Cara's Commentary & Community Chat, Fri., May 22, 2009

Person who knows more and more about less and less

Bill you are correct to never say never but I believe your observation that buy and hold or as I like to say "buy and hope and perish" is changing going forward. I know two people who said the business at discount brokerages here in Canada is up over 100% as more and more are adapting to the new mentality going forward by taking a hands on approach. Have a safe and happy Memorial Day weekend.

CIBC raised the target to $14 from $9 per Dow Jones newswire. Luckily I picked it up at the close yesterday at $9.40

An interesting comment at ZH this morning:

Think-Treasury auction. The Fed cannot have a strong market now(hey, the banks did their secondaries) and sell 100 billion in worthless crap at the same time. We were in the throws of bond revulsion 3 weeks ago. The market was propped with all this programmatic trading and SPY purchases to keep the barn open for B of A and Citi.
Now BennyTimCo have to fence all this stuff to the risk trade-so -let the S&P and DOW go faceplant 3 trading days before auctions time.Watch for a nice sucker punch to gold futures to drive panicked investors into the Bond market in the "nick" of time. It all works out "great" for the Fed so far! Even Standard and Poor's going Sarah Palin on British ratings drives money out of Europe. Ain't life grand when you are the 4th branch of gubment
Originally posted as a comment by Aenar on Zero Hedge using Disqus.

...until he knows everything about nothing.

Am puzzled by yesterday's action where the financials were the leaders in the face of some very bad action. Any rationale here?

From Dave Landry this AM: "This market needs more cowbell."

POT - Upgraded to Buy @ Citigroup

We should be aggressively buying SLW which could have a big day today. Maybe Yamana too.

Gold and silver are making a run and it's for real this time. Kaimu's best friend when this is said and done will have turned out to be the Obamanator...He's like the terminator when it comes to Forex values:)
He's like Jimmy Carter without the dumb sweaters and the defeatist talk.

Happy Memorial Day weekend.

You're right Craig.

BTW, you're not left handed are you?

Heading out for an appointment, errands to run . . . back later. Like you, a lot of cash on the sidelines with a greatly reduced number of holdings.

Leaving an order to cover JUL 40 BG puts previously sold at $2.20 if it hits my price.

Cmon bro...You KNOW Jimmy Carter was incompetent. Carter told us to shut off the oil burner, and Reagan told us we could be great again...Who would you believe?

shark- I believe Carter agonized over making the right decisions. He was and still is a great man.

Hey Cara, I love your blog and your attitude.

On these subjects note that economics deals with the formal implications of the fact that men have ends and utilise means to attain these ends. In contrast psychology deals with the content of human ends – such as why does the man choose a particular end? Consequently, economics is a separate discipline from psychology. Therefore the use of psychology is counterproductive as far as economic analyses are concerned.

If you are a good day trader - I am not - more power to you and please accept my respectful admiration. Don't confuse though psychology with the intrinsic risk of markets which is being largely mis-specified by the followers of the efficient market theory or MPT started by Markowitz. Risk is a lot bigger than what he calculated as the assumptions of the MPT are not applicable in real life: prices do not vary continuosly and distributions are not "normal". MPT is a first, VERY rough approximation and, although not worthless, is inapplicable at turning points like we have right now. I suggest to read Mandelbrot's Markets' (Mis) Behavior. Not a guide to trading (yet) but a good start for understanding what is really going on.

I enjoyed the chuckle. Having been a professor I know that depth of knowledge is important but so is breadth of knowledge. Helping students requires both.

Light, slow trade just now in the PM stocks....

...

Cramer really is a contrary indicator...

I second 2nd. I voted for Carter so I remember pretty well how it was.
I think we failed to recognize the guys decency and misread it as we do today as weakness. That's like saying Christ was weak.

There is a difference between power and force.

no point in being greedy ;)

Market seems to be behaving like a guy who just can't hold his drinks - leaking everywhere. I was hoping for a rally today so that I could reload into some SRS, but doesn't look like it yet. What to do - buy in now, or wait for pullback in SRS? Where's the memorial day bounce? Time for me to do some drunk kung-fu !

...ditto...

2nd- Thinking of searching this weekend for individual EM shorts based on debt, instead of the whole basket.

Mark- Yes. We shoud be able to hold those longer than a few minutes ;)

it is PM's day today.

uup flat

tlt rising.

Saw an interesting pattern this morning. First we had all the chatter yesterday about gold being the Thing To Buy on financial entertainment TV. Then this morning they move gold up in the futures market premarket so it opens +8. Then, at market open, huge volumes in GLD, with absolutely no price movement. I wonder who was buying, and I wonder who was selling?

Gold may move up after this, or not. But, its interesting seeing HB&B run a "sure thing" moneymaker trade on +8 points of GLD (and/or gold futures).

2nd- I almost cried when I heard that last night...on the other hand, I'll take it as a positive for a LT trade. Shake out a few more weak hands. I can't help but think the smart money is distributing their equities and accumulating NG for the long haul.

I have a few lefties in my family (being at least partly a genetic trait).
Like you they suffered from early prejudices against left handedness. I didn't. I loved writing cursive and was one of the first in my class to do well at it and get high marks. The only hard part is ink not drying fast enough, so you do that stupid paper positioning thing (at least in school) to avoid smearing. I used printing as well and that helped with drafting and technical illustration in school. I was bored with math but love it today.

You can see from your post how recent our prejudice is. We also have more minorities in prison and some say they aren't as smart as 6'2" white right handers. Is it the people or the system? Does anyone overcome this type of societal hardship in a few generations? We could use the improvement curves from about any recent minority and get similar results.

Do we judge Einstein by how he was viewed in high school by prejudiced right handed teachers wanting to whack him for being "gouche" or linked to Satan, or do we look at his accomplishments? I would say that anyone that was so talented that they were able to overcome the disadvantages and outright prejudices is well above the average as they excel where common folk do not.
He could have been black and never had the chance.

One could as easily link height with success, or white bread as most of us eat white bread at some time in our lives. Statistics, as you note a lot in your trading posts, can say about anything. They could also say society fails minorities and doesn't fully use their talents or cater to their needs. Society is set up for the majority, the majority being right handed. But how do we explain the over-representation in science, math, sports, art and politics as a percentage of the general population, with talented over-achieving left handers?

Maybe I'm an exception, but as a lefty I'm used to it. I don't feel at all disadvantaged against my right handed counterparts. I DO however have some other ideas why I think taller men are more represented in influential positions and make more over their lifetimes. I think this is also a societal selection of power like women with that certain shape we know is desirable. It is largely unexamined (except maybe by professors) :>). We generally pick big and strong over smaller and smarter. Ask Woody Allen, he's made a career from it.
Just look at high school scholarships. Who get's the most free rides, athletes or brainiacs? Our selection process (and some of our ideas)is still stone aged.

hi 2nd,

most of my cramer info, comes through my 82 year old father who watches him on tv. my father got a laptop for xmas and he has now figured out how to trade online by himself through scottrade. we are all worried since he listens to Cramer and is now day trading! He called me last night and said he was thinking of buying Cramer Pick LINE, FITB and BCS.

Well I'm still pushin' ol' Goldstar...now up to a canter...

I saddled up UNG this AM at 13.80 and I'm thinking about sending the ol' horse to glue...with Cramer tied on the saddle.

"here Sammas, go torture yourself. I no longer attempt to pose or know the answer to such an arguably simplified question. http://www.bard.edu/bluecher/lectures/last_lecture. This guy is the husband of Hannah Arendt - a noted power theorist. http://www.iep.utm.edu/a/arendt.htm Note the following subheading - the tripartite of: The Vita Activa: Labor, Work and Action. Perhaps in response to your thoughts I can best articulate a response that imitates the closing remarks of Blücher. That system is us, as artificial and self-destructive as these two suggest."

the goal is not to inspire some sort of angst against "the system" or "the man", but to recognize that any "WE" or "US" that is used as a rationalization for why not to behave in a certain manner is simply that, a rationalization to avoid the known responsibility of what any "I" does. "WE" is simply an aggregation of "I"s and the only way to fix a "WE" problem is by correcting a sufficient number of the "I"s.

having "that system is us" as the endpoint of discussion and proof of the validity of inaction is similar to saying that some day the sun will become a red giant and swallow the earth, so all life on earth is pointless.

He is something, Les. If I could get him to get on this blog, he would be in good shape. I will work on that next time I see him. He doesn't open emails or google. He goes right to scottrade, logs in and buys and sell. :) Wish I could get him out of the bank stocks. If anyone can recommend good dividend stocks for him, let me know

thanks!

vb

VB- Sure, let him buy LINE. Yields 13.7%. For the dividend, Ding-Dong got this one right.

When you figure out how to do it...do it

Just to clear something up, Einstein was way, way ahead of his high school classmates when it came to math, mastering forms of calculus back when his peers were probably struggling with things like quadratic equations!

That old cartoon "Animaniacs" had me mislead on that one myself, for a while there.

Les, Mark,
Here is the 1 yr chart

Thanks, Shiva...I've been working on my TA, but not ready to embarrass myself just yet. I agree though, on TA alone, I wouldn't buy it...But you know the back story.

