Cara's Commentary & Community Chat, Thurs., Dec. 11, 2008

Here's to those who had the patience and confidence to hold SLW. Today is confirmation of that strategy.

Me, I traded myself out of this run. There's a time to have tight stops and there's a time to give your positions breathing room. The situation with SLW shows that the latter was the right strategy.

Community,

I have been following this blog for almost a year, I rarely post.

I just got a trust, before I got the trust my parents were kind and established some nice positions in GG, CCJ, SLW, RIO, SU, and TCK in October.

I am sticking with the Cara 100. To protect my profits I feel I need to add a Trailing Stop Loss to my positions, or at least some type of sell order. I do not have time to watch these like a hawk.

Briefly, what would you recommend? 10% TSL GTC? Please help. May be best to email me through the group to keep this off-line.

Thank you all for your commentary. I enjoy reading it daily.

I would turn it over to Bill's CTAB and allow them to manage it for you.

I brought yesterday _OXBAH 10 of them at 23.00 I am under right now but
it is OEX where I got most of my money back and right now I am at my OLD high
also 3X are good to play for me. I hope you brought PLD as you mention you will week ago.

GE - estimates cut at Oppenheimer through 2010. Capital Finance is the main culprit. Perform rating and $17 price target.

GOOG - 2009 estimates cut at Credit Suisse from $22.29 to $20 based on limited visibility and weak global ad trends. Maintained Outperform rating and $400 target price.

INTC - upgraded at ThinkEquity from Sell to Accumulate. $17 price target. Stock is finally starting to price in lower earnings expectations for 2009.

wow! that's all I can say...

"I would turn it over to Bill's CTAB and allow them to manage it for you."

I agree, wise choice.

Nice call on DXO yesterday, cp. This morning I moved up my stop. Sure, this may leave me high and dry if it pulls back like SLW did before its run, but one of my key priorities as a trader now is to NOT let a profitable trade turn into a loss. 'Happened too many times in the past.

Just did the same for my position in TNA, which I opened this morning after the gap down.

Not sure if any of you posted this already:
http://tinyurl.com/5npdfu

number2son
Yes, I know about your trade. your time with ESLR is coming

It has not happened yet but SIL has the look of a potential winner

BTW I took SLW at 4.50 this morning and sold it...So I have a smile on me face.

I note Roubini in the link you provided Bill. I used to read him until I caught up with this site. I've gathered the impression that he's sold himself well to the media, public and government officials.

Thing I've learned from you is that Roubini seems to have something to sell, not something to tell.

I glean more from the posts and hyperlinks in these pages than from RGE.

LE.s

I doubt Bill will take 50K, I'm small potatoes.

Heard a comment regarding "room to breathe"

In today's environment, is 10% TSL too tight? Maybe 15%, obviously I have to weigh my own loss risk.

Yep, and the Saudi's haven't started pumping their new mega field yet. This is the largest field in the world with a 50yr est. lifetime. Saudi Arabia oil recent production cost is around $2/bbl.

thought the board would appreciate RR comments on Fiat money

December 10, 2008 -- Son Ryan picked up a five dollar bill on my desk, a bill encased in glassine. Ryan asked, "What are you saving this for?" I said, "read it." He read "United States Note." I asked, "Do you see the words "Federal Reserve" any where on that bill?" He answered, "No." I replied, "That's a five dollar bill put out by the United States, not by the Fed. It was printed during the Kennedy years." Ryan looked at the five dollar bill carefully. Our conversation became the theme of today's site.

As I watch the various markets drying up and dying before our eyes, I have the sense that we are watching a worldwide tragedy. The source of this tragedy is fiat money created by the Federal Reserve and other central banks throughout the world.
In one sense, I suspect what we are seeing is an historic morality play.
"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a money aristocracy that has set the government at defiance. That issuing power should be taken from the banks and restored to the government to whom it properly belongs." Quote from Thomas Jefferson.
President John F Kennedy agreed. Kennedy moved to get rid of the Fed and ultimately eliminate the national debt as had Andrew Jackson and Abraham Lincoln before him with their battles against the National Banks.
In 1963 by presidential order, president Kennedy enacted executive order 11110. The US Treasury began printing upward of four billion of US Notes to replace Federal Reserve Notes. When a sufficient supply of the notes reached circulation the Fed and the Central Banking system could be declared obsolete. This would end control of the bankers over the US government and the American people.
Five years later, President Kennedy was professionally assassinated by an order from unknown sources.

JFK believed in the US Constitution.

