Cara's Commentary & Community Chat, Mon., Mar. 30, 2009

just for the sake of posting first.

gold digging a trench at $928. lets hope its a spring board for $950.
miners looking strong today.

$USD on a tear for some reason though, EU still having some issues?

Submitted by 2nd_ave (1052 comments) on Mon, 03/30/2009 - 10:52 #19463 (Posted in reply to this comment (#19419))
David- It hit your buy limit @ 23 and bounced. You seem to in fact trade better while you sleep.

Well that was a freaking unexplainable massacre

I've heard some rumors that the reason banks are profitable this Q is the unwind of loosing trades at AIG. That is loosing for AIG and taxpayers and profitable for banks (we knew of course about GS part of the deal). Supposedly that process is not finished yet. If that is true, that would give more weight to the scenario #2 in my post above and confirmed the bear rally nature of this.
Anyone else heard that?

you mean from 786 to 789?

I think I earned a stripe as a day trader today, not on the SLW massacre but on the much more profitable GM longs. Totally automatic, like a machine.

Yes. Felt like a short squeeze for a minute.

My perspective is swing trade vs day trade so, I will sit tight on FAZ/TZA. Tempting to take profits though. But, I took profits too early on the way up (circa 780), and the previous slide in February, so gut feelings are worthless to me.

S&P 200 DMA is about 1015 and could be below 1000 by late this week or next week. I think that could act as a signal to analytical models of a lesser degree of risk being long in the market.

If you look at a chart of the 2002-2003 S&P bottom, the index had already bottomed by the time the 200 DMA average moved below 1000.

Passage of the Employee Free Choice Act, if not gridlocked, may tank the market. It looks like Bernanke may be followed by Summers in 2010. Today, the Fed is in control. We must keep our eyes on their moves.

And one more time..11:34

"Passage of the Employee Free Choice Act, if not gridlocked, may tank the market."

Agreed, American companies would much rather open themselves up to paying decent wages, retirement programs and healthcare benefits than relocate to third world countries where employees live in 30 story corporate dormitories (Samsung).

http://www.semiconductor.net/blog/270000427/post/1...

"Samsung is one of the major purchasers of electronics produced at the Lite-On Computer Technology production facility in Shijie Town, Dongguan Province, China (founded 1997).[8] By early 2008, the facility employed about 5000 people who enter the company by paying agencies based in Shijie town, Dongguan, 500-600 yuan (for men) or 200 yuan (for women). [9] While Lite-On production schedules follow a normal 8-hour workday, breaks consist of only 10 minutes twice a day and are unpaid – further, overtime work in the evenings, on weekends, and especially during busy seasons, is mandatory and can reach up to 100 hours a month, in violation of both Chinese Labor Law and the [EICC] standard. [10] Basic wages at Lite-On complied with Chinese minimum wage laws (690 yuan/month in 2007), but until mid-to-late 2007 when overtime began being paid at twice the standard weekend rate (8.24 yuan/hour) the company violated overtime wage laws by paying over 2 yuan less per hour. [10] A fire in the factory in February of 2008 has caused workers to be extremely concerned about their safety, and as of May 2008 production had not yet fully resumed at full capacity due to the damage the fire had caused. [10] Workers are charged up to one quarter of their wages on food, electricity, and water for eating and living in the factory dormitories, which house up to 16 people per room. [10] Research conducted by [SACOM] and [Bread for All] in early 2008 concluded that workers at Lite-On were unaware of their rights under either [EICC] standards or any of the codes of conduct of Lite-On’s customers, including Samsung.[10]"

http://www.sourcewatch.org/index.php?title=Samsung...

"Ritholtz on Wagoner's firing, very funny! - also asking why the bank CEO's are still there."

Simple - Because banks shovel vast amounts of taxpayer wealth to the political elite while GM struggles to meet their pension obligations and pay a couple million employees and contractors every two weeks.

I especially like how the timing is arranged so the American market is the last one allowed to react. This probably provides HB&B an ability to harvest even greater gains.

Nice going Shark!!

Rob.

