Cara's Commentary & Community Chat, Thursday, Jul 2, 2009

China Allows Yuan Trade Settlement, Offers Tax Breaks
http://www.bloomberg.com/apps/news?pid=20601087&si...

Russia, China to Promote Ruble, Yuan Use in Trade
http://www.bloomberg.com/apps/news?pid=20601087&si...

Good morning.

TTM - Upgraded to Buy @ Deutshe Securities

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FSLR - Downgraded to Neutral @ JP Morgan

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New Coverage:

AMZN - AmTech Research Initiates with a Neutral. PT = $87
CSCO - Deutsche Securities Initiates with a Buy. PT = $26
JNPR - Deutsche Securities Initiates with a Hold. PT = $22

It is a fact that China is greatly increasing their gold holdings, and my bet is so are other ' overseas ' central banks. So, the lower the price goes, for now, the better. This may sound to simplistic, but that's the point. Gold itself is really a trading equity, so why not try to buy low, especially if one can exert unseen pressure on the trades.

ChrisM

Mine is up and running...seems ok so far... What kind of problems are you experiencing?

works great if you like blank screens that suck up virtual memory like a black hole and is completely un-responsive.

I blew up my S&P road map from the beginning of the week for better detail. keeping a close eye on the May Low green line around 880. Looks like futures this morning may get us started towards it a day early.

http://tinyurl.com/m4s798

Here is an article worth looking over by Doug Kass who I personally have great respect for.

Kass: Many Challenges Still Ahead: "Things are still bad and will remain that way"

http://tinyurl.com/mzolxp

Visualizing helps to retain the 12 and 24. Just a mental trick that's working for me at the moment. I can see unlearning old patterns is a challenge.

Bev

That H&S (should it get completed) projects to roughly 805, yes ?

ToddinFL

Yes 805-810 the 50% Fib line..A bear's dream GRrrrrrrrrrrrrrrrrrr!

Also Market Club yesterday posted this video. They say the same thing!

http://broadcast.ino.com/education/sp500_update_20...

Yesterday I picked up DTO @ 71 but sold it a few mins later for a quick trade after the oil report. BIG mistake. Looks like it broke out of a symmetrical triangle this morning in pre market. I have a target around 85. Now is at 81.23.

http://tinyurl.com/lqr8m6

My experience is similar to ChrisM. Looks like a meltdown at Scottrade. I cannot even log in.

2nd

If this is a symmetrical triangle with a breakout to the downside I have a target of about 12. Hard to believe I know, but that is how the numbers crunch out. Just another piece of data to confuse you even more.

http://tinyurl.com/l8cgrq

I see 9 bucks but in any case, the upward sloping support line from the end of April low was broken and was much shorter than the descending resistance trendline from the 3/19 high.

RSI hasn't lined up for a buy as well.

No position, long or short. Just watching the parade.

please everyone give www.juancole.com a look in the morning before thinking what youre told about the world is right. pakistan is not out of control. as much as its against the gold bug agenda to have the world always on the precipie of disaster its just not the case. nor is iran about to blow.

juan dissects how in fact pakistan is neither about to be over run by the taliban as so many claim, and that most pakistani's arent in favour of the taliban despite media outlets that love the drama of making everyone scared of what the taliban are going to do next, heres a link provided from the site showing something very different than what we are told.

http://www.worldpublicopinion.org/pipa/articles/br...

Arguing with Gann (about missing the pre-market entry). Is he telling me to shut up and watch, and I might learn something?

Les- Do you have a (Gann) target for a short entry into SPY?

Hmmm.....

You know, it was obvious to me this morning (pre-market) it was going down- fear gauge. I'm left wondering how Gann incorporates sentiment and/or intuition into his rules. Of course, it could just be a case of the 10% of the time it would have paid off. Discipline over conviction?

Fell -70 bcf.

2nd
"...short entry into SPY?"

Just my 2 cents.. Watch 900.... we been getting stuck around this level lately. And the important level to watch is 880. I have a feeling we may churn around here for the rest of the day and even could rally a bit at EOD. I still believe early next week will be the critical turning point.

Bev
Thanks for another great chart. Hard to argue a bullish case on technicals or fundamentals.

My Scottrade elite's working fine...Now if I'd actually gotten up before 10 am and bought some ESLR....Ahh, perchance to dream.

Why is this stock rising as oil is crashing? You could drive yourself nuts trying to make sense of causality-and-effects....didn't really see any news on it either but then again I don't have a fancy-pants news feed.

Looking forward to pulling a few corks this weekend...went to Zachy's bought some xpensive Spanish reds.......Spanish wines really are better(for the money by far) than most Italians, and certainly, the French.)

Some of them are AMAZING. Zig-Zags is the word that comes to mind. I'm talking the wine here, not the car:)

HAPPY FOURTH!

One more gripe: Obama did an excellent job of bailing out the Wall Street multi-multi-millionaires....Terrific. Now who's gonna buy any houses? Who's getting a job? A amnufacturing job? Where's the move to bring manufacturing back to America? To give those companies gov contracts? To pay for national health care? To buy American?

What good is a Wall Street bailout if the average American is going down the tubes?

2nd- Looks like we might be basing....The trade was before the report, but no biggie. It seems to me the seasonal trade would start a few weeks before Aug. Might we see UNG green before days end? .05 away.

I noticed Yamana was offering at 9.03 for the longest time even as the bid moved around.....

BTW I am always amazed, even after all this time, the subtle changing ways that the screwdoodle manifests each day without any central planning or anything. I'm talking shapes on a chart here.

I believe the fireworks are over for today. I expect we will churn around here for the rest of the day and maybe even rally up a bit into the close. Next week [Tues-Wed] I believe will be day of truth, especially for the bears.

Hope everyone, especially those in the USA will have a good weekend. I will see everyone here Monday morning at the bell. I promise not to post so much next week. Looking over today's posts, I have become a real "Chatty Kathy".

Interesting. I didn't consider a rotation out of long term to short term treasuries as one of my cases. Based on what Bill was saying, that's what is happening. But it makes sense. A lot of my cash is sitting in short term treasury money markets. I want the safety, but not the interest rate risk. I suspect I've got company.

TBT looks pretty happy on a day where the S&P is down 20.

although this is a risk, the FDA advisory panel gave a 6 - 2 thumbs up 9 months ago... the FDA itself requested more info ( ? ), but apparently there were no ' real ' issues with the drug itself... august seems to be the month tossed about as far as determinate on approval..they have aligned themselves with mrk... I will scale in, as with vicl several months ago .

"Looking over today's posts, I have become a real "Chatty Kathy"."

Is that a bad thing? Not IMO.

from one worker to another.... remember in 1980, in Arkansas, when a mechanic working in a Titan II silo, dropped a wrench and the puncture results !!

Postings are encouraged...particularly welcome are the names of stocks which are in immediate play.

FWIT I'm playing a bit with CPA on the oil weakness theme. In pretty late at $40.54; just a time-killer, really, and definately a day-trade.

edit: Oh, btw, whenever I post a trade here it always immediatedly goes down. DYODD! :P

"I have become a real "Chatty Kathy"."

Is that a bad thing? Not IMO"

Agreed, chat away till your ♥heart's♥ content!!!

Really, the Argentinian debt collapse in its fullness is described by the documentary 'Memoria del saqueo' (titled 'Social Genocide' in Englilsh)

http://www.imdb.com/title/tt0400647/

I thought the title incredibly harsh, but watched the documentary anyways. The focus in not necessarily on the underclass where the brunt of the economic pain was felt, but on the ruling elite. A fascinating portrayal of a convincing campaign for change by a popular candidate who immediately turned around and opened the doors wide to the vending of the public trust. They socialized risk and privatized profits like no other country in the world. Consequently it was the first nation to default in the 2000 crash.

The lesson is how much Mr. Obama in all his sincerity has changed U.S. democracy into wholesale banker's socialism, that the moment he got into power, reversed his position on changing the status quo, and did almost exactly as the populist Argentinian president.

Anyone have a free site that that lists the front month in each futures contract.
Thanks

CP,

I think the initial reason for going into Afghanistan (the Taliban) was legit, but we blew it and let BinLaden escape. A small US force had him dead to rights early on.

As far as meddling in their affairs — they are not really a nation any more than Iraq was/is. The whole Middle East "boundary" set up is a fiction established in 1922. These are essentially a nomadic people much like the American Indian tribes were and similarly have been easy for the western countries to play off against each other.

My view is we are there for the oil and all other considerations are excuses which gain the backing of various sympathetic groups.

For a complex variety of reasons we are still dependent on the oil from there.
There is no question we still need oil or our entire system would shut down is short order. The fact that we could and should have eliminated that dependency is whole other discussion.

The drug thing is another issue which could be solved by legalizing is similar — politics and money — prevent it.

CP- Are you falling in love with Bev ;)

I can't think of too many reasons why DXPE wouldn't be good for a trade into August or even September as more stimulus announcements are made, look what happened with OSK yesterday...(surprise?) Catching the low will be important as always, I don't want to sleep through the excitement if I can help it.

FD: no position

raz22,

I concur with your logic, but always question anything stated as "fact". Since we seldom "know" what the heck the USA is doing, how do you see this gold ploy in China as a "fact"?

I have heard they monitor and censor the internet and a decade ago tanks were called out to quell protesters — I can't accept the idea that we can know much of anything from anyone regarding China.

Exception: My friends who have been there do all agree the pollution is bad. I guess I can accept that :-)

I like Futuresource, go to bottom of gray area with the chart and hit the "get options" button, will bring up a chain and front month designation. The chart can be of several contracts and commods, play with the features and see if it suits.

http://futuresource.quote.com/charts/charts.jsp?s=NG%201!&o=&a=D&z=610x300&d=medium&b=CANDLE&st=MACD(12%2C26%2C9)%3BSTO(14%2C3)%3B

Inverse straddles with delta negative bias started on IWM, DBA
Inverse delta neutral straddle started on FXE
long calls bought on DUG to hedge delta positive OIH straddle

After these additions, the entire portfolio has a net beta weighting against SPX of approximately -3.5 which is pretty close to neutral

Bill- LOL. Let's just say in San Francisco, you wouldn't want to go down that path ;)

Speaking of San Franciscan paths, have you walked the scenic(vertical) footpath down from Coit Tower when the nasturtiums are in bloom? ♂

http://www.sisterbetty.org/stairways/filbertsteps.htm

The information comes from Bill Fleckenstein and major trading desks in Europe.....

just beginning..................................

Out of those I listed yesterday, SWY has triggered on a short side and dropped 50 cents or 2.5% so far in a single session. Minor support on intraday is 19.70; if loses it, 19 is next - providing market helps of course.

http://www2.barchart.com/mktcom.asp?section=indices

Here is a video where Peter lays out a pretty good case for owning the yellow metal

http://thehonesttrader.blogspot.com/2009/07/miller...

interesting.
TLT
95 max pain for July, 100 for Aug

SPY

92/93 respectively

FD:long TMF

this was a capitulation play from a week or so ago.

Any good news with the RSI below 10 and the stock skyrockets.

1:58 PM Matrixx Initiatives (MTXX +28%) spikes after FDA releases a document (.pdf) saying the company's coordination of various procedures has improved over time, and notes that some degree of smell loss resulted in complaints for 3.6 persons per 100K, down from 6.7 in 2004.

No position (stopped out this AM - gotta work on that)

...

looking at longer time frames, SPX/SPY look like a megaphone pattern.

http://www.trending123.com/patterns/reverse_symmet...

IT support appears to be around 600 which would absolutely kill the bulls and get the bears lathered up. And IT resistance would be in that 950-960 area which would do the opposite. Something for everyone.

Volume from the March low has been in a steady decline.

FD: no position in SPY. Carrying slug of inverse ETF's at much higher prices.

And we'll talk a little treason.

Messidore transitioned to Thermidore and Ropespierre lost his head. The Jacobins were out and the counter revolution had begun. Twernt long til a sawed off Coriscan corporal brought order to the country.

Happy 4th to all and may we fare better.

Also, on July 4th, 1845 a little Concord whimp named Thoreau moved to Walden pond and began writing a little treason. Simplify...

Alright, I tried saving my data file and reloading ST elite, but the only way to do that is to use their import/export tool in the wizard menu, and trying it the other way was overwritten by the 'new' installation. apparently the install on the website isn't the updated version, so you could uninstall the old version and the updater would simply write over it with the new funky version and there you are all over again....

I tried to go from my desktop to my laptop to save my set-ups and the darned thing shut it down just as I was saving the data file....GRRRRR. so I've been rebuilding all my setups, lists, charts, etc this AM.