"Most people know that the Federal Reserve bank is creating US dollars. But the truth is that the Federal Reserve is not Federal at all, but owned by twelve super-wealthy International banking families, such as the Rothschilds and the Rockefellers. This is a well-hidden secret, but can even be verified in 'Encyclopedia Britannica.' This situation is in direct opposition to the US Constitution -- the government is supposed to create our money (the 16th Amendment), which in its turn must be backed up by gold and silver."

"What JFK did was to create interest-free government money, backed up by the US silver reserve. This is contrary to Federal Reserve money, which is not backed up by anything... Kennedy wanted to pay off the US debt this way. Apparently aware of the secret behind the Federal Reserve, he decided to follow the dictates of our Constitution. Of course, this was a very dangerous thing to do, because if he was allowed to continue, it could have put the International bankers out of business in the long run. So this was even more serious than his other ambition of reigning in the CIA's powers. Interestingly enough, soon after his assassination the silver-backed interest-free money was taken out of circulation."-- From Wes Penre, 2003, Hidden History.
The Federal Reserve system was created outside the constitution, it was never put forth as an amendment to the constitution nor has its constitutionality ever been reviewed by the Supreme Court.

Through the machinations of the Federal Reserve, trillions of intrinsically worthless Reserve Notes have served to create a gigantic bubble in almost all assets since WWII or certainly since 1971 at which time Nixon took the US completely off the gold standard and put the US and the world on the paper fiat money system.

I keep thinking that the current ghastly bear market is the market's way of undoing all the damage we have suffered from fiat currency, inflation, and the excesses that accompany it.

Where will it end? It may end when the cupboard is bare and the last traces of fiat money are destroyed. Ironically, the bankers who thwarted the express wishes of the Founding Fathers are now watching their power being destroyed by the primary trend of the market. Fiat money has been used previously, but never before has it infected the monetary system of the entire world. It seems we are now paying the price for our incredible passivity and ignorance.

Democracy demands an informed electorate.

"According to one 2007 survey, four in ten American credit card holders do not pay the full amount due every month on the card they use most often, despite the punitively high interest rates charged by credit card companies. A third had no idea what the interest rate on their card was. More than half said they learned 'nothing at all' about financial issues at school. Two thirds did not understand how compound interest works." - from Niall Ferguson's The Ascent of Money.

Why has the Federal Reserve been accepted by the people? Because it has brought on the pseudo-prosperity and "comfortable" inflation that Americans have enjoyed for so many years. Today's "financially illiterate" generation and future generations will pay dearly for our decades of false and painless prosperity. They are paying for their passivity and ignorance even as I write.

Why prolong the agony of the bear market, or inflate ourselves into another bubbly mess down the road? It is time to return to a system of constitutional United States notes that are at least partly backed by gold and silver.

"We give you a republic," said Benjamin Franklin, "if you can keep it."

Stopped out while I was away from my computer. Looking to reload at a lower price. May not get the chance.

A trend line on the 1 min chart proved useful in setting stops.

And Otis, I think getting in touch with Bill is a solid idea, particularly if you haven't the time or inclination to manage your own money.

One of Bill's traders called a rally to 950 in Wednesday's comments. TCK's already made me 32% in a week. Will the institutional investors get on board come opening on monday or is this as good as it gets?

LE.s

Last night, on Alex Elder's webinar, his colleague Kerry Lovvorn made this interesting assertion: with each announcement of a new Buffett investment, wait 3+ days (for the euphoria to subside) and then short it. Kerry maintained this works 95+% of the time.

Does anyone in the Cara community have the time & data to test this thesis - beyond GS and GE, which sure did fall?

closed out my position at 43. too busy at work and it sure feels like an upside move in the market given a lower dollar and rising commodities.

still watching the downside on the banks and the potential for a russian/fgn nation crisis...

Cough cough: http://tinyurl.com/6psljc

OUCH!

haha

Long time lurker, first post. Love the new site, Thanks, Bill.
A couple of days ago, Billy Sundance and SiO2 suggested that ETF's should not be held long term. I think they were talking about the Ultra's.
If the S&P goes up 25% in one year, won't the ProShares Ultra S&P 500 (SSO) be up approximately 50%?

I found the active control aspect most interesting because of the rot and bull%çit in the system.

After 9/11 I changed direction in my university studies and majored in International Relations.

I've been looking at economics and finance since this present situation began to explode in our face. Bill's helped me tremendously in coming to grips with what is wrong and how not to be financial screwed by it.

Gonna have to do an economics/finance degree. This game is too interesting.

Trailing P/E doesn't mean much. How secure is dividend?

Besides commodities, the rest of the market seems to be waiting to see what will happen with the Auto Bailout.

It's interesting that the dollar is down 2.54% ahead of the bailout and the expected rate cut next week.

Rob.