Yeah, the bank CEO's are the definition of too big to fail. And we're still waiting for all the promised strings to be attached to the bank bailouts. Luckily we're not holding our breath. I'll bet we learn of another secret conduit for taxpayer money to travel to banks before we see any strings attached to the Congress approved bank bailout money.

I still think, even with all their problems that real manufacturers like the Auto companies are far more important than these banks. If there are no products to buy, who needs loans? Too bad the auto companies didn't read Atlas Shrugged and learn that influence and pull are much more important than any industry, even farming.

Rob.

Dr.

As you may already know I'm strictly a Toyota man.

Rob...Thanks for the congrats....It did feel good doing the right thing more or less.

I missed this one...

"Shell Ends Its Small Investment in Renewables

* corporations
* global warming

Source: The Guardian (UK), March 17, 2009

The oil company Shell, which recently launched a blog about climate change issues, announced that "it will no longer invest in renewable technologies such as wind, solar and hydro power because they are not economic." Instead, "it plans to invest more in biofuels which environmental groups blame for driving up food prices and deforestation." Shell will also work to develop "cleaner ways of using fossil fuels, such as carbon capture and sequestration (CCS) technology. It hoped to use CCS to reduce emissions from Shell's controversial and energy-intensive oil sands projects in northern Canada," reports the Guardian. Friends of the Earth commented that while "Shell is at least being a bit more honest about the fact they are a fossil fuel company," it is "backing the wrong horse when it comes to renewable energy -- biofuels often lead to more emissions than the petrol and diesel they replace." Columnist George Monbiot writes that he now understands why, during his recent interview with outgoing Shell CEO Jeroen van der Veer, "I asked the same question 15 times: 'What is the value of your annual investments in renewable energy?'" Eventually, van der Veer "admitted that he knew the figure, then flatly refused to reveal it," saying that it "is not the right message to give to the people."

Let's say you held onto your longs last Thursday and Friday. What would it take to shake your confidence? Maybe a 6% pullback? More? That's what it feels like.

I'd let loose of some longs as 666 approaches, then buy them again as 555 rolls by.

Rob -

Just look to Leyland for the results of a gov't run automotive conglomerate. Not good.

Question I have is that if Team Obama forces GM and Chrysler into bankruptcy, what will Mr. President's loyal UAW membership do? They're not going to sit back and say 'Gee, it was fair, really, to give AIG employees a massive bonus while shutting us down and taking our pension and healthcare after working the line our whole lives.' No. They're going to organize and seek answers. UAW is hardboiled.

Well, I wasn't awake to sell it when it bounced off $23, so trading while sleeping does have its deficiencies. :) But then, it gives me the lifestyle I want and also helps me eliminate my emotions from trading (e.g., my fear arising when I see the market go down).

I also just sold at $3.65 1000 shares of SWC I purchased a few weeks ago at the average cost of $3.51. I am still worried about SWC losing a customer for their palladium sales if GM or Chrysler were to fail.

UCO down 15%. Anyone with UCO straddles can get out at a profit. Keep or ditch the calls, your choice. http://straddles.nexalogic.com

More about GS shadiness...as if the taxpayer funded AIG conduit used to pay off Goldman wasn't enough (not to mention the fact that our prior Treasury Secretary headed GS and was one of the main people requesting relaxing leverage requirements), we get this info:

http://dealbook.blogs.nytimes.com/2009/03/27/goldm...

Of particular note:
"One bonus that may draw some attention was $273,718 that Goldman paid to Edward M. Liddy, the embattled chief executive of the American Insurance Group. Mr. Liddy, the former chief of AllState, served on Goldman’s board, but he resigned in September, after he was named the chief executive of the insurance giant. The other directors at Goldman were paid their fees in stock, according to the proxy." The AIG-Bank Taxpayer Conduit plot thickens...

Great shiva.

UCO is now at another sweet spot at 8.25, right in the middle of the 7.50 and 9 strikes, $0.45 for the calls and $0.45 for the puts.

