Cara's Commentary & Community Chat, Thurs., Jan. 15, 2009

conflict of interest, if not outright corruption, of the highest order.

It's sad isn't it. The government is on its knees in indebtedness and its own representatives open the doors to permit private interests to clean out the taxpayer in the process.

I can't get my head around such behavior. A nation literally destroying itself financially, socially and if it doesn't change Middle East policy soon, militarily.

These people are a piece of work. My take is that Paulson took care of his GS and banking buddies to the detriment of the citizens of the U.S. Congress and the judician and the executive branches are right there with him! I can never forget the Bush back slap after Katrina "GOOD JOB BROWNIE" Just change "Brownie" to Paulson or whoever else fits and there are lots of "Leadership" candidates. They all work Bill!

I've gotta buy at least one share of Berkshire B before too long. Buffet's looking out for his shareholders as always.

Bless the few honest souls in the game.

Wht am I missing? A spoilded brat, a denizen of the polo-pony set, Whitman goes to her legacy schools, Princeton and Harvard. Here the story gets murky...Was she romantically involved with the inventor of EBAY, of did she go west, get a job at ebay and procede to violate harrassment policies? Either way, all of a sudden SHE owns EBAY too, even theugh she's never done anything with her life...How Perfect! Another Republican in the making...And look...she want to be the Guvernator of California ....The skipper lives and breaths on Ebay island...She coulldn't be governor of my sockdrawer!

They are up ~2% this morning, although it was ~4% at one time. Better than expected from what I understand... wonder if investors off-load or load-up this morning.

PPI slightly "less worse" than consensus. Jobless claims 24K worse than expected. The Empire State Mfg Index 2.8 "less worse" than the -25 consensus (prev -25.8) Nothing exciting here!

For those with the courage. (not me)! Watch the JPM open and buy if it's up then keep your finger on the sell button.

Gold is moving up +5 right now, but didn't drag silver -.06 and oil -.80 along.

http://www.youtube.com/watch?v=dOPF0S7Hss4

VIPERS AND THIEVES = Paulson should be in JAIL

Lap dance used as bribe: Sentinel trustee

By: Ann Saphir Jan. 14, 2009

(Crain’s) — Sentinel Management Group’s bankruptcy trustee on Monday sued Keefe Bruyette & Woods, Cohen & Co. Securities LLC, and three former or current KBW and Cohen salespeople, accusing them of using trips to strip clubs, tickets to sporting events and lavish dinners to “bribe” Sentinel’s head trader into buying from them hundreds of millions of risky securities that that ultimately led to Sentinel’s collapse 18 months ago.

Looking a little top heavy at the moment, but still not ready to relinquish the crown.

shark- here's one for you...on the road in the mid-seventies, Gentle on My Mind, Please Come to Boston, Loving Arms all got lots of play, but I liked this one "Most of All:"

hello darlin, my-it's good to hear you.
i'm at the railroad station in st.paul.
how are all the folks, i'd love to see 'em.
but girl i'd love to see you most of all.

well i've been staring at the rain and i've been thinkin.,
ever since the train left montreal, thought i'd always
love this life i'm living, but now i know i love you most of all

many times before i know i swore that i''d come home to stay...
but it always seems that foolish dream and trains got in my way

tomorrow there will be snow in minnesota
but i won't be around to watch it fall
i'll be heading for that old familiar station.. hopin' you still love me
most of all

-JR Cobb, B Buie

Second place in the most overplayed songlist of all time, trailing "Stairway to Heaven" by a small margin.

You forgot to mention "Come Monday".....LOL!

oil -1.18 and ERX +0.35 -- go figure

Started a small position in BAC premkt after watching the action with JPM and C, then leading BAC. Also added GFI premkt. when it appeared sentiment had changed after Jamie Dimon told his tale this AM and JPM was up a buck.
Amazing, but it is what it is.

The ECB also made it clear the race to the bottom is not yet at the second furlong, so PM's are looking better in the big picture/longrun.

It seems weird is good these days, I should do alright then....I always wanted to be a pro at something.

USA, Paulson & the Talking Heads

A short time ago Jim Grant (Grant's Interest Rate Observer) wrote a piece for the WSJ asking Where is the Outrage? I'm seeing a lot of that outrage expressed here often.