These updates invariably happen on the morning of a correction so mental stops are either broken or you try to get on the java based program premarket after goofing around with new installs and have no useful charts, an old watchlist, old set-ups etc.
That said I have few suggestions.
1. Save all your templates and then make a backup of all your layouts regularly using the export function that saves it to your document file or wherever you want it.
2. Call Scottrade compliance at 1 800 888-1980 ext. 1900 and tell them about your frustration with their timing of updates and the lack of testing them BEFORE costing customers money with crashes, lost set-ups, lists, chart settings etc. They should update on weekends, after markets close and after fully testing the updates for various machines.
3. Remind them there are other brokers with better fees. ST is a good deal only because they include decent charting tools and real time data. They don't have a moat around that small advantage. Let them know how much you trade.
4. Stick with it. I won't mention what they did for me, because it's a really good deal and I don't want to risk losing it, but you should know it can improve under certain circumstances. I have a really good relationship with my local office and their service is beyond the call of duty. I told compliance that is the reason I stay and that I've considered moving to Interactive several times because of their lower fees. Let's just say the fees are negotiable and if you have enough capital they can improve them....by enough to make a sizable difference. So from now on I'll be trading for a pretty big discount over the advertised rate of $7 a trade....it pays to have a good relationship with the local office and to let them know how to improve their service.

I've tried to help other businesses improve their service and not had them be as understanding as Scottrade. AAMOF, some I've never heard from after assurances I would. It isn't personal to me, it's business. You never know but it speaks volumes about their intentions when they listen and act to resolve obvious problems.

Besides, I think I've paid for that nice purple helicopter...:>)

The information comes from Bill Fleckenstein and major trading desks in Europe.....

Thanks

Craig,

I finally got thru to support bout an hour ago. He walked me thru saving the data file,uninstalling and downloading a new Elite from their site. This one does not save my setup/data though. Said for me to call Tuesday to get a patch and to install my saved data.

The patch fixes a glitch in the charts.

Mikede, I agree with Barry, Futuresource is quite good with charts and they have alot of options. And as Telestar also noted Barcharts are also very good but they are mostly java based so can be harder to work with.

One thing I do is to create a local webpage on my computer with a list of futures I want to follow. I have the links to the charts for each so when I open the file with my browser it gets all the current charts from Futuresource and displays them, saves going thru the website menus to call them up individually or having to bookmark each one individually.

Here is a simple one I use which has a few currencies, PM's and energy, (oil / nat gas). The file is attached here as a text file so you can see how its set up. Just save it to your desktop (or anywhere) and rename it with the file extension .html rather than .txt you will get a message saying are you sure you want to do that as it might not work, but its what you want to do so your browser will treat it as a webpage, then open the html file with your browser. If you want to change any of the symbols just change it back to a txt file, change and then back to a html file.

Note you can also change the chart style, overlays, indicators, duration etc, just get the desired coding by pulling up a chart at Futuresource.

In case you're wondering what it would look like before you try it, I've also attached a screen shot of what I get, the second file png image.

Quasi

Anyone looking at an entry for FAS, sub $8 ?

Contemplating...

I'll bet she sells off into the close...

Just noticed that MACD for UUP is about to roll over to the downside. This would seem to be bullish for gold & commodities - in spite of the unpleasantness of what happened to PM & oil today. Just saying. Maybe the lows for today are a good buying opportunity for PM?

*NYSE CITES `CONNECTIVITY' PROBLEMS FOR EXTENSION OF TRADING
*NYSE TO EXTEND STOCK TRADING PAST 4 P.M. IN NEW YORK TODAY
*NYSE TO EXTEND STOCK TRADING PAST 4 P.M. IN NEW YORK TODAY
*NYSE SAYS THAT IT WILL EXTEND CLOSE OF STOCKS UNTIL AFTER 4 P.M

At this point SWY stop can be trailed to above 20.30. Next leg down is for first partial cover. It's at 70 cents gain vs. 25-30 cents initial risk, not too shabby for one day's work.

GFG - Closed up 22%, wearing anti-gravity boots and smiling into the sunset.

FD: No position

Good Point Craig... I was thinking the same thing... smells really stinky; these folks really must think the rest of us are stupid... it is madding however; it is a Long Weekend for me in my 'regular' job and the 4th of July... Going to spend time thinking of just what does the 4th of July mean... Everyone have a great Safe weekend...

Notice that the drop today came when people on this board started to give up waiting for the market to go down and started expecting a short-term rise in S&P to 940-950. In the past, the market started falling after a rally when people started to give up waiting for the rally to end and started believing that the rally will last a little longer. I think I wrote about this yesterday as a partial explanation of why I sold my KGC and placed a sell stop order on some of my UXG. Those who are new to the market may want to keep this "feature" of the market in mind -- it never moves when people expect it to move and instead moves only when people stop expecting a move in that direction. The same thing happened in January 2009: the decline to March lows began when everyone got convinced that the market was preparing to break out upwards from its December-January trading range.

2nd - I decided to start wading in to some Oct 15 calls on SLV late yesterday and again today. Average price paid $0.60. These are replacing some PM exposure I shed a few weeks back as gold hit the $960-80 area and I unloaded a large chunk of the mining fund I had. My thought process for the trade:

1) On one hand, I think this holiday market bludgeoning may have actually been a HB&B stop raid to free up shares to cover yesterdays shorts (while people are away from screens for the holidays). I'll be more convinced of an overall market decline if S&P breaks 888 (which would break the streak of higher lows since 666).

2) But, if this is the market making a move down in earnest, I wanted to have long dated calls that will still be in play even if POSilver declines to say $12 where I believe there is very long term support.

3) If the POS continues to crash and go below $12, I will utilize cash in order to add more physical silver to my position (and presumably will still have the calls for a few months as well).

I also bought a few July UNG $14 calls - average price paid $0.33 for a shorter term trade. Same theory though that alot of today was holiday stops being taken out while people were away on vacay.

today was all three for me.

The Good - Cashed out yesterday morning with $11,400 day gain

The Bad - After Hours bought a few back, my technicals said by only TBT and SMH....lost $3,100 with what I bought, if listened to my TA, today's loss would have been $197

The Ugly - If I did NOT cash out yesterday, loss today would have been $22,000

Note: Keep Emotion Out Of It

MK

Thanks Kaimu

It was a pleasure sipping green tea smoothies and chatting in the tropics

something almost Hemingway about it... without the cuban cigars ... and perhaps a few other things...

It was a honor to meet and talk yesterday.

As an aside... we might watch the numbers on this site. But behind the numbers are the people and their lives... My living is in watching people... and I can tell you ... not based on forecasts , trend analysis, or anything fancy... we are nearing a new breaking point in the average person's level of safety...

So many people are in foreclosure, at the very edge of their limits, savings... and most of those people are now truly ready to walk away from the economy in general... I am not saying this in doom or gloom... But unless things change soon, this system is going to get a big shock as a lot of people walk away for good.

A month or two ago... the average person I met was still holding it all in, not talking about their problems... afraid to share or to reveal their fears... That's changing now. I don't know where it will all go, nor do I want to know. I can just say, I have seen a measurable change this last month.

I teach people how to release into their life, not to build into life. It is pretty much as opposite relative to the current economic system as you can get where a person needs to buy into power...

More people are beginning to look into directions opposite of conventional thought. As investors keep your eyes open in counter trends. Strangely by investing in such counter trends, that might end up being the Social Equity process that Bill asks everyone here to ponder how best to make real. Since such investing also supports people releasing out from a rigged and abusive system.

Something to ponder.

Namaste

They already do in the form of service fees.

I think I read somewhere in the papers or on the web here that there is a website in the U.S. that facilitates small lending between people for various rates of interest depending on risk profiles. Anywhere between 7 - 20%.

Get ready for negative interest rates in the U.S., I think this will be the next move.

All of this is astonishingly good for gold. Perhaps the restrictions on gold price movements are signaling to us that a major trend change in borrowing for the worse is coming to light.

"Total of the above listed line items is over $34BIL USD spent in one day."

I wonder how long those foreign Heidelberg presses can keep pace... they need to step it up if they're going to save the federal reserve system. To heck with jobs or creating value, damn the torpedoes Jouett, full steam ahead!

At the close I heard him stamp his foot, light a cigar, and tap the desktop twice before leaving.

CP- Have to say I've never tried that footpath, but I'm going to take the family when we start our stay-at-home vacation in August. I can tell you're a highly visual person. Still planning to stop at Kennedy Meadows (as you suggested) if we get ambitious and take a 2-day drive over the Sonora Pass into Nevada.

Craig- Did you say the US markets are closed for trading next Monday?

David- This was filmed at Shoreline in 1988, probably an exit or two north of where you live. Clapton together with Mark Knopfler.

http://www.youtube.com/watch?v=_1vJD3J7u-A&feature...

2nd, I'm sorry, I caught that and knew someone would point out my error....usually holidays are Mondays, this time a Friday. How perfect it was you.

I remember backpacking to Kennedy Meadows when I was in Boy Scouts, part of the Silver Knapsack trail 50 mile hike. The hike started at Camp Whitsett, north of Kernville and Quaking Aspen. That was back in the days when there were no roads in that part of the world, not even a four wheel drive road. The Forest Service employees used what was essentially a 15 HP minibike with a more stout suspension and ability to haul tools/supplies. They told us then that road building was going to happen for logging. Now I think you can drive an RV there, which really ruins it for me. This was 40 years ago and it was like Dorothy landing in Oz for kids from the San Fernando Valley, absolutely gorgeous and magical with trails through head high skunk cabbage and mosquitos so thick the only respite at night was a tent, netting and 'off'.

There are two Kennedy Meadows in the Sierra.
The Kennedy Meadows you are probably talking about is near Sonora Pass.

My memories of Sonora are less cheerful but incredibly meaningful none-the-less. I attended a national cattle dog competition there and my dog Banjo revealed his cancer there (Australian Cattle Dogs are very stoic so I didn't know until I got there) and I had to let him go in Sonora at the Vet, but not before he revealed his true greatness to everyone present, which was more than his way with cattle.

You know me...I'm not an airy-fairy over the top spiritual person for the most part. I've never had a human Guru or direct human spiritual experience, but I had a doG Guru. Banjo taught me more about life in five years than I've learned at any other time of my life from any person or entity. He brought people into my life that were instrumental in my being the person I am today. They showed up at the perfect time, with exactly the lesson needed at that time, and he was central to all of those experiences, including his passing. He and I had a truly psychic connection and he knew what I was thinking before I did.

People severely underestimate dogs. I don't make that mistake anymore.
There is a reason doG is God in reverse. You never know what your spiritual teacher is going to be or where it will happen. Mine just happened to be born a Dog. I don't know what that says about me, other than I'm open to whatever is.

I'll bet Kennedy Meadows in Sonora is beautiful. If I went there I know what I would find and feel.

Okay, before I got caught up in Kennedy Meadows and Banjo I was going to write about my experience today with Scottrade. Not because an almost 28% discount on trading fees is really good for me, but because of what it might mean to everyone here in this low volume market and the future. I mean, what does it mean when a broker voluntarily cuts fees by almost 30%? I'm not as big a fish as most of you, I trade smaller lots, I'm not making four or five figures a day these days. I have in good markets, but you don't make five figures on 1-3% low risk trades on ports the size I manage for myself and my parents. So....how bad must it be?

I'm happy to use the lower fees to my advantage, but it concerns me at the same time, especially when I combine it with talk of -.25% yields on bank accts.

What must this mean for all the brokers, banks, etc? What are they seeing that concerns them so much? It has to be more than low volume.

"I've never had a human Guru or direct human spiritual experience."

Craig- Not even on Father's Day? Here's one from Judy Collins.

http://www.youtube.com/watch?v=h0qM95epNxY

Mark- Well, let me preface my remarks by saying that everything I know about Gann I've picked up in the last 24 hours- no 'expert' in any way, shape, or form. Just trying to use what little I've learned in some way. Repeating a paragraph I posted last night:

"Safest Selling Point. After a market has advanced for a long time and made Final High and has the First Sharp quick Decline, then rallies and makes the Second Lower Top, and from this Top declines and Breaks the Low point of the First Decline, it is then Safer to Sell because it has given the Signal that the main Trend has changed to the Down side."

Just based on that, I would say the entry point is 888. Open to any and all comments/criticisms.

Mark- You have a point. I would avoid the ultras (especially the 3x):

(a) The extreme volatility would throw you off your game.
(b) Value erosion should the market zig zag down.
(c) I could probably handle a 2-6% position in ultras. 10% would distract me to the point of being unable to fully attend to other things.
(d) If I'm confident in the trend, going 35-40% short (based on portfolio value) would be manageable.

2nd,
Sadly no. My father worked very hard and that was his life before he retired.
My parents divorced when I was younger and he was largely absent.

When my daughter was born I told him it was time to get his $hit together and decide if he was going to be a part of our lives or not. From that time forward we had a better relationship and now much later we are very close and I understand him much more. But guru? Not really, not even on Father's day.
Ironically one of his favorites is Judy Collins.

Thanks for the links (2). I only became aware of Judy rather late in life (1990). Ry Cooder.....only a few years ago did I stumble upon his recordings in Cuba. You know, Buena Vista Social Club. Smashing.