Mark, Just use TA to get better price points your entry ( i suppose you are scaling in here).

interesting point craig, and i think in a general sense we actually agree more than not, the difference being i am speaking of broad trends and the fact that
challanges in school faced by very bright people can help them eventually while it can hold back a less bright child.

on balance if most left handed children faced problems in school, then the majority of them being of average intelligence may find school more difficult than their equally intelligent rigth handed students. creating a barrier that some will cross and be strong for it, while others never pass.

the same way disparate poverty has brought us many leaders who emerged from difficult upbringings to become successful, but sadly this is the exception to the general trend that poverty holds more back than it empowers.

taking your example, your colour in the US is not the most consistant determinate of socio-economic status. there are sadly many many more poor people as a total number of whites than blacks, simply because there are more "white" people in america. but if you look at black males, over 6'2 you see a dramatically different lifestyle than the average 5'8 american male. the left/right handed thing was an added bonus as lefties are very highly over represented in prisons and among children with learning disabilities and the like.

though i will add the numbers are stunted by the fact that really tall men in the NBA earn so much more than the average they might actually distort the facts, i wonder how much more money on average a man earns for every inch of height over 6'2... id be curious.

there is something deeply seated in our biology that associates height w/ some sort of power. i remember my friend who is 6'8 seemingly able to meet girls without doing anything. they were staryeyed when he walked in a room. mabey its the same for guys when a girl with a great butt struts in. biology.

we know the challanges faced by minorities in the states, and that per capita black and latino's are poorer and face more discrimination, but why is it that the taller they are, the less afflicted they tend to be with the drawbacks of poverty and the like?

w/ respect to your left handedness congrats, ive never met a lefty who excelled at handwriting, especially when we were forced for so long to use our right hands so we never got the chance to really try along w/ other kids how to write. and yes i still write with the paper turned 45 degrees to avoid smears!!

coincidentally, notice how tall most presidents are and prior to obama the main features of a president were tall, white male. check 1 from the list!!!!

"PhD =Piled High and Deep"

Higher and deeper ;)

LOL! I know when i'm in the presence of a tall guy that I feel less powerful.
I feel smarter, but I know I'm going to have to out-think, not overpower...

Maybe writing is the art part?

"numbers are stunted by the fact that really tall men in the NBA earn so much more than the average" Stunted numbers on tall men, hilarious!

There have been a lot of left handed Presidents. Interesting connection. Maybe it skews the numbers being they were all white guys for over 200 years!

Yes, poverty. The big nut for a lot of us. I was more stifled by poverty than which hand I used, that's for sure. If only IQ translated into income instead of height....

"RE:>having "that system is us" as the endpoint of discussion and proof of the validity" Not at all. But if I recall Bluchers closing remarks it stated that we need to stop leaning on religion, nature, the idealised proletariat of Marx's, science and all other gods we have created. The question we should be asking, most simply posed as "why?" is something I ask myself frequently. Perhaps the best position I could place myself in my lifetime is similar to de Tocqueville's America, where a new rich had sufficient resources to retire and contemplate the nature of their political system. That, in my esteem, would be worthier than reaching for the crumbs of my "masters" table to buy a 300sq bathroom, huge SUV and roll the dice with fools like Jim Cramer. I am quite certain, and I will undertake this conversation with my neuroscientist friend and neighbour, that human beings are not physically ready to release these "false idols" for an idea infinitely more difficult, be it worthwhile. Spaced out intellectual that he is (the guys wrapping up his second doctorate), he is nonetheless quite certain that the human mind will always seek power. On this thought, and with a reasonable understanding of the nature of revolutions, utopian dreams and their certain and often abhorrent failure, I leave you to address the issue of improving your (as opposed to our collective) lot in life. peace Sammas. EDIT: of all the "false idols" out there, I choose Bill and the group here as a place to improve our lot in life, without getting in each other's face as to how that should be done.

one cannot have a discussion of improving ones lot without a discussion of how that should be done. if such comes off as "getting in each other's face", then that is an unfortunate and unintentional result. i am merely asking the same question as you: why? in this case, why participate in financial markets that are structurally unjust? i do not view this as the same as markets that are inherently unfair. in other words, i am not against faster people being allowed to win the 100m dash; i am against some people being allowed to start 5m from the finish line.

aucourant - It's ok to mock professors or catholics, for example. On the other hand, it's not ok to mock women.

There is a much wider list of mockable folks to choose from. Lawyers, now bankers, politicians, let's see what else? Nerds. You can mock them too. (I was a nerd once. Trust me, we got mocked something fierce.) Pretty much anybody famous - from President Obama all the way to Britney Spears. Let me point out, she's a woman, and eminently mockable.

And if you are a member of a group, you can mock your own group. John Stewart has a history of mocking jews, for instance. He gets away with it because of course he's Jewish.

"why? in this case, why participate in financial markets that are structurally unjust? i do not view this as the same as markets that are inherently unfair. in other words, i am not against faster people being allowed to win the 100m dash; i am against some people being allowed to start 5m from the finish line."

We are here to learn how to defend ourselves against these dirty tricks. They are no different than cattle rustlers who controlled the local townspeople. Perhaps the difference today is that we are no longer terrorized by force of these brigands' arms into obedience and submission. If you choose to find another vocation besides raising cattle, then this is up to you. What we could certainly use, and we did not witness in the manner of that useless inspector from the federal reserve (to take an example, and no offence to women), is an honest and brave sheriff to come clean things up. History repeats itself sammas.

I'd opt out of this society, were it possible. I think its structurally unjust. But short of that, I'm happy to learn and to share with my family Bill's notion of a level playing field for my financial well being - the fundamental basis of an individual's wellbeing in our economic system.

This weekend is memorial weekend. Go ask some vets why they fought for a structurally unjust society. Bet you get some diverse and interesting answers.

"I can't help but think the smart money is distributing their equities and accumulating NG for the long haul."

I find myself in agreement with the above statement, but ONLY if you define the long haul as the fall of 2010.

I see nothing that encourages me to buy NG at these prices. If I were forced to put everything on NG breaking $3, or not, I would take the under.

Let's start with the basics. Demand for NG has seasonal swings, and the NYMEX price is determined by North American supply/demand/storage fundamentals. Fundamentals ARE important, and storage is vitally important. (Someone asked a question yesterday about whether storage mattered?)

You can go broke trading technicals on NG, although I recognize many on this site can trade it profitably short term, with proper money management. Price volatility can occur at any time of the year.

It find it useful to refer to long term seasonal price patterns like this one:
http://www.spectrumcommodities.com/education/commo...

Note that there is a tendency for a price bottom in July. I prefer to accumulate NG positions in June, July, and August, doing some short term trading around a core position on volatility related to hurricane scares and heat wave induced demand spikes. I usually sell into the normal fall rally, then wait for a pullback to reload for possible winter cold periods. Then I selectively short it into the summer.

However, I'm not convinced there will be a "normal" rally this fall. Instead, there could be a big drop. The fundamentals are awful to say the least. One poster yesterday (Alberio?), who is in the business, made some very salient points. First, storage is high for this time of the year, and production will have to drop off considerably for storage capacity not to be filled before the end of injection season (late October, early November). Quess what happens to price if maximum storage is reached and there is still surplus supply?

All projections for a sustained price rise are predicated on the American economy improving. (There can be rallies based on "green shoot" blather, or on sector rotation by the "big boys".) Industrial consumption for NG is down considerably.

Rigs have been "going horizontal" for the last half year, but that has not affected production so far. Producers aren't in the habit of drilling wells and then capping them. Many producers carrying high levels of debt desperately need the cash flow, regardless of spot price. If you spend $5 million on a shale gas well, you're going to flow it.

Also, some producers are increasing production. There is more production coming on from the Gulf of Mexico, interrupted by last year's hurricanes.

And there is price hedging. Many producers hedged forward production during last year's high prices. Last night I saw a report from one heavily-leveraged Barnett shale producer who had hedged 75% of 2009 production at $8.75. One Canadian producer had hedged about 40% of production through 2011 above $7. Chesapeake Energy has an extensive hedge programme. So spot price is not the only consideration. Cash flow is vital to many smaller producers.

As the economy has tanked, so has the cost of new production. Virtually everything is cheaper than last year, so break-even analyses based on last year's data should be revised downwards.

The question is when will the natural depletion of well flow, combined with drilling reduction, reduce production to a point where it meets reduced demand. What if demand doesn't increase, but continues to decrease? Uh-oh! What's plan "B"?

Low natural gas prices encourage some switching from coal, or oil products, where possible, particularly in electical generation. But I think electrical demand is down also, and the price of coal has dropped as well. Think of the auto industry basically taking a summer off, and all the other industries that may be in the same circumstance; that can't be good for energy consumption.

There was an interesting thread on NG on theoildrum.com on May 20. I would highly recommend reading the comments by Murray, as well as anything by Rockman who I believe is a drilling contractor.
http://www.theoildrum.com/node/5413#more

The one positive I can see for the price of NG is the decline in the USD, but that effect should apply to anything priced in USD.

Sorry for the long post. I'm not in the NG industry, but I have been trading seasonal swings in the producers and the commodity for almost 30 years, sometimes even profitably:) I apologize if this duplicates anything posted above; I've been picking away at this off-and-on for some time now.

I'd just like everyone to ensure they take a good look at fundamentals before accepting anything said by people like Gartman, Cramer, or the "Fast Money" traders.

Good luck everyone; NG can be a trader's delight, or a "widow maker" depending on how you treat it.

right now Jack I'm stuck on a large unrealised loss in UNG. It has got my attention. As David pointed out, it has a life of its own seperate from equities, which I've pretty much avoided except for the many debacles these last few choppy weeks.

Looks like the Fed is trying to tame gold as well.