Paulson embodies and exudes the arrogance and cronyism which crosses party lines and unites business and governing elitists with nearly complete media acquiescence. In an interview by Maria Bartiromo this week he actually stated that "bank transparency so far has been excellent." (Maria gave it an eyelash fluttering, complete pass.)

Before we can expect effective action on genuine issues (forget baseball on steroids) we need a return to the basics expressed in the preamble to the US Constitution. Instead of justice and provision for "the general welfare" of our posterity, we now have a congress who have far more in common with the CEO elite than with their constituencies.

The present approach to the financial crisis has been a circling of the Wall St and K St wagons. The media are backing businesses first and foremost. CNBC is the most blatant, but even my own middle America rag is not dealing with our local 10.4% unemployment or even aware of the insidious underemployment since our manufacturing jobs were exported.

The CEO and congressman with the aid of boards of directors and internal compensation committees, set their own income and benefits. Citizens and shareholders have no real control or voice anymore. Lobbyists write the bills. Committee chairmen control the agenda. The media simply parrot the messages in bites which a gullible public swallows.

Unless we can get rid of the entrenched professional politicians we'll never see tax reform, satisfactory health care, a government we can trust, or restoration of hopeful future for the country.

If I want to get long, I prefer to see futures flat to down pre open and stick in a limit order pre market. Don't like to chase the open.

I see some nice divergences showing up on the intra-day charts. But it doesn't look like the portend anything good at the open.

So far we haven't moved back below yesterday's low, but if it does this trade comes off faster than a wife's nightie on her honeymoon.

Update: Well, that's that. In and out in less than six minutes with a small sting.

Just another reason to keep the trades relatively light and/or very closely monitored...

Societe Generale said on Thursday that the United States' economy looks likely to enter a depression and China's could implode.

In a highly bearish note, veteran cross asset strategist Albert Edwards said investors should now cut equity exposure after a turn-of-the-year rally and prepare for a rout.

He predicted that the S&P 500 index of U.S. stocks could be set for a fall of around 40 percent from recent levels.

Edwards also raised the danger of a global trade war with China.

http://tinyurl.com/98mhe2

Sold my entire trading position at $5.24. Ave. purchase price $3.07 late Nov., early Dec. I agonized over this. It hit my mental stop at $3.50 a couple of days ago and I did nothing. Bill's trading commentary this morning convinced me that my scrawny little neck is too far extended.

Also closed out SSRI with smaller gain, holding small core SLW and FCX, but now lots of cash.

The 850 S&P level Bill talked about has slipped away, going lower?

Be careful with the oil quotes you see on TV. These are for the February contract (CL/G09). The February contract expires on 20-Jan-09. The last week of trading in these contracts is usually very volatile because the specs are rolling over to the next month. The March contract (CL/H09) is higher and less volatile (contango).

Because the price is almost immediately reflected in the USO, I use the ETF's price to help me gauge oil prices.

Well this guys a cheery fellow isn't he

added to position at .90, ave cost 1.11.

max pain 7.50. see what happens.

I'm glad my BAC position was small, that was a record setting fall to $8... Dividend gone too, no doubt.

Agree with the notion of nation destroying itself from within.
One interesting aspect of the "free market" system in USA is powerful industries benefiting at the cost and detriment of the entire nation (parasitism). The examples that come to mind is GM dismantling public transportation (post WW2), oil industry destroying energy conservation, denying global warming, and promoting energy speculation (Dick&Bush gang recently), and now banking awash with free taxpayer money while blackmailing with great depression 2 (under the short reign of king Henry P.). What's next? I've heard that porn industry asked for a bailout. I support that, as they are at least honest about their business model.

... the world might even take better care of its children.

My next target for C is under 3 and BAC under 5
also undr in GG. I had buy order for 23 but gave in and brought at 24
sold my february put 5 and 10 on C and BAC

Financials anyone? Huge volume = capitulation? The obvious trade is long in the tooth. Dipping my toe in FAS and will accumulate on further declines...
With the ability to print money (and steal your savings through taxes and inflation), anything is possible. Hoping for an inaugural bounce here...

KC

Jose! Olay!

Look at BAC and C......Are these puppies going out of business?