"In my work I build models of complex systems and design automated algorithms for making optimal decisions in complex, nonstationary, unknown, uncertain environments."

Sounds all pretty "fuzzy" to me, David. I think you and Vadym could hook up to construct a wicked 'lil fuzzy black box trading system. And 2nd - take a break, friend. This thing ain't going to zero despite what Kaimu and Craig say. Actually it's what they fail to say. How it will all resolve itself. Kaimu? You've provided a litany of the challenges and missteps made, in particular, by the U.S. Treasury, but you haven't speculated - beyond AU going to $gazillions - on the end result. 1984? Dark Ages? Mad Max? WW3? I'm not so sure.

I think we all might be pleasantly suprised - if we could live that long. There's a whole new dynamic in the equation that hasn't been around in similar past circumstances. We've, here, been sharing it. Not only in our own discourse but in pointing out things like the "train station" dancers, the Swedish Stats Prof, the many countervailing opinion blogs, the ludicracy of the MSM.

Here's a big HUG to all my American Friends on this 4th of July Weekend - the most gregarious and friendly people I have ever met in my life.

http://www.youtube.com/watch?v=9AdQo1qBy1E
http://www.youtube.com/watch?v=RKILQPBcVTI
http://www.youtube.com/watch?v=vr3x_RRJdd4

Aha, Mackinaw........You have importantly observed:

"I think we all might be pleasantly suprised - if we could live that long. There's a whole new dynamic in the equation that hasn't been around in similar past circumstances. We've, here, been sharing it."

An astute and noble thought. I hope it is the catalyst for the way forward. It is necessary and I think the further degradation of the environment or not is key. Large human populations cannot survive on an Earth that is anywhere similar to a lunar landscape.

nice video, Craig.

And, if this is going to disintegrate into a musical festival, here's my next submission:

http://www.youtube.com/watch?v=5D8abCoVXm4 (English version)
http://www.youtube.com/watch?v=UzBncolQjP0 (original, French Version)

http://tinyurl.com/ltvhyr

chinese officials voicing concern of reserve currencies is popping up daily. The group of eight meeting next week will hopefully be the catalyst to launch precious metals.

Excerpt:
Zeng also cautioned against the possible ill effects of “loose” monetary policies, such as those of the U.S., echoing a statement by the central bank in May.

“A policy mistake made by some major central bank may bring inflation risks to the whole world,” the People’s Bank of China said then in a monetary-policy report.

Premier Wen Jiabao said in March that he was “worried” about his nation’s holdings of Treasuries as spiraling U.S. debt threatens the value of the dollar. China, the owner of the world’s biggest foreign-exchange reserves, called yesterday for a stable dollar and damped speculation that it is seeking talks on a new international reserve currency at next week’s Group of Eight meeting.

ALOHA !!

Ohana Hawaiian style ...

http://www.youtube.com/watch?v=iqF5AvERMNg&feature...

http://www.youtube.com/watch?v=Bw2M3QJ-oR4&feature...

http://www.youtube.com/watch?v=3SFS0CPtlwM&feature...

http://www.youtube.com/watch?v=0ltAGuuru7Q

Rogue Trader Blamed for Year-High Oil Spike

PVM Oil Futures, a London-based division of the world’s biggest broker of over-the-counter derivatives, has lost almost $10 million after falling victim to a rogue trader.

The unauthorized trades in the early hours of Tuesday morning are reported to have been brokered by Steve Perkins, a senior, long-standing trader in futures on the Brent oil contract. He is understood to have been suspended from his post.

A spokesman for PVM Oil refused to confirm the identity of the trader and said the company had launched an investigation and continued to operate normally.

The rogue trades are widely believed to have caused global crude oil prices to spike to their highest level in more than eight months — a leap that traders and analysts had struggled to explain.

Oil breached $73 a barrel during Asian trade on Tuesday, up by more than $1.50 a barrel in under half an hour at around 2 a.m.

More than 16 million barrels of Brent crude oil traded in just over half an hour, according to Reuters exchange data, an unprecedented amount for a market that typically trades less than one million barrels before Europe opens.

The volume of crude traded during Asian trading was almost double the current daily output of Saudi Arabia, the world’s largest oil exporter.

Mackinaw, Kaimu,

Interesting exchanges of thought between you two today. At times I find Kaimu's comments interesting because I agree with so much of what he says and other times because it's encouraging to me that I may not be the country's most cynical person after all :-)

I have had the thought when simply trading to make money, or at least stay even, that I only differ in degree with those at Goldman Sachs, etc. In fact trading doesn't create anything tangible any more than any other form of gambling does. In some sense I am only serving myself or a select few at best.

It takes investment in an enterprise which employs people to provide goods and services for others to make a workable economy. Anything else is like a giant garage sale — just shuffling what already is.

While I value his opinions, I see Kaimu's flower enterprise as his genuine contribution to society as a whole. Jobs and beauty are "real" things which endure.

Also, I might mention that if things continue to deteriorate here on the "mainland" there may be a mad rush to stake claims in the islands. Be careful about painting such idyllic scenes.

Mark- So here's Bill's take:

"Maybe now is the time to wreak havoc with swing traders, as the S&P appears to forming a nice, clean head-and-shoulders top. The neckline is approximately 880, a measured move projecting a 76 point decline, which is very close to 50% retracement of the March to June up-leg. If the S&P penetrates and closes below the neckline, be aware Mr. Market may be setting a trap, trying to catch intermediate traders leaning short after an obvious breakdown level is violated, only to have stocks rip to the upside, again frustrating the majority of players.

"As long as prudent stops are used and traders properly size their positions, getting whipsawed and losing a small defined amount is a cost of doing business, a mental annoyance for a disciplined trader. Once the true trend commences, those traders will easily recover their losses, profiting by jumping aboard the newly formed main trend."

I'm sure there are all kinds of corollaries/refinements/nuances/exceptions, conditional or otherwise/whatever to any of Gann's rules and observations.

Kaimu,

lol! Thanks for the thoughtful exchanges last night. As I was showering this A.M. I recalled that I posted:

"But isn't it no less greedy to hedge oneself in AU and tropical lands?"

That was totally uncalled for on my part, downright silly (knew I shouldn't have had that last glass of Chardonnay :), and I apologize. Of course you're are just trying to protect what you've got and deserve. I see you posted exactly that after I retired:

"Because I protect myself and my family from US FED monetary fraud somehow it is GREED? All I am trying to do is save what I've got."

Cheers.

"That was totally uncalled for on my part, downright silly (knew I shouldn't have had that last glass of Chardonnay :).

Mac- That's OK, man. We understand human nature here ;)

http://www.theglobeandmail.com/globe-investor/chin...

I still can't believe this company traded for $2.60 in Nov. and again in Mar. Up $0.50 today to $19.00 on the news of this dilution.

Craig:

“Banjo taught me more about life in five years than I've learned at any other time of my life from any person or entity.”

“You never know what your spiritual teacher is going to be or where it will happen.”

Yes.

Years have made me aware, that in life, important things like love, spiritual experiences, come from unexpected angles and sources. Many, if not most times, you don’t find it, it finds you. You recognize it if your intuitive, situational awareness is alert. If there's too much noise in one's life, it may dawn on you later with that inner speaking voice.

"The volume of crude traded during Asian trading was almost double the current daily output of Saudi Arabia, the world’s largest oil exporter."

I wonder how many people really get it that you can create millions of barrels of oil into the market with no more than a trading station with the understanding that you have to produce them eventually.

Its like any other market, where naked short selling is the rule. But I would call the other half of the problem 'naked long buying.' Somebody fill me in if I begin to sound too absurd. Just haven't managed to read anywhere how derivatives apply to crude. If its a derivative on the interest rate of the margin contract tied to the barrels traded, meaning the derivatives apply to the interest rates on the lending to buy contracts, then this would make some sense.

I have my doubts whether you can hang the reversal of a $300b./day market on so little as a $10m. error.

All the more reason why you should never judge a book by its cover. Truly that was a shock

Thanks Quasi,

I was on the booze yesterday for our kids end of year school fete. I had the dang idea it was Friday, probably because of said fete, and didn't look into yesterdays action.

2nd, you asked me something in relation to Gann, to which I must say I have no idea. I didn't read Gann, merely commented on similarities to his exit strategy in what I had read elsewhere. Is there something to learn in his teaser article?

Will look into your further links over the weekend Quasi, thanks. With a simple understanding of charts I feel like a blind man less blind.

I have less enthusiasm for trading now with all the question marks that hang over most of the charts I'm looking at. Without significant reversal Monday the SMA's are all going to be pulled down on one another, from 5 through to 20, with the 50 not far off. Shorter SMA's crossing under the longer ones is bearish.

My chips remain on some small cap miners and GLD

Bon weekend a tous.

Vadym,

No LOL, but certainly a smile... (With the holiday/weekend down time I'm feeling more philosophical.)

Not "parasites" — there is a useful function, but not what I would consider a basic requirement of a healthy economy. Economies should function for the benefit of society and society for the good of the whole.

I see anything which does not add to the basic working of the economy as emergency measures needed due to failure of the original intentions of the system. At the moment the "experts in charge of the world" are dealing with everything other than the most necessary and basic economic functions:

• Trust — It has been dealt a series of massive blows, so far the solutions have only increased distrust.

• Individual livelihoods — Unless people are able to be confident of earning a living we can forget about recovery.

• Show trials of a few — Typical slight of hand as dictatorial regimes continue to expand their reach.

• Media cooperation — It worked for Hitler, Stain and a bunch of lesser tyrants — I suppose there was a Roman equivalent if we look for it. The Bible is full of it.

As you stated, "One can argue that excesses in functioning of such market played their role in current dire situation but this is different matter... Unregulated excesses in anything can and do lead to undesired outcome, which doesn't necessary mean whole system is bad."

I'm not saying trading is necessarily bad, just that unless any group of people produce a tradable product, we cannot expect to survive much less prosper. The whole "service economy" idea was doomed from the beginning, but nearly two decades of letters to unions, legislators, newspapers, etc. were ignored. Hey, I've never had an econ class, but I remember an old Swede who started a cabinet hardware company here nearly a century back kind of laid it out to me about 35 years ago, "Vel, I don't know much about accounting — I yust know you gotta take in more than you pay out."

His company Amerock Hardware employed a lot of families, many worked there over forty years. He's gone now , the company is too — just like our nation's balance of trade .

http://ronsen.blogspot.com/2009/07/bands-on-run.html

Helpful? Not so much. A process top or more of the same...

Sorry to take up so much space- I thought it was a good.
vb

Matt Taibbi's article on Goldman-Sachs, found at Something Awful
http://forums.somethingawful.com/showthread.php?th...

THE GREAT AMERICAN BUBBLE MACHINE
From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since20the Great Depression - and they're about to do it again

By MATT TAIBBI
The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled-dry American empire, reads like a Who's Who of Goldman Sachs graduates.

By now, most of us know the major players. As George Bush's last Treasury secretary, former Goldman CEO Henry Paulson was the architect of the bailout, a suspiciously self-serving plan to funnel trillions of Your Dollars to a handful of his old friends on Wall Street. Robert Rubin, Bill Clinton's former Treasury secretary, spent 26 years at Goldman before becoming chairman of Citigroup - which in turn got a $300 billion taxpayer bailout from Paulson. There's John Thain, the rear end in a top hat chief of Merrill Lynch who bought an $87,000 area rug for his office as his company was imploding; a former Goldman banker, Thain enjoyed a multibillion-dollar handout from Paulson, who used billions in taxpayer funds to help Bank of America rescue Thain's sorry company. And Robert Steel, the former Goldmanite head of Wachovia, scored himself and his fellow executives $225 million in golden parachute payments as his bank was self-destructing. Th ere's Joshua Bolten, Bush's chief of staff during the bailout, and Mark Patterson, the current Treasury chief of staff, who was a Goldman lobbyist just a year ago, and Ed Liddy, the former Goldman director whom Paulson put in charge of bailed-out insurance giant AIG, which forked over $13 billion to Goldman after Liddy came on board. The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange, the last two heads of the Federal Reserve Bank of New York - which, incidentally, is now in charge of overseeing Goldman - not to mention ...

But then, any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain - an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively b y free markets and free elections, organized greed always defeats disorganized democracy.

The bank's unprecedented reach and power have enabled it to turn all of America into a giant pump-and-dump scam, manipulating whole economic sectors for years at a time, moving the dice game as this or that market collapses, and all the time gorging itself on the unseen costs that are breaking families everywhere - hi gh gas prices, rising consumer-credit rates, half-eaten pension funds, mass layoffs, future taxes to pay off bailouts. All that money that you're losing, it's going somewhere, and in both a literal and a figurative sense, Goldman Sachs is where it's going: The bank is a huge, highly sophisticated engine for converting the useful, deployed wealth of society into the least useful, most wasteful and insoluble substance on Earth - pure profit for rich individuals.