Mark- Didn't you say something about being an EMT once? So they shut down the King Street ramp to 280 for a tanker-trailer explosion yesterday afternoon:

http://tinyurl.com/daonow

"The explosion - a fireball at least five stories tall - will be part of an NBC pilot of "Trauma," a show about the lives of a team of San Francisco-based emergency medical technicians, described as an edgier "ER."

Overburn by a Coal Industry Front Group
Thu, 03/26/2009 - 3:51am

In 2008 the American Coalition for Clean Coal Electricity, a coal industry lobby group, spent $9.9 million on federal lobbying as well as $38 million on advertising promoting "clean coal." The president of the coalition, Steven L. Miller, said "we’re fighting for our livelihood." Coral Davenport reports that the coalition "won't try to block a climate bill -- it's inevitable, Miller says -- but will try to influence how it's structured, chiefly by delaying emission limits until clean coal is a commercial reality -- if it ever is." The coalition also hired Quinn Gillespie & Associates. "We are ramping up even more beyond the effort we had last year," Miller said. However, some lobbying insiders doubt that the scale of the campaign is warranted. "You can only influence and pressure people so much. If you're spending that kind of money, you’re not getting your money’s worth," an anonymous insider said.

http://www.frontgroups.org/

Thank you for the example Si02.

I didn't realise that the option premium could rise so handsomely against the competing straddle option. I was under the impression they'd rise and drop in unison, negating profitability. I look forward to giving it a go.

cheers

Le.s

Yep...Damn, I can't believe they let them do that. Pretty dangerous for other drivers if they saw that.

http://tinyurl.com/ca558m

"President Barack Obama said General Motors Corp. and Chrysler LLC must survive without becoming “wards of the state” and the companies have one last, limited chance to “fundamentally restructure.”

After his administration forced GM Chief Executive Officer Rick Wagoner to resign and pressed Chrysler to form a partnership with Italy’s Fiat SpA to get more taxpayer aid, Obama today said that company creditors, shareholders, workers, dealers and suppliers will be expected to make more sacrifices.

“We cannot and must not, and we will not let our auto industry simply vanish,” the president said at the White House, announcing new and final deadlines for the No. 1 and No. 3 U.S. automakers to remake themselves. “We cannot continue to excuse poor decisions. We cannot make the survival of our auto industry dependent on an unending flow of taxpayer dollars.”

"Obama addressed industry workers, a crucial constituency, saying that while there may be more pain to come, “I will fight for you. You are the reason I am here today.”

He said he’s appointing Edward Montgomery, a former deputy Labor Department secretary “to cut through red tape and ensure that the full resources of our federal government are leveraged to assist the workers, communities, and regions that rely on our auto industry.”

wabrew, which option are you referring to? 7.50 right now is .40 .50, 9 is .45 .55.

"You do realize Hillary Clinton is Secretary of State right? Or maybe you're just intimidated by a female in a position of authority..."

Ha, ha, ha.... My point is government policy (or lack thereof) caused GM's near bankruptcy condition, and now government is rushing to show them what they've been doing wrong (Ok, maybe not rushing). Let's see, wasn't it government who offered a huge tax break if you bought a 9000lb GVW vehicle just a few years ago?

Automobile manufacturers are victims of sloppy governmental policy just as you and I are, because the rules change at the drop of a hat. One moment you own a huge position in SKF then the next moment the SEC institutes a no-short rule.

So you figure it out and get back to me about whether I'm so shallow as to be intimidated by women.

Yes - I thought you bought options - the offer is 50 + 55 for total of 1.05

How you going to buy them at 90 when they are offered at 1.05?

CP - Yes.
SATSQ

Otherwise, what does your repeated refrain about our SoS have to do with policies that were passed when Bush was President?
And I believe CAFE standards are phased in over a decade or so. I'm really not getting your assessment here.

Glad I didn't put in that "stink" bid for 5.20 earlier when it was battling 5.25
Looking to pick it up but as you say, the screws are being turned by people with a lot more $$ and info than me.