Anyone with the balls to buy at these prices and hold ten years is going to make his fortune.

Sick man or not, BAC is the biggest player in the US banking industry now. That'll pay off on the stock price eventually.

Mind you its probably better to buy their debt at the moment than their stock

long FAS @ 12.36

Nov. low was 750.

You're living up to your name 'knifecatcher'

BAC is the biggest player in the US banking industry now.

I get what you're saying, but in terms of market capitalization, Wells Fargo is the biggest right now (2x as large in fact). US Bancorp is also larger, fwiw.

Long FAS @ $12.10 (50% of planned buy)

I was planning on buy around $14, but I think this is better.

I sold FAZ way too early at $48 (bought at $33). A couple days later it is at $64 now...

I think that the financials will go up next week along with the rest of the market. I hope I am not WAY TOO early...

agreed!!!

I ejected from a small position in DOW; in prior times, I would have held on and hoped (prayed?)for a turn-around. Now, it's automatic, hit the stop, and say goodbye.

Slowly, I'm learning discipline from watching and learning from the good folks on this board. Watching for the next trade, a bit bruised but still standing...

is making holders richer again this morning

Don't forget Bohemian Rhapsody

"One whiff of TARP II and all of the financial companies line up at the FED soup kitchen."

Boy you got that right! Just give em' another Trillion and see what happens... S.O.S.

"They worshiping their WOO DOO god"

I laughed so hard it hurts....

as per prior comments,

sold out about 1/2 gold short position around $810, and used those funds to purchase HOU. its even right now but looks like it wants to move lower. this is ok, im holding it for a few months at least to see where oil goes.

my current feeling is that the moves in gold and gold shares are muted compared to the dramatic drop we are seeing in the financials. a welcome change. but still in its development, i dont buy into any of the decoupling hogwash for PM's and their shares during a market downturn.

(barrick is holding up especially well compared to the other golds)

i will close out the rest of my short around $790-$795.
then go long HGU if things hopefully settle down after the new president takes the helm.

Which makes this N2S ever so happy he botched the trade when it was @45. Sigh.

BTW, volume in BAC is 2x its average while volume elsewhere is very low.

Sold all of my SLW at 5.08. (my favorite stock)
Sold Drys at small profit.

I couldn't get to BAC in time so I am watching the tank sink.

Palm is holding.

Peru is on my list of travel destinations, since I was a boy...

trade levels between China an US. Walmart is China, not to mention a lot of other stores

I own 1k USD@28 and am tempted to add 1k here@11.81. hmmmm. hmmm...

not yet

Two months before Paulson took over the next 2 generations of working peoples future, Lehman went bankrupt and the sky didn't fall.
Let these greedy incompetent over leveraged banks FAIL......
It's a scam people, and in return Paulson is single handedly leading the second class society into the Paulson and buddies financial death camps.
F%#k the bankers, it's time they tear down those iron gates surrounding their mansions they live in, and try surviving in the second class society.
Paulson wasn't even elected by the people, but he holds more power over the people then the elected crap that we end up voting for year after year.
Democracy no longer exists with pre Tarp 5 (tarp2) on the horizon for those greedy banks.
BAC gets 25billion in Tarp, now they need more.
C gets 2 tarps already (45billion) and now they are begging for more.
These banks aren't in trouble because of the working people defaulting on their mortgages. The people defaulting on their mortgages are the end result of these greedy bankers.
Let them bankers all die a well deserved slow death.
Tarp 3 is already being pegged at 900billion, where does it end? Tarp5? The genocide of the second class working society?

Is anyone a regular reader of Grant's Interest Rate Observer? And has anyone been to one of his semi-annual conferences?

He seems always to have interesting insights, but never to make his followers any money. Am I wrong?

thx, though im down so far this seems like 2 tears in a bucket.

gold is holding up well, especially in light of the USDX jumping toward .85 right now.

gold shares are moving down w/ the market, magnifying any weakness in gold as usual. im looking for a critical relationship change in which the shares lead the metal and return to historic valuations relative to gold.

i always maintained the high oil prices were not the reason they were undervalued compared to the rise in the POG, my view is the people who run these companies are no more honest than the rest of the industry. w/ oil cut down more than %50 we've seen no massive readjustment in labour costs or share price vs. gold to prove this thesis correct. imho.

but i think the relationship will change at some point. perhaps gradually, or suddenly in the event of an ETF (GLD) problem or COMEX issue. but to date these remain the realm of tin-foil-hattery and nothing more.

some people dont like these kinds of comments, too bad.

