Cara's Commentary & Community Chat, Tues., Apr. 28, 2009

But the rest of the world may prove unfazed by the bankster mentality toward the peoples 401k's.

Italy Seizes Millions in Assets From Four Banks

With municipal bond investigations spreading to Europe from the United States, Italian authorities have seized about $300 million in assets of four global banks — JPMorgan Chase, Deutsche Bank, UBS and Depfa — whose officials have been accused of fraud.
The Guardia di Finanza in Milan, the financial police of Italy, took over real estate properties, bank accounts and stock holdings on Monday to assure it could collect from the banks if their officials were found guilty and the banks were held responsible.
The seizures stem from the banks’ handling of a $2.2 billion municipal bond issue and related financial contracts known as swaps that Milan undertook to retire other debt in June 2005. The lead prosecutor accused the bankers of misleading the city and falsely claiming that the deal would generate savings. If all the costs had been properly included, the prosecutor said, the entire deal would have been illegal under a national law that allows restructuring of debt only if it produces a savings.

http://www.nytimes.com/2009/04/28/business/global/...

I see it had a positive day yesterday when everything was getting weaker.

Think it's time to take on a little defensive stocks.

It's a Motley Fool Pro choice, which has clearly suffered (in the newsletter portfolio) as the investor took on more risk the last month, but suspect it will see a revival in coming weeks.

From a (what is that, a doji candle?) indecisive day on Friday it rose strongly.

Opened around 49.10, closed 49.97.

What would you say against PG technically?

I can never get over the PMs. With all the bad news overnight. A nacient pandemic, BOA and Citi told to raise capital, Italy seizing bank assets, the futures mkt down (SPY -1.01%) pre-mkt open, --- gold is dropping and down -18.60 to 886.70. I almost bought a little DGP yesterday. At least my FAZ is up.

Can't have people thinking they're the 'go to investment'.......

Is acknowledgment the first step to recovery for a business press that still drinks its own Kool-Aid?

http://tinyurl.com/cca4fm

QCOM - Price Target Raised from $47 to $50 @ Jefferies & Co. Buy

A few health stocks in the 7d oversold category.

biib, mrk, ppdi

HK - Proved technical support 4/8 and again 4/23, both retain hold atatus.
PG - Proved technical support yesterday. Perhaps that support will remain if market continues down but could weaken if market resumes advancement? (safety play)

ALOHA !!

Lets go back to September 26, 2008 and look at one of the top financial news stories then. It was centered on JPM and WAMU. Of course, the JPM CEO, Mr. Dimon was center stage on that deal ...

This article appeared in BLOOMBERG NEWS. Here is a portion of it ...
"New York-based JPMorgan said today it sold $10 billion of shares at $40.50 apiece to raise capital. The bank rose $4.78, or 11 percent, to $48.24 in composite trading at 4:10 p.m.

JPMorgan will add branches in California, Washington and Florida, among other states, and will have 5,400 offices with about $900 billion in deposits. The branches and credit cards will carry the Chase brand and will be integrated by 2010, JPMorgan said.

The extent of job cuts aren't yet known, Charles Scharf, CEO of JPMorgan's retail bank, said today on the call with reporters. The bank plans to consolidate about 10 percent of the overlapping branches in locations including Illinois, Texas and New York.

`Bid to Win'

JPMorgan had 75 people involved in the transaction and ``bid to win'' because it wanted WaMu's assets, Dimon said on a conference call yesterday. JPMorgan used its own investment bank to value the mortgages, he said.

Dimon also said on the conference call that he's in favor of the government's proposed $700 billion plan to prop up the banking industry, but didn't rely on it to complete the deal. The plan was jeopardized yesterday as congressional Republicans failed to agree on its details.

JPMorgan is taking on $176 billion in mortgage-related assets and writing down the value of it and other portfolios by about $31 billion, the company said.

Citigroup Inc., which had been among five potential acquirers, elected not to bid for WaMu because presumed loan losses outweighed benefits from the deposits, said a person familiar with the situation. Wells Fargo & Co., Banco Santander SA and Toronto-Dominion bank had expressed interest in buying all or parts of WaMu, said a person with knowledge of the process.

Earnings Forecast

The acquisition may add 50 cents a share to earnings in 2009, JPMorgan said in a statement yesterday. The firm said it may save $1.5 billion in pretax costs by 2010, offsetting the $1.5 billion it will take in merger-related charges.

WaMu had about 2,300 branches at the end of June. Its $310 billion of assets dwarf those of Continental Illinois National Bank and Trust, previously the largest failed bank, which had $40 billion ($83 billion in 2008 dollars) when it was taken over in 1984."END

Okay, so someone bought 250million shares of JPM back then at $40.50USD each. They are now underwater on that BUY! So while JPM dilutes massively what happens to their share price that day? It goes up 11% because those on the street have yet to understand the depths of the unemployment problem in the USA and how lost jobs spell missed mortgage payments. And within one week, on Oct 1, 2008, marked the one year high for JPM shares($49.63) and ever since the JPM share price has plunged to lows of $16USD. Currently, during this rally, JPM shares trade around $32.40USD ...