SiO2 - as per your analysis, except for DTO, HFD, HOD pair, one would have lost money on all others... FAZ was trading close to $200 few months back & now back to $40s, I bet the underlying indices havent had that much movement. They are still worse than they were at the start of the year, so why should this 3X be trading so low, if it is tracking the underlying index? I have a hard time figuring out the moves on the ultras

shiva, I have spoken to the issuers and they all claim the same, daily resets (BS) and compounding on volatile markets, blah, blah. The latter does have an effect, I am not even sure under a perfect storm scenario that would explain such high losses. It's buyer beware. They are ok for short term trading, as in you may win big by placing the chips on red or black... Given the popularity of these things, the issuers must be making a ton of money. The house always wins.

Of course, had you shorted both the long and the short ETFs you'd have made a lot of money, beating them at their own game :-)

Caveat Emptor.........

Regarding the Ultra/3x ETFs (Ultras/3x only, I have no problem with plain vanilla ETFs), I think they are a vehicle for issuers/market makers to profit from the fact that they have much more information at their immediate disposal regarding the true value of the product.

These products are very opaque to the individual trader, but the market maker has a view of all of the swap, option products that make up the value of the product. Thus, (I think) they are able not only to profit from generally wide bid/ask spreads but also from arbitraging the price of the shares in the market against the true value of the underlying assets.

Essentially, the thing I don't like about them is that they are a legal way to create a situation where not all information is known and thus they are a dangerous weapon.

If we're not too late and they change the rules, I plan on buying puts on the next ultra ETF to shoot the moon. Any ultra that went really high could have been shorted for huge gains regardless of market direction.

You know that's exactly what the smart money has been doing all along.

As long as they don't change the rules I don't see a downside to this strategy.

Rob.

They're heading for the hills...All bets are off.

I guess they aren't closed til their closed.

Isn't it AMAZING the way the perception of value changes in a heartbeat?

Value? Who cares about value :P. Can you imagine the leverage you get playing these 3X thingys using margin?

I just sold 500 shares of SWC at $3.85, which can be classified as selling into strength. At the same time, if the auto bailout does not get approved immediately, SWC can fall a lot, since the company is selling all of its palladium to Ford and GM.

-Jack Black-
"As we had the expected pause in rally, I sold my FAZ at 40 and change making a small profit yesterday. People still holding FAZ have balls of steel and probably will be rewarded."

Still holding FAZ(avg cost $41.50), up very nicely today. Good call on the reward... @ $48.22 now

Boy what a day makes!

Proshares disclosure check it out and build and excel file to test the numbers.
http://tinyurl.com/Proshares2xs

I have heard the argument about holding these or trading them on a daily basis.
Fact is they double(double inverse) on their index and close at NAV at 4:00pm daily. There is no right or wrong strategy for them, it matters what are you goals for the trade like trading with all other financial instruments.

They can't be charted for accuracy because they are derrivatives. Their value is based on another instrument.

buying at the low, holding to a higher high will pay off massive with these. Now if that were to correct off of the high go down your gains dissapear very, very fast.

Read the page, make a spreadsheet and make hypothetical what ifs... ideally if the underlying instrument has momentum i your favor then a long term hold is highly profitable but if it stals and corrects some, your gains dissapear very, very fast.

Hopefully that helps.

It would be pretty easy to calculate 300% of the daily move of Russell 2000.

But, the scary word in that statement is SEEK! Lots of these ETFs have sought one thing and done another.

The products use various banks swaps and put/call options as well so the only security you have is a big fat promise that the issuer is seeking to fulfill the stated objective.

Hey I am not saying they are all illiquid - that varies from ETF to ETF and improves based on volume. I am not saying that you can't be succesful trading these - You can. I am jsut saying that flat out, you and I know much less about the true value at any given moment than the issuers/market-makers. On any given day, if it is too their advantage to run the index one way or another beyond the stated objective, I don't see what is stopping them.

See "correlation risk" at http://www.proshares.com/funds/performance/Underst...

A person's relationship to the stock market is a little like the relationship between a drug addict and a dealer.

The addict purchases cheap transitory thrills from the dealer and ends up broke. The question you need to ask yourselves is, are you able to play the role of the drug dealer? Are you able to always be there to supply the goods to the addict and to be there to pick up the pieces when he crashes hard?

Have gone long SLW, KGC, TCK, SSRI, AEM & PAAS. Not advice. DYODD.

Took positions after examining 1-year daily charts with EMA(12), EMA(25) and SMA(50). The hardest position to put (back) on was SLW, having originally bought @ 2.80, traded in & out to lower basis, and then exited at 3.63. Also difficult was TCK, which strikes me as the most speculative of the lot.

Admire OG for pulling the trigger today. Given the automotive, oil and unemployment news, this seemed to be a restrained close. Stocks want to go up but... maybe not quite yet.