China as capitalism's savior?
Mao Tse-tung, 1957 - Only socialism can save China
Deng Xiaopeng, c. 1979 - Only capitalism can save China
Post Berlin Wall - Only China can save socialism
Current day, 2009 - Only China can save capitalism

Taken from http://humblestudentofthemarkets.blogspot.com/2009... humblestudentofthemarkets March 30th, 2009

Have fun. See the humor.
NB

I don't know, it seems we could close at low today.

Food for thoughts: If someone is holding FAS underwater by the end of today (and intend to hold), how about kick it at close and replace it with XLF of 3 times the dollar amount (corrected)? This way, if FAS doesn't come back immediately in the next two days we don't have to pay for volatility decay.

babybear- That's a good idea.

...

Nice trade, Mark! You caught it right at the bottom!

Maybe Obama is just growing into his job. If the big banks and auto companies need US to bail them out, then maybe the bozos who got them into this fix should be gone !

If Obama's job includes having to take charge of Government Motors, shouldn't he insist upon new management, which hasn't lost $80B?

http://ronsen.blogspot.com/2009/03/sub-rosa-garden...

Nuthin changed. The 26 week EMA's are still in downtrends for Naz,DJIA, and SPX. Nice 3 week counter rally but the LT picture is the same for now. My guess is a retest of the recent lows that will fail but will establish THE low for the next 12-18 months.

FD: very long FAZ, some FXP and some DUG. And some long boat anchors.

1000 at 1.98 caught a my bid

"If Obama's job includes having to take charge of Government Motors, shouldn't he insist upon new management, which hasn't lost $80B?"

GM = Lada?

At least there will be a lot more offices near you to bring in your car for warranty service.

Jock -

"If Obama's job includes having to take charge of Government Motors, shouldn't he insist upon new management, which hasn't lost $80B?"

See Leyland. Gov't management is not the same as allowing bankruptcy and, lest you forget, gov't has lost 'We the People' trillions of dollars in mismanaged excess and is now printing money to pay debt. President Obama embodies this excess. Gov't is inefficient to the extreme while bankruptcy solves it. Full stop.

The bigger point, however, is that President Obama is not willing to REPLACE the financial oligarchs [they're part of his Administration!] like he has with the weak-handed CEO of GM and therefore the UAW, his party's loyal union vote bloc, will beg the question why a HB&B employee is worth retaining with a massive (truly massive) taxpayer-sponsored bonus but the dedicated automotive working stiff is kicked to the curb with a food stamp and some gov't cheese?

I don't have too much sympathy for the UAW but they are a hardboiled group that knows a thing or two about organized protests and this administrations' now obvious double standard against a loyal voting bloc is a powder keg. A lot will depend on the MSM treatment of the UAW. We shall see soon enough.

FAZ to $70 may be unlikely, due to depreciation(a.k.a stealing by Drexion).

Disclosure: Long FAS

GTU current premium to net asset value 22%

Something to keep in mind....A roundtrip purchase/sale of physical gold from the coin dealer costs 10-12% in commissions.

Buying CEF/GTU also includes storage and an offshore location for storage, plus instant liquidity via daily market operations. They provide gold investors an alternative to holding physical gold at home or bank lock box storage. I think the higher premiums are just reflective of current investor demand for what they offer as an alternative to GLD, in which gold holdings are questionable.

When the stormtroopers come to your house seeking guns and gold, they won't get your holdings in CEF or GTU. Metal dectors read down to 6ft below the surface of the ground. Diversification offers somme protection.

"When the stormtroopers come to your house seeking guns and gold, they won't get your holdings in CEF or GTU. Metal dectors read down to 6ft below the surface of the ground. Diversification offers somme protection."

What happens if they use IRS to declare offshore positions, they already might be tagging all these electronic transactions.... Nowadays Citibank issues me a 1099 INT (for a tiny sum) for an offshore bank account opened many years back, they never used to do this before.

1st useful application of "tweets" that I've seen. But even THEY don't just want to hear how well you did on your last daytrade of "C" though (as I don't).

They ask that people "tweet" substantive ideas and information that might be of use to others.

You can put tickers into a "portfolio" and follow all commentary on those stocks. You can decide to follow certain "tweeters" who have insights which you like. Quite cool.