So was DIMON wise to add 5,400 offices that sell mortgages to JPM-Chase already huge exposure to US real estate? At this point in time I do not see that as a wise move. Of course we now have hindsight working in our favor, but I guarantee you DIMON is looking back at WAMU and wondering what the hell he has done and just exactly what it is he will be "integrating" by 2010. Unless I miss my mark he must be hacking all sorts of US TAXPAYER deals through the US FED'S backdoor ...

Then there is this fitting tribute to the WAMU CEO: "`There's a lot of sadness and a lot of people are hurt,'' Lee Lannoye, 71, who was chief credit officer at WaMu from 1988 to 1998, said yesterday. ``Having worked with Kerry Killinger for 10 years, I still absolutely cannot fathom where or why he went wrong, and what caused him to lead the company into taking the kinds of risks that they did."END

Remember who replaced Killinger as CEO of WAMU during the JPM merger? Here he is Mr. Fishman.

"Facing $19 billion of losses on soured mortgage loans, the lender put itself up for sale last week. WaMu fired CEO Kerry Killinger on Sept. 8 and replaced him with Alan Fishman, who was awarded a $7.5 million signing bonus and $1 million salary."END

Fishman got $20milUSD pay for 17 days work! Here are Fishman's credentials which overlap with Lehman Bros via Neuberger& Berman: "Fishman holds a bachelor's degree from Brown University and a master's degree in economics from Columbia University. He was previously president and chief operating officer of Sovereign Bank and president and chief executive officer of Independence Community Bank. He has served as chairman of Meridian Capital Group (beginning in 2007), one of the nation's largest commercial mortgage brokerage firms. He has been a private equity investor, focusing on financial services at Neuberger & Berman, Adler & Shaykin and at his own firm Columbia Financial Partners. In addition, he held senior executive positions at Chemical Bank and ContiFinancial Corporation.END

Where is Mr. Fishman now? If this is any clue then he is mired deep into the elite power structure embedded in Wall Street and Washington DC. Look at all his affiliations ...

BOARD OF DIRECTORS MEMBERSHIPS*
2008-Present
Chief executive Officer and Director
Washington Mutual Inc.

2008-Present
Director
Continental Grain Company

2006-Present
Former President of Sovereign Bank, Chief Operating Officer of Sovereign Bank, Chairman of Sovereign Banks Metro New York Market Division and Chief Executive Officer of Sovereign Banks Metro New York Market Division
Sovereign Bancorp Inc.

2001-Present
Former Chief Executive Officer, President, Director, Member of Executive Committee, Chief Executive Officer of Independence Community Bank, President of Independence Community Bank and Director of Independence Community Bank
Independence Community Bank Corp.

1999-Present
Chief Executive Officer, President, Director and Member of Executive Committee
ContiFinancial Corp.

1999-Present
Former Chief Executive Officer, President and Director
Contitrade Services Corp

1998-Present
Former Director
KeySpan Corp.

1989-Present
Former Director
KeySpan Energy Corp.

Member of Advisory Board
Ironwood Management Partners II, LLC
Chairman of the Board

Ladder Capital Finance LLC
Director

New York City Investment Fund Manager, Inc.
Director

The Partnership for New York City, Inc.
Chairman

Brooklyn Academy Of Music Inc.
Chairman

Meridian Capital Group, Inc.

OTHER AFFILIATIONS*
Washington Mutual Inc.
New York City Investment Fund Manager, Inc.
KeySpan Corp.
Continental Grain Company
Sovereign Bancorp Inc.
Affinity Technology Group Inc.
Independence Community Bank Corp.
KeySpan Energy Corp.
Sovereign Bank (Wyomissing, PA)
Columbia University
Meridian Capital Group, Inc.
Contitrade Services Corp
Brown University
Ironwood Management Partners II, LLC
Independence Community Bank
The Partnership for New York City, Inc.
Brooklyn Academy Of Music Inc.
Ladder Capital Finance LLC

Now I have to ask how can one man competently do so much with a 24 hour day? I know most of these affiliations are basically "pay-offs" because my Uncle sat on Boards of various companies and he hardly showed up but once a year! I know for a fact he told me he got paid $180,000USD per year for just flying to Palm Beach, FL for the annual shareholder meetings for American Cyanimide and he even complained about that!

Tracking-g-g! Hit the "tracking button"!!!(press)

BACK TO JPM ...

Perhaps we should look at JPM as a barometer from the angle that they want to make good those who bought JPM shares at $40.50 some eight months ago. Seems JPM $40 per share sees some serious headwinds.

NO JOBEY ... NO MONEY!!

IT ALL WORKS ...

...

MG that was a good, short article, as I see it, the mass of journalists, editors, and publicists are all business/success/readership volume oriented. Story lines that increase business are the mantra for all businesses.

Hence, the publishing industry is predisposed to 'drink the cool aid' and tell the rest of us how good it tastes, because it's good for business, it's good for careers and sadly it's usually what the public (myself included) want to hear. Cries in the wilderness go unheard.

There is little coverage or emphasis on what the public needs to know and what the public needs to hear. It is a guaranteed outcome. Just look at the run-up to the Iraq invasion, with all the manufactured/spun lies from da-leadership.

I can't really blame the publishing industry without first blaming ourselves. There were many cries from the wilderness. Bill made some, Ritholtz and others. In 20/20 hindsight it's all so obvious.