Caveat emptor........
BMO says chances of Canadian banks cutting dividend are low.

I apologize for the repetition on this if it has already been covered, but has people put together a list of infrastructure companies that will benefit the most from the Obamulus?

First, thanks to Bill and all contributors. I've been following discussions for a few months and found the site to be one of the few places I can use to help keep a proper perspective and learn something useful every day.

Second (and the main reason for posting) is that I was thinking about this a couple of weeks ago and put together a list of companies that appeared to warrant research. I haven't gotten around to doing much of the research, but the list includes: GVA, LFR, URS, JEC, SGR, MDR, KBR & PCR. I'm sure there are many more, including some smaller companies and more specialized companies which might benefit from specific programs (if any such programs can actually get funded), but this is my starting point.

This morning the Big Board was flat, Treasury yields were falling, PM's were increasing, the Yen was firm, but the USD was soft so I entered a bid on TNA @ $26.50 which hit @3:34pm

Still holding DXO @ basis $2.90

Automanuf. loans - Isn't it ironic that the same guys who squandered trillions are squeezing the guys who squandered only a few billion?

SiO2 is correct. Just plot a two year chart of an ETF along with it's inverse and you'll see how much you'd of lost over the period by buying and holding both long term.

Thanks to whoever brought FRG to the attention of this blog last weekend! Its price chart seems to have nice regular waves recently, and not wanting to ride FRG down at this point, I have just placed a sell stop limit order (stop $2.38, limit $2.35) for the 1000 shares I purchased on Monday at $1.80.

Thanks JP. I'll check these out over the weekend if I have a chance. Work has been super hectic lately.

It is beginning to look like the purpose of the Fed is not to control inflation but to put everyone in debt all over the world, the default condition of the little folks has always been economic slavery due to ignorance, the U.S. was the exception for about 200 yrs. but that is changing rapidly. Looks like our standard of living is about to take a major hit real soon. Prez Kennedy tried to fix it.

Is Corker the same senator who was so opposed to the Tax Stimulus Plan for the working people, stating the deficit was too high already...

My personal opinion is the originator of TARP hand out to the HB&B will go down in history as the absolute worst treasury secretary of all time. Paulson has done more direct and indirect damage to the US economy then any other single person in the history of the nation! And his damage is just starting to make an effect.

Big 3 bailout or no bailout, not sure it will make a difference for the economy at this point.

vinod- i thought about opening the OEX calls at the close, but hoping for a (slightly) better entry at the open tomorrow...

so you're back to your highs for the year? i recall pegging you as a player back in February...i was not wrong...

I use Prophet.net to draw trendlines using their Javachart. It's free. SPX had been in a descending channel for at least one year (about 300 SPX point width) before it nosed over about 9/29.

Drawing trendline on the daily chart from about 9/19. 12/5 it finally broke above the trendline resistance. Following day it broke above a very ST resistance line drawn from 11/11. Today it fell below that line.

Next thing is to see a retest of the descending trendline from 9/19, that's about 845 at the time of this post. Given that the LT (26 week EMA) trend for SPX, I'm expecting SPX to fall below it (also the 10 day ATR is 44 so it's only 30 pts lower, not a big reach).

If/when it breaks and closes below 845, the descending support line is at 702 and since it is shorter in length (time) than the descending resistance line, I wouldn't be surprised to see it drop below 702 (big time)

Many TA types saw the bullish ascending wedge but those tend to fail in bear markets.

We'll know in the fullness of time.

FD: long SDS, FXP, FAZ, EEV, BGZ, but not near enough.

only RTP was in the buy mode per Triple RSI screen 3 days ago at 72.44

No position.

Is this something that will effect the market tomorrow?

"Madoff Charged in $50 Billion Fraud at Advisory Firm

By David Glovin and David Scheer

Dec. 11 (Bloomberg) -- Bernard Madoff, founder and president of a New York firm that invested funds for wealthy individuals, hedge funds and other institutions, was charged with operating what he told employees was a long-running $50 billion Ponzi scheme in what may be one of the largest frauds in history. "

........more at
http://www.bloomberg.com/apps/news?pid=20601103&si...

Bloomberg: "Corker’s alternative would give the UAW half of the $23 billion it’s owed for health care as GM stock instead..."

Ouch.

Auto-bailout - NO, no no no no no no. If my point isn't made, one more time. No.
Create a pre-package BK and move forward. They will rebuild and be back and be way better three years from now. Time to take the medicine now because it will only be more painful later and cost the tax payers more money.