GOOG - price target cut at Goldman Sachs to $420 from $475 based on lower expectations for revenue stabilization. Believe revenue growth will recover in the fourth quarter of 2009, later than previous assumption. Maintained Buy rating.

In at $29.50 and a 6.68 hourly RSI We'll see.....

I find all that talk of the great gold conspiracies, the Fed holding down prices of gold, COMEX defaults, and the like to be fascinating, but I do not trade with that sort of stuff in mind.

My view of gold is relatively simple. Long term, POG should rise at the rate of inflation. I believe the CPI is understated. I choose to use the CPI as provided by Shadow Stats. So, using CPI-U from USG, POG should be around $430. From ShadowStats its about 3 times that, or around $1300.

(Method: start at $20 back in 1913, and multiply by CPI from that date forward)

So according to my belief, gold is undervalued by maybe $500/oz.

Of course it's also a good thing to have if all that new money makes it out of the vaults and into the economy. Or if the buck is no longer the reserve currency of the world. But that's all just gravy. There's no cost to holding gold right now. Based on all of that, I'd rather have GLD than, say, some money market fund denominated in USD paying me 0.33% PA.

Making new lows... wonder if the dividend might be in trouble?

LT Debt - 8.4B
Total Debt - 12.4B
Cash - 2.2B

Soon add the debt incurred via the ROH deal.

for some reason, being strapped to a board with cloth over his face, having water poured on it is probably not the way he wants to spend his trip over

limit filled at 10.60

teamonfuego - "i warned you guys about this bank when it was at 16."

And thank you, I'm sure some of us heeded the warning. This was part of my decision to keep my position small, now I see I should've dumped it altogether and hope no fixed income folks got suckered in. :)

This is why I'm unwilling to sell.

This month's cover story on gold in National Geographic is excellent, IMO.
An on the ground look at:

- what the world's 15M artisan miners go through to produce 1/4 of the world's yearly new gold;

- how the big mining cos. are producing the other 3/4's;focus on cutting of environmental corners in third world;

- how India's financial system revolves around gold; for the people it's MUCH more real than paper money. (India consumes 2x as much gold as China, which just surpassed the US as a gold consumer).

- half of all production has been in the last 50 years; all of global production throughout history would only fill 2 olympic swimming pools!

NG's long-term price chart helped me realize: the 18th and 19th century peaks (of $1300 of today's dollars) were exceeded by the 20th century peak of $1800.

What did it take to produce the 20th century peak? - the inflation of the '70s, the "death of equities", the Russian invasion of Afghanistan, the '73 Arab oil embargo & 1979 Iranian revolution.

Are today's conditions any less perilous than those which drove gold to $1800:

- wars in Gaza, Iraq, Afghanistan
- rise of Iran, and growing nuclear program
- disintegration of Pakistan
- decline of US and Pax Americana in the eyes of the world
- worst market crash and economic downturn since the Great Depression
- jury still very much out as to whether current downturn can be halted.

While Obama is "a breath of fresh air", aren't we likely to surpass the 20th century peak in the next few years?

Since the NG story takes 13 mouse-clicks to get through, here is the text-only version:

http://ngm.nationalgeographic.com/2009/01/gold/lar...

The photo gallery is worth a clicking through

The author and photographer appeared on a radio interview on US/NPR, and showed themselves to be quite a bit better informed than the typical critics of gold mining. It’s 30 mins, and worth listening to:

http://www.npr.org/templates/story/story.php?story...

The Feb 09 oil contract is getting taken to the woodshed - down to 34, from a high of 39 this morning. That's some volatility...

Shark
I did some call last weekend for BBI store. They are installing new system and software
Getting rid of old DEC equipment. During my 8 hours there I got impression that they may be on verge of Turnaround mode. I do not own or intent to buy BBI

....After reading this line from WSJs article "Democrats to Unveil $825 Billion Stimulus Measure":

"A key element of the recovery package identified by President-elect Barack Obama and House Speaker Nancy Pelosi, (D., Calif.), has been to not simply invest in traditional infrastructure but to spend money improving the efficiency of the federal government."