Okay, Bill's commentary shines a light on why we're observing weaknesses across the banking sector. The war between the big banks is heating up again, bring with it a new wave of uncertainty.

Glad I'm not trapped in a 2x/3x stock that suffers from the rapid decay of volatility. I'll hang in there with my bank equities and ride the storm out. Heck, maybe JPM will buy one of them out for my pay day.

CP- I can't find a E/P Co. that is preforming better than HK.

ALOHA !!

Okay ... over $18bil USD in one 24 hour period. That is how much the two mystery line items OTHER and UNCLASSIFIED grew. Their combined total now stands at $1.526TRIL USD. The last total(April 23rd)was $1.507TRIL USD. Where is any comment on this HUGE ASS HOLE??? TIMMY?

The US TREASURY fed $2.1bil USD to TARP, the other black hole, so it is now at $305.9bil USD in six months.

For Food Stamps/Nutrition the US TREASURY has spent some $42bil USD so far in their fiscal year that began in OCT 2008.

For Unemployment Benefits they have spent $53.5bil USD so far.

So between Food Stamps and Unemployment Benefits our elected leaders have not even spent 1/3 of what they have spent on saving banks. For every $1USD our government spends on assistance to its citizens it spends $3.20 on assistance to insolvent US Banks. The US TAXPAYERS are getting the double whammy. Not only are our tax dollars not being spent on us but they are being spent on US Banks that charge us 16%-30% on credit cards and pay people like Mr. Fishman $20mil USD for 17 days work! Without the backing of the US GOVERNMENT, which is backed by nothing more than tax revenues and "faith and credit" from its citizens none of these US banks and insurance companies would be standing. They would have all collapsed on counterparty failures like dominoes.

Buying time ...

AND THE BEAT GOES ON ...

IMO Bill's theory on JPM and the Lehman affair is dead on. This is a zero sum game and given the immense size of losses stemming from bad bets it seems plausible JPM (and GS) are culpable and capable of massaging the numbers and circumstances. I dislike conspiracy theories in the main but do not believe this is one of them. Lehman Bros. failure had a massive impact on many aspects of the market specifically the commodity's sector where it was a Prime Broker to most of the commodity focussed funds/hedge funds. The Fed gets it both ways, rids itself of parabolic commodity prices by making clients/creditors and JPM gets to be the white knight. Recall Bear Stearns faltered and would never have recovered due to their non-participation in the bailout of the LTCM debacle 10 years prior. Backdating to gain advantage for JPM is looking to be the smoking gun.

Edit: So I see my p. exit for ERX was hit @ 26.68- 3.7%
Missed on TNA, but am going to hold overnight.

2nd/David- Not to be left out... Starting to scale in UNG @ 13.39. Nothing like having some skin in the game to sharpen my focus. I should have my plan finished tonight.

if china was secretly buying gold for the past few years,
then are we to assume European Central banks were secretly selling more gold
than agreements permit to them?

does anyone think that inherently the chinese know something the EU and America doesnt? no one finds it interesting that there is an implicit assumption that a buyer of gold is wise, yet the chinese also hold the king kong of all US t-bill positions, the supposedly soon-to-be worthless paper gold bugs refer it to as. remind me why holding a massive position in both gold and US t-bills makes one nation smarter?

if the chinese were successfully buying gold secretly why let the cat out of the bag now?

i cant wait for more central bank sales induced tom-foolery, and GLD inflow obscfucation to justify why the price should be higher than it is.

volume was weak on the last rally, we know this for the miners, and gold didnt fully break out of a downtrend line started from earlier this year. this is nothing new. it doesnt mean we hit $800, nor does it mean we jump to $1000 in a hurry. until that downtrend line is broken and some volume returns to the miners, and all this china nonsense stops, its back and fill time... looking to reload should we fall through the 200 ma on gold, or add if we crack that downsloping trendline on strong volume. though the later seems less and less likely as the USD is curling back up again on percieved market weakness... just like it did last fall. act like you know.

So FranSix, if this is some sale from London having to do with copper mines, why would they sell all that metal at one moment, causing the price to fall $12 over ten minutes? Wouldn't you expect the holders of the gold to sell slowly, so as not to move the market, so they can maximize how much they are going to earn? (I'm referring here to the price movement this morning at 0820, which dropped gold from $897 to about $885 in about 10 minutes).

I'm going to presume whoever sold that gold wanted to move the market, for reasons unknown. Possibly to pick up gold stocks cheap. Possibly for political reasons. I certainly don't know. But I call it intervention, because that's what it looks like to me.

ALOHA !!

Link to PAYROLL TAXES: http://www.trivisonno.com/withholding-taxes-chart

Thanks Matt!

Link to US TREASURY DAILY: http://fms.treas.gov/dts/index.html

Don't forget to look at the US Defense Vendors line item and of course the ever expanding Social Security and Medicare/Medicaid line items. Those three combined costs somewhere around $5bil USD per day.

With all the Pakistan talk I am wondering why nobody here is looking at LMT and the other "easy money" defense contractors? The Taliban and Al-Qaeda with nukes sounds a lot more problematic than swine flu!

GOVERNMENT IS ONLY AS HONEST AS ITS MONEY ...

