks is fine, WhereTF is goldilocks?, it's a medium landing but free drinks, no worries it's a hard landing but we're in Vegas, no worries it will be a short recession, and all the accompanying calls for bottoms, 10K,9K,8K,7K....and we have a Caraista with a screenname with 5300 in it! Which leads me to trends.....

I've been checking Ron Sen's site out a lot lately. Lot's of interesting stuff to learn, a little Gann magic (I looked deeper and it's still a mystery), some Landry cautions on trend worth noting (for myself), and this AM it looks like Kaimu is going viral with the Three Stooges. Oh! and that lovely S&P chart. Reminds me of the old ABC Wide World of Sports, "The thrill of victory.....The Agony of defeat".....Whaahooo,hooo,hoooo!

But, the one Landry idea that stuck....basically...don't fight the trend.
Kinda late to be thinking short...maybe best to stand aside until Mrs. Market tells Mr. Market to pull over and get directions.

I think the gold in Fort Knox is not really in Fort Knox but in Barrick's operating mines. The Carlin trend is the new Fort Knox, ounces are very secure there; you have to mine them first before theft can occur.