I remember my friend remarking at the beginning of the year, hearing from a french (probably UBS/Credit Suisse) analyst that the greenback will take a dive around June or July. Prognosis playing out so far.

Bill wants to play with bought puts soon. That tells me he has confidence in the leg down.

I'm trying to think what I'd short the most. Retail, Real estate?

financials?? uh uh, ain't going near there

Everyone interested in trading gas should read and consider the analysis. I'm a technicals guy, but that is some good, good stuff. Thanks for it--

Oh jeez...lighten up. I have a masters. Have trained in philosophy for twenty years, am vertically, and follicley challenged. Being of italian descent (and I do mean descent) I'm a guinea, dago, WOP, garlic eater. On the Irish side I'm a mick. I can use those words because I am one. However I can't use words of what I am not. I am more than willing to skewer myself (psychologically masochistic).

I have eminent respect for highly educated people. Bill comes to mind. As well as many others.

Having said that, political correctness is what it is, whether here, Nazi Germany, the communist bloc or...take you're pick.Oh, forgot Cambridge, Massachusetts...(they don't call us Massholes for nothing)

"I mock anyone who does so."

Shoemocker....

jack black - I like the idea of gold, but the TA aspect of gold to me is completely illusive. That is, TA works well for miners but not the metal. Just when the PM's look like they're falling out of bed they bounce back, and when they look poised for a breakout, they fall flat on their face.

We'll see how it goes, I expect everything will be going up in price, wouldn't want to hold dollars (which I have many more of today than yesterday (because of all the constant warnings about how the sky is going to fall from the heavens any day). Not everyone will be buying gold, need to be prepared for migration with the flock.

ahhh..Bill - I see you're beginning to see Dennis Gartman for what I have seen him all along. We posted about him a few months ago and I mentioned that he kind of gives me the heebie jeebies...frankly, I don't know what it is but I just don't trust the guy. Anyone that comes on tv with such an air of knowledge and know how must be doing it for reasons other than offering advice...

F57, nicely put, thx. I dont have any position in NG but have been watching it for a while

These charts follow the dow/gold ratio over long periods, and suggest that the value of the dow may once again come to equal the value of an ounce of gold before the unfolding debacle is over- at 2,000 if there's deflation, at 5,000 if there's inflation:

http://www.financialsense.com/fsu/editorials/2008/...

The author has been 100% in physical gold since year 2000.

ALOHA!!

On the psychology theme ... Apply that to our current monetary system(if you can call it that) ...

Fiat money, as I have said many times before, is based on the most overly developed of the human conditions ... "greed"!

If you are handed a blank check by the US government who among us would not be tempted to write as many nines as possible. Would you rather have ...

1,000,000 or 9,999,999?

Fiat is not money. It is a clever derivative of real money, disguised, so those who control the money issuance can become rich by accumulating huge sums at the expense of the lowest rungs of the socio-economic levels, whereby these paper IOUs can be traded in for "real wealth", for hard assets. The accumulated "real wealth" of past American generations.

Really the entire financial system and all our present lives and the futures of our children are based on the frailties of the human condition. We live and spend in a World where reality does not exist simply because there is no "real money". We have never seen real money! Everything "real" has been confiscated from us ... Wall Street has been the epitome of careers that short circuit real work and real savings. Endless Fiat money supply has accommodated that process.

While professors have their limited visions, where they train all their lives in a specified subject we who are students do not. We are open to an unlimited mindset and unlimited vision if we allow that for ourselves. I myself never committed to any one career. When I started Delta Technology in San Francisco,CA I told my business partner then that this company was just a "stepping stone to getting out". All my life jobs have been nothing more than tools to achieve my vision of what my life should look like and that vision had nothing to do with cubicles and 401ks.

The sad truth to the death of "buy and hold" is that this is actually the definition of living in a fiat based economy ... of living in America. What part of life in America is "buy and hold" any more? You certainly cannot apply that strategy to saving money. Or buying real estate. Or your career. Or even choosing a mate. Nothing in the American psyche today is long term. So do not just apply "buy and hold" to just trading, do not limit that concept. Even the Chinese see no value to "buy and hold" in terms of holding a US Dollar. So FIAT has achieved the globalization of SHORT TERM! The Grand Masters of SHORT TERM reside at the US FED ... Congratulations ... GLOBAL DEBT IS KING!

The US education system is the most poorly suited for such globalization that I have ever seen. I believe the US education system has to be taken away from government and placed into the hands of the corporations who will be employing the end users of these degrees. Let the US corporations fund their own future workforce. They do in Germany and Japan ...

We in America need to de-centralize and we need a real monetary system ...

ELIMINATE THE US FED!
ELIMINATE US INCOME TAXES!

For UNG, read the DoE site and look at the numbers. I am also in the industry and work on shale plays as an engineer. For most companies that acquired acreage in the 2007-2008 timeframe they need 7-8$ NG prices to generate a 10% ROR. These prices have come back down, but the companies' assumptions, royalty interest and lease bonuses require these kinds of values for acreage. If you look at the inventory at 2 TCF and max inventory stated by DoE at 3.6 TCF with a build of 0.1TCF per week, we need 16 weeks to reach capacity. The first week of September is 16 weeks away from now. You typically do not see draws (where demand outstrips supply and inventories fall) until the late October to November time-frame. This is when you will see gas bottom. Plain and simple. You are currently seeing supply for NG peak just about now, but with a 20-30% year over year decline, it will not be seen until about October, for the simple fact that it takes the gas producers time to slow down, and even though rig counts have dropped by 50% or so in the NA gas market, the volumes from the wells drilled 6 months ago are just hitting the market about now. Typical time to market is between 3-6 months. So if you are investing in NG now, be aware of what reality is (although, reality in these markets is a figment of one's imagination). There will be a few spikes but the general trend for gas is to fall further an I predict a bottom in October-November.

Now for gold, are we seeing a mid cycle top right now, is it time to sell and wait? As for the miners such as GG, it looks as though if we break the trend at ~$37.50 or so, we could see a moonshot. Or will it fall back to about ~$30 range?

Take it EZ....

RE:>There will be a few spikes but the general trend for gas is to fall further an I predict a bottom in October-November.

Don't want to play this game anymore. The next spike will hopefully be the ticket out. It's gonna cost me though.

yes!

Our local library carries Steve Nison's book on Candlesticks. I will check it out.

Thank-you Ken.

Really, have we conditioned our elected to be dishonest? How do you explain Ron Paul?

kaimu - bingo!!! A REP/DEM vote IS a wasted vote! Everyone has televisions (brainwashing machines).

IF I were to be playing energy right now, I would play oil. With it being priced in $'s and a truly world market it should outperform NG. For a pure oil play I would pick Oxy. Safe North American production, low cost properties, tons of cash. What is not to like about that? Not much, also not exposed to the refining sector like the integrated co's.

EZM...

Don't forget, folks: SLW will follow the broad market down during the sell-off for which Bill is seriously preparing. I still think that SLV is a much better alternative now. I'll switch to SLW when pessimism will be permeating the markets and the price action will indicate the end of the sell-off. At THAT point SLW will have a better medium-term upside than SLV.

Anthony Steen said public "jealousy" was fuelling the furore and claimed that taxpayers have no right to see the details of individual MPs' claims.

Mr Steen made his comments in a BBC interview shortly after announcing that he would be standing down at the next election. His decision came after it emerged that he claimed £87,729 over four years to maintain his Devon country house. The payments included money to inspect some of the 500 trees surrounding the property and to guard his shrubs from rabbits.

But his attack embarrassed Conservative officials when he claimed that public outrage over MPs' expenses was unfair and misplaced. "I think I have behaved impeccably. I have done nothing criminal. And you know what it's about? Jealousy. I have got a very, very large house. Some people say it looks like Balmoral, but it's a merchant's house from the 19th century," he said. "We have a wretched Government here that has completely mucked up the system and caused the resignation of me and many others, because it was this Government that introduced the Freedom of Information Act and it is this Government that insisted on the things which caught me on the wrong foot."

This issue of expenses is reportedly Margaret Thatchers fault. Rather than increase MP's salaries at a time of fiscal conservatism the PM created a whole rafter of expenses that would be kept out of the public eye. Given Maggie Thatchers policy issues pertaining to home purchasing at the time, she gave the green light to MP's purchasing a second house. One can deride Mr snob here for using public money to look at his trees, but in a twisted logic he is right. If government had stayed clean and paid the salary commensurate with the job - it is crappy hours and stress and British MP's are not all wealthy elites - then there wouldn't be this stupidity. But for Mr snob to suggest that the FOI act is the fault - he obviously has his electorate's interests at heart.

David, I've been pondering the exact same thing the last couple of days and haven't pulled the trigger, yet. At least as far as selling SLW for now.
Take a look at the daily RSI 7 and the stochastic. Divergence.

You imply that silver will drop when the market drops. I don't know if that is valid. Both gold and silver could break out significantly counter to a broad decline in a final wave down of the general market. Fear could send people out of equities and into precious metals for safety on a selloff.

Papa I don't know if it's valid either but why would it be different than sell off we had last fall?

http://tiny.cc/OwQXj

Ok got this one.
You are using the 14 RSI but even that is diverging here.
Also using the 14 period slow stoch rather than full stoch.

alberio,
My comment on the USD was just to consider that it could have some influence on the "floor price" of NG, as all commodities priced in USD should be priced higher (approximately) in inverse proportion to the drop in the $USD. Considering the NYMEX pricing on NG relates only to North American, and not world conditions that may not be the case. Was that your point?