Now online stocks may catch on. Toronto based CRYP

Barney Frank, Head of the U.S. House Financial Services Committee, is expected to re-introduce a Bill to legalize and regulate Internet gaming.

Online gambling coming back to the US? - NY Times : NY Times reports executives of some of the European companies whisper excitedly that they may soon get a second chance with online gambling in the United States. Meanwhile, a number of European countries that have long maintained barriers are moving, under pressure from regulators, to legalize, and tax, online gambling. "There's still a lot of gambling going on, where there's no revenue coming in to the governments," said Gavin Kelleher, an analyst at the research firm H2 Gambling Capital in Ireland. "They realize they could use the revenue." The biggest potential change would be in the United States, where, perhaps within days, Representative Barney Frank, Democrat of Massachusetts, is expected to introduce legislation aimed at overturning the Unlawful Internet Gambling Enforcement Act. "He supports the repeal and wants to move forward on it," said Steve Adamske, communications director for the House Financial Services Committee, of which Mr. Frank is chairman. Mr. Frank tried and failed to do so once before, in 2007. But advocates of liberalization think they might get a friendlier hearing in Washington this time around. President Barack Obama, they note, boasted of his poker prowess during the election campaign. And the Democrats, who are seen as less hostile to Internet gambling than the Republicans, have tightened their grip on Congress.

2nd, I got out @9.33, should have taken the 9.50 at open, but not ready to get on that train again, just yet. Watching gold/pm presently. KGC, GDX and others have traced a large downward 'U' and a buying opportunity is patiently being expected.

FRANKFURT, April 28 (Reuters) - Gold and gold receivables held by euro zone central banks fell by 823 million euros ($1.1 billion) to 240.84 billion euros in the week ending April 24, the European Central Bank said on Tuesday.
Net foreign exchange reserves in the Eurosystem of central banks fell by 11.8 billion euros to 265.4 billion euros, the ECB said in its regular weekly consolidated financial statement.

Gold holdings fell because of sales by two euro zone central banks, consistent with the 2004 Central Bank Gold Agreement, the ECB said.

It added its balance sheet had decreased in size by over 16 billion euros in the last week to 1.824 trillion euros.

LMT, hanging around support since 4/16 as I see it. Presently @77.32 -0.74

Now that's "smart money"

Bringing Marvel Characters and gambling together.

Interesting Company London

Good luck, got to run...

An interesting, informative speech given by
Keith O. Rattie
Chairman, President and CEO
Questar Corporation
to students at
Utah Valley University
April 2, 2009

This is a 10 page read about energy. You may not agree or like what he says but he cites some self evident truths about our energy problems.

http://www.fcpp.org/pdf/UVU%20and%20BYU%20speech.pdf

Anybody notice Ron Insana is now a new member of "The Street.Com? You are right Sharkie. It is nice to have friends who are connected. CNBC needs to buy a bigger bed.

$irx... (+38.89)...stockcharts.com...can this be money moving into stocks?

Perhaps, how long will it last?

If you look at a 24 hour/60 minute chart of GC you will see that support from 4/21 was broken at this mornings drop. It held for about 9 hours before it broke. Exact same thing happened on the 27th when a head and shoulder pattern broke. In the futures market it only takes one trader trading one contract to trigger stops that were placed too close to support and resistance that then trigger others in a waterfall. There may have been no conspiracy - just the markets doing what they do.

Look like it is a Fierce Outbreak of Swine Flu Coverage by media.
Not actual swine flu outbreak. And market reflects that?

RE:>Look like it is a Fierce Outbreak of Swine Flu Coverage by media

"Mediatisation", or making a mountain out of a mole hill (a slight exaggeration).

I can't imagine what CP's generation went through during the Cold War.

A situation grave enough, but spin it through the media box and intensify it for popular consumption - can imagine the world looking like it was going to hell in a bucket.

I agree vinod. The coverage has been overwhelming, but the facts across the dozen articles barely change. I.e. there was the initial story of 80 deaths, and an update to 150 deaths. 2 stories really, but those two have been repeated in what seems like hundreds of news releases...

CP
and they are saying Case Shiller index declined .1% less than expected and that is good news. Housing crisis is over?

"if china was secretly buying gold for the past few years,
then are we to assume European Central banks were secretly selling more gold
than agreements permit to them?"

China wasn't buying gold on the open market. They were buying it from domestic producers.

My understanding of reading the news releases is that they had decided to accumulate gold 6-7 years ago but had an internal dispute whether to account for it as a commodity investment, or to include it in currency reserves. They recently came to the decision to put it in currency reserves, hence the news release.
http://www.chinastakes.com/Article.aspx?id=1169

Sold at 13.52 pre-earnings yesterday. Not the most exciting stock but I trade around it all the time.

Just switched parties.

I am amazed. He is a brilliant man, seeking relevancy in his twilight years. Reminds me of Churchill when he "ratted" to the Labour party and then "re-ratted" back to the conservatives later in the century.

The Dems should not let him run the party, though.

What a snake!

(as one of the chief architects and expounders of the "single-bullet theory" ((and yes, I'd love to know what you gun....enthusiasts think about that theory)), but Spector earned my eternal enmity for covering up true facts behind the murder of a President.)