They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They've been pulling this same stunt over and over since the 1920s - and now they're preparing to do it again, creating what may be the biggest and most audacious bubble yet. ...
IF AMERICA IS NOW CIRCLING THE DRAIN, GOLDMAN SACHS HAS FOUND A WAY TO BE THAT DRAIN.

BUBBLE #1 - THE GREAT DEPRESSION
Goldman wasn't always a too-big-to-fail Wall Street behemoth, the ruthless face of kill-or-be-killed capitalism on steroids - just almost always. The bank was actually founded in 1869 by a German immigrant named Marcus Goldman, who built it up with his son-in-law Samuel Sachs. They were pioneers in the use of commercial paper, which is just a fancy way of saying they made money lending out short-term IOUs to small-time vendors in downtown Manhattan.
You can probably guess the basic plotline of Goldman's first 100 years in business: plucky, immigrant-led investment bank beats the odds, pulls itself up by its bootstraps, makes shitloads of money. In that ancient history there's really only one episode that bears scrutiny now, in light of more recent events: Goldman's disastrous foray into the speculative mania of pre-crash Wall Street in the late 1920s.

This great Hindenburg of financial history has a few features that might sound familiar. Back then, the main financial tool used to bilk investors was called an "investment trust." Similar to modern mutual funds, the trusts took the cash of investors large and small and (theoretically, at least) invested it in a smorgasbord of Wall Street securities, though the securities and amounts were often kept hidden from the public. So a regular guy could invest $10 or $100 in a trust and feel like he was a big player. Much as in the 1990s, when new vehicles like day trading and e-trading attracted reams of new suc kers from the sticks who wanted to feel like big shots, investment trusts roped a new generation of regular-guy investors into the speculation game.

Beginning a pattern that would repeat itself over and over again, Goldman got into the investment-trust game late, then jumped in with both feet and went hog-wild. The first effort was the Goldman Sachs Trading Corporation; the bank issued a million shares at $100 apiece, bought all those shares with its own money and then sold 90 percent of them to the hungry public at $104. The trading corporation then relentlessly bought shares in itself, bidding the price up further and further. Eventually it dumped part of its holdings and sponsored a new trust, the Shenandoah Corporation, issuing millions more in shares in that fund - which in turn sponsored yet another trust called the Blue Ridge Corporation. In this way, each investment trust served as a front for an endless investment pyramid: Goldman hiding behind Goldman hiding behind Goldman. Of the 7,250,000 initial shares of Blue Ridge, 6,250,000 were actually owned by Shenandoah - which, o f course, was in large part owned by Goldman Trading.

The end result (ask yourself if this sounds familiar) was a daisy chain of borrowed money, one exquisitely vulnerable to a decline in performance anywhere along the line ....

BUBBLE #2 - TECH STOCKS
Fast-Forward about 65 years. Goldman not only survived the crash that wiped out so many of the investors it duped, it went on to be come the chief underwriter to the country's wealthiest and most powerful corporations. Thanks to Sidney Weinberg, who rose from the rank of janitor's assistant to head the firm, Goldman became the pioneer of the initial public offering, one of the principal and most lucrative means by which companies raise money. During the 1970s and 1980s, Goldman may not have been the planet-eating Death Star of political influence it is today, but it was a top-drawer firm that had a reputation for attracting the very smartest talent on the Street.
It also, oddly enough, had a reputation for relatively solid ethics and a patient approach to investment that shunned the fast buck; its executives were trained to adopt the firm's mantra, "long-term greedy." One former Goldman banker who left the firm in the early Nineties recalls seeing his superiors give up a very profitable deal on the grounds that it was a long-term loser. "We gave back money to 'grownup' corporate clients who had made bad deals with us," he says. "Everything we did was legal and fair - but 'long-term greedy' said we didn't want to make such a profit at the clients' collective expense that we spoiled the marketplace." ...
But then, something happened. It's hard to say what it was exactly; it might have been the fact that Goldman's co-chairman in the early Nineties, Robert Rubin, followed Bill Clinton to the White House, where he directed the National Economic Council and eventually became Treasury secretary. ...
Rubin was the prototypical Goldman banker. He was probably born in a $4,000 suit, he had a face that seemed permanently frozen just short of an apology for being so much smarter than you, and he exuded a Spock-like, emotion-neutral exterior; the only human feeling you could imagine him experiencing was a nightmare about being forced to fly coach. It became almost a national cliche that whatever Rubin thought was best for the economy - a phenomenon that reached its apex in 1999, when Rubin appeared on the cover of Time with his Treasury deputy, Larry Summers, and Fed chief Alan Greenspan under the headline THE COMMITTEE TO SAVE THE WORLD. And "what Rubin thought," mostly, was that the American economy, and in particular the financial markets, were over-regulated and needed to be set free. ...

The basic scam in the Internet Age is pretty easy even for the financially illiterate to grasp. Companies that weren't much more than pot-fueled ideas scrawled on napkins by up-too-late bong-smokers were taken public via IPOs, hyped in the media and sold to the public for megamillions.20It was as if banks like Goldman were wrapping ribbons around watermelons, tossing them out 50-story windows and opening the phones for bids. In this game you were a winner only if you took your money out before the melon hit the pavement.
It sounds obvious now, but what the average investor didn't know at the time was that the banks had changed the rules of the game, making the deals look better tha n they actually were. They did this by setting up what was, in reality, a two-tiered investment system - one for the insiders who knew the real numbers, and another for the lay investor who was invited to chase soaring prices the banks themselves knew were irrational. While Goldman's later pattern would be to capitalize on changes in the regulatory environment, its key innovation in the Internet years was to abandon its own industry's standards of quality control.

"Since the Depression, there were strict underwriting guidelines that Wall Street adhered to when taking a company public," says one prominent hedge-fund manager. "The company had to be in business for a minimum of five years, and it had to show profitability for three consecutive years. But Wall Street took these guidelines and threw them in the trash." Goldman completed the snow job by pumping up the sham stocks: "Their analysts were out there saying Bullshit.com is worth $100 a share."

The problem was, nobody told investors that the rules had changed. "Everyone on the inside knew," the manager says.=2 0"Bob Rubin sure as hell knew what the underwriting standards were. They'd been intact since the 1930s." ...
Goldman has denied that it changed its underwriting standards during the Internet years, but its own statistics belie the claim. Just as it did with the investment trust in the 1920s, Goldman started slow and finished crazy in the Internet years. After it took a little-known company with weak financials cal led Yahoo! public in 1996, once the tech boom had already begun, Goldman quickly became the IPO king of the Internet era. Of the 24 companies it took public in 1997, a third were losing money at the time of the IPO. In 1999, at the height of the boom, it took 47 companies public, including stillborns like Webvan and eToys, investment offerings that were in many ways the modern equivalents of Blue Ridge and Shenandoah. The following year, it underwrote 18 companies in the first four months, 14 of which were money losers at the time. As a leading underwriter of Internet stocks during the boom, Goldman provided profits far more volatile than those of its competitors: In 1999, the average Goldman IPO leapt 281 percent above its offering price, compared to the Wall Street average of 181 percent.

How did Goldman achieve such extraordinary results? One answer is that they used a practice called "laddering," which is just a fancy way of saying they manipulated the share price of new offerings. Here's how it works: Say you're Goldman Sachs, and Bullshit.com comes to you a nd asks you to take their company public. You agree on the usual terms: You'll price the stock, determine how many shares should be released and take the Bullshit.com CEO on a "road show" to schmooze investors, all in exchange for a substantial fee (typically six to seven percent of the amount raised). You then promise your best clients the right to buy big chunks of the IPO at the low offering price - let's say Bullshit .com's starting share price is $15 - in exchange for a promise that they will buy more shares later on the open market. That seemingly simple demand gives you inside knowledge of the IPO's future, knowledge that wasn't disclosed to the day-trader schmucks who only had the prospectus to go by: You know that certain of your clients who bought X amount of shares at $15 are also going to buy Y more shares at $20 or $25, virtually guaranteeing that the price is going to go to $25 and beyond. In this way, Goldman could artificially jack up the new company's price, which of course was to the bank's benefit - a six percent fee of a $500 million IPO is serious money.

Goldman was repeatedly sued by shareholders for engaging in laddering in a variety of Internet IPOs, including Webvan and NetZero. The deceptive practices also caught the attention of Nichol as Maier, the syndicate manager of Cramer & Co., the hedge fund run at the time by the now-famous chattering television rear end in a top hat Jim Cramer, himself a Goldman alum. ...
"Goldma n, from what I witnessed, they were the worst perpetrator," Maier said. "They totally fueled the bubble. And it's specifically that kind of behavior that has caused the market crash. They built these stocks upon an illegal foundation - manipulated up - and ultimately, it really was the small person who ended up buying in." In 2005, Goldman agreed to pay $40 million for its laddering violations - a puny penalty relative to the e normous profits it made. (Goldman, which has denied wrongdoing in all of the cases it has settled, refused to respond to questions for this story.)

Another practice Goldman engaged in during the Internet boom was "spinning," better known as bribery. Here the investment bank would offer the executives of the newly public company shares at extra-low prices, in exchange for future underwriting business. Banks that engaged in spinning would then undervalue the initial offering price - ensuring that those "hot" opening price shares it had handed out to insiders would be more likely to rise quickly, supplying bigger first-day rewards for the chosen few. So instead of Bullshit.com opening at $20, the bank would approach the Bullshit.com CEO and offer him a million shares of his own company at $18 in exchange for future business - effectively robbing all of Bullshit's new shareholders by diverting cash that should have gone to the company's bottom line into the private bank account of the company's CEO. ...

Such practices conspired to turn the Internet bubble into o ne of the greatest financial disasters in world history: Some $5 trillion of wealth was wiped out on the NASDAQ alone. But the real problem wasn't the money that was lost by shareholders, it was the money gained by investment bankers, who received hefty bonuses for tampering with the market. Instead of teaching Wall Street a lesson that bubbles always deflate, the Internet years demonstrated to bankers that in the age of freely flow ing capital and publicly owned financial companies, bubbles are incredibly easy to inflate, and individual bonuses are actually bigger when the mania and the irrationality are greater.

GOLDMAN SCAMMED HOUSING INVESTORS BY BETTING AGAINST ITS OWN CRAPPY MORTGAGES.
Nowhere was this truer than at Goldman. Between 1999 and 2002, the firm paid out $28.5 billion in compensation and benefits - an average of roughly $350,000 a year per employee. Those numbers are important because the key legacy of the Internet boom is that the economy is now driven in large part by the pursuit of the enormous salaries and bonuses that such bubbles make possible. Goldman's mantra of "long-term greedy" vanished into thin air as the game became about getting your check before the melon hit the pavement.
The market was no longer a rationally managed place to grow real, profitable businesses: It was a huge ocean of Someone Else's Money where bankers hauled in vast sums through whatever means necessary and tried to convert that money into bonuses and payouts as quickly as possible. If you laddered and spun 50 Internet IPOs that went bust within a year, so what? By the time the Securities and Exchange Commission got around to fining your firm $110 million, the yacht you bought with your IPO bonuses was already six years old. Besides, you were probably out of Goldman by then, running the U.S. Treasury or maybe the state of New Jersey. (One of the truly comic moments in the history of America's20recent financial collapse came when Gov. Jon Corzine of New Jersey, who ran Goldman from 1994 to 1999 and left with $320 million in IPO-fattened stock, insisted in 2002 that "I've never even heard the term 'laddering' before.")

For a bank that paid out $7 billion a year in salaries, $110 million fines issued half a decade late were something far less than a deterrent - they were a joke. Once the Internet bubble burst, Goldman had no incentive to reassess its new, profit-driven strategy; it just searched around for another bubble to inflate. As it turns out, it had one ready, thanks in large part to Rubin.

BUBBLE #3 - THE HOUSING CRAZE
Goldman's role in the sweeping disaster that was the housing bubble is not hard to trace. Here again, the basic trick was a decline in underwriting standards, although in this case the standards weren't in IPOs but in mortgages. ...
None of that would have been possible without investment bankers like Goldman, who created vehicles to package those lovely mortgages and sell them en masse to u nsuspecting insurance companies and pension funds. This created a mass market for toxic debt that would never have existed before; in the old days, no bank would have wanted to keep some addict ex-con's mortgage on its books, knowing how likely it was to fail. You can't write these mortgages, in other words, unless you can sell them to someone who doesn't know what they are.