I think I was looking for something more positive for NG pricing than I was finding in my research. I had been doing OK taking small short positions with HND.TO, but faked myself out by switching to HNU.TO in anticipation of a counter-trend rally that never appeared. It was part of a hedge against short positions in the S&P 500, but oil would have been a much better hedge.

I don't think LNG will affect much short term, but could help slow price rises when domestic supply drops below demand. There is considerable consternation in the areas where new LNG facilities are being built:
http://www.cbc.ca/canada/new-brunswick/story/2009/...

Been trying all day to find a US$ asset to buy with my new-found C$ strength. Opening a half-position on MON. Time-frame: not a day trade. O.K. ... so what else is US eco good for besides Agriculture?

Yes F57, thanks for a helpful post and chart. Glad I held off buying UNG lately.

That website has a lot of seasonal pattern charts:

http://www.spectrumcommodities.com/education/commo...

"Considering the NYMEX pricing on NG relates only to North American, and not world conditions that may not be the case. Was that your point?"

Correct, something priced in USD only matters relative to something else, so US gas in a NA market won't matter unless you are a canuck..... and I'm allowed to say "canuck" because I am one :).

pfffft...

Cry me a river... crappy hours, stress...pffffft

I'll tell you about crappy hours and stress. Try going to medical school at a base cost of 200K, followed by indentured servitude for 5 to 7 years afterward making a pittance for 100+ hour weeks. Yes I know legislation says we are only allowed to work 80, but believe me, most places get around that cap without any concerns for the resident or the patients they treat after having been up for most of a 36 hour shift.

These guys can go F&^% themselves.

Agreed, I'm thinking more of a correction with the market until it reaches "a lower RSI" then to re buy. Last falls drop was so dramtic however that I remain nervous. (must be a bull market).

and in the time we've been talking about it, SLW has gone from
9.29 TO 9.44

I won't bet against Bill(anymore). If theres a storm a comin, I want my raincoat on before it dumps. Have a 5.3% gain on SLW and a 38% gain on a mini portion of AUY. Thinking of selling

deleted error on Jun $16 put

replaced loss with 3 Jun $15 calls @ .49

They are in effect covered calls for 2. One naked call.

If $13 Jun put is laid on me, so be it.

rinse and repeat until UNG does something. That could certainly be an income plan for 12 months, if no price spiking in worst case scenario in which to sell off.

I agree with the selection of OXY as an oil play. It's a solid company. Be aware Institutions make up 79.35% of the shareholders. You can also use it as a "tell" IMO.

Bill sometimes writes about dancing with the market. OXY movements are like a dance with which I have fortunately been in rhythm. (Wish all stocks were like that!) Over the past year, I profited from a couple of OXY trades as well as a number of option trades, mostly selling puts. It doesn't have to be a day trade, swing trades can work well also. It helps to recognize which way the "institutional" wind is blowing.

Disc: (Usually post over on skype with Si02 and others). No present OXY position; last Friday previously sold MAY 55 puts expired worthless and earlier this week took profits on AUG 40 puts previously sold.

Only other current oil position: Long SU. Have also sold JUN 35 calls vs position (when price spiked recently) as well as SEP 22.50 puts sold when price recently dropped. (Wouldn't go as far to say I am in rhythm with SU like OXY)

DOYDD.

Heading out to the airport after mkt close to catch a flight to Phoenix. Have a great Memorial Day weekend and a great weekend to those outside the U.S.

"Papa I don't know if it's valid either but why would it be different than sell off we had last fall?"

Me as well, last fall when the market tanked, so too did precious metals. So what's different this time?

I haven't felt like I do now since about a second ago...

Yep...plastic surgeons...sheet metal mechanics. The only difference is their medium heals itself. Now if we could get both professions to charge only when they actually fix something....

I know Mark (for example) has to actually build something that passes inspection to get paid.

Hmmm. Seems like May.

I just laid on a downside S&P 500 bet for June.

short 1 SPY June 90 Call at 2.44
long 1 SPY June 93 Calls at 1.21
long 7 SPY June 70 Puts at 0.16

This is a "revenue neutral" trade, as long as SPY stays below 90.
It makes me big money if SPY goes below 70.

My losses are limited to $300, if SPY goes > 930 by June 20th.
My gains are $700 for each point SPY goes below 70 by June 20th.
If the market tracks sideways, I lose (and gain) nothing.

So if we retest the 666 lows, my return would be more than $2100.

Better than an ultrashort - no decay.

Here's a truly International group for all the global Cara members.

http://tinyurl.com/cbnwp4 (Click on button)

Chanda Mama
From Playing for change.com

Have a great weekend!

Albeit the drop was pretty small, we closed lower on S&P for the 4th consecutive trading session. This is the first time we have closed lower for 4 days in a row since bouncing off of S&P 666.

Thanks, ezmoney, for the good info on NG. I do have one question, though. You wrote:

"You typically do not see draws (where demand outstrips supply and inventories fall) until the late October to November time-frame. This is when you will see gas bottom. Plain and simple."

What I see is that there were 4 NG price spikes over the last 10 years: in 2001, 2003, 2005, and 2008. Leading up to each spike, the NG spot price was increasing significantly between March and November without noticeable drops. So could it be that the seasonality of the NG price is superseded by an expectation of a supply crunch? Maybe we'll have another counter-seasonal increase in NG price this spring-summer?

ALOHA !!

CDR-Government Risk Index

Yet another indicator to follow in order to understand why and when the USDX plunges and gold rises ... naturally it all ties into CREDIT DEFAULT SWAPS(CDS). I guess literally CDS rules the World! I mean how much "insurance" can any one planet pay for? God only knows the counterparties behind these ...

What transparency?

Off of GATA (5/22/09).

READ ON:
From The King Report:

Bloomberg: The CDR Government Risk Index rose 9.43 percent today, meaning that government debt is perceived to be more risky, according to the Credit Derivatives Research.

The CDR Government Risk Index measures the cost of protecting bondholders against default. A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year. At the current value, it would cost $58,700 to protect $10 million dollars from default for five years.

The index is calculated as the average 5 year credit default swaps of France, Germany, Italy, Japan, Spain, the UK and the USA.

papadynamite, I am simply suggesting that SLV is very likely to outperform SLW during a broad market sell-off. If SLV rises during the sell-off, then SLW will rise less than SLV. Just look at today's closing prices: SLV up, SLW down.

I'll probably keep my modest position in CHK unless an NG bull market starts for no good reason. I'd be selling in that case.

alberio - Another thought possibly touching on the subject of NG availability is carbon sequestration? Any idea of whether or not this might change the quantity of NG supply in favor of lower prices?

The new energy policy may hold a piece of the puzzle we're overlooking?

With all this excess of NG, one might think the operating cost of NG electric power plants would improve.

Dr. Coda, define 'success'? In Italy the definition would be quite different don't you think. Q: what were the same traits for successful women? IQ probably not one of them. Sharkie, don't answer! Heading over the border now to soak up some Canadian hospitality ...celebrating saving an elderly client from foreclosure (just got the news) so I am feeling very grateful today.

"I don't know anyone who has a very good answer to that, and in fairness there are sooo many variables each of which is a mini black swan event."

alberio, what if I re-phrase my question as follows: when would production be noticeably below demand, with the accuracy of +-6 months? If the average lifetime of a gas well is 2 years, then isn't it true that in 2011 we will DEFINITELY have a supply crunch if no new wells are added until then? And if that is the case, then shouldn't NG have a price spike sooner than that?

I used to be a tool and die maker/machinist. At one point my wife had a melanoma (yikes!) and we knew a plastics guy that was reputed to be very good, which turned out to be an understatement. He also was a car nut and did a heck of a lot of charity work in the poorest places on earth and it was a blast to talk to him about how his work was a lot like working on machinery and sheet metal. He required a thickish type wallet.

BTW: Top plastics guys know top Oncologists and they can help a lot. Everyone was completely freaked out except the Oncologist. We are probably 20 years past that event but she still has her entire body checked every year. The spiral incision he made in her leg to make sure he got all of the margin is essentially invisible now.

Be proud Canadians. His name is Sherwood Smith and he was educated and trained in Canada. A well deserved giant super competent ego, he was a doctors doctor, they all used him or recommended him. I think he must now be retired. A great guy to chat with.

Well irrespective of all this blather about fundamentals (kidding, kidding!) I notice that price movement today on UNG signals accumulation. Massive volume, and very small price movement. That, plus, RSI is now at 30.

Candlesticker calls the recent 2-day pattern a "bullish doji star", which is a medium reliability reversal sign. We will see on Tuesday if we get a white candle up confirming the reversal - morning doji star, abandoned baby, etc.

That's 3 in favor. RSI, a medium reliability candlestick reversal, and a clear sign of accumulation.

http://www.candlesticker.com/Cs37.asp

FD: bought UNG @ 13.70

Sounds like a true role model; I hope I may look back on a life as purposeful.

And, by the way, what physicians do is not illegal. Im not sure these politicians can say the same. The courts will settle that one.

Have a great weekend everyone. I've gotta go hit the books.

Gold is at about Apr 08 level. All gold miner stocks are within 10% of their Apr 08 level, except AUY which is way behind (-40% or so), followed by ABX which is -20% or so???

ALOHA !!

In memory of Jeffrey Skilling former CEO of ENRON. Is he still in jail? What must he be thinking of all this SUPER FRAUD that makes ENRON look like Sponge Bob yet nobody goes to jail?

So the CEO of AIG steps down ... then this comes up ...