2nd Avenue, We are seeing a action from the TARP banks now too:

The first of our Fannie Mae Freddie Mac lenders are rolling out the new 105% refinance for folks whose home is underwater with a mortgage higher than the house value. This program has a short window and only applies to people with Fannie/Freddie loans. Unfortunately, many owners in places like Arizona and Nevada whose values have dropped more than 20-30% won't be able to take advantage of this program unless they can bring funds in to close. Fortunately, the values in our area have not dropped below about 5% and in many cases they have held value since folks originally financed, so the program should work for many people. If you have a loan without Mortgage Insurance now (would have been 80% or an 80/20% combo then the good news is you won't have Mortgage Insurance now even though your new refinanced loan to value may be over 80%. Rates and price hits relating to risk factors to follow. Meanwhile, contact your local broker if you think you might qualify. The Debt to Income limits are pretty strict: we are told 33% to expect housing expense ratio (including PMI and regular monthly accounts).

if SPX goes to 660, i see FAZ going to 70 or so. If it bounces back up from 740 level, maybe FAZ would end in 35 to 40, i think. Volatility of the drop counts more than an orderly decrease.

Dave, you weren't supposed to TELLLLL!!!!!!

David
BAI87 is long on FAZ. He may be holding for week or longer
I brought FAs only to keep until tomorrow and have stop at 4.75 in cast it goes down
I also traded FAZ three times today. And my intention was to make between 10cent to 30 cent per share and with very tight STOP
So, there are different style of trading here between me and BSI87 in FAS and FAZ
This is my view

The evidence just keeps on building in front of blind regulators...

Stunning new evidence of manipulation in silver and gold has just been published by the Office of the Comptroller of the Currency (OCC), a bureau of the U.S. Treasury Department. The OCC, first established in 1863, charters, regulates and supervises all national banks. Their new data proves the manipulation in unambiguous terms. The report also confirms how the U.S. Government, in partnership with JPMorgan Chase, intentionally cheated silver investors worldwide of many billions of dollars during the fourth quarter of 2008, and longer. This was all outside the futures market I normally write about. It was a scam of historic proportions.

According to the OCC’s latest data release, U.S. banks, led by JPMorgan Chase, caused to be liquidated, under intentional duress, more than $20 billion of gold and as much as $9.5 billion of silver in Over The Counter (OTC) derivatives transactions during the fourth quarter of 2008. These derivatives are highly leveraged transactions mostly held by hedge funds and other large investors on the long side and big banks on the short side. While the OCC declares it is responsible for regulating U.S. banks, there is no regulation of these OTC derivatives by anyone. All the OCC does is compile the statistics. This was the largest amount of gold and silver derivatives ever liquidated in a single quarter in history. In the case of silver, more than 50% of all the OTC silver derivatives held by U.S. banks were liquidated in the fourth quarter. I doubt we will see such a large liquidation ever again.

That the U.S. Government has aided and abetted JPMorgan in this illegal endeavor you should find as repugnant as I do. U.S. Government agencies, like the Treasury Department and the CFTC are the ones publishing these data. The Treasury Department and the Federal Reserve arranged the JPMorgan/Bear Stearns takeover. How could they not be aware of and have sanctioned this historic silver liquidation? It is sickening. Officials should and must go to jail over this.

http://tinyurl.com/cembgj

"The evidence just keeps on building in front of blind regulators..."

They're deaf and dumb as well. They don't get it, the same way a millionaire doesn't get that he needs to pay his paperboy, his pool man, or his gardener.

for a 4.5% gain. Not trading advice, just pointing out the opportunity.

David- Based on my observations, both bsi87 and Vinod are successful traders. Is it possible for two successful traders to take opposite sides of a trade at a single point in time with successful outcomes for both? Yes.

Where's the YouTube video?

I find MS's and GS's current 1 year chart to be eerily similar to that of the Dow's chart during the 1929-1930 period. In October 1929 there was a substantial drop in the index, a quick spike up, and then a drop down to intermediate term lows in November 1929. The index then gradually rallied to touch it's 200 DMA in mid April, which failed, and then again in late May, which failed miserably.