Goldman used two methods to hide the mess they were selling. First, they bundled hundreds of different mortgages into instruments called Collateralized Debt Obligations. Then they sold investors on the idea that, because a bunch of those mortgages would turn out to be OK, there was no reason to worry so much about the lovely ones: The CDO, as a whole, was sound. Thus, junk-rated mortgages were turned into AAA-rated investments. Second, to hedge its own bets, Goldman got companies like AIG to provide insurance - known as credit-default swaps - on the CDOs. The swaps were essentially a racetrack bet between AIG and Goldman: Goldman is betting the ex-cons will default, AIG is betting they won't.
There was only one problem with the deals: All of the wheeling and dealing represented exactly the kind of dangerous speculation that federal regulators are supposed to rein in. Derivatives like CDOs and credit swaps had already caused a series of serious financial calamities: Procter & Gamble and Gibson Greetings both lost fortunes, and Orange County, California, was forced to default in 1994. A report that year by20the Government Accountability Office recommended that such financial instruments be tightly regulated - and in 1998, the head of the Commodity Futures Trading Commission, a woman named Brooksley Born, agreed. That May, she circulated a letter to business leaders and the Clinton administration suggesting that banks be required to provide greater disclosure in derivatives trades, and maintain reserves to cushion against losses. ...

Clint on's reigning economic foursome - "especially Rubin," according to Greenberger - called Born in for a meeting and pleaded their case. She refused to back down, however, and continued to push for more regulation of the derivatives. Then, in June 1998, Rubin went public to denounce her move, eventually recommending that Congress strip the CFTC of its regulatory authority. In 2000, on its last day in session, Congress passed the now-notorious Commodity Futures Modernization Act, which had been inserted into an 1l,000-page spending bill at the last minute, with almost no debate on the floor of the Senate. Banks were now free to trade default swaps with impunity.
But the story didn't end there. AIG, a major purveyor of default swaps, approached the New York State Insurance Department in 2000 and asked whether default swaps would be regulated as insurance. At the time, the office was run by one Neil Levin, a former Goldman vice president, who decided against regulating the swaps. Now freed to underwrite as many housing-based securities and buy as much credit-default protection as it wanted, Goldman went berserk with lending lust. By the peak of the housing boom in 2006, Goldman was underwriting $76.5 billion worth of mortgage-backed securities - a third of which were subprime - much of it to institutional investors like pensions and insurance companies. And in these massive issues of real estate were vast swamps of crap.
Take one $494 million issue that year, GSAMP Trust 2006-S3. Many of the mortgages belonged to second-mortgage borrowers, and the average equity they had in their homes was 0.71 percent. Moreover, 58 percent of the loans included little or no documentation - no names of the borrowers, no addresses of the homes, just zip codes. Yet both of the major ratings agencies, Moody's and Standard & Poor's, rated 93 percent of the issue as investment grade. Moody's projected that less than 10 percent of the loans would default. In reality, 18 percent of the mortgages were in default within 18 months.
Not that Goldman was personally at any risk. The bank might be taking all these hideous, completely irresponsible mortgages from beneath-gangster-status firms like Countrywide and selling them off to municipalities and pensioners - old people, for God's sake - pretending the whole time that it wasn't grade-D horseshit. But even as it was doing so, it was taking short positions in the same market, in essence betting against the same crap it was selling. Even worse, Goldman bragged about it in public. "The mortgage sector continues to be challenged," David Viniar, the bank's chief financial officer, boasted in 2007. "As a result, we took significant markdowns on our long inventory positions .... However, our risk bias in that market was to be short, and that net short position was profitable." In other words, the mortgages it was selling were for chumps. The real money was in betting against those same mortgages.
"That's how audacious these assholes are," says one hedge-fu nd manager. "At least with other banks, you could say that they were just dumb - they believed what they were selling, and it blew them up. Goldman knew what it was doing." I ask the manager how it could be that selling something to customers that you're actually betting against - particularly when you know more about the weaknesses of those products than the customer - doesn't amount to securities fraud.
"It's exactly securities fraud," he says. "It's the heart of securities fraud."
Eventually, lots of aggrieved investors agreed. In a virtual repeat of the Internet IPO craze, Goldman was hit with a wave of lawsuits after the collapse of the housing bubble, many of which accused the bank of withholding pertinent information about the quality of the mortgages it issued. .... But once again, Goldman got off virtually scot-free, staving off prosecution by agreeing to pay a paltry $60 million - about what the bank's CDO division made in a day and a half during the real estate boom.
The effects of the housing bubble are well known - it led more or less directly to the collapse of Bear Stearns, Lehman Brothers and AIG, whose toxic portfolio of credit swaps was in significant part composed of the insurance that banks like Goldman bought against their own housing portfolios. In fact, at least $13 billion of the taxpayer money given to AIG in the bailout ultimately went to Goldman, meaning that the bank made out on the housing bubble twice: It hosed the investor s who bought their horseshit CDOs by betting against its own crappy product, then it turned around and hosed the taxpayer by making him payoff those same bets.
And once again, while the world was crashing down all around the bank, Goldman made sure it was doing just fine in the compensation department. In 2006, the firm's payroll jumped to $16.5 billion - an average of $622,000 per employee. As a Goldman spokesman explained, "We work very hard here."
But the best was yet to come. While the collapse of the housing bubble sent most of the financial world fleeing for the exits, or to jail, Goldman boldly doubled down - and almost single-handedly created yet another bubble, one the world still barely knows the firm had anything to do with.
BUBBLE #4 - $4 A GALLON
By the beginning of 2008, the financial world was in turmoil. Wall Street had spent the past two and a half decades producing one scandal after another, which didn't leave much to sell that wasn't tainted. The terms junk bond, IPO, subprime mortgage and o ther once-hot financial fare were now firmly associated in the public's mind with scams; the terms credit swaps and CDOs were about to join them. The credit markets were in crisis, and the mantra that had sustained the fantasy economy throughout the Bush years - the notion that housing prices never go down - was now a fully exploded myth, leaving the Street clamoring for a new bullshit paradigm to sling.
Where to go? With the public reluctant to put money in anything that felt like a paper investment, the Street quietly moved the casino to the physical-commodities market - stuff you could touch: corn, coffee, cocoa, wheat and, above all, energy commodities, especially oil. In conjunction with a decline in the dollar, the credit crunch and the housing crash caused a "flight to commodities." Oil futures in particular skyrocketed, as the price of a single barrel went from around $60 in the middle of 2007 to a high of $147 in the summer of 2008.
That summer, as the presidential campaign heated up, the accepted explanation for why gasoline had hit $4.11 a gallon was that there was a problem with the world oil supply. In a classic example of how Republicans and Democrats respond to crises by engaging in fierce exchanges of moronic irrelevancies, John McCain insisted that ending the moratorium on offshore drilling would be "very helpful in the short term," while Barack Obama in typical liberal-arts yuppie style argued that federal investment in hybrid cars was the way out.
0A
GOLDMAN TURNED A SLEEPY OIL MARKET INTO A GIANT BETTING PARLOR - SPIKING PRICES AT THE PUMP.
But it was all a lie. While the global supply of oil will eventually dry up, the short-term flow has actually been increasing. In the six months before prices spiked, according to the U.S. Energy Information Administration, the world oil supply rose from 85.24 million barrels a day to 85.72 million. Over the same period, world20oil demand dropped from 86.82 million barrels a day to 86.07 million. Not only was the short-term supply of oil rising, the demand for it was falling - which, in classic economic terms, should have brought prices at the pump down.
So what caused the huge spike in oil prices? Take a wild guess. Obviously Goldman had help - there were other players in the physical-commodities market - but the root cause had almost everything to do with the behavior of a few powerful actors determined to turn the once-solid market into a speculative casino. Goldman did it by persuading pension funds and other large institutional investors to invest in oil futures - agreeing to buy oil at a certain price on a fixed date. The push transformed oil from a physical commodity, rigidly subject to supply and demand, into something to bet on, like a stock. Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent. By 2008, a barrel of oil was traded 27 times, on average, before it was actually20delivered and consumed.
As is so often the case, there had been a Depression-era law in place designed specifically to prevent this sort of thing. ... In 1936, Congress recognized that there should never be more speculators in the market than real producers and consumers. If that happened, prices would be affected by something other than supply and demand, and price manipulations would ensue. A new law empowered the Commodity Fut ures Trading Commission - the very same body that would later try and fail to regulate credit swaps - to place limits on speculative trades in commodities. As a result of the CFTC's oversight, peace and harmony reigned in the commodities markets for more than 50 years.
All that changed in 1991 when, unbeknownst to almost everyone in the world, a Goldman-owned commodities-trading subsidiary called J. Aron wrote to the CFTC and made an unusual argument. Farmers with big stores of corn, Goldman argued, weren't the only ones who needed to hedge their risk against future price drops - Wall Street dealers who made big bets on oil prices also needed to hedge their risk, because, well, they stood to lose a lot too.
This was complete and utter crap - the 1936 law, remember, was specifically designed to maintain distinctions between people who were buying and selling real tangible stuff and people who were trading in paper alone. But the CFTC, amazingly, bought Goldman's argument. It issued the bank a free pass, called the "Bona Fide Hedging" exem ption, allowing Goldman's subsidiary to call itself a physical hedger and escape virtually all limits placed on speculators. In the years that followed, the commission would quietly issue 14 similar exemptions to other companies.
Now Goldman and other banks were free to drive more investors into the commodities markets, enabling speculators to place increasingly big bets. That 1991 letter from Goldman more or less directly led to the oil20bubble in 2008, when the number of speculators in the market - driven there by fear of the falling dollar and the housing crash - finally overwhelmed the real physical suppliers and consumers. By 2008, at least three quarters of the activity on the commodity exchanges was speculative, according to a congressional staffer who studied the numbers - and that's likely a conservative estimate. By the middle of last summer, despite rising supply and a drop in demand, we were paying $4 a gallon every time we pulled up to the pump.
What is even more amazing is that the letter to Goldman, along with most of the other trading exemptions, was handed out more or less in secret. "I was the head of the division of trading and markets, and Brooksley Born was the chair of the CFTC," says Greenberger, "and neither of us knew this letter was out there." In fact, the letters only came to light by accident. Last year, a staffer for the House Energy and Commerce Committee just happened to be at a briefing when officials from the CFTC made an offhand reference to the exemptions.
"1 had been invited to a briefing the commission was holding on energy," the staffer recounts. "And suddenly in the middle of it, they start saying, 'Yeah, we've been issuing these letters for years now.' I raised my hand and said, 'Really? You issued a letter? Can I see it?' And they were like, 'Duh, duh.' So we went back and forth, and finally they said, 'We have to clear it with Goldman Sachs.' I'm like, 'What do you mean, you have to clear it with Goldman Sachs?'" ... [I]n a classic example of how complete Goldman's capture of government is, the CFTC waited until it got clearance from the bank before it turned the letter over.
Armed with the semi-secret government exemption, Goldman had become the chief designer of a giant commodities betting parlor. Its Goldman Sachs Commodities Index - which tracks the prices of 24 major commodities but is overwhelmingly weighted toward oil - became the place where pension funds and insurance companies and other institutional investors could make massive long-term bets on commodity prices. Which was all well and good, except for a couple of things. One was that index speculators are mostly "long only" bettors, who seldom if ever take short positions - meaning they only bet on prices to rise. While this kind of behavior is good for a stock market, it's terrible for commodities, because it continually forces prices upward. "If index speculators took short positions as well as long ones, you'd see them pushing prices both up and down," says Michael Masters, a hedge-fund manager who has helped expose the role of investment banks in the manipulation of oil prices. "But they only push prices in one direction: up."
Complicating matters even further was the fact that Goldman itself was cheerleading with all its might for an increase in oil prices. In the beginning of 2008, Arjun Murti, a Goldman analyst, hailed as an "oracle of oil" by The New York Times, predicted a "super spike" in oil prices, forecasting a rise to $200 a barrel. At the time Goldman was heavily invested in oil through its commodities-trading subsidiary, J. Aron; it also owned a stake in a major oil refinery in Kansas, where it warehoused the crude it bought and sold. Even though the supply of oil was keeping pace with demand, Murti continually warned of disruptions to the world oil supply, going so far as to broadcast the fact that he owned two hybrid cars. High prices, the bank insisted, were somehow the fault of the piggish American consumer; in 2005, Goldman analysts insisted that we wouldn't know when oil prices would fall until we knew "when American consumers will stop buying gas-guzzling sport utility vehicles and instead seek fuel-efficient alternatives."
But it wasn't the consumption of real oil that was driving up prices - it was the trade in paper oil. By the summer of2008, in fact, commodities speculators had bought and stockpiled enough oil futures to fill 1.1 billion barrels of crude, which meant that specu lators owned more future oil on paper than there was real, physical oil stored in all of the country's commercial storage tanks and the Strategic Petroleum Reserve combined. It was a repeat of both the Internet craze and the housing bubble, when Wall Street jacked up present-day profits by selling suckers shares of a fictional fantasy future of endlessly rising prices.
In what was by now a painfully familiar pattern, the oil-commod ities melon hit the pavement hard in the summer of 2008, causing a massive loss of wealth; crude prices plunged from $147 to $33. Once again the big losers were ordinary people. The pensioners whose funds invested in this crap got massacred: CalPERS, the California Public Employees' Retirement System, had $1.1 billion in commodities when the crash came. And the damage didn't just come from oil. Soaring food prices driven by the commodities bubble led to catastrophes across the planet, forcing an estimated 100 million people into hunger and sparking food riots throughout the Third World. ...
BUBBLE #5 - RIGGING THE BAILOUT
After the oil bubble collapsed last fall, there was no new bubble to keep things humming - this time, the money seems to be really gone, like worldwide-depression gone. So the financial safari has moved elsewhere, and the big game in the hunt has become the only remaining pool of dumb, unguarded capital left to feed upon: taxpayer money. Here, in the biggest bailout in history, is where Goldman Sachs really started to flex its mus cle.
It began in September of last year, when then-Treasury secretary Paulson made a momentous series of decisions. Although he had already engineered a rescue of Bear Stearns a few months before and helped bail out quasi-private lenders Fannie Mae and Freddie Mac, Paulson elected to let Lehman Brothers - one of Goldman's last real competitors - collapse without intervention. ("Goldman's superhero status was left intact," says market analys t Eric Salzman, "and an investment-banking competitor, Lehman, goes away.") The very next day, Paulson greenlighted a massive, $85 billion bailout of AIG, which promptly turned around and repaid $13 billion it owed to Goldman. Thanks to the rescue effort, the bank ended up getting paid in full for its bad bets: By contrast, retired auto workers awaiting the Chrysler bailout will be lucky to receive 50 cents for every dollar they are owed.
Immediately after the AIG bailout, Paulson announced his federal bailout for the financial industry, a $700 billion plan called the Troubled Asset Relief Program, and put a heretofore unknown 35-year-old Goldman banker named Neel Kashkari in charge of administering the funds. In order to qualify for bailout monies, Goldman announced that it would convert from an investment bank to a bankholding company, a move that allows it access not only to $10 billion in TARP funds, but to a whole galaxy of less conspicuous, publicly backed funding - most notably, lending from the discount window of the Federal Reserve. By the end of20March, the Fed will have lent or guaranteed at least $8.7 trillion under a series of new bailout programs - and thanks to an obscure law allowing the Fed to block most congressional audits, both the amounts and the recipients of the monies remain almost entirely secret.
Converting to a bank-holding company has other benefits as well: Goldman's primary supervisor is now the New York Fed, whose chairman at the time of its announcemen t was Stephen Friedman, a former co-chairman of Goldman Sachs. Friedman was technically in violation of Federal Reserve policy by remaining on the board of Goldman even as he was supposedly regulating the bank; in order to rectify the problem, he applied for, and got, a conflict-of-interest waiver from the government. Friedman was also supposed to divest himself of his Goldman stock after Goldman became a bank-holding company, but thanks to the waiver, he was allowed to go out and buy 52,000 additional shares in his old bank, leaving him $3 million richer. Friedman stepped down in May, but the man now in charge of supervising Goldman - New York Fed president William Dudley - is yet another former Goldmanite.
The collective message of all this - the AIG bailout, the swift approval for its bank-holding conversion, the TARP funds - is that when it comes to Goldman Sachs, there isn't a free market at all. The government might let other players on the market die, but it simply will not allow Goldman to fail under any circumstances. Its edge in the20market has suddenly become an open declaration of supreme privilege. "In the past it was an implicit advantage," says Simon Johnson, an economics professor at MIT and former official at the International Monetary Fund, who compares the bailout to the crony capitalism he has seen in Third World countries. "Now it's more of an explicit advantage." ...
And here's the real punch line. After playing an intimate role in four historic bubble20catastrophes, after helping $5 trillion in wealth disappear from the NASDAQ, after pawning off thousands of toxic mortgages on pensioners and cities, after helping to drive the price of gas up to $4 a gallon and to push 100 million people around the world into hunger, after securing tens of billions of taxpayer dollars through a series of bailouts overseen by its former CEO, what did Goldman Sachs give back to the people of the United States in 2008?
Fourteen million dollars.
That is what the firm paid in taxes in 2008, an effective tax rate of exactly one, read it, one percent. The bank paid out $10 billion in compensation and benefits that same year and made a profit of more than $2 billion - yet it paid the Treasury less than a third of what it forked over to CEO Lloyd Blankfein, who made $42.9 million last year.
How is this possible? According to Goldman's annual report, the low taxes are due in large part to changes in the bank's "geographic earnings mix." In other words, the bank moved its money around so that most of its earnings took place in foreign countries with low tax rates. Thanks to our completely hosed corporate tax system, companies like Goldman can ship their revenues offshore and defer taxes on those revenues indefinitely, even while they claim deductions upfront on that same untaxed income. This is why any corporation with an at least occasionally sober accountant can usually find a way to zero out its taxes. A GAO report, in fact, found that between 1998 and 2005, roughly two-thirds of all corporations operating in the U.S. paid no taxes at all.
This should be a pitchfork-level outrage - but somehow, when Goldman released its post-bailout tax profile, hardly anyone said a word. One of the few to remark on the obscenity was Rep. Lloyd Doggett, a Democrat from Texas who serves on the House Ways and Means Committee. "With the right hand out begging for bailout money," he said, "the left is hiding it offshore."
BUBBLE #6 - GLOBAL WARMING
Fast-Forward to today. It's early June in Washington, D.C. Barack Obama, a popular young politician whose leading private campaign donor was an investment bank called Goldman Sachs - its employees paid some $981,000 to his campaign - sits in the White House. Having seamlessly navigated the political minefield of the bailout era, Goldman is once again back to its old business, scouting out loopholes in a new government-created market with the aid of a new set of alumni occupying key government jobs.
AS ENV ISIONED BY GOLDMAN, THE FIGHT TO STOP GLOBAL WARMING WILL BECOME A "CARBON MARKET" WORTH $1 TRILLION A YEAR.
Gone are Hank Paulson and Neel Kashkari; in their place are Treasury chief of staff Mark Patterson and CFTC chief Gary Gensler, both former Goldmanites. (Gensler was the firm's co-head of finance) And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits - a booming trillion-dollar market that barely even exists yet, but will if the Democratic Party that it gave $4,452,585 to in the last election manages to push into existence a groundbreaking new commodities bubble, disguised as an "environmental plan," called cap-and-trade.
The new carbon-credit market is a virtual repeat of the commodities-market casino that's been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won't even have to rig the game. It will be rigged in advance.
Here's how it works: If the bill passes; there will be limits for coal plants, utilities, natural-gas distributors and numerous other industries on the amount of carbon emissions (a.k.a. greenhouse gases) they can produce per year. If the companies go over their allotment, they will be able to buy "allocations" or credits from other companies that have managed to produce fewer emissions. President Obama conservatively estimates that about $646 billions worth of carbon credit s will be auctioned in the first seven years; one of his top economic aides speculates that the real number might be twice or even three times that amount.
The feature of this plan that has special appeal to speculators is that the "cap" on carbon will be continually lowered by the government, which means that carbon credits will become more and more scarce with each passing year. Which means that this is a brand-new commodities market where the main commodity to be traded is guaranteed to rise in price over time. The volume of this new market will be upwards of a trillion dollars annually; for comparison's sake, the annual combined revenues of an electricity suppliers in the U.S. total $320 billion.
Goldman wants this bill. The plan is (1) to get in on the ground floor of paradigm-shifting legislation, (2) make sure that they're the profit-making slice of that paradigm and (3) make sure the slice is a big slice. Goldman started pushing hard for cap-and-trade long ago, but things really ramped up last year when the firm spent $3.5 million to lobby climate issues. (One of their lobbyists at the time was none other than Patterson, now Treasury chief of staff.) Back in 2005, when Hank Paulson was chief of Goldman, he personally helped author the bank's environmental policy, a document that contains some surprising elements for a firm that in all other areas has been consistently opposed to any sort of government regulation. Paulson's report argued that "voluntary action alone c annot solve the climate-change problem." A few years later, the bank's carbon chief, Ken Newcombe, insisted that cap-and-trade alone won't be enough to fix the climate problem and called for further public investments in research and development. Which is convenient, considering that 'Goldman made early investments in wind power (it bought a subsidiary called Horizon Wind Energy), renewable diesel (it is an investor in a firm called Changing World Technologies)=2 0and solar power (it partnered with BP Solar), exactly the kind of deals that will prosper if the government forces energy producers to use cleaner energy. As Paulson said at the time, "We're not making those investments to lose money."
The bank owns a 10 percent stake in the Chicago Climate Exchange, where the carbon credits will be traded. Moreover, Goldman owns a minority stake in Blue Source LLC, a Utah-based firm that sells carbon credits of the type that will be in great demand if the bill passes. Nobel Prize winner Al Gore, who is intimately involved with the planning of cap-and-trade, started up a company called Generation Investment Management with three former bigwigs from Goldman Sachs Asset Management, David Blood, Mark Ferguson and Peter Harris. Their business? Investing in carbon offsets. There's also a $500 million Green Growth Fund set up by a Goldmanite to invest in green-tech ... the list goes on and on. Goldman is ahead of the headlines again, just waiting for someone to make it rain in the right spot. Will this market be bigger than the energy-futures market?
"Oh, it'll dwarf it," says a former staffer on the House energy committee. ....
"If it's going to be a tax, I would prefer that Washington set the tax and collect it," says Michael Masters, the hedge fund director who spoke out against oil-futures speculation. "But we're saying that Wall Street can set the tax, and Wall Street can collect the tax. That's the last thing in the world20I want. It's just asinine."
Cap-and-trade is going to happen. Or, if it doesn't, something like it will. The moral is the same as for all the other bubbles that Goldman helped create, from 1929 to 2009. In almost every case, the very same bank that behaved recklessly for years, weighing down the system with toxic loans and predatory debt, and accomplishing nothing but massive bonuses for a few bosses, has been rewarded with mountains of virtually free money and government guarantees - while the actual victims in this mess, ordinary taxpayers, are the ones paying for it.
It's not always easy to accept the reality of what we now routinely allow these people to get away with; there's a kind of collective denial that kicks in when a country goes through what America has gone through lately, when a people lose as much prestige and status as we have in the past few years. You can't really register the fact that you're no longer a citizen of a thriving first-world democracy, that you're no longer above getting robbed in broad=2 0daylight, because like an amputee, you can still sort of feel things that are no longer there.
But this is it. This is the world we live in now. And in this world, some of us have to play by the rules, while others get a note from the principal excusing them from homework till the end of time, plus 10 billion free dollars in a paper bag to buy lunch. It's a gangster state, running on gangster economics, and even prices c an't be trusted anymore; there are hidden taxes in every buck you pay. And maybe we can't stop it, but we should at least know where it's all going.