Oh and BTW Andrew Jackson applied Nazi tactics against the Cherokees, ethnic cleansing, forced from homes into death-camps, "removed" to the west so increase our Lebensraum or "room -to live" ....And we presume to judge the Germans, to dehumanize the German gentile even though we did the EXACT SAME THING HERE? It's just that there were far fewer indians to kill and of course, the Germans applied good, efficient German engineering and technology to their deplorable genocide of the Jews.

Why is Specter's ugly face still on the 20 dollar bill? And who will be next to be featured on our phony currency? George W. Bush? Picture that one!

HA!

Scaled in @ $USD 4.58. Limit order took 2 hours to fill.

When the Berlin Wall went up my US Army Reserve unit was on 24-hour alert (Be ready to leave for Europe within 24 hours.)for one year.

Cuba Missile Crisis was more scary, though... be ready to be blown to hell in the next few minutes.

We kind of got used to it — hoping to be at the epicenter rather than on the fringe.

HNU.to - That's a very good entry point from a technical perspective. Today's benchmark price is $5.56. If the closing price is below this amount, technical support has failed. I believe technical support will prevail.

CP, you captured my past feelings exactly. I noticed all the cars on the road were new, or at least shiny. Huge homes were being built on 5 acre lots from developed farm land. It was simply incredible. $5-7 for a morning latte/mocha/grande coffe didn't get a blink of an eye. Everybody was rich.

TLT will prove to be the perfect ticker symbol...

dang, I had my limit order in at 46.70 yesterday at close. It never filled despite closing at that price. Opportunity missed once again.

this makes sense CP,

the critical distinction is that on any rhino horn there is a the need to jump on board in a panic sense that we will never see these prices again.

i thought for sure when the HGU hit 16 a month ago we were ready to lift off, everything seemed in place, and here we are back at 10.

its not so much that me or anyone else was wrong on a particular call. its the tendency to justify upward spikes with specific pieces of news. further fusing said news to the eventual fall out.

with the recent explosion in teh gold price then settle back down below after the QE announcements by the fed, i ask my self a simple question: if QE is so bullish for gold as everyone seems to think, why are we back to the same levels when the announcement was first made a few weeks later?

was gold wrong? or was it part of a broader bullish picture?

i think deep down in most of our hearts we dont want to miss the big move in gold, the big $100 move that we all think is gonna happen all of a sudden and never reverse.

we have reversed pretty much every one of these moves. the mining shares inability to recapture ground and still value themselves at much cheaper gold is the canary in the coal mine on any given move. miners are the ones digging for gold, if their share prices continue to underperform then we know that there is a problem somewhere on teh line from digging for gold to selling the bars. someone is taking someone's lunch money as oil is less than 1/2 the price 1 year ago and miner's costs are still escalating and profit pictures are still hurting.

Newmont or GG recently made a comment about lack of labour. they are starting to sound like the Canadian government citing a labour shortage amidst mass unemployment in Toronto and the big cities. if a CEO of a major mining outfit cant find miners, he should be replaced, that is the most pathetic excuse i have ever heard to justify production problems. perhaps they werent paying people enough to attract the kind of skills they needed. if you cant make money at $890 gold there is something systemically wrong with your approach.

how long will Barrick claim losses due to unwinding their hedge book? how long will people tangle themselves in notions that miners wont make money becuase of problems with hedge books, labour, copper prices and everything under the sun?

CEO's will make the usual boilerplate statements about how rosy the future is for gold, especially their mining outfit as they continue to report losses due to one thing or another. people will fall for these antics all while claiming the masses are sheep for believing what CNBC says.

we're in the matrix for gold here. dont believe the hype. we will see $1200 in the next year or two, but it will make the ride hard enough that most will jump ship. such is the nature of riches: they are elusive.

the next big con is in gold miners. just wait till congress gets a hold of a few of those guys found shorting their own company stock in hidden accounts, while talking up gold.

I'm still riding the TBT wave. Was a little stressful yesterday with the strong drop from mid day to the close, then openning much lower this morning.I just cashed out half of my position a moment ago.

Billy, Johnny I agree Calpine ,C P N, Looks like if it reaches $ 7 ,it will be just under R. S. I. 30 ON THE DAILY .http://tinyurl.com/c3hfvd

are performing extremely well, as I see it. UXG and WGW (which I have in my portfolio and which I am observing daily) are MUCH higher now than they were when gold was at $890 a few weeks ago. It does feel like they are in a medium-term uptrend, as Bill has suggested.

Dr.cosa - So looking at trading gold from a logical standpoint, we've reason to believe in long term fundamentals but holding gold carries along with it a bag full of opportunity costs.

There's talk of how when gold breaches the $1k barrier, maybe this time around, it won't return to three figures. Well, I'm willing to give it a chance but meanwhile, it would behoove us to occasionally offload some of the opportunity costs onto others.

If gold doesn't breech $1k on the next horn, this is what I will be attempting to accomplish (using 50% of my position).

They're not independent dealerships? ok.

GM given up on Hummer, has it? Good riddance.

ha, made me think of the poor grunts who'd bring their wide hummers out to our narrow land rover worn outback tracks.

Always busting their tires.

The current price pattern in market indexes looks very similar to the ones we saw when a late afternoon sell-off took place. I can't help but feeling that it will happen again today.