Fed and their F-Bills.
We know that their balance sheet has over two trillion dollars worth of crap on it and the abc facilities that the fed and the treasury have created. Many are screaming inflation or hyper inflation are wrong (for now) because there is no velocity of money. We need M*V even if M increases V is the multiplier. M*1 is M, not going to do much but M*3 is M*3 right? (put a billion or trillion for M and you get the picture). The catch about the V is you need one really, really important factor. Confidence. There isn't' any from consumers and lending institutions. Banks have tightened standards and quite frankly everyone on the globe who had a heart beat took out a loan and now the world is saturated with credit. Right now the banks are going to hoard the cash (so will consumers) because of the uncertainty of the debt to be serviced vs defaulted. This is self-fulfilling because everyone is going to clamp down and hold on until a miracle happens or social mood changes.
So eventually that will change, I doubt it will change anytime soon, the world needs more debt and who else but the good ol USA to issue it. One step closer right?

Well my thought with the FED and the F-Bills is the following. With all of this pointless stimuli around the globe and the demand for dollars the fed/treasury has been trying to keep up with the demand (yes the dollar is fading now but don't believe that to be the intermediate trend, until people line up to take out loans and those banks are willing and able to give those loans, no inflation). Ok so when the point in time comes, the global economy has turned around corner and is looking to get rolling, and rolling fast. The fed has a HUGE PROBLEM. They oversupplied the world with US Dollars.
Where do the F-bills come into play?
Simple, once they eliminate the abc facilities - deleverage their balance sheet (unwind the two trillion) and give those banks back their toxic assets, stop paying banks interest overnight on their access deposits, they will be on a mission to take US Dollars out of the system.
They will issue their "F-Bills" by doing so they will take dollars out of circulation and issue their bills. This is similar to the Fed selling T-Bills but this mechanism they will have direct control of the facility. By doing this, this probably could hinder the super inflation after we have reflation, inflation before hyper inflation.

been stewing on that for a while and thoughts???

I am not saying that it would be right but it could help prevent too many dollars floating around the globe.

On the other hand - from a purely technical viewpoint - this pullback in the $USD might provide an interesting long entry if support is found, say around $82.

$USD: http://tinyurl.com/5t3z5j

great post!

What? Expecting government funds if future bets go wrong? I thought the bailout was just for CDOs already written?

Reports AIG taking excess insurance risks. Excerpts:

NEW YORK (Reuters) - American International Group Inc is slashing prices to win new business, industry insiders say, raising concerns that taxpayers could again be left to pick up the tab.

In the wake of its federal bailout, which last month swelled to more than $150 billion, industry executives say AIG has been rashly lowering prices, and at a time when market fundamentals show insurance rates need to rise.

"I think it's fair to say they're doing some very stupid things in the market," Kelly told investors on a quarterly conference call last month. "If (AIG units) are not reined in, it could be very destabilizing for the market."

"AIG has the money to do things that it could not do without it," said Thom Bradshaw, an insurance wholesaler in Monticello, Indiana. "With $150 billion of taxpayer money we could all be more aggressive, but a) it is irresponsible and b) it is unfair" to the rest of the industry, he added.

It is also possible that the U.S. government, as AIG's majority owner, would feel obliged to step in with more financial support for the insurance subsidiaries if underwriting losses become a problem.

http://tinyurl.com/5uytgu

looking at daily charts AMZN ATI BHP BTU CAT CHK CRM DECK ICE LFC, all look like ready to roll over....

offtopic -- someone (vlad?) posted a link a couple + months ago to some realtime news pop-up. I installed the thing and found it useful.

Hard drive or mother board crashed and the thing is "archived/buried" in a chunk of hardware that i haven't been able to access.

Anyone have the link handy?

Thanks & please.

Re: the infrastructure theme -- wouldn't ABB in the cara 100 (i'm underwater) be a candidate?

One thing is for sure. If CDS are based on interest rates of bullion leases and not prices, then there is a huge market waiting for a rally, because interest rates on bullion leases are about to come down:

http://www.kitco.com/charts/popup/au0030lr.html

That means bullion leases will come under demand, raising their prices. Ultimately, this means that parties and counterparties arranging securitizations will have to purchase a great deal of both long/short contracts on leases, affecting the price.

We could see negative interest rates on bullion leases, if that's the case.

the markets will rally or not with or with out the bailout.

today's decline already assumed that the senate wasn't going pass the bailout. Market drives market, news does not drive the market.

christmas rally might still happen, IMO it will.

Bill,

Independent traders know that a good night's sleep means few or no take-home positions at the current time. Anything longer than a day trade feels like investing these days. Even position trades have a half-life quicker than some bizarre man-made element high up on the periodic table.

The Maddoff thing is going to get folks wondering how many other hedge funds are Ponzi schemes, or just outright scams. It was bad enough when they were mainly the ATM's of well-connected twenty-somethings. The Maddoff thing could as you say really reverberate, and it looks like the Senate is voting as I write.