The bubbles don't come 'til the end of the program... Turn off the bubbles... Turn off the bubble machine!

I thought their might be some interest in this - Rob McEwen has created his own index to track his emerging gold investments. It is available at the McEwen Capital Web site:

www.mcewencapital.com

informative. I downloaded that one for archives.

Rolling Stone now has the article up on their website:

http://www.rollingstone.com/politics/story/2881632...

ALOHA !!

Nemo ... that was great info. It goes to show you what some people did to face a Superpower in their desire for Liberty. Which of us alive now would do the same? Probably not one in 10,000 would in our midst now. I do not speak to lack of Courage, but the lack of knowledge. Most people conduct their lives as if no threat exists. Nobody recognizes that our Liberty is at stake. It will take a complete collapse of the entitlements before People understand. The confiscation of Liberty is like a ship. If you wait until the iceberg is right on the bow it is too late.

So the Brits called it the AMERICAN INSURRECTION ... Really what the Brits were conducting was out and out genocide of anyone who stood in the KING's way! Like the MAFIA ... the BRITISH EMPIRE laid waste and destruction across the globe in its time, not to mention the Missionaries that followed in that path! Surely the Hawaiian Islands were not spared that wrath ... Bow to the benevolent EMPIRE!

"So few understand that our monetary system is not about "money" but about our Liberty."

Just ask anyone who can't sell his house how money and freedom are intertwined. Two of my neighbors need to sell their houses. One has a job in another state, but needs to sell his house on four acres so he can buy there. It is on the market and his wife and two kids are here in Illinois — he is in Wisconsin.

The other neighbors want to move to Seattle to be near their daughter and grand children, but must sell first. They will eventually sell, but perhaps not at a good price.

Even worse is those people who are dependent on the government for income, whether retirement, disability or their job. this category is increasing big time. Millions now get a "tax rebate" although their income is to low to pay any tax. They are now essentially "owned" by Uncle Sam's agents — guess who they will vote for.

When the government provides your wages, your health care, your housing — you have few rights left. Smoking, gun ownership, vehicle ownership all things which were a personal choice, are subject to Big Brother.

One which hasn't happened yet, but can...

To break the saving "epidemic" which threatens the stimulus effect, what if all welfare payments, cash stimulus, Social Security, etc. were issued on debit cards with an expiration date?

Bernanke has promised to use extraordinary measures.

bobbor - Perhaps your data source is superior to mine, it wouldn't surprise me. I obtained the data from finviz.com...don't know how current, and didn't subtract current debt because I supposed the figure was already reflected in book value. I also didn't include cash on hand in my calculation for the same reason.