ALOHA !!

I have posted about two currencies before. One currency for use within the US borders and another for use by holders of US DEBT. Sort of a preferred shares versus common shares. Naturally those holding our DEBT will be preferred. What is a US Dollar other than a stock certificate for the USA?

I have been conversing with Prof Antal Fekete about the structural demise of the US GOVERNMENT due to the excesses of PROMISES mixed with a collapse of tax revenues and he led me to his latest article regarding two currencies and as he says it seems they already exist.

From FALSIFYING BANK BALANCE SHEETS, April 27th, article: "This is the secret of deflation, and the answer to the much-debated question whether you can have hyperinflation and deflation all at the same time. The answer is that you can, because hyperinflation refers to electronic money that people reject, and deflation refers to FR notes that people hoard."END

Well, many here have heard me refer to "electronic money" as MOUSE MONEY, that can be clicked in any amounts within nano-seconds. In this respect the advent of the computer has put banking into a whole new realm that did not even have a hint of life back in 1929. One reason I stay away from 1929 comparisons because in reality the details, which are HUGE and where the DEVIL resides, are APPLES and ORANGES!

Here comes the C WORD ... Everyone here believes an old fashioned "bank run" is out of the question in these modern times, but is it really? What is backing up this from happening? We saw some bank runs on TV when IndyMac went under. The FDIC is considered the insurance for bank depositors, but its role has expanded in great proportions now. The latest Timmy Geithner plan utilizes the FDIC for backing private purchases of toxic bank assets. Whats next? Essentially the FDIC is US Bank sponsored and acts as yet another tool for risk leverage by US Banks similar to what a CDS contract does, except once again the FDIC is US TAXPAYER backed. I would say US GOVERNMENT backed but all the government has is tax revenues to back it and "faith and credit". As I have pointed out the mainstay of US tax revenues is payroll taxes and they have been decimated again like they were in 2001/2002. What if MOUSE MONEY could no longer be trusted? As Fekete says there is only about 10% of total FRNs that actually circulate as actual "folding paper". It takes time and paper and ink to print the folding stuff. During Weimar Germany they only printed one side of a German Mark because they ran out of time and ink. Possible reasons MOUSE MONEY would collapse would be a bond market panic or FDIC failure or US GOVERNMENT rating downgrade or a computer virus. Imagine having to convince your bank that you had $80,000USD in your account based on your last statement? How long would that take?

Fekete writes about Geithner's plan: "Is deposit “insurance” a myth as suggested by Palyi, designed to mislead the public? There is plenty of evidence that it is. Why did the big Wall Street banks not sell government bonds from portfolio before begging Congress for bailout money? On the face of it this would have been a good time to sell, as the bonds are quoted above par value by the market, thanks to a super-low interest-rate structure. Could it be that the bond market is rigged? Could it be that high bond values are artificially maintained, e.g., by tempting bond speculators to the long side of the market with risk-free profits, and threatening those on the short side with sudden death — the essence of open market operations as I have long suggested? This time we shall find out.

If you examine the latest measures initiated by the Geithner Treasury, there is indeed reason for alarm. Treasury Secretary Timothy Geithner openly invites private investors to speculate, risk free, in buying the toxic assets of the banking system. The risks, should they materialize, are covered by pledging, most improperly, the assets of the FDIC. If the gamble succeeds, private investors may keep the assets they have bought on the cheap. Otherwise the FDIC will pick up the tab and will reimburse investors for their losses.

Let me ask the only relevant question. Why would private investors, in their right mind, speculate in toxic assets which have no market, given the fact they can already speculate, directly and risk-free, in the “ultimate” asset that is held in the guaranty fund for those toxic assets, that do have a market in which the troubled banks compete with overseas central banks for the bonds of the U.S. government? The Geithner-plan is a hare-brained plan, and is bound to fail."END

What's changed? Regarding the US Bond Panic of 1921: "A corporation publishing faked balance sheets would be barred from every stock exchange. It may even face criminal prosecution. The objective is to protect the public against fraud. But exactly the same fraudulent practice has been legalized in so far as commercial and savings banks, and life insurance companies are concerned. They can carry government bonds on their books at par value. A $1,000 bond may be quoted in the market at $800 or less; the balance sheet of your bank will still show it at $1,000. The purpose of this regulation, adopted by all federal and state supervisory agencies and by the Securities Exchange Commission as well, is to give those bonds a sacrosanct status and guarantee against paper losses. Thereby they are promoted to an absolutely safe and “liquid” status. The bank examiners count the bonds of the federal government, whatever their maturity and actual market price may be, as prime liquid assets, just like cash. The more bonds in the portfolio, the more liquid is the bank by the examiners’ standards, — never mind the paper losses."END

As I have pointed out the US TREASURY cares not whether its accounting is accurate or truthful otherwise we would not have a $1.526TRIL USD BOTTOMLESS BLACK HOLE in our Balance Sheet. The GAO is constantly reprimanding the US TREASURY over its lack of transparency and its accuracy and speed of reporting pertinent financial data. This clash between the GAO(non-political) and the US TREASURY(highly political) has been going on for decades and was what led the former US Comptroller General and head of the GAO, David Walker, to resign. At the time I equated that to the resignation of Jeffrey Skilling at Enron.