This is already the worst Christmas during my lifetime by far, bleaker than '91-'92.

What Americans are going to realize is this isn't just a standard job-cutting scenario; it's really the beginning of the middle of the end of the great age of American employment.

Australian stocks fell sharply in afternoon trading after a $US14 billion ($21 billion) bail-out plan for car makers failed to win US Senate approval.

In mid-afternoon trading, the benchmark S&P/ASX200 share index was down 3.4%, or 120.3 points, at 3477.7, while the All Ordinaries index was down 3%, or 106.1 points, at 3428.1.

Most sectors of the market were lower, with materials sub-index off 3.3% on falls in both BHP Billiton and Rio Tinto. The financials sub-index was down 3.1%, while the energy sector was down 1.9%.

Adding to market nerves was the arrest in the US of a former Nasdaq stock market chairman on a securities fraud charge, accused of running a phony investment business that amounted to what prosecutors called a "giant Ponzi scheme''.

EDC said: "Today's decline already assumed that the senate wasn't going pass the bailout. Market drives market, news does not drive the market. "

No, EDC, I venture to say that today's decline only priced in a small probability of failure. Now, if this is really a failed deal, the market will price in the remainder and the momentum of this rally will be turned. I sure hope you are right because half of my stellar gains made today are going to be gone at the open tommorow, thanks to loading up long at the close yesterday.

Hang Seng and Nikkei both off close to 7% so I would say a bailout was assumed. I personally don't see what a bridge-to-nowhere loan would have accomplished anyway. If the market is forward discounting then you would think it would 'see' that we're going to have to take this medicine sometime soon anyway.

It looks like the Grinch has stolen our Christmas rally. ;(

Amazing is all I can say ... bankers who caused the financial crisis get hundreds of billions that they are currently hoarding while a mainstay of U.S. manufacturing gets the shaft.

Bill's last comment shows that even he is losing patience with these markets. Tomorrow is going to be as ugly as any day we've had, it seems.

It's completely nuts.

The social order will be preserved.

The no bailout will send manufacturing overseas. It was, perhaps, in the cards. The Chinese, however BETTER DEPEG.

The only way that great cars are going to be built in America again is if the dead bodies of the big 3 are swept aside and the mafia known as the United Auto Workers is crushed. We need to build new factories in other parts of the country, work with new "un-American" designs and keep the workforce in a no-benefits salary-only arrangement. Finally, there should only be a limited number of designs, and they should be great designs.

Found it. http://www.rttnews.com/Apps/deskalert.aspx

Sharkie - US design is still not that bad compared to japanese or korean, they seem to turn out macho looking cars every now n then, its the engineering & quality that sucks. And the overall management, there is no coherence. Ford & GM (Opel) are selling well in Europe & Asia, they make inefficient products for North America

they see more jobs disappearing along with their potential buyers.

PBGC only pays about 25% of whatever the original pension payment amount was from what I understand. Not sure how underfunded the automakers pensions are, but if worse than that, PBGC will need to be bailed out as well.

Many countries have automative industries but most if not all rely on subsidies in one form or another. My own country has been subsidising foreign owned local production for the best part of 50 years for all the usual reasons "we need it for defence; jobs in the car industry multiply into more jobs outside the industry; export opportunities" etc, etc. In my country a massive sales tax is added to overseas produced cars to support local production. The cost of a middle to top of range BMW or Merc is twice the cost of buying one in the US. We do not import US made cars as they would not be able to compete style and quality wise with the Europeans and Japanese cars. We expect our cars to last for at least four years in near new condition. This is often supported by manufacturing warranties for that duration.

It never fails to amaze me that whenever we have American guests here they remark on how much better designed and produced our locally made Fords and GM's are vs. back home. It appears GM and F have taken their home market for granted, perhaps once too often.

Market down tomorrow, probably. I think I'll do a Rip Van Winkle and go to sleep for a few years and come back to something nicer... goodnight!

Missed most of today's action. Saw slw hit $4.95 on cell phone and had to do a triple take. I was in our hq training so could really setup proper trades so i am still holding. i am waiting for the real move, and hoping to sell put options on hard pull backs into the low $3's if that occurs(Maybe as soon as tomorrow Fri-12). If it doesn't, i will let her run and wait for the dollar to fall.

Congrats to all who made money on commodities today. I stand corrected on the auto bailout, shocked it didnt get approved, but this painful process must happen. too many cars, too many dealers, not enough buyers/credit.