I have been wondering when all the litigation will start up in earnest. Surely America's vast lawyer glut will not disappoint me!

READ ON:
Within hours of Liddy’s announcement, AIG made the headlines yet again, as California insurance policy holders announced a suit against AIG, following a six month analysis of AIG’s financial records which allegedly show the company “raided” California insurance companies to gamble on high-risk, sub-prime market investments in effort to keep the financial side of the firm afloat.

The court action was filed by an insurance broker who purchased and sold over $15m of AIG life insurance.

“The complaint presents the most in-depth financial analysis of the impact of the hundreds of billions AIG lost in the high-risk derivatives market,” says Patrick DeBlase of Kiesel, Boucher & Larson, the co-lead counsel for the plaintiffs.

The suit claims AIG channeled funds from its California insurance companies into a lending program that put over $75bn of AIG insurance assets at risk, using the companies’ bonds and investments to speculate in high risk real estate mortgage securities.

“AIG lost the gamble and taxpayers have paid over $180bn,” the counsel for the plaintiffs said in a press release.END

Kiesel, Boucher & Larson ... are they public?

http://tinyurl.com/q6gb9k

"The governor's cutbacks could include ending the state's main welfare program for the poor, eliminating health coverage for about 1.5 million poor children, halting cash grants for about 77,000 college students, shortening the school year by seven days, laying off thousands of state workers and teachers, slashing money for state parks and releasing thousands of prisoners before their sentences are finished.

"I understand that these cuts are very painful and they affect real lives," Schwarzenegger said. "This is the harsh reality and the reality that we face. Sacramento is not Washington — we cannot print our own money. We can only spend what we have."

But the figures are probably misleading:

http://tinyurl.com/jag9w2

"The U.S. unemployment rate for April was 8.9 percent. California has had a higher jobless rate than the nation during this recession because of greater exposure to the housing bubble, economists say.

"Unemployment rates also dropped slightly in the Bay Area's three metropolitan regions in April.

"In the San Francisco metropolitan area, which includes San Mateo and Marin counties, the unemployment rate fell to 8.3 percent in April from 8.6 percent in March.

"Metropolitan San Francisco, which has one of the state's strongest labor markets, also added jobs in April.

"But elsewhere around the Bay Area, Friday's report offered mixed signals.

"In the Oakland metropolitan area, made up of Alameda and Contra Costa counties, the jobless rate fell to 10.1 percent in April from 10.3 percent in March. But the two counties lost payroll jobs, EDD said.

"Greater San Jose, which includes Santa Clara and San Benito counties, continued to have the Bay Area's weakest labor market, losing payroll jobs even as unemployment edged down to 10.9 percent in April from 11.1 percent in March, according to EDD."

I recently read in the Sacramento Bee where the junior colleges are given money to subsidize classes such as bowling to the tune of $4500 per student. There's a lot of pork in the California education system. I hope these kind of shenanigans are cut and not the meat and potatoes classes.

David - what if drilling supply doesn't come off as hard as you think because "better" wells are currently being drilled?, what if its a "cold summer" and air conditioning demand is low?, what if there are no hurricanes?, what if there are 10 hurricanes?
See the problem?
My suggestion for the moment is to see what happens with the march production figures to get a better handle first on the current state of production. As mentioned before the February data didn't tell us much. Also, the rig count was down again this week, I think it dropped 17 to 900 rigs approx.
I'll watch for the data and let you know.

http://ronsen.blogspot.com/2009/05/service-citimor...

Trading NGas is a bipolar experience. Four weeks ago we were looking for a 2-handle. Last week we were looking for a 5-handle. NGas can reverse on a dime and then it's pedal to the metal until it decides to change direction.

Keeping positions small is the only way I know to stabilize the mood swings.

CP- "come get me GS!" How come I have a mental image of you sitting on your front porch with a shotgun across your lap!?

Mark - "How come I have a mental image of you sitting on your front porch with a shotgun across your lap!?"

Because the way the dollar got a shellacking while equities slumped over this week, gold's looking like a "3" on the Budweiser scale. True, oil rose a bit more than gold but the one year oil chart says it all. I mean really!!! Low and behold, GS ran out of sugar? ;)

Shiva - Does ABX have a big financial problem? I recall something about 9 million ounces of gold hedged at a three handle...

http://www.reuters.com/article/companyNewsAndPR/id...

http://tinyurl.com/qymel4

kaimu can probably explain better than I could, I just stay away from ABX...

Economists got it wrong? These must be the GS economists "advising" our government.

Didn't he also say "We're in for a bad time."?

There's no such thing as ethics in business, I wonder who he means when he says "we"?

Now it suddenly dawns on me why I can't figure out what's going on in the market; there's a steady stream of manipulation going on using that 12.8 Trillion of taxpayer money...

http://www.youtube.com/watch?v=zhhkF3dqXR0

CP,
Thx. Read through the ABX call and didnt find anything alarming w.r.t hedge. Other link also didnt sound anything alarming. Maybe its the financing obligations thats keeping them down. Will do some more research in the weekend about AUY & ABX. I was kind of interested to see Rand Gold (GOLD) already above its last year highs, rest of the group somewhere near apr 08 highs & AUY/ABX lagging.

To all troops who fight and stand ready to protect us, thank you.

As i prepared for the long weekend, i noticed people running for the exits on financial stocks at 3:30ish, which was the 1 sector up most of the day, holding up the indices. As soon as financials began to drop around 3:30pm, the indices also went red. I think this short train that is servicing hb&b just announced "All Aboard on Track 3."

Sneaky on their part as many mom and pops were not watching the markets, which were flat most of the day on low holiday volume.

I suspect next week we will see more news on the new credit card law passed Friday by Obama, GM Bankruptcy status, and the realization the consumer and housing are still in deep trouble, even after all that has been done.

If you think the consumer/housing is recovering: A) try to sell your house not at depressed prices, or B) try to apply for a better job. Nuff said.

Then add the new wall st pay structure regulation/speculation moving fwd. hb&b will usually attack this move with a nice manufactured crash. If they can't earn gross bonuses, then they'll bail themselves out with bonuses again.

Attached is a chart on RIFIN. Disclosure i am positioned bearish on financials. Not meant as advice. just sharing my observations.

Market may try to backtest up to trendlines recently broken on many financial equities. But they are well overdue for a big pullback. banks future eps will be dismall with all the dilution of late. Any bank who has revenue from credit cards will see a big portion missing with the new law+credit adverse consumers.

timing this is the tricky part. enjoy your weekends.

RE:>Why Wall Street is deserting Treasuries and the dollar
1:56 PM, May 22, 2009
This week couldn't end fast enough for the Treasury bond market or the dollar, both of which were hammered again today as investors bailed out in thin pre-holiday trading.

Take the slow and steady rise in yields, add the 8th biggest economy ready to default, which is playing hardball with Washington for its own bailout, opening the door to the others (how many states in the US?) and you've got one half of the TOG coming into place.

Gold, the other half, doesn't feel like its there yet. Another few months for the USD, S&P, govt. bond market to really hit the skids...

We have not seen hide nor hair of gold intervention all during this current rise. This makes me suspicious. With miners and the POG extended like it is (gold's RSI is 79, GG is 85), having gone up 4 straight days, we are at 960 which is the point at which the last gold rally was beaten down by serious intervention. So resistance, a gold rally long in the tooth, overbought, spinning tops in gold and falling star doji in the miners, and only moderate volume in GLD - it's just begging to be hit by a Fed that is motivated to keep the lid on.

I guess I'm differentiating between paper gold as a trade, and physical gold as a store of value. When I look at paper gold, I am nervous about that. The big guys seem to do a good job working the market ebb and flow. I don't think they can or will fight against a strong primary trend, but when the trend gets a little tired, that's when they can strike cheaply, blowing through stops and causing a decline at minimal cost to themselves.

While fundamentally I think physical gold is a good store of wealth over the long haul, the paper gold market seems overextended and subject to too much manipulation for me to maintain a risk position in right now.

Just my two cents. And my book. I still have a little left, but the bulk of my position is sold off.

Update: The FDIC Friday voted to impose an emergency fee on member banks in order to replenish its insurance fund, Bloomberg reports.

Earlier:The failure of BankUnited FSB, a Florida thrift with $12.8 billion in assets and $8.6 billion deposits, is a stark reminder the crisis in the banking sector is far from over. But it's also a reminder that deposits at FDIC-insured banks are safe, up to the $250,000 limit.

"There's going to be more bank failures, there's no question about it," says Dave Kansas, a contributing editor at The Wall Street Journal. "The FDIC is going to have a lot more work to do this year."

A private equity team has agreed to buy BankUnited's banking operations, and retail branches were scheduled to be open normal hours on Friday. But BankUnited's failure will cost the FDIC's insurance fund $4.9 billion, a pretty big hit considering the fund stood at $19 billion at the end of 2008.

"Bank deposit insurance is the bedrock of the financial system," says Kansas. "I cannot envision a scenario where [the Federal government] does not permit the FDIC to be fully flush."

Indeed, the government has said the FDIC can borrow up to $100 billion from the Treasury and fees banks pay into the fund are likely to rise."

You think the banks will take that fund payment lying down? No, they'll be the conduit from the taxpayer to the FDIC. Another 100 billion off the printing press please!

ALOHA !!

These banks should be able to afford $5.6BIL since they got $308BIL from the US TRES so far!