I feel like I am in that CareerBuilder commercial surrounded by a bunch of chimps. Maybe I should just liquidate my assets and take a year or two living expenses and hideout on a beach and wait for the government system to finish devouring itself.

Jock - excellent article on gold. Thank you.

right there with you..sold jan120 skf calls at 3.20..now worth 40..ugh

Microsoft is reportedly considering significant layoffs. According to The Wall Street Journal, the cuts could be announced as early as next week.

Billy,
I spent a month in Guatemala backpacking and studying spanish. Wonderful and beautify county, with more visible indigenous culture than most anywhere in central america. Antigua is beautiful and has a solid backpacker infrastructure. Lake Atitlan is breaktaking, and there are towns dotted around its rim ranging from expat hippie colonies to real, rural, indigenous communities. Safety is probably more of an issue than other places in central american (based on stories from fellow travelers), but I never carried anything I wouldn't part with, and I never had a single problem.

And it was cheap. I was getting my full time MBA at Bezerkely at the time, and with no income I was cash poor, and I probably got by on $10 or $15 a day down there. This was 2002.

Let me know if you want to chat more offline, my bet is Bill doesn't want to hear about my travels :-)

seeing pretty bearish divergence in MACD, RSI & Stochastics in the Yen all the way up to 240 min.
But not seeing it yet in the Daily .

>If you hold for more than a day and surely for more than a week, there are discrepancies and things don't quite add up.

Yes, I'm down 10% on TBT but its holding fairly stably. I'm hoping for a killer move that makes holding it worth while but recent market moves are dampening my enthusiasm.

Education stock pretty safe bet.

Good morning! As we wait patiently, the prices are coming to us. This is what Bill was telling us for a while. The way I would say it: let's not be greedy! If we have a long position and the market is moving up, then let's be happy about making money on that position. It is worth adding to that long position (in small quantities) only if you see BETTER prices than those at which that position was initially opened.

As I have waited, the USO came to me and the buy limit order at $29 was executed this morning (now USO and UCO together make up 7% of my portfolio). Also, the buy limit order for UYG at $3.80 was executed (now UYG makes up 3.5% of my portfolio). Finally, to my surprise, the January put options I bought on IWM (strike $48) in early December rose above my purchase price, and I sold them a little while ago making 20% on them. I figured tomorrow we may get a rally, to surprise those who will buy today cheap January puts hoping for a quick profit in one day.

http://finance.yahoo.com/q/bc?s=GG&t=5d&l=on&z=m&q...

in one year a trillion dollar package will be old-hat....what will be the value of the dollar?

i'm thinking of adding to leaps in GG and USO, however, looking to see if a washout signal Bill mentioned yesterday should come first...i'll probably wait

Let's see if we're going any lower than today's efforts.

Here's to a bounce shortly with the inauguration of the 44th President of the United States.

Night all.

Those are such important remarks you're making about dealing with life threatening illness such as cancer. I see the strength and courage of battling pancreatic cancer in Patrick Swayze. I also see it in the way Steve Jobs is boldly fighting his illness, whether it's recurrent cancer or something else. These are life lessons for me. I'm sorry for the loss of your wife to cancer in 2006. I'm sure by your words she was a fighter.
NT

Great catch Seamus. The Barron's article is correct and gives an example ("Let's say Index A goes up 10% on day One, then drops 9% on day two,..."), which is a losing trade and it's fair enough. That's what the thing is designed to do.

What the article fails to mention is that had you held the opposite long fund, you'd make money - in theory. Had you held *both* funds, you'd still make money because the losses keep getting smaller, and the gains keep getting bigger.

But in practice you don't. These funds are extracting billions from mom & pop who stay invested for the long term, and are paying dearly. It is a great, terrific, fantastic business for those who run these ETFs.

The potential play is to short both long and short funds, and beat them at their own game.

Seeing a little strength in semiconductors, and XLNX reported a nice quarter after the close yesterday - not enough to make me go overboard, but I am opening small positions in BRCM and MCHP; already long a little TXN.