Is there a link available to your source of information?

Grym - "When the government provides your wages, your health care, your housing — you have few rights left. Smoking, gun ownership, vehicle ownership all things which were a personal choice, are subject to Big Brother."

I believe all of the above (tobacco/guns/vehicles, etc..) are taxed, and are therefore subject to control of Big Brother.

Bernanke's "extraordinary" measures aren't likely to be a magical elixir capable of completely vacuuming away the blood stains we seem to be accumulating.

Consider what's being done to stem the blood letting.... It appears to me - not much as of yet, except for re-capitalizing criminalistic behavior. I'm quite disappointed at the moment, it seems Joe Sixpack, Ma and Pa are being hung out to dry and I don't understand the rhyme or reason. The parasites left running the show don't seem to grasp the basic concepts of supply and demand.

I used my normal approach which takes me some time but I am not a day trader so have more time.I went to the Teck home page and looked up the 1st quarter 2009 financial report and used their consolidated balance sheet and income statement to obtain the shareholder equity and book value.

I find if I use other sources I end up using my approach anyway in order to cross check the other sources.I dont want to invest in companies using key bad data.

Just trying to be helpfull.

Regards

I agree Kaimu

The reason most people don't understand that our monetary system is not about "money" but about our Liberty , is they don't truly understand what money represents. Oh people think they know what money is...

Money is tool for power... Ok many people know this

But here is where people get lost

What is power? Power represents the ability to define oneself and the world around us...

Which then translates into desiring power for the freedom to define ourselves..

That's the link people miss

SO yes the "Monetary System" is a SYSTEM used to control power to define people at a group social level...

Buy into that system and you also support that system of power and ironically limit yourself to how you can find your own liberty.

Many Many Many options exist to how to find your personal power... that is your personal definition. Money is just one system of many.

Right now we all here acknowledge the current system is based upon fraud right...

So do the math go through the logic chain I gave, and discover if the "Monetary System" is based upon fraud then your person freedom based on that system is also a fraud...

Which ties full circle to Bill's Social Equity quest. since to truly have social equity requires the system not be based on fraud...

I am off to teach now... but What Kaimu brings up is more important than most people realize since it opens a question about one's very lifestyle and purpose... That's deep stuff, be careful before jumping down that rabbit hole since as a Taoist Teacher I will give you forewarning it will not be what you expect... (which is why so few people truly explore the meaning the repercussions of your statement Kaimu...)

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2...

"The former Republican vice presidential candidate made the surprise announcement from her home in suburban Wasilla on Friday morning."

Its been an interesting week for me, since my gold junior announced that they are offering a financing using gold based debentures. This is only the second such effort in the gold space that I can recall. I believe the offering is only for Canadian jurisdictions.

The first such offering attempted was with CMM.V, who subsequently ran into problems with their $65m offering when they posted a quarterly loss. The offering of their gold based financing collapsed, and they fell into the clutches of having to offer collatoral of their mine to their financier. They are a gold producer, but lost money.

Now, a gold mine that runs into a loss will invariably be overestimating the grade in their deposits in the hopes of obtaining financing. When the production falls short of costs, it can only be because there isn't enough gold to support the operation.

This is one of the biggest risks in gold mining, bar none.

So by now, I am only a few points from break even on my original purchase many months prior to the stock market crash and making a serious profit on those shares which I bought in last December, and last year July after a lengthy decline.

This type of financing offers some serious risks to the brokerage that offers to underwrite it. But if it gets carried off, then they can move onto much bigger financings of the same type, based on gold production. Instead of a $30m. gold based financing, they could move to $300 million financings. Its not out of the question, because Claymore raised some $200m. for a bullion fund which only hold some 200k oz. A small mine will hold many times that amount, yet there is little in the way of investment because of the risks in involved.

Its an interesting story to follow if it succeeds, because that means gold companies set to grow will ultimately be successful at closing these financings and will not be reliant on the collapsing financial sector. Its an interesting wrinkle in the ongoing saga of world financial collapse.

Saskatoon Star Phoenix

bobbor - We all must perform our own DD, and base our assessments upon accurate(hopefully) data, our beliefs in how the data are represented, and how well the company is managed, current circumstances, etc. One of the underlying managerial subjects from my perspective has revolved around the poor timing of the Fording purchase and an emerging pattern of news-related trading inconsistencies.

My belief is CIC has taken full(possibly unfair?) advantage of imbalance in the global economic situation which from my view was engineered by (same) large financial institutions. IMO, this deal reveals to me that shareholder equity has been purposely low-balled through manipulation.

I have no desire or interest in TECK going forward.

davefairtex - The total auction next week will peddle another $75B, included is $10B of TIPS Monday.

"Something's just not right about this particular statement - I can't put my finger on it..."

What part is difficult to comprehend? These ATM machines were abused and overdrawn and will remain an economic boondoggle until asset prices stop falling. If nothing were done(as has been the case so far), unemployment and public debt would no longer fit on the charts..

I don't hear too many folks suggesting constructive criticism or plausible solutions, mostly I just hear complaints about the possibility of a weaker dollar (DUH!).

Published: June 30 2009

"“‘You’ve never had it so bad’ seems the most apt summary of the state of the UK economy in the first quarter,” said Ross Walker, economist at RBS. “Although to some extent this is ‘old news’, it does serve to emphasise the size of the hole out of which the UK must climb.”

Since the end of March, there have been signs the economy is stabilising. Manufacturing output grew in March and April, while survey data suggest the economy has returned to growth.

The National Institute for Economic and Social Research, a respected forecaster, said it thought the economy began to grow again in April.

The ONS said: “Revisions to GDP are larger than usual, reflecting greater uncertainty in measurement during a period of rapid change in economic activity.”

The figures confirmed the recession began in the second quarter. Despite the dramatic contraction in the economy, Fitch, the rating agency, confirmed the top triple A rating on the UK’s sovereign debt."

http://www.ft.com/cms/s/0/971b65f6-6551-11de-8e34-...

Les - "David Fry commentary. Lots of charts."

Feel free to summarize, then I might want to follow the link.

Careful CP- Not that 2nd can't handle himself, but you never know who might have his back. Last time I can remember someone really wanting to mess with me was in Wales while playing Rugby for a US team. The whole thing was over in about 2 minutes. ( And yes, I know your having fun...Hope you do tomorrow also, my friend!)

2nd- Agreed. I keep thinking about the players who have held tight from the lows, and those that never left. How much pain are they willing to take a first or second time.

I also like the weighting of the finacials and lack of tech in SPY.

I hope everyone one who intends to celebrate the 4th tomorrow can share it with family and friends and remember what we are celebrating. I intend to. Pls. be safe.

Oh no...How come I'm sure that means we will have to hear much more from her in the future.

Edit: Just heard her speech...now I'm really scared. What a crazy, rambling, disjointed "statement?".

What happen to the party? X-republican.
1 no nation building
2 fiscal conservatism
3 state rights
4 individual rights
5 less government is better government

This party doesn't represent its values anymore in my opinion.
These were the issues that were the republican party's platform.
It seems that they know what to do but just don't do it.
I'm an independent now.

2nd- Thank you for the assumption. One of the great disadvantages of being a big guy is everyone wants to take a shot at you. I learned very early in life there were certain situations/locations that were best avoided. After that little scuffle in Wales, I received letters from the women we were helping at the time. She left her abusive boy friend and went on from being a bar tender to college and moved to the states about 10 years later.

http://www.youtube.com/watch?v=Ua_8LP802xY

You have to ignore the ridiculous spoken lines someone wrote in for Glen near the end. Otherwise, a beautiful arrangement.

You know, I can't recall when the republican party actually executed on the long-cherished principles of said party, of which I agree with many. Exactly which recent republican was fiscally conservative? The last balanced budget was on Bill Clinton's watch. And it was a republican president, recall, who slammed the gold window and started us on this whole inflationary slide downhill.

We had 8 years of republican leadership. Wasn't that fun? Two wars, and a ruined (bubble) economy. The results were so good, now you want to go do it again, this time with a pretty face instead of a folksy texas guy.

So the Dems are no better, don't get me wrong. They aren't quite so hypocritical in their personal lives, but certainly Obama took the Bush bailouts and decided he wanted to not only match, but raise the stakes. Let's fix a debt problem with even more debt, and they never met a bankster they didn't want to rescue with public money.

Both parties (and their respective supportive - almost parasitical news organizations) provide a circus to entertain the public while the real monetary (liberty) issues continue unchecked. I am hopeful that someday we will quit watching the performer and then at that point we will catch the guy (at the Fed) picking our pocket through institutional inflation.

My sense is, things will have to come to a very pretty pass where both parties approaches are so discredited that we sweep away the current thinking in charge (both parties) and get some folks who aren't such captives of the major lobbies. I can't see how that might happen - but I am really clear that Sarah Palin is not the one to lead us to such a promised land!

Just my opinion. :)

http://www.youtube.com/watch?v=X7nhSclIEYM&feature...

Jimmy Webb night. (Didn't think Glen could cut loose on the electric guitar? Check out the two minutes beginning at 4:24...)

Oh 2nd, It was an attempt to amuse via self-association with legendary status:

"people who either are true legends (or more commonly, those who are legends in their own minds)"

"So the Dems are no better, don't get me wrong. They aren't quite so hypocritical in their personal lives, but certainly Obama took the Bush bailouts and decided he wanted to not only match, but raise the stakes. Let's fix a debt problem with even more debt, and they never met a bankster they didn't want to rescue with public money."

Just to further clarify my position, I'd like to point out a few observations I'm focusing on:

1) Government is now operating(actually growing!) on borrowed money.

2) IRS receipts generated by economic activity are rapidly shrinking, screeching to a halt.

Not much if anything has been done to compensate the divergence of 1&2.

3) HB&B have sopped up huge sums of taxpayer capital(At huge opportunity cost, government must compensate via borrowing).

4) HB&B still are not lending (This is understandable, as asset prices still are falling: reference #2).

5) Massive trade deficits

Recovery efforts are lopsided, not holistic or full-circle.

These descrepancies are why recovery efforts are failing, IMO, and I'm guessing somehow government believes economic growth will overcome the recessionary pressures. I have my doubts.

These observations should please those who believe government should do nothing, because that is nearly the gist of my observations.

--------------------------

Fundamentally, continuously rolling forward trade deficits is an unsustainable business practice. The enabling of trade deficit is where intervention has gotten the global economy into trouble(IMO). This intervention has been occurring on both sides of the fence. Judging from past experience, our government is notoriously reactionary, instead of adopting a proactive approach:

"Senator Warns China of US Anger at Trade Deficit

Posted on: Tuesday, 10 January 2006, 04:40 CST

By Chris Buckley

BEIJING -- China's currency exchange controls and trade surplus are fanning so much ire in Washington that Congress may pass legislation threatening to punish Beijing, a U.S. senator said on Tuesday.

Max Baucus, the top-ranking Democrat on the Senate Finance Committee which oversees trade policy, said he favors trade with China and opposes legislation targeting China's currency exchange rules. But the ballooning U.S. trade deficit with China may encourage many lawmakers to support such steps, he said."

"Baucus said the Chinese officials he met did not reveal any details of currency policy moves, especially recent speculation that China may reduce holdings of the U.S. dollar."

http://www.redorbit.com/news/general/352046/senato...

If you close your eyes and listen, this 10 year old gives a decent impression of Audrey Hepburn

http://www.youtube.com/watch?v=bOeWz2k4tTI

Audreys' version:

http://www.youtube.com/watch?v=7Ezy50aY6Bg

nemo - "will today's "current value" be tommorrow's 125% appraisal? It still "interferes" with the natural correction process."

So does the pegging of currencies our largest trading partner practices. Let's not kid ourselves, there remains an attempt underway to re-leverage the system that broke down.

"Pookster...don't know if you meant to use "lye" or "lie""

I suppose whichever is the more caustic is the one I meant to choose. When I write code, my favorite pieces are loops within loops (nested loops).

"So does the pegging of currencies our largest trading partner practices. Let's not kid ourselves, there remains an attempt underway to re-leverage the system that broke down."

I don't disagree, but I can understand why they don't want to let it float. Outside of the competitiveness of their exports, their treasuries go from Charmin to two-ply. Yes, they're trying to leverage-unfortunately, by piling it on us.

http://tinyurl.com/nsg3ny

India Joins Russia, China in Questioning U.S. Dollar Dominance
By Mark Deen and Isabelle Mas

July 4 (Bloomberg) -- Suresh Tendulkar , an economic adviser to Indian Prime Minister Manmohan Singh , said he is urging the government to diversify its $264.6 billion foreign-exchange reserves and hold fewer dollars.

“The major part of Indian reserves are in dollars -- that is something that’s a problem for us,” Tendulkar, chairman of the Prime Minister’s Economic Advisory Council, said in an interview yesterday in Aix-en-Provence, France, where he was attending an economic conference.