Great Post & Link Les! I have been scratching my head about how the media marketing machine can forecast the bottom, when employment losses are far over the top horrendous. Just who is going to buy all this stuff and borrow all this money? Are the multi-trillion dollar government bank/auto/insurance bailouts and ever increasing taxpayer debt going to buy us out of the financial hole we are in? Things just never add up. Your post helped to clarify a great deal. Green shoots propaganda in the USSA is the emperor with no clothes!

This must be the Transparency Obama promised!

I'd say it's about time California had a reality check — it's not only lunch — there is no free anything. Some day the bill comes in the mail.

Yes!

I saw yesterday that "investors are buying bank stocks" — My first thought, IDIOTS! Who would buy after the old shareholders got dumped and bondholders are 100% OK?

Then I recalled Bill saying how fund managers are putting 401(k) dollars to work.

Any one in a 401(k) plan may be better off cashing out in whatever is the cheapest way.

I tell my kids, "Nobody cares about YOUR money, but YOU!

BRAVO!

A simple correlation chart (attached) shows GLD and SLV correlating well with bond yields since December. Silver correlates to gold quite well and gold has a reverse correlation to the USD$ (except for that tentative period from mid December to late February when the US$ & gold rose together). This is just a little morning research I did and thought others might be interested.

Also note how the GLD/SLV gap has narrowed.

If you remove the bonds but keep the 10 year note $TNX as a proxy for the bonds, then add TLT and SPY, it also makes for an interesting view.

Mark- there a few sources for rig count but the baker hughes is as good as it gets.

"Alberio- What do you make/think of the recent 38% move in UNG? Was the true value of crude $144 last July? I'm not trying to make a case hear."

No offence taken, I actually think it's a great question. That, ultimately, is what we are trying to do here isn't it? We are trying to trade price in order to make money and in my case I believe it helps to understand the fundamentals in order to help the decision process. So how do I explain the 38% move? I can't. Like I said before I can make something up but that doesn't really help. (like it was short term oversold etc., etc.).

Don't get me wrong, I too believe that these low prices are unsustainable in the long term and that at some point there will be a very big rally. My concern with the gas market at the moment is that storage is huge and there is a very real possibility that storage could reach capacity before we turn the corner on supply. So is the turn point now or at a $1/mcf??

I don't think this view is any different than Bill's view on PM's. Take a look at the traders report for today. Without putting words in his mouth, Bill has indicated that long term his thinks the price of gold is going much higher, however in todays report he indicated either selling or hedging some or all of his holdings. Is this inconsistent? I don't think so, I believe the message indicates short term risk in a long term market.

If we can figure out from the market exactly when the turn is, I'm all ears.

Full disclosure: I own as a principle/manager equity in a private shallow gas company. I have a vested personal interest in understanding how this is going to work and directly impacts my net worth/retirement. I can assure you I don't take this topic lightly or for granted.

It may come as a surprise that bullion prices advance in correlation with long bond yields.

One would presume that the previous correlation of the EURO/US to the gold price is now defunct, but other currency correlations may take the place of that, probably crosses of the Yen, or the Yen by itself. I was fully expecting various currencies to sell off, such as the pound the euro or the loonie, but some of these have shown some life, while the dollar declined. Higher long bond rates in the dollar should mean appreciation in the dollar, though that hasn't worked out yet.

As the next stage of deflation takes hold, the scope of depression will widen to encompass sovereign debt. This week we had the National Post and Bloomberg speculating on the downgrade of UK debt. Another unprecedented rise in the Yen may see long rates rise in Japanese bonds spectacularily. (the normal way it goes is that the currency collapses first, bit a reversal on that scheme here.)

US long bond rates have already had their rates rise according to the fall in prices, though not so much in Canada. Part of the reason why Canadian rates are lagging the US is the perception that the Canadian banking system is more sound, thus Canadian bonds are likely more dependable, so you have more U.S. buyers of Canadian bonds, keeping rates behind those of the U.S. Long bond rates in Russia had seen 13%, its likely that bonds in the U.S. and Canada will head in that direction. Long bonds in Britain during the depression obtained 12% during this phase.

None of the technicals for the gold charts are very revealing, only that some pressure should be taken off that market. Just the same the fundamentals are so overwhelmingly in favour of gold that technical indicators do not go far enough to chart the course, only the elliot wave have come up with a number with the gold price running into the thousands. But if there were no inflation, just a massive deflationary wave, then it should not appear strange that slow appreciation in the gold price is actually advancing smartly to challenge previous turning points in the long term chart.

Getting a good long term inflation adjusted chart for gold prices since the '70's may actually help with the technical points, there are some examples here:

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=6120...

http://www.321gold.com/editorials/hoye/hoye120705....

http://www.kitco.com/ind/Field/dec022008.html

A long term gold chart without adjusting for inflation or deflating the cpi over the long term may lead to a false impression. The more inflation there is, the higher those old highs will appear, and the further away gold will be from past highs. The more deflation there is, the closer gold prices will come to past highs if it only maintains its price level. (all theoretically speaking)

http://www.rickackerman.com/2009/05/golds-moon-sho...

Anyone got a handle on when the waves of corporate bankruptcies go tsunami? With half their normal income revenue, many companies must really be hitting a brick wall of debt...

CP, I think that's a really interesting question. I suppose it would depend on the cash on hand for the business, and the burn rate of the company. Interesting how "everyone is high tech" now - meaning, the company burn rate gives you months to date of expiration of the company.

LIke homeowners, they'll try to make mortgage payments out of everything on hand trying to gut it out until it becomes overwhelming. I think the homebuilders have done that. Build up a cash stockpile, and hope the cash lasts longer than the downturn.

I think how long the halving of revenues lasts depends on the businesses. I'd guess, the more durable the good, the longer the time to revenue recovery.

Auto sales during the Great Depression: sales went from 4M in 1929, to 2.5M in 1930 to 1M in 1932. It recovered back to 3.5M in 1936. A 6 year roundtrip. I suspect the car executives are re-reading depression stories for a glimpse of their future.

http://www.christonium.com/automotive/ItemID=12366...

Durability of product probably increases time to recovery. Autos recover much more slowly than, say, work clothing companies.

davefairtex - Good point on product durability, there seems to be an unhealthy trend of repeating shareholder dilutions setting in as well.

ALOHA !!

Thanks F6 ... Yes it is interesting to see how people view yields on long term/short term bonds and the money inter-connectivity.

Back in the early 1980s, as I recall, many people were flocking into money market accounts at banks to pick up the 12%+ interest rates, yet I doubt a single one had a clue why the rates were so high. Essentially the US TREASURY and the US FED had to convince the monied masses that it was better for them to hold US Dollars(fiat) than gold/silver. In order to do this Volcker raised Fed Funds to around 20% at the height of the mania. When there is more risk in the underlying entity, whether country or corporation, the yield must go up in order to compensate the "risk takers"(bondholders). Really what happened then was a combo of futures markets rules changes in concert with raising the Fed Funds rates extremely high. Both tactics worked to make the US Dollar look much more attractive than holding gold/silver. Short of total confiscation by the US TREASURY(like FDR in 1933)that was the best the US FED could come up with. I have always wondered what would have happened if that did not work? How high was Volcker prepared to go on the Fed Funds rate? 30%? 40%? How high could he go until he looked really desperate? I guess 20 was the magic number! We will never know ... What will the magic number be this time? Or will there be one?

Really historically modern money started out as a "warehouse receipt". The warehouse housed the value of the currency with some sort of commodity of known value. That is where the expression "store of value" comes from. For a good part of modern history that "store of value" was based on gold and silver. As evidenced by the US TREASURY DAILY REPORT the US Dollar is still a "warehouse receipt" only the warehouse the US Dollar has is full of DEBT and PROMISES(IOU). Our government trades "PROMISES" to pay, not only to foreigners who hold US Dollars but also to its own citizens held in the Social Security/Medicare Trust Fund. The US TREASURY has a claim to gold reserves, but will not disclose what those gold reserves are, even though that gold belongs to the American people. Are they actual gold bullion bars or are they "loan and swap receipts" or are they "deep storage" receipts? Probably a combination of all, but nobody really knows for sure. Unless we can do a third party audit(external)that question will remain unanswered for as long as the US TREASURY deems. They report amounts but then they report a lot of false info, just look at a what the GAO says about the US TREASURY'S accuracy and reliability and credibility every year. Amazes me how so much "faith and credit" can be amassed by the US GOVERNMENT year-to-year ...

Our GDP and our money is all DEBT based ... That has never been much of a historical foundation for long term stability.

So the battle continues, in layman's terms, and it all boils down to a monetary war between "false wealth" versus "real wealth"! Fiat versus Gold! DEBT vs MONEY!! Now where would that battle be if our government allowed all the US Banks(US FED members)to fail? The US government(US EMPIRE)needs to SPEND to stay viable and they knew that the cost to spend(Fed Funds rate)would have skyrocketed if JP MORGAN and GOLDMAN SACHS filed BK. Its the same as having the US government BK. Now you see why the banks employees run the US government. US Banks are the USA! Its all about their ability to retain power ... From their viewpoint CHANGE would be a disaster! For them ... and I agree, but then again, I am NOT them and I would never care to be. Its the whole "eye-of-the-needle" thing! I mean really ... what sort of self-image must one possess in order to be Barney Frank or Timmy Geithner or Benny on any given day? Is their mirror really that "sexy"? As I have said before, these guys do not spend their entire lives achieving power just to throw it away voluntarily! They are literally cashing in their power chips! This is the human condition at its worst ... and that is what our monetary system is based on.