Time to take our yucky medicine. looks like the inverse etf's will roar tomorrow. Asia down big, Dow futures down.

good explanation - market there demands that. Consumers abroad are more informed than consumers in US (besides here they can always bribe the politicos to keep the standards low), its one politico, business nexus in US that i havent seen in any other developed country

if they would only fix management compensation, everything would work right in USA. No idiot manager deserves to take a billion $ as compensation, if he was an entrepreneur/inventor its a different story.

My answer to yesterday's question has come.

I should have cut TCK with a 32% profit.

So much for the S&P rallying to 950.

Is this a new congress? Reasserting its authority after the free money party thrown by Hank Paulson?

I wish.

At least it's a step in the right direction. All those UAW workers will need to learn how to say 'good morning' in Japanese, by the time this thing settles.

:)

Or can we expect a repeat of Lehman Bros? Angry citizens flooding Congress with 1001 reasons that the big three should be bailed out.

Man, this is gonna hurt today.

LEs.

One reason I've been shorting is that a longish move, such as the bear we've had this year, usually ends with a bang, not a whimper. For two weeks we've been basically sideways... up and down like a .... well, up and down. Maybe today will be the blowoff that nails the bear and I can start buying the stocks in my watch. Watching today's action with great interest.

ALOHA !!

As I have been saying all along at some point "investors" throw in the towel(as Bill says), but wait until the global fiat monetary system throws in the towel ... the BIG T! Its all about the "C WORD" in the end, so if you still admire and desire unlimited liabilities then you are in US DEBT denominated cash on the sidelines! Maybe you will even get into some F-Bonds, eh? And when the IMF and World Bank and BIS need more DEBT they will issue "I-Bonds" and W-Bonds" and "B-Bonds"!! It's the never ending circle jerk of DEBT!!! Have you ever asked yourself why is it Gold never has any debt like the USA does? Why is it Gold clears debt and a US Dollar(FRN) doesn't? Ask FDR JR about that! Being on the sidelines in cash is far from "safe"! It will take a severe US Peso devaluation to prove that point but FDR JR. will not disappoint! We have had two US Peso defaults in the past 100 years. One with FDR(DEM) and one with NIXON(REP) now for another DEM! After that the US Voters will once again prove their ability to be "fooled all of the time" and vote back in the REPS!

Enter the "RULE OF 38" ...

So here we have AIG now cruising through the galaxy known as UT-0(US TAXPAYERS-ZERO) with a $150bil BAILOUT and they are still on life support systems! DC I think we have a problem!!! The last BIG BAILOUT of the LTCM cost $150bil and here AIG alone has swallowed that up and begs for more like some sort of voracious locust plague on the US TAXPAYERS of our kids generations and beyond.

ITS ALL CHICKENFEED NOW!!

I cannot imagine what it must be like to watch TV in America today(I have no TV to watch)and see the billions and trillions of numbers rolling past the screen on a daily basis. It must be mind-numbing! Not to worry, since by 2011, about when the UAW's contract ends the US public will be introduced to "quadrillions"!!!

Once again I will trot out my faded and tattered prediction ...

"Fortunes will be lost trading the markets successfully ..."

If you have not figured that out it is a statement about our monetary system not the stock market, for no matter where you park your fiat dollars they are never "safe" as long as they have unlimited liabilities exposure!

Okay so we elected a black man on the basis of HOPE and CHANGE and here we are "HOPING we have some CHANGE left to retire on!" At least that is what GM retirees are hoping for! I believe the DEM and UAW long term relationship will not fail and for sure Bush has no desire to have the BIG 3 collapse on his watch or else his Presidential Library will have to be moved to the family compound in Uraguay!

When America finally elects a "GP" instead of a "FP" as President then we will see some long awaited CHANGE!!! Not before, but that takes some massive re-education on the part of the US VOTER! It seems the US VOTER is now under the influence of the STOCKHOLM SYNDROME.

As I have said before REAL CHANGE will start with the dismantling of the US FED and its member banks not before. Hand out all the BAILOUTS and PROMISES you want US CONgress but its still "THE MONEY STUPID"!! You can never obtain real prosperity as long as the Keynesian belief of prosperity through spending exists! Hasn't that economic model been disproven yet? I think it has been disproven every year I have been alive, but then do not listen to me I am just a "tinhat anti-statist monetarist" farmer like Thomas Jefferson and his pals were! To me there is nothing more impotent and butt-ugly as paper warehouse receipts chock full of counterparty liabilities! Hummmmm ... I believe that is a FIRST!! The first time the words "impotent" and "butt-ugly" have been used in close proximity to Thomas Jefferson! HA!! Well, make no mistake, in my mind Thomas Jefferson and his beliefs regarding government and money are DEAD SEXY! I can hardly walk into a grocery store or a hardware store(a lot lately)any more and pull out a FRN without wanting to PUKE all over the cashier's little "scanner"!!! COME ON ... give me some REAL MONEY ... PREZ!!! I'm suffocating here!!!