Back into gold at 810, oil (March this time) at 46.75.
Rebought SLW at 5.25 that I sold earlier at 5.10.

Thanks QT read this a few years back and it was very worthwhile to read again. Not to be a sap but guys like Jobs give me the inspiration to keep on going and the people like them are going to be part of the solution to the mess we are currently working through. Like an old friend said to me once, 'being positive is easy compared to the alternative.'

crazy move back.

i missed going back long on HGU this morning, but im up on my HOU and thats always nice.

the late day surge in gold has failed to impress me yet. would like to see something continue into tomorow to find out if we are ready to turn back higher or no.

personally, taking tuesday off to celebrate, whether or not the market 'agrees...'

looks like shake-out city (actually, it felt more like they slammed the container down twice on the table to make sure it all came out) is being re-populated by more optimistic traders...

USO touched its December 24 low at $29 today and then rebounded (thanks to the whole market turning around). If USO continues going up tomorrow, then we will have a double bottom on USO, which might inspire traders to pile in.

Now that I have acquired a long-term core position in USO (at the average cost of $30), I can start selling my UCO for some trading gains. I have just placed a sell limit order on 1/2 of my UCO at $13.80 and on the other 1/2 at $17.

http://www.elitetrader.com/vb/showthread.php?s=&th...

Don't know what to say other than it is pretty unbelievable. Doesn't say when he did it though.

True enough and if it is the support he sees this could be a VERY significant bounce today.

Looks like the recent rally attempt was a huge head-fake.

Rob.

Haven't we had a huge rally off the lows on October 10 and a minor retreat at the end of the session so as to "reload the ammunition" and then send all market indexes +10% the next day? I think an up day tomorrow is likely, as the market that was falling for 2 weeks finally showed some signs of buying today.

Look like we will rally tomorrow (expiration day) and Tuesday

One comment to rant...

We have witnessed IB demise and we are now watching the money center banks demise. It is all connected. The balance sheets of all of these banks are garbage. Nuff said. Do not even begin to think about going long as an opportunity for a buy a hold. You are throwing your money away. better idea, burn cash, at least that will create energy from the heat. Yeah, there is and will be a short term trade because they are heavly oversold but don't expect to get a pay day. That includes all money center banks. The latest bogey was today, no more than a month ago the "group" bank got their govie bailout. Next will be the wagon bank, followed by the bank that announced earnings today. Yeah all garbage banks.

On deck?? Insurance companies - they can't get yield to honor annuities with step up and guarentees (much more worse than that staement). After them? The little regional banks because of their CRE exposure.

Not to sound doom and gloom but we crossed the line. The stream will be down till we hit bottom and that bottom will be not this year.... look for recover sometime around 2011.

Social economics folks. Mood drives stocks, not over inflated balance sheets with goodwill and intangibles marked to fantasy values. The mood has shifted and we are in the paradox of thrift. People will hoard and not spend as much, more defaults and bks to come.

Don't believe any hype and quit sounding suprised.
Set your stops or don't play at all.

finished significantly down:
XLF -4.6%
KBE -7.7%
RKH -7.3%

Every other sector finished in positive territory today... if financials need to participate (and lead) the new rally... why would they lag?

Either the rally will not have the strength to continue or a paradigm shift might be taking place... if we wait for financials to lead or even participate, we might wait a long long time... the "traditional leaders" in the industry seem to be in the midst of their own paradigm shift.

low at 15.22

I'll wait one more day and put a sell stop under the low of past 2 days.

looks like the big boys didn't buy this AM's happy rap.

No position.

Hope everyone makes it out ok from the plane crash/landing into the hudson river. radio reports mentioned no casualties so that would be great!

Also noticed a nice reversal at the close on a lot of the popular stocks from the discourse :)

SLW is up 5.3% from my $5.26 buy yest. This almost feels like luck, cuz i rarely get 2 trades in a row right. Me = not that good.

Nice call. Max pain shows 12.50 for Feb. When I'm using the capitulation trade, I like to see that max pain 100% higher than current price. Doesn't mean it'll get there but there's some pull to go higher.

GL, no position.

jock thx for the Nat Geo piece, pics are great and the story compelling although somewhat reflective, doesn't catch the whole picture. keep 'em coming.