The Clinton era slogan with a twist ... ITS THE MONEY STUPID!

http://tinyurl.com/q99q8m

May 23 (Bloomberg) -- The U.S. Treasury’s plan to regulate the over-the-counter derivatives market outlined by Secretary Timothy Geithner on May 13 contains recommendations similar to those made by Goldman Sachs Group Inc. , JPMorgan Chase & Co. , Credit Suisse Group AG and Barclays Plc three months earlier.

looks like India also wants to reduce gold import exposure and trying to re-circulate

http://timesofindia.indiatimes.com/Business/SBI-at...

Bravo KAIMU

You are right on-- the need for an audit at FT Knox is very important. I read Ron Paul's HR audit bill, which hopefully includes FT Knox, now has 170 sponsors. It currently seems the Banksters are willing to destroy our money or wealth in hope of saving their power. This audit is the first step to Honest Money. Promises made with IOU's is the weapon which they are using to destroy the wealth of our country. This needs to be stopped soon or we shall go over the cliff. Maybe its too late already. One can only hope.

Recently I was looking at US gold reserve stats and stated reserves of 261,475,950 troy ounces or 8,133 tonnes
has a current market value of $250.1 billion, not even enough to pay the interest on the debt for one year. If our current debt $11.5 trillion were to be backed by gold, it would need to be priced at $43,981 per oz.
History repeats itself as empires destroy their wealth in an effort to save themselves. Guess they don't realize that plan doesn't work.

f6 - "Equities have advanced, as have certain currencies vs. the $US, mostly since the rebound was in effect. This was essentially the bear market rally."

Well yes this has been true up until just recently, I'm trying to comprehend why the trend of higher US equities appears to have paused while the dollar's decline has accelerated. Perhaps the fear of stagflation has stymied the US equities rally. The TBT has really been a winning trade for the rally.

I don't quite get how a stronger yen would tend to stymie a US equities rally though.

Observing the FED's next move should prove interesting...

It seems to me the usefulness of money, real or fiat, is totally reliant on your C-word, Confidence.

I once attended a Meeting of the John Birch Society (back about 1962) at which the speaker's first question for discussion was, "How long can the US last with a currency we don't trust?"

After a long silence I spoke up saying I'd never had anyone turn down a dollar and saw no problem. That was then, this is now. I'm unsure just how a less than AAA rating on the US will affect us coming from from the same people who rated all kinds of crap AAA. People have short memories and the media is so pervasive that perhaps it would be tragic.

Then the immediate question is what will be the alternative? Will only gold be acceptable between nations? Within nations? Between individuals? If most people have no gold do we resort to arming ourselves to go to the grocery?

I have so little confidence in government announcements or media blather on the "value" of anything that I almost think we may end up swapping donuts and cabbages for a haircut or dental checkup. If I'm hungry I'll no the value of a loaf of bread.

A big decoupling between the Dollar and stocks occurred in the last three days. Stocks down were led by financials and big oil(XLE). The thing that tripped up oil was natural gas, since crude went up (at least USO did).

Certainly is interesting to see the rally gold out of season with the past five years.

Eddy Elfenbein of Crossing Wall Street posted an interesting chart of the market divided by gold:

http://www.crossingwallstreet.com/image808.png

A ratio less than 1.0 is currently holding (Chart was posted a couple days ago).

In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: "We are out of money."

C-SPAN host Steve Scully broke from a meek Washington press corps with probing questions for the new president.

http://www.drudgereport.com/flashocs.htm

Everyday people do amazing things that we should be inspired by...Whether it is the soccer coach that spends extra time with an athlete, a police office stopping by after duty to check on a child, fund-raising efforts to fight breast cancer, our brave men and women that volunteer to serve in the armed forces during a time of war...Life goes on. We may be on the verge of a economic collapse, but the human spirit will fight on, it always has, it always will.

Please join me on this Memorial Day weekend by donating to Purpleheart.org.

I'm sure you have all seen this many times but it will always be worth repeating... http://tinyurl.com/owle27

Mauldin’s letter tonight is particularly good. He spells out in clear language the big picture. Ends up saying that debt is piling up so fast around the world that the bond markets won’t be able to absorb the deficit spending. He suggests that interest rates will have to rise to sell all the debt over the next few years and the US$ will depreciate against all currencies that are not subject to similar monetization of debt as the dollar.

There’s only one currency I can think of that’s not subject to these pressures, because it has no debt behind it, and no counterparties: It’s gold – although he makes no mention of this.

Should we just get 100% into physical gold in the next down cycle, and then just wait for the end of the borrow&spend game?

Just sold mine, I'm reasonably sure the FEDs are going to hit it at market open. Not sure what to think of Obama's comment that he's out of money, unless that means the FED should print more... I don't suppose he qualified his statement further in regards to his administration's next course of action other than repeating his 5/14 Rio-Rancho comments: 'We can't keep on just borrowing from China'. Come to think of it, that's about when the equities rally ran out of steam:

http://www.koat.com/money/19463436/detail.html

Intel by the way, used to be very proud of their Rio-Rancho fab and I suppose still are, I didn't know they shuttered their 200mm line. Strange, will have to investigate. Here are some comments from an Intel employee in Rio-Rancho that provides a glimpse of what I've been imagining for the semiconductor industry:

http://tinyurl.com/dlyu9c

Rio-Rancho is more of a captive audience than any other US location, but I'm pretty sure the feeling has permeated throughout the industry.

Congressional budget office release graph showing projected differences in GDP without stimulus measures.

San Fran Fed releases graphs showing household deleveraging efforts. (remember the URL I linked to yesterday that suggested an uptick in credit consumption will be a real "green shoots" scenario)

Kaimu, Congressional Budget Office testimony PDF embedded at bottom of page.

http://www.businessinsider.com/heres-your-stimulus...

From another of BI's articles:

"Anyone looking for further validation that the economy is on the mend didn't find it in the April U.S. retail sales numbers out of the Commerce Department this morning. Sales fell 0.4% from the prior month, far exceeding the economist consensus expectation of 0.1%. This is the second month in a row of declining sales."

Shorting retail looks good. I don't want to be too aggressive with the industry as a whole, as you'd have giants like Wal Mart propping it up. What are some juicy brand label names that should not be on people's shopping list this year?

I read about Argentina. Not a pretty scene.

One observation: If you can "arrange" to pick up means of production for pennies on what it cost originally - or in this case, simply by force, its much easier to make a profit. Are those workers paying down the debts of the original factory owners who had to build the factory and buy the machinery?

NYUgrad,

I can't get streaming video. Just what did Macke say? (I have not watched Fast Money since Ratigan left.)

My last impression of his view was that the rules are gone, so don't hold anything overnight.

CP,

Stable is a real understatement! Wow! The one year chart, except for the momentary bobbing for apples last Halloween , you could land the space shuttle on it.

Agreed the weaker dollar will help those US companies with large foreign customer base, but since most Americans do not work at those places, the overall effect will not be beneficial.

I recently heard 2/3 of all new jobs are in the service sector. If you are a former assembly line worker or middle aged (kids, mortgage, etc) chances of medicine or Microsoft as your next job are slim.

A good friend and former fellow graphic artist has been in nurses training for over three years, but her engineer husband still has his job. They have only one son in college.

I think I need to find a richer class of friend — maybe I'd feel better.

ALOHA!!

WOW ... what a HUGE day it was, May 21st, for "marketable" TBill(short term) redemptions. A total of $114.9BIL was cashed out. Where did that cash go to on Thursday? All anyone knows is that it left the "safe haven" of US DEBT!

MARKETABLE? That means its not just the US GOVERNMENT trading IOUs with itself(Government Account Series are "non-marketable")and there is a "market" for this DEBT., which usually means either US citizens or foreigners and their governments and foreign central banks are the buyers and sellers.

Further the pittance that US Banks have so far paid back on TARP($7.6BIL)was blown out of the water on Thursday by the $8.533BIL USD they took. So really this idea that the US Banks are paying back the TARP is just pure BS. Now the total TARP funds paid to US Banks is at $317BIL USD. Any kind of idea that US Banks will ever pay the TARP funds back is a plain lie. The current efforts to do so are feeble at best, since the US Banks have paid back 2.4% so far ... Its all just PR! Plus ... where's the interest? Didn't our astute US TREASURY make them pay interest on that "loan"? Or how about this? The US Banks and AIG etc have taken $317BIL USD tax money so far so shouldn't that be treated as taxable income? Are they paying taxes on those BAILOUTS? What are they paying? Please don't tell me the US TREASURY was stupid enough to settle for toxic collateral!!! Or did the US TREASURY accept preferred shares in AIG? Common shares ... TIMMY?

We added another $21BIL USD to our National Debt on Thursday, May 21, 2009. Making total US PUBLIC DEBT(subject to limits) at $11.246TRIL USD.

SPEND ... SPEND ... SPEND!

Lets look at the SPEND RATE: 68.8

WOW ... for every $1USD in tax revenues the US GOVERNMENT took in on Thursday it spent $68.8USD!!! MAN ... that is huge. Total tax revenues(FTD)was $1.975BIL USD total outlays was $135,980BIL USD. That anomaly was due to the mass redemption in TBills of $114.9BIL USD, so lets "smooth that out" ... we'll use May 20th "short term redemption" numbers and the SPEND RATE drops to 10.91, which was 4.5 times higher than the peak of FDR's spending during the Great Depression(1937) and 5.32 times more than peak spending for WW2(1945) D-DAY and all. No matter how you slice it "receipts", tax revenues, fell off a cliff on May 21st, which has been the dominate trend since the start of FY2009. This matches my "real World" experience where it seems everyone I know is unemployed or about to be! In all my life I have never known this many people out of work. At my age 50+ I would expect to see unemployed friends and relatives numbers rise just due to age discrimination or plain old "age attrition". Does this square with the younger aged bloggers here? I don't know ...