PUKE - slang for "blow chunks", "chunder", "up-chuck", "cry ruth", "barf", "hurl" ...

Now the Aussie phrase "shake hands with the unemployed" comes to mind and is very topical these days! I imagine a huge number of Americans will become intimately reacquainted with that pasttime on a more regular basis now that jobs have become scarce! Certainly lots of Citibank and Bank America employees are in line for a bit of that! NO WORRIES MATE!!

The FIAT MASTERS are in non-stop continuous INTERVENTION MODE and why shouldn't they be? They have been INTERVENING for close to a century now! It is what they do best ... No matter what you think of these banking scoundrels they could not exist without the duplicity of the US VOTERS who continually relect the same two party aristocracy US CONgress year after year! ITS YOU!!

Own REAL MONEY and a farm and then wait! Who said LONG TERM is not SEXY? Ahhhh, you SEXY BEAST you!!! HA!!!

QUESTION AUTHORITY !!! Its is your Constitutional right ...

ALOHA !!

Someone here posted why the Japanese companies are tanking on the stock market when the US car companies are on the ropes? Why?

It is because they use the same GM suppliers here in America and if the US Big 3 go down it takes the US auto suppliers down also. That then will cause the Japanese auto makers with US plants to have the added cost to import parts from Japan to keep their assembly lines going! WOW ... how ironic is that??? A Japanese auto maker who needs to import parts from Japan!

Globalization at work!! I got a lot of flack here over a year ago when I posted my doubts and said that globalization is an accident waiting to happen! Once again people always look at one side of the coin ...

IT ALL WORKS UNTIL ...

ALOHA !!

Looks as if the POG is in for some ruff headwinds this Friday ... What a shock!

Ever since Ronald Reagan signed Executive Order #12631 this market intervention via futures markets has been the GO TO play for the US FED and the FIAT MASTERS! Whatever the original reason for inventing the futures markets was(forward price discovery for farmers)it has been confiscated and is now just a "play thing" for those who's only intent is to control power in the markets and the money! Just the money is not good enough ... They employ derivatives through the futures markets ... Yet ... when you distill it down it is nothing but paper(false wealth)leverage and anyone who believes the US BANKS now hording their BAILOUT money will ever change their spots is daffier than Daffy Duck! LEVERAGE IS THEIR BUSINESS!! They do not care whose money they use to LEVER their power! You can always bet these banques de fraude will never use their own money! Why? They don't have any money of their own! They never did!

LA CUCARACHA! CHA ... CHA ... CHA !! Yeah, its a dance!! STOMP ON EM!!

From the EWIT November.

"Voters chose ________ to help navigate the country through the global financial meltdown, handing long-serving
__________ an election defeat. The 47-year-old leader of the _____________ party ousted __________’s _________
party after _____ years in office. ______ has promised a more _____-leaning government than _____’s, which for
almost a decade made ____________ a key policy issue. In a country where the environment is a mainstream
political issue, _______ has vowed to _________ a gas-emission trading scheme. The economy fell into recession
early this year, and the worldwide downturn is the most immediate problem. “Today, voters have spoken, and they
have voted for change,” _______ told supporters at a packed victory celebration. The global financial crisis means
that the road ahead may well be a rocky one,” ______ said. “Tomorrow, the hard work begins.”

They all ignore the deficit twins on the boob tube. I don't hear anyone talking about $2 billion a day going out with the trade deficit. I didn't even hear any howling about the budget deficit being $180 billion for November, let alone what it must be if "off budget" spending were included.

As soon as they won't lend it back to us again, our economy goes into a tailspin, and that's where we are. I mean why do they think nobody has money to buy a car or a house, anyway? It isn't that nobody WANTS a car or a house, its that we don't produce enough to be able to afford them without borrowing to buy them, and our credit has collectively run out.

Why doesn't anyone on TV see that if you buy $600 billion more from overseas than you sell to them, that the only way you get those dollars back is to sell them your capital assets, which they are now full of, or borrow it back from them, as long as your credit is good? Well, the public's credit is now no good, and the corporations credit is now no good, and muni credit is now no good, and state credit looks to me to be no good, and the ONLY thing left is debt backed by the Federal government or, next, I guess, the Fed. The Federal debt is the next bubble, IMO, and any delay in foreigners lending us back the money we spend on their goods, means no money here to borrow, no money here to spend, and we all know where that road goes...

Sorry for the soapbox routine... It just bothers me today...

Announcement of the new president C.Jeannes has me looking for an entry point now. Top notch fellow who will serve the shareholders well. Happy Trading