It's great to see how this has turned out. Heroic piloting, people all around responding to the call and doing a great job. We get so much bad news every day that it becomes hard to not feel bad about our own little species sometimes. Events like this are refreshing. Makes you want to high-five someone - anyone.

I think Obama's speech next week will inspire more of this.

To anyone: There was talk here about the PPT. I've read opinions on both sides of this; some think it's bunk, others are certain that it's not. In today's environment, it's certainly easier to believe it. Given that assumption, is the PPT a tool of the current administration, or is this something that would continue under Obama?

http://online.wsj.com/article/SB123146363567166677...

truth is better than fiction -- especially when fiction become truth.

Early today, I made these trades: Longer-term trade: GE for additional shares @ $13.46 which is 5% above GE's 52-week low; medium-term trade: EXM (Excel Maritime Carriers)@ $6.76; Short-Term trade=BAC @ $8.20. Hoping for, at least, a short-term bounce for the EXM and BAC trades.

SiO2 wrote: "The potential play is to short both long and short funds, and beat them at their own game."

Exactly. But only if you are agnostic to the market direction. I am planning to short the hell out of SKF if it rises above 200 (and maybe buy some more UYG at that point). I thought that buying 3-month long SKF puts at that point would be a no-brainer trader (since SKF never stayed above $200 or even above $150 for longer than a couple of weeks), but the "smarties" have already figured out how to price SKF options, which are getting exponentially more expensive as SKF rises. So I guess I'll just have to short it the old way. So I am really looking forward to another market plunge, since shorting SKF above $200 is a guaranteed way to make money, provided one's margin account will tolerate another doubling of SKF to $400, if it were to take place.

Been a while since I meandered here.

Been looking at the news:

A total of 2.3 million homes had at least one legal notice of foreclosure filed during 2008, one of out every 54 homes in America

and so much more like this, It reminds me when I once walked along an old road just reading the litter as I walked by:

Walking a summer road, following humanities trail.
Revealing light of constellations amid
scattered stars of broken glass.
Glinting remains of pepsi, 7-up and beer bottles.
Wondering if a lesson is to be found...
Nothing else comes
As man made stars destine me
to silently and hypnotically move along.

Archaeologists document:
The history of any culture is told in garbage.
By this account modern civilization
has already thrown away its tale.
Leaving me to understand:
The time of lessons
just passed on by.

If we are to be measured by what we throw away.
Then I must ask....

Why not leave behind beauty?

Strange isn't it? But we will be measured by this garbage we leave behind, seems like a waste of our creativity.

One thing for sure so much of what we have thrown away has been hot air :) perhaps that is the true source of global warming. Heh

Peace my friends. I be off again.

Casey- excellent words. Look forward to more when you be back again.

Perhaps the 10yr Treasury will see 2% again? A 3.5% 30 yr should push home prices, stop the slide, bring buyers into the market, and free up some cash for those who want to refinance. Unfortunately, it might save the banks too... Since we're up to $8T in Federal feral obligations, and the total outstanding mortgage debt is just over $10T, the government could have simply paid off 80% of the outstanding mortgage debt....

"All Time Low Mortgage Rates For A++ Borrowers Only, Fed’s Efforts Futile
January-15-2009

Since December 31st when I warned that only the best borrowers would be getting approved, rates have continued to decline. The best borrower can now obtain a par rate of 4.5%. On an after tax basis, mortgage money now costs around 3%. (I remember when savings bonds used to pay 6%.) The good news is that for those who handled their financial affairs properly, the reward is the lowest mortgage rate ever. The bad news is that your home has crashed in value, your stock retirement account is 40% lower and your hard earned savings yield zero interest if you prefer to invest in government treasuries. On my scoreboard, we are all losers here, regardless of lower mortgage rates."

http://mortgagedfuture.com/

Teamonfuego - thanks for your most thoughtful comment. I think the trick is to combine technicals with fundamentals, and macro considerations.

On the macro level, half of GE's earnings have been from finance, which HAVE to be toxic at this point. None of those on your list involve this risk.