DOW:
http://finance.yahoo.com/echarts?s=^DJI#chart6:symbol=^dji;range=19281001,19310101;indicator=sma(50,200)+volume+rsi(7)+stochasticslow;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

MS and GS both dropped down hard in October 2008, spiked up quickly, then bottomed out on an intermediate basis in November 2008. Both stocks have since rallied to their 200 DMA only to fail...it's presumable that they will bottom here soon, then rally to their 200 DMA only to fail again, should their charts mirror the same movement in 1929.

What does this say? I would only use it as a suggestion that the 200 DMA is a very strong point of resistance and that these stocks are not nearly as strong as the media and stock pumpers would like you to believe.

I am biased because I own puts in GS. But my reasons are as follows:
(1) aforementioned technical resistance at 200 DMA
(2) investigation by cuomo into the AIG counterparty payments and potential political backlash this could cause
(3) the fact that the earnings power of these banks is going to be far lower than in the past because of:
(a) lower leverage
(b) little M&A activity
(c) less counterparty "swindling" (a la AIG) going forward

http://tinyurl.com/54qccl

Badly timed diary entry, but I don't think today's action negates his comments.

http://tinyurl.com/cc9d2e

(after opening down 0.4%)

Mackinaw - You make a good point, so I'm curious... I think equities are moving in response to the USD, do you think USD is moving in response to equities?

What would balance the tyranny of the people? Tyranny can happen as easily at the hands of a mob calling themselves a majority, just look at NAZI Germany.

Internet voting for Representatives and instant polling to inform them would/could preserve our Constitution, speed the process and serve the people at the same time.

We should do anything that diminishes corporate/political input and increases input and involvement by the people, but we should be mindful that sometimes the people are stupid. Example: "Unelected activist judges". Duh. Read the Constitution, that's the point! To put the judiciary ABOVE the *temporary* whims of the people in order to preserve the Constitution and protect ALL the people, including the smallest minority. Yet some people actually use this argument! So, sometimes the people are wrong.

After all, who let this go one for so long? Yep, the stupid people.

2nd- Saw that, thanks. FAS average @ 5.18. Last 25% on the houses' money. My take is a 10% drop from the recent high, say S&P 740, in a two step back, one forward fashion. I'm looking to take profits in the 4-5% range, unless volume picks up.

The obvious question is..."Then why not just play the short side?". To which I have no credible answer. Maybe just my nature.

http://seekingalpha.com/article/121121-ten-reasons...

Your assessment of the auto companies is one thing - that's up to you how you read what's going on there.
What I objected to was your repeated side comment about our SoS picking out fabrics - or some other bullshit like that.
What value did that add to your "analysis"? Does Hillary play any role in this?
No.
I think you're just a little man who looks for any way to debase a powerful woman. Period.

Thanks for your enlightened observations Corner Stone but you are incorrect, that was not my intent. Let me be clear, the fact that our secretary of state is a woman hadn't actually entered my mind, I'm not so twisted as to conjure up such notion and I think you'd be hard pressed to find examples of such. I do find your belligerent tone offensive and take exception with the accusation. If I bother you so much I suggest you place me on ignore.

During the March rally the VIX hardly budged, usually we would expect to see fear abate and the VIX to fall. Bulk of VIX decline came on one day -- the day the rally started March 10. VIX needs to drop below 40 from its current 45 in order for the bear market rally to continue.
This VIX measures fear in the market by looking at the premiums paid in the options market. The higher the price investors are willing to pay for protective options, the more fear there is.

David- Looking at the futures, you seem to have made the better play on ERX. Hopping my swing into FAS can catch up.

BTW, I take my family to Tahoe a couple of times a year. For skiing, we like to stay at the Marriott Residences. Tram basically takes you from door to slope. I have young kids also, and this really makes it easy.

CP- So do I. I used to go there when I was at UCSB. I'm working on a e-mail for you. Keep an eye out. It will start with barry...

Wakadimashita, arrigato.

i love that ridge run in heavenly overlooking tahoe lake. Always refreshing....