So the two mystery line items OTHER and UNCLASSIFIED have risen to $1.708TRIL USD on May 21st, Thursday. That was a one day combined increase of almost $14BIL USD. God only knows where all that money goes to? TIMMY? Remember TARP only accounts for $317BIL USD of that total $1.708TRIL and almost $400BIL USD of that is listed as "UNCLASSIFIED"! TOP SECRET! How can that be possible that US TAXPAYER money is TOP SECRET? Add US GOLD RESERVES to that query ... So RON PAUL while you're trying to make the US FED more transparent and accountable why don't you add in the US TREASURY to your list? God knows the GAO has been on the US TREASURY'S ass about that for decades now! AHHHH-H-H!!

Okay ... hey its 2:15AM here in Hawaii. I have to go out and clean up a rat carcass off our dining room floor. Look what the cat drug in! Hey, its farm life ... WOW ... what an absolutely awesome starry night! I can see the Milky Way so clearly its as if I could reach up and grab it! Awesome ... the stars in the nights sky could care less what atrocities the US FED perpetuates ... Neither does the volcano ... That's what I love about living here is the BIG SKY keeps me in my place! Humans and all our great humanity are just tiny specs of nothingness in this Universe. In the eternal timeline we aren't even a pimple ...

Mahalo ...

http://www.ritholtz.com/blog/2009/05/the-1938-para...

Saw this today on PBS (I can't sleep-in being a 4AM trader... so I'm up early everyday).

We had a long thread last weekend about our methods of interrogation and how to gain information and fight terrorism, mainly Islamic Jihad, and the relative effectiveness of carrots and sticks.

I found this story, with unprecedented access, fascinating. I'm sorry you don't get video Grym, maybe check your local PBS schedule, it's well worth the time. I guarantee it will blow your mind.
http://www.pbs.org/now/shows/521/

Here's a synopsis from the author, Robert Lacey. Quite accurate I think.
Use a carrot where a carrot works. The remainder, like all broken sociopaths, remove them from society to protect society.

Week of 5.22.09
Rehab the Terrorists...With Love
By Robert Lacey

This article originally appeared in The Daily Beast

The 240 detainees who remain in Guantánamo Bay are the radioactive waste of the war on terror. Earlier this week, the problem of their safe disposal provoked the first serious congressional upset of the Obama presidency, and they were the central theme of the president's speech Thursday. Obama conceded that he cannot achieve his keynote ambition to close Guantánamo until he can resolve this dilemma.

So what is to be done with ex-terrorists? Can they ever be recycled safely? I take a look at the unusual answer that Saudi Arabia has been developing to the question: Treat the boys nice—and rather more than nice, if necessary. At the rehab facility I visited in Riyadh, I met bearded jihadis off the jet from Gitmo who'd been enticed to reform with the offer of a car, a job—and even a wife.

Sixty thousand riyals (some $18,000) is the going rate for an arranged marriage in Saudi Arabia these days. But once you have convinced your minders that you have genuinely turned over a new leaf, the Ministry of the Interior will pay for your new bride—and the deputy minister may even come to your wedding.

This policy makes perfect sense if, like certain psychiatrists, you think that jihadi violence is linked to the sexual frustrations of young men in a society that blocks sex before marriage. But it also stems from a peculiarly Saudi tradition of conciliation. The House of Saud built its Arabian empire on the basis of ruthless holy warfare—and on being very nice to those who surrendered. The present king, Abdullah, is the product of a marriage between his father, "Ibn Saud," and a widow from the Rasheed clan, the Al-Sauds' bitterest enemies.

"Of course we could build a Saudi Guantánamo," says one official who has helped shape the creative rehab strategy. "But we believe that being cruel would be counterproductive. It would alienate the inmates' families."

Enlisting the families is the key to the Saudis' "soft" policing policy. When the grisly DNA evidence of a suicide bomber reveals that the young man was Saudi, the ministry gets on the phone to his family before contacting the media.

"Once you have convinced your minders that you have genuinely turned over a new leaf, the Ministry of the Interior will pay for your new bride—and the deputy minister may even come to your wedding." "We give them our condolences. They have lost a family member—we have lost a citizen," says the official. "We show an interest in those mothers and fathers because they too are victims. And we know that if we don't take care of them, there are others who will."

This February, the Saudis issued a list of 85 extremists known to be operating outside the country, many of them south of the border in Yemen, but they say nine young men have since come back under pressure from their families.

"Yemen is our new Afghanistan," says one Saudi official. "But at least it is in the same cellphone calling area"—meaning that mom can call any time. In the West, most young people are delighted to be independent of their parents at 18. In Saudi Arabia, a man of 30 will obey instructions from his mother and father, particularly if the whole family is in agreement.

So does this interesting mixture of traditional culture and re-education offer any answers to Obama's Guantánamo problem? As many as 3,000 young extremists have now been through different versions of the Saudi rehab scheme, and estimates of their reoffending run from as low as 1 percent to 10 percent. This compares very favorably to the 68 percent reoffending rate of American male prisoners.

Defense Secretary Robert Gates' recent visit to Riyadh has prompted talk of the Saudis being entrusted with the custody and care of Guantánamo's Yemenis, the largest and most intractable group of inmates in Cuba, and the Riyadh rehab has become a routine stopping point for hopeful human-rights activists and media experts.

But the remorseful young men who are willing to appear in front of the Western cameras are not the whole story. While I was filming for PBS in one compound, I was told that the compound next door was occupied by less malleable Guantánamo graduates who declined to spend time with the media circus—and there is yet another group of truly hard-core jihadis who have refused to have anything at all to do with the rehab program. These are the men who were the backbone of al Qaeda. They do not want to change. They remain essentially at war with their own country, and they have been locked up indefinitely in SuperMax prisons, purpose-built to U.S. specifications.

"Niceness is only one answer, and it only works for young men who are willing and able to change. It does not apply to the 240 dangers to the world who remain in Guantánamo" The Saudi Ministry of the Interior makes no secret of these men's recalcitrance. Under the kingdom's Shariah laws, these detainees have the right to go to court at any time and can, in theory, secure their freedom if they can convince a panel of Saudi judges that they are not a menace to society. But they choose not to do so, which probably means that they are deeply violent and dangerous—the equivalent, in other words, of the 240 hard cases who are left in Guantánamo.

So let us celebrate the articulate young men you will see in my program Friday night—they are building new lives for themselves. Congratulate, if you wish, the Saudi government for making it possible. They have sought to learn the lessons of 9/11 and to change their cultural role, from being exporters of terrorism to becoming exporters of a creative solution.

But niceness is only one answer, and it only works for young men who are willing and able to change. It does not apply to the 240 dangers to the world who remain in Guantánamo. For them, America has no option but to apply the other Saudi solution—and Obama said as much Thursday—SuperMax.

Somewhat off topic. Apologies to those who have seen this demonstration before...

http://airamerica.com/blog/2009/may/22/chicago-rad...

All of us want our children to be safe, and yet how do we achieve this? That evil exists in the world goes without question, but where do we draw the line between the oppressed and the oppressors? I do not know.

Craig, next time you are out take a look at the constellation Cygnus, there is a bright yellow star which resolves into a double star, one yellow/orange and the other blue. An amazing site even at low powers, its name......"alberio" :).
Keeps me grounded.

Grym - "Agreed the weaker dollar will help those US companies with large foreign customer base, but since most Americans do not work at those places, the overall effect will not be beneficial."

Well that's not precisely how I feel, the economy as a whole should lift with a reversal of trade imbalance and potentially the coming yuan carry trade. A rising tide lifts all boats, perhaps some slightly more than others, but nun-the-less.

So if you want to hold a currency other than US dollars, there are other options. The Yuan (CNY) is rock steady but the Australian dollar ETF (FXA) provides a fixed return of 5.46% and the Australian dollar doesn't face the mountain of debt faced by the US dollar.

The WHOSX trade looks like it could've been a winner if the timing was right, maybe if the economy tanks from here it will return to it's recent glory.... I just don't know, Bill seems to think the economy will tank but I'm not convinced. I suspect the market is a bit overbought right now and due for a correction before resumption of any normalcy. These fluctuations are all result of a step response to the shock wave, full of difficult to interpret harmonics and constant governmental intervention. I think they're in over their head, is the USA too big to fail?

Empires don't fall overnight, they tend to fade away. Perhaps instead of inquiring why Rome was destroyed we should rather be surprised that it had subsisted for so long.

Les - Don't all bankrupt countries eventually have their debt forgiven? Why should the US not enjoy like benefit? It seems like the only one's who get screwed any more are the savers. Wow, the baby boomers lost 1/2 of their total life savings in a span of just over one year, stolen by HB&B. And the misery probably ain't over yet!!!

CP, don't feel cheated, the eye isn't sensitive enough to pick up color other than stars, planets moon etc. The Hubble shots are long exposure picks utilizing various filters. Yes they can be alterered, but otherwise we wouldn't be able to see them at all.

That GS stock price is sick.

I wish travis(?) would edit that infinite loop out of the script, it's murder when the page grows this long. Gotta look for that noscript plugin discussed last week but I don't like fueling bad habits, sometimes I think my incessant posting here is just that. I really need to back off.