Yeah, I just think if we are going to invest our hard earned money into a company that we technically have no idea what the inside of the company is like, how it is run, how trustful the managers are, what their true growth prospects are, etc., then we should be investing like hawks...with a keen focus on CASH and companies that have governments as their main customers. There is SOOOOO much freaking corruption in this country its despicable. Absolutely despicable.

I'm fired up, even more so because one of my good friends just survived a layoff but still managed to get a 10% paycut. And he's overqualified for his job. All because these dirtbag bankers ran the biggest ponzi scheme of all time.

of the falling market now is because I don't see any major new negative developments that could take the market significantly below the November 20 lows. Not enough time has passed since November 20 in order for something principally new to appear. Therefore, the current fall in the market is a buying opportunity, IMO. If we test November 20 lows -- all the better, I'll be able to buy stuff at great low prices.

I'm just beginning to think about the longer term downside of the foreclosure/BK crowd not having the ability to buy anything on reasonable credit for the next 7 years. 1 in 10 to 1 in 6 homeowners is the spread of estimates I have heard. I think the longer term impact of this issue and where the economy will trend has yet to be fully "seen" by the short focus of the market. I'm very worried for my children!

teamonfuego, I agree that the events you listed may happen in 2009 (with some small probability). But I don't think the current drop in the market is due to someone finding out that one of these events (or any other "major" event) is becoming highly probable. I may be wrong, of course, as I am usually the last one to find out the reasons for a drop. This is just my intuition speaking, which tells me that it is safe to buy this drop.

Seamus - thank you so much for posting this. This board is great.

ALOHA !!

Citibank share price is getting down to "nationalizing" level!

As I posted last week, $852bil worth of crap derivatives and losses! Its a prime candidate to go onto the US TAXPAYER Balance Sheet under the "100 year long term liability" line item!

Unless something changes soon, by Friday, I would not want to hold "C" until next Monday! Then again, lets consult MAD MONEY first to confirm that!

Dr. Doolittle economics.

http://tinyurl.com/8rukg3

About the pilot
http://tinyurl.com/9q96bb

Great 1st hand accounts from NYC, of the miracle on the Hudson today. Good news across the board. I am so happy no one was seriously hurt. the pilot and the crew deserve all the merits of heroism there are. to see passengers and commercial ferry boats 1st on the scene is inspiring.

I hope this type of resolve, courage and willingness to help, outshines the tarnish that wall st excess has left on new york city.

Finger Lakes - "Never in my life have I ever seen such incompetence and greed rewarded so blatantly. "

I've been watching them do this for most of my life, difference is this time it got too big and they got their hands caught in the cookie jar. They will never admit it though, they've brainwashed themselves into believing they are entitled and justified.

http://tinyurl.com/7stcvt

Napoleon Dynamite said it best, "Idiot." Why I don't watch Tout TV anymore.

"Rally today and at least through Tuesday, I believe. Bank of America and Treasury deal eases concerns.

Thanks Bill, this greatly assists my decision on when to take gains.

HI,
I am new to the blog and wanted to introduce myself on a slow day. Quickly, I am a general contractor in the Bay Area. Most of the homes I build are in the $3-4M dollar range. As a new self directed investor I appreciate the quality and thoughtful comments made.
Bill....I hate thank yous directed at what I do, but at least want to express how impressed I am at the level of commitment you bring to work every day.
My only input that might be of help here are impressions, comments, and conversations I have with owners of the homes I have built. These are CEO's, Chairman, etc. of very large company's you all have heard of. I would have to protect their confidentiality, but I have found the input helpful to my trading. Don't worry, no insider trading at all. These are overall reviews of market conditions.
I have been doing my own trading for about 1 year and if I don't see better results for the amount of time I spend on it I will probably transfer my account to CTBA.
Quick question...I have asked my friends (read client) about TBT and have read a lot of articles about it. General comment is very positive but all say not to hold it for more than a couple of days. What is the blogs position on holding TBT for any length of time?

Best,
Mark

Bill, you are correct on my intent and time available for trading. I am severely limited during the day to trade...work and all. Someone I trust said the better long term trade is shorting TLT. But for trades made in 3-4 days max, TBT is better.

you are all posting on the Thursday chat :)

just an fyi

Edit..."I see that now, sorry I started it." Should have read "I see that now, sorry, I started it." One comma can make all the differnce.