VB- Hope you can make it back home again, to Gods country. I wouldn't wait much longer though. Like the Nevada side better also, and the short walk to Harvey's.

Mark - Nothing yet, will check again tomorrow. tks.

CP - thanks for this information. This means its going to be pretty volatile next three days...

yeamonfuego - "One could make the argument that we still have this in the cards...a final whoosh down...based on the above and the valuation of the market assuming base level earnings, which will no longer be goosed the way they used to be with leverage."

Don't forget to account for overshoot on the downside. Obama might put us there quickly in order to avoid the pain of a prolonged negative slope?

shiva - "This means its going to be pretty volatile next three days..."

Yes, maybe like watching a tennis match. But the trend could be down, I'm hoping it doesn't exceed my lower threshold limit.

wfc chopped their dividend...oh yeah, and they bought Wachovia, the most poorly run big bank out there. and they have huge exposure to the west coast.

Thank you to whoever provided the analyst run down of GLD.

Inside that article was the following link:

"NEW YORK, June 12 (Reuters) - Morgan Stanley (MS.N) will pay $4.4 million to settle a class-action lawsuit with brokerage clients who bought precious metals and paid storage fees, according to a court filing.

The proposed settlement, which must be approved by the federal court in Manhattan, includes a cash component of $1.5 million and economic and remedial benefits valued at about $2.9 million, according to a court filing on Monday.

The suit, filed in August 2005, alleged that Morgan Stanley told clients it was selling them precious metals that they would own in full and that the company would store.

But Morgan Stanley either made no investment specifically on behalf of those clients, or it made entirely different investments of lesser value and security, according to the complaint.

"While we deny the allegations, we settled the case to avoid the cost and distraction of continued litigation," Morgan Stanley said in a statement."

http://tinyurl.com/djvz8j

Guilty until proven innocent - that's how the French justice system works.

ALOHA !!

To all the wild rumors ... "No ... and NO!"

I will be boarding the American Eagle(made in Brazil)island hopper plane later today to head back to HAWAII ... First stop Miami, then LA then Honolulu some 14 hours later! We will decompress in Honolulu for a few more days over at the Ilikai in Waikiki before returning to Hilo!

I have to say that Bill Cara put on a great conference and I was lucky to be there filling in the real money sector! Bill presented some impeccible Chinese connections(M Wong & Hutchinson Whampoa)with some REAL WORLD ground reports from the Hong Kong/Maccau region. You constantly are barraged about CHINA MYTHS and in many cases it is hard or impossible to discern the truth due to "agendas"! Some "eye-opening" reports to be sure that confirm my belief that you need to own something that CHINA wants ...

CTAB will be a success ... In a World of financial fraud and snake oil CTAB is a breathe of fresh air, an oasis of accountability and virtue and hopefully a lauching pad for true social equity and free markets. The "little guy" needs a voice ...

As to the Caraistas I met ... You never know what to expect from conferences, especially internet based ones! My first thoughts were that perhaps I'd show up to the "meeting room" the first day and open the doors and there would be "Chris Hanson" the guy from the internet predators TV show with Bahamaian Police and riding crops and machine guns and a TV crew! Or that the group would be sporting their THUG NATION tats! Or it would be the opposite extreme where they all had Armani suits and their valets serving tea and crumpets as the Hilton parking lot is stuffed full of limos and Ferraris! As it turned out none of the extremes turned up and I did not see "Chris Hanson" at all! Instead everyone I met were really great people! Everyone was there to learn and enjoy the Bahamas experience and have a good time. Bill certainly came through with the good time part(most memorable was the Junkanoo group at the Atlantis), but the really "good times" were meeting the many faceted Caraistas from all over the World. All hard working types ... taxpayers ... looking to improve their lot in life through trading the markets and real money!

Thank you again Bill and all those like Jim Watt and all the others for their logistical efforts ...

I look forward to CTAB 2010 in Freeport!!

"some REAL WORLD ground reports from the Hong Kong/Maccau region"

Great teaser, hope you (and the others) find some time when you have rested up to post a summery of what you found interesting for us less fortune Carista's who stayed home

Good morning.