CP said - These descrepancies are why recovery efforts are failing, IMO, and I'm guessing somehow government believes economic growth will overcome the recessionary pressures. I have my doubts. These observations should please those who believe government should do nothing, because that is nearly the gist of my observations.

CP, your summary of why things are going awry are - very well put.

For me, it's not about being pleased or sad. At this point, both parties AND the vast majority of the American people have bought into the myth that the government IS the solution to just about any problem. First posited by politicians in an attempt to get more power, it has snowballed to its logical end game where the Government is now responsible for the movement of the sun, the stars, the moon, and the tides - and held responsible for any difficulties that arise therefrom.

Ok, hyperbole. But you get the sense of what I'm saying.

There are some things the government can't fix. But after these many, many years of providing solutions to poverty, homelessness, health, education, social injustice, and now the economic cycle, Government is a prisoner of its own story: just give us money and authority, and we'll take care of everything. Why else have we let them take 13 trillion dollars (lent, spent, or committed) to "just fix the damn problem, ok?"

So, now to correct this hubris, we need to have our black swan: something the government cannot fix. There are limits to power. There are things the government cannot fix. And this set of events unfolding now will be the case study for this, I believe.

It's not what I want to happen. But it will happen. As has been said many times here before, you can't fix a debt problem by borrowing MORE MONEY. At some point, the alcoholic has to go into recovery, and stop relying on "the hair of the dog" to fix the situation. But before that happens, we will need to hit bottom, and that process will not be a painless one. Hyperinflation, a market crash, a market boom, money carried in wheelbarrows to buy a loaf of bread - I have no clue how it will play out. But I'm willing to bet heavily it won't be a return to business as usual.

Again, just my opinion. Honestly, I would LOVE to continue business as usual. I LIKE business, especially as usual. I have a great life, I don't want a thing to change!

But wishing won't make it so.

ALOHA !!

Davidfairtex posted: "But wishing won't make it so."

Now how do you know wishing won't make it so? We just elected a President on that basis! Oh ... or was that HOPE?

I never really believe "doing nothing" is doing nothing. You are doing something ... You are doing NOTHING! Ask a surfer what's the best strategy when you wipe-out on a 20ft wave and they will tell you do "nothing" ... You're powerless. Do not fight the undertow. You sometimes have to go with the flow, because the flow is so powerful that it is useless to fight it. Best to save your strength for when the wave passes. That way you can still rise to the surface and take a breathe of air and still swim to shore if need be and you will live to surf another day! In "surfing terms" I just described why the US government should DO NOTHING! Very Zenny!

At this rate OBAMA will drown ... For a guy from Hawaii he is not very surf savvy! Plus he smokes ... smokers can't hold their breathe very long! Isn't smoking a subliminal "death wish"? You must know at some level that if you smoke you are committing "slower suicide" ... My father smoked his whole life and he died from it. His last years he was like a fish out of water gasping for air. It was a horrible sight to behold and he told me at times he was terrified. I am glad he is not in such torture now and I am ever so glad he died in 2006 and did not have to live to see what America is now. To see GM go down the tubes would have broken his heart. He always used to tell me that GM won WW2 ... I have to admit the carnage is getting tiresome. I am ashamed this all came down on the babyboomer's watch! Hey, what do you expect from kids who grew up with Leave It To Beaver and Gilligan's Island? I was speaking to a lady today who grew up in the Great Depression era and she warned me ... LOOK OUT FOR THIS GENERATION IN CHARGE NOW ... TAKE AWAY THEIR TOYS AND ALL HELL WILL BREAK LOSE! I thought of that very popular bumper sticker back in the 1980s ... HE WHO DIES WITH THE MOST TOYS WINS! Anyone here recall that one? One I used to virtually puke when I saw it was that stupid CAT Garfield suction cupped to the car window! Then the one that said "CAUTION-PRECIOUS CARGO ONBOARD"!! Were they talking about the "baby" or themselves? They were the ones going 90 in a 70 zone! Then recall, SHIT HAPPENS? HA!! Man, what a FANTASYLAND ... Seems like another lifetime ago now!

Like you say ... sometimes you just have to crash and burn ... hit bottom! Its harsh medicine for sure, but at times that is the only viable SOLUTION.

Then there was that Blue Oyster Cult song DON'T FEAR THE REAPER ... More cowbell!!

Mahalo ...

http://ronsen.blogspot.com/2009/07/saturday-mornin...

Happy 4th...off to the ICU.

Dave Fairtex posted:

From the Tao: "The Master does nothing, yet he leaves nothing undone. The ordinary man is always doing things, yet many more are left to be done."

Kaimu posted:

"I never really believe "doing nothing" is doing nothing. You are doing something ... You are doing NOTHING! Ask a surfer what's the best strategy when you wipe-out on a 20ft wave and they will tell you do "nothing" ... You're powerless."

Lao Tzu differentiates here, between the actions of a master, and the preoccupation of a "herd" member co-opted (as most if not all of us are to one degree or another)by artificial social values.

"does nothing" is code for the concept of "wu wei", which for us English speakers, is often translated as "action/in-action." More accurately, it should be translated/interpreted as "non-interference." As Kaimu points out, not doing something is doing something-nothing. The point of "wu wei" is to take correct action (for which Kaimu provides an excellent example)in a given situation.

It's not that the master does nothing (words must always be considered with their opposite (Yin/Yang)). He does what is in accord (doesn't interfere) with the self-interest of his core well-being. The common man (of which we are all a part, by the way)is driven to action by an implanted set of artificial cultural/societal values.

Implied in the statement, are the many actions of the "herd" man that do not contribute to his core well being (thus interfering) as contrasted to the correct actions of the master.

mrking, mntinhi,

I have always considered myself a conservative, but like all labels this one has become almost illegible from too many dirty hands.

I've always voted as an independent:
• Goldwater — no troops to Viet Nam as Johnson did.
• John B. Anderson — $0.50/gal gas tax to develop alternatives and break dependence on foreign oil
• Ross Perot — Realized NAFTA was the beginning of the end for US manufacturing jobs and a benefit only to the wealthiest Americans.
• Obama for IL Senate — I believed he meant what he said and the alternative was Alan Keyes.

Politically,(IMO) Geo the First was never a conservative, Clinton was not a liberal and W was conservative in his religious views only, but each of them was a go-along type who worked and played well with the big money interests.

I can't say I think Palin would be a good candidate nor a good president, but depending on the alternatives she may get a lot of attention and we have done worse.

When someone I voted for was elected it has always been due to the poor quality of the list we had to choose from.

I want someone who will conserve the principles listed in the Preamble to the US Constitution — too much to ask?

These folks have a theme song. We can all sing along as it appears we are not at the bottom yet.

http://www.youtube.com/watch?v=LD5sahXoj0U

Thanks for sharing that Moyers link, Craig. Indeed, very "interesting, enlightening, and educational".

DrSchoon on Goldman Sachs. I read this a week ago and thought it too was a good piece.

AND THE WINNER IS…
GOLDMAN SACHS
The king to the banker did say
Tis I who ride you this day
This day it is true the banker did say
But tomorrow tis I who ride you.

http://tinyurl.com/mgcm6g

Let me just add that 'doing nothing' can be (and often is) very difficult. It can involve strong acts of will and immense emotional control.

(a) Walking away/restraining oneself from confrontation.
(b) Adhering to discipline.
(c) Refusing to participate.
(d) Resisting peer pressure.

All of the above are some of the hardest things I've had to do.

As much as I would like to do nothing I can't. I have made a fairly good income in the market, but those days are over for me now, just too scared to put anymore than 20% of savings in market. I'm now 65 trying to start a small business. I certainly don't feel like starting a business at 65 years old, but to do nothing is not acceptable. To do nothing would be giving into the system that brought us to this point. I just can't lie down like a dog and get run over by these corrupt politicians, so I will fight to stay above the herd. I will have the patience to stay out of the market until the "s&p 500" goes to 700 or above a 1000.

kc - I think selling TCK at 5 sharkie would call "screwdoodled." Being the master, I sold mine at 6 and change. :)

http://tinyurl.com/nb89bw

Personally, I like the underground approach. If the Bay Area can build a transit system as efficient and clean as the one in Hong Kong, it would completely change the willingness of motorists to give up their cars. Not all of them, of course, and not all of the time.

My objections to BART right now include (a) the long wait between trains, especially very early in the morning, (b) the long transit times, (c) an insufficient number of convenient destinations, and (d) at least IMO, unacceptable standards for cleanliness.

In any case, high-speed train service between North and South is something I hope to see in my lifetime. I'd probably use it several times a year. Flying can be a hassle (long-term parking, security checkpoints, the need to rent a car at the other end if you have more than one destination in mind). Driving I-5? Mind-numbing.

I'd actually like to see high-speed rail service to all 50 states. Sleep cars equipped with decent dining/entertainment/communications options would probably turn me into a rail junkie.

Following my own advice given in the previous post and also following Gann's rule of never letting a profit turn into a loss (which I think is the most important rule for my trading style and the one that I have been, unfortunately, ignoring), I have just placed a sell stop limit order (stop 28.99, limit 28.50) on the small BTU position I bought last week at $28. Even though I like BTU a lot and would like to accumulate more of this stock, I would rather start accumulating it at lower levels. For example, I am still keeping a buy limit order on it at $26 for the same small number of shares (say 10% of maximum BTU allocation).

Also, I have just placed a sell stop limit order (stop 2.29, limit 2.28) on 1/9 of my ESLR position, which I sold at $2.68 in mid-June, then re-purchased at $2.10 at the end of June, and now want to sell again at $2.29 so as not to let a profit turn into a loss.

Grym...

I agree 100%. Palin is the true independent conservative and for whatever her weakness, she is genuine...last one I saw like that was Reagan.

The MSM is frustrated as she behaves in ways they cannot predict or control, the liberals attack her viciously because they know her potential. I am sick of moderate republicans and recall how Romney sr and Scranton tried so hard to de-rail Reagan...they will do the same to Palin...or any other independent conservative.

Why? Look at what Reagan did to them in his two elections for POTUS. Liberals thrive on fear, victimhood, and racism...Palin and Reagan thrive on hope.

I choose hope.

MK

IMO, you are right to protect profits. I was up 104% YTD a month ago, but now that's down to 85% because I found myself where I couldn't exit my largest position when I wanted to because for a couple weeks the shares couldn't be traded in the US. Obviously, I hadn't expected THAT. But there was ONE day before that happened that I could have sold aggressively, and didn't. I only sold 10%, but could have sold 25 or 30% had I pushed it a bit.

Hindsight is always so clear...

"Are Miller and Buffett experienced traders? Yes. Legendary traders? Yes. What happened?"

I think they, just like me and many others, placed their *assumption* about the price drop being temporary and unjustified above the rule of never letting a profit turn into a loss. When they lost 1/2 of the YTD gain (I assume they were good enough to be up through most of 2008 and took a hit only in October, as most of the people on this blog did), they decided to stay in the market because they wanted to chase the extra profit (if a quick recovery in prices took place) and decided to ignore the rule of protecting the gain they already had.

The longer a person stays successful, the more trust he/she places into his/her "evaluations/estimates" of the current market environment. Eventually, they run into a situation where the market behaves SO unexpectedly that even their evaluations/estimates turn out to be wrong, and it is harder for them to clear their minds and step aside simply because their evaluations/estimates have been right so often in the past. So the longer a person stays successful in the market, the more careful he/she should be about not taking the extra risks (manifested, for example, in sticking longer with losing positions that he/she hopes will turn around soon) that seem justified based on the previous successes of that person. That's how I see it...

What absolute rubbish.

Reagan was a master communicator and used it very effectively in debates and during his terms. Palin can't put together a sentence and will be eliminated in the primaries by more intelligent, moderate debaters like Romney who can think and talk circles around poor Sarah, especially about finance which will be a key topic.
Reagan was a two term governor of California, the sixth largest economy in the world. Palin is a one term quitter of the smallest least populace state.

There is no comparison, except perhaps how embarrassing their kids were/are to both of them. It will be easy to take out Palin. 1. The party is in the wilderness. 2. The moderates will reassert themselves. 3. The party stands for nothing. 4. The party is divided. That you "hate moderates" is proof of the lack of plurality, a losing proposition from the start. 5. She and others are still blaming the press instead of taking responsibility for their own actions. 6. There is no such thing as an 'independent' conservative politician, all politicians need not only their own party united, but a healthy percentage of moderates of both parties. That is a tall order for anyone but most of all a quitter with communication problems. Make no mistake, everyone in her own party running for Prez will paint her as a opportunistic quitter. Communication is key and that is her biggest weakness.

A Dem or Liberal will never lay a hand on her, she will be out of the primaries in the first debates at the hands of her own party.

We will still have to choose between two lousy choices, the two party aristocracy. Neither party is worth a damn, otherwise we wouldn't be in the predicament we're in.

Might not, as I'm 70% cash right now. When I feel the market is toppy I try to unload before I NEED to.

But its hard to make big gains in cash...