I mentioned to Fekete the "COLLAPSE OF PROMISES". Really all the FDIC and the Social Security/Unemployment "safety net" is are ANTI-RIOT INSURANCE so the REPS and DEMS retain power. In reality we US TAXPAYERS are funding our own sedation, our own Valium. Financially speaking the Valium is called the "BOND MARKET"!

Buying time with smoke and mirrors ...

IT ALL WORKS UNTIL ...

"ha, made me think of the poor grunts who'd bring their wide hummers out to our narrow land rover worn outback tracks.

Always busting their tires."

Yeh, I agree completely! This was the first thing I noticed about these things when they came out years ago (H1?). GM either got lucky or knew oil prices were going to fall, probably the former. Otherwise, they make great dessert vehicles and then vehicles for eventual desertion given the fact that global resources aren't infinite.

You can't escape death, but you can hasten it's arrival.

Was listening to a commodities analyst with Thomas Keene on Bloomberg. Guy was a bit slllllloooowwwww to speak but what he had to say was interesting.

Huge contraction in consumption - monthly trade deficit (26 billion a month) changing to a trade surplus in a quarter or two, or so he thinks.

So even though GM is home grown consumption (is it?), the path to a balance of trade is occurring - essential to paying down the debt - even if its killing off American brands at the same time. We can at least look at it as renewal.

Of course, downside of trade surplus is that China et al. no longer recycle their non-existent trade surplus dollars on American money markets.

When that happens...?

will buy at 15.50 -OEWRR

On fire today on little news.
fd part position long

Pill, could you say why out what I see as early? I see on ta, RSI7 not yet 70 and RSI14 still climbing, MACD not falling over and stoch not oversold
Thanks in advance. I agree this is a good sector to watch, just curious on your decision

KRI - Proved technical support 4/22 at $0.41. Support still meets technical requirement.

Seamus, I heard they wanna offload another 200 billion next week.

Can't recall where I read that.

I'd like to tell you this sell was based on a bunch of technicals RSI(7) near 70, but in reality it was "feel" as I have watched the ticker on this ETF a lot and felt we were short term overbought. Turned out correct short term.

....not positive, but wife just called and said this is breaking news.

...

.....

"In all seriousness, I feel bad for the employees and service staff, as well as the surrounding neighborhood businesses."

NYUGrad -

Neighborhood businesses weren't reliant on car buyers, I can assure you of that. Many of those dealerships are large tracts on corners and in prime commercial locations and will be redeveloped into more productive uses when the economy recovers. Little known fact is that state franchise laws forced OEMs to stock family-owned dealerships with new cars since forever. In essence, if the franchise stays in family ownership, the manufacturer is forced to support it ... forever. That's why Billy Bob's great granddaughter is now pitchin' the Surburban on local TV. Idea of the franchise laws was to stop the OEMs from monopolizing car sales. So it became impossible for OEMs to downsize its dealer network. Catch 22. Can't win for loosing. Big Three has 3 to 6 times the dealerships than the Japanese here in the U.S. So the U.S. dealers canabalized sales to compete and make the consumer experience a nightmare. But, believe me, those franchise families made a bundle ever since Henry introduced the T. I don't feel sorry for Billy Bob's granddaughter, just, as you said, her employees.

State franchise laws: Just another example of why the Big Three can't compete.

ah, i didn't know this. Thx for that quick primer.

In this market, nothing moves. I think only wise trade to make is to sell premium :)

Shiva, nothing will move in this market until it actually starts moving. Statistically, when you actually decide to sell short a large number of puts so as to pocket a lot of premium in this flat market, THAT'S when the market will break down and crash. So be careful out there... We saw the same flat market in December-January, and then it broke down in February... We are now oscillating in exactly the same range as back then, and the outcome might be exactly the same...

They gonna hold the line to closing?

bullish intentions for tomorrow?

Swine flu was shrugged off quick.

In this market, nothing moves. I think only wise trade to make is to sell premium :)

:)

bought a little slice at 6.07

just what an exuberant market needs to wake up to tomorrow.

Nothing like a cold shower...

"And then I'll be rich!"

Sounds like a reasonable plan to me!

ALOHA !!

The C WORD in action ...

Excellent development!

A wild card is Obama's huge fiscal package may not survive a congressional vote. Even though the media generally portray him as popular there are cracks emerging in his foundation.

Jobs (lack thereof) could cause even his most ardent supporters to fall away. His continued backing of Wall ST. and the big financials have made this his economy.

When the stimulus reveals it has no validity he will become a second Jimmy Carter.

Did not hold up to well today...except CSCO & GILD.

Daily: IBM did OK...JNPR did not fare well.

Bill - People rob banks because they think they can get away with it

Quote from Willy Sutton, bank robber back in 1933, when asked why he robbed banks: "because that's where the money is."

Sorry I couldn't resist.

This is a case of massive overreach. They just don't know when to stop grabbing for cookies, they've been at it for so long now.

Outa here.

With the Pig Swine potential crisis, an already big bear run up and nothing really stellar coming out of earnings seasons to progress this rally. I'm starting to think I may need to put on a big short position and go away for a month (a David-like trade). :' )

well, confidence is a big thing for the markets and consumers have gotten more confident. i'm in the camp that will wait until we see a definitive break one way or the other, which means a break above 890 on volume or below 780 on volume. until then i have a few long positions but most of my money is in cash money.