GOOG - Upgraded to Buy @ Merriman Curhan Ford

teamonfuego,
There is a report from occ.gov stating that GS is leveraged 1000:1 (page 25, table 12): http://www.occ.gov/ftp/release/2009-34a.pdf
That exposure should wipe them out in a volatile markets. However, they somehow seem to hold all winning trades (like AIG). How is it possible without inside information? Maybe Paulson could answer that?
I've heard that the AIG contracts unwind is only half done. Thus, I would be scared to short them. You have balls and will be rewarded at some point.

BTW, I added these facts to GS' wiki page: http://en.wikipedia.org/wiki/Goldman_Sachs#Critici...
Anyone with any literary skills is welcome to improve the wording in that GS article (or AIG or Paulson).

Craig,

It looks to me as if your first point…

"Tyranny can happen as easily at the hands of a mob calling themselves a majority, just look at NAZI Germany."

…illustrates the danger in your second point…

"Internet voting for Representatives and instant polling to inform them would/could preserve our Constitution, speed the process and serve the people at the same time."

Properly followed the Constitution prevents such immediate action. Picture the events which could have followed 9/11 if we'd simply taken an internet poll.

Just as the Roman crowd — many if not most would have turned thumbs down.

"Nuke the whole damned Middle East! Turn their sandbox into glass!"
"The only good Muslim is a dead Muslim!"
"They want war? We'll show them war!"

And your third point (with which I totally agree) says it all…

"We should do anything that diminishes corporate/political input and increases input and involvement by the people, but we should be mindful that sometimes the people are stupid. Example: "Unelected activist judges". Duh. Read the Constitution, that's the point! To put the judiciary ABOVE the *temporary* whims of the people in order to preserve the Constitution and protect ALL the people, including the smallest minority. Yet some people actually use this argument! So, sometimes the people are wrong."

IMO, our problems come mostly from NOT following the original intent and structure of our governmental limits.

Our current financial mess is not so much a result of deregulation as it is from restructuring (for personal gain) the regulations to favor the biggest businesses, the biggest banks and the biggest, greediest among us. It comes NOT from a lack of bipartisanship (the 2-party system calls for a "loyal opposition" to guard against oligarchy) but it comes from a long term joint venture of Democrats, Republicans. lobbyists and tycoons who have taken control of international trade, money and thereby — immense power.

This is very similar to how the Nazis took over. With the death of Hindenburg, Hitler took the reigns and ignored due process (Obama is doing a similar thing today.) All that's missing (so far) is to involve our top level military. We are "employing" a large number of young people who otherwise would add greatly to our jobless.

As soon as you find your glasses be sure to post the pics of the weekend's activities. And hey, at least all you lost are your glasses. Usually after a 3-day blowout my glasses are gone, my wallet is missing and I'm wearing skimpy underwear not my own:)

haha that was funny shark.

Hey, what did everyone decide about faz / fas?

AMZN - target raised at ThinkEquity to $85. Kindle will help margins and earnings, though not boost the top line as much. Buy rating.

INTC - estimates, target raised at Morgan Stanley through 2010. Upstream data points are largely positive across the industry. Equal-weight rating and new $14 price target.

RIMM - numbers reduced at UBS to $52. Estimates also lowered through 2010, because of lower expected replacement demand. Neutral rating.

GM @2.39 bounced off the low.

out @2.52

What I think would make more sense is for the market to crash until they suspend mark-to-market than take off. But that may be too obvious so maybe we could drift until the announcement and then crash for a couple of days to scare everyone into thinking suspending mark-to-market won't help the banks and then when everyone jumps off the huge rally will start.

Rob.

Mark- I took a minor loss also. Will look for re-entry.

http://tinyurl.com/cwmq4u

McHugh was right. The problem with the "solution" to this mess is that none of the interventions support the American household. For the (taxpayer) money that will ultimately be spent, our government could have refunded several years of taxes to ALL taxpaying CITIZENS- even with stipulations that a certain percentage go toward debt. Instead, the money goes to the "elite" banksters that caused this mess in the first place. What will the American household get? HIGHER TAXES AND INFLATION!