I sense that many investors were pulled out of the market during the February plunge and have been on the sidelines as the indices have run back up 25-30%. Now there are many investors waiting for the elusive pullback to deploy cash but the market isn't providing many "safe" or seemingly "low risk" opportunities to jump back in at this time. Question is - is there anyone left to actually panic out of the market or will future sell-offs be met with short covering and accumulation?

I think this situation is causing a general tug-of-war and subsequent die down in general market volatility. I feel the "Smart money" is currently employing distributional tactics in financials and simultaneous accumulation of beaten down commodities/industrials/cyclicals. Market participants are not eager to aggresively bid stocks up from this level but are also being careful to cover quickly on short positions.

Its hard to say how long this tug-of-war last but I am thinking we may be looking at a range of 780-930 on the S&P for a few months. I echo some of the comments from Shiva that now is a good time to be selling option premium rather than buying it. I for one am keeping some managed risk trades by selling OTM call options for May on position that I want to hold in order to decrease overall volatility in my portfolio.

Just an update. LA Times was the original news source. They should think twice before publishing that. If i was a trusted news source, i would have def held back until the claim was substantiated.

"Swine Flu Ruled Out as Cause in 1 Los Angeles Death; 1 Death Still Under Investigation"

http://tinyurl.com/cykfgr

TCK failed short term support today, the benchmark was $9.56

Looking into geothermal power, it looks like the MACD for ORA is about to roll over, and there's been a very good run from the low. It looks like CPN's MACD just rolled over as well.

We may witness an entry opportunity for CPN tomorrow it seems, and an opportunity for ORA in the near future.

I'll be watching the price action carefully, ORA is perhaps a better clean energy play?

if the banksters can go lower, they will find a away.....

DNDN
Submitted by vinod (626 comments) on Mon, 02/09/2009 - 22:57 #11001
Friend send me this Email
DNDN -before April trial results are in. Gamble pure speculation high
risk reward.
Provenge is expected to have yearly sales of $1 BIL. If it's approved,
you can expect DNDN to trade in the $30s within 6 months. The company
will not be DNDN for long after that, it will be bought out .
In a meeting with the FDA on May 29, 2007, Dendreon received confirmation that the FDA will accept either positive interim or final analysis of survival from ongoing Phase 3 D9902B IMPACT study to support licensure of Provenge. The primary endpoint of the IMPACT study is overall survival (an event-driven analysis), and time to objective disease progression is a secondary endpoint. In October 2007, the Company completed enrollment of over 500 patients in the IMPACT study. FDA agreed to amend the special protocol assessment for the IMPACT study.

anyone has any other information about DNDN?

DR.

I thought we were responding to this comment...

"In all seriousness, I feel bad for the employees and service staff, as well as the surrounding neighborhood businesses."

In which case the job losses would have the effects I mentioned. Too many auto mechanics, secretaries and janitors will not find equivalent jobs and will therefore cut back on their purchase of products and services.

No doubt you are right about too many dealerships. Beginning with too many models, too many choices within the models and makers, too many employee benefits the entire US auto business model is overgrown.

They should have been simply allowed to wither without any government involvement of any kind.

Our economy nationwide is just beginning on the path we in the rust belt have been on for over a decade. This is going to last a long time and is unlikely to ever return to the "good old days".*

Was that the one referred to as the Hong Kong flu? My wife and I both got it and sent the kids to Grandma's house where they all got it too.

Vinod,
Have a look at the crazy option volumes....

I don't have the url handy, but one newspiece I read on the swine flu said that a pig can be infected with two viral strains at the same time and that the strains will create a hybrid inside the host. Unfortunately, the origins of this outbreak/strain have not been isolated (leaving aside the discussion of why). Currently, it hasn't even been confirmed that this started in a pig (although there are industrial pig farms in the area of Mexico it is believed to have started in). Without this precise opening information, it is much harder for epidemiologists to put numbers on things like rate of mutation. The current propagation method requires liquid, like a sneeze, cough or surface contaminated from same. If this mutates to more effective contagion vectors (ala the bird flu we saw) the scenarios all change.

Too early to tell, I'm watching closely and keeping the victims in my prayers.

http://tinyurl.com/c3wyte

I just took a look at Fortune 500 companies and large majority of them are US companies. Yes, there is a few HB&Bs, housing companies but majority of them are strong companies (IBM, HP, ORCL, Coke, FLR, GOOG, AAPL, Pfizer etc etc). These good companies sure are tightening belts but they are not cutting workforce to the point of closing down shutters. They are all basically resizing to current economic conditions & to meet stock market expectations. These companies are selling their products globally. So even if the american customer is in the tank, they can survive with positive cashflow coming from overseas sales.

Lets weed out the worst industries and write them off
Autos
Housing
Financials
Consumer Discretionary
Gambling
and maybe a few others....

But the rest of the industries should survive barring a global meltdown & credit contraction of unimaginable proportions. Already I hear banks recalls loans from small & medium sized companies because of loan covenants broken etc. Will this credit freeze be sorted out? If not, all companies die just like plants die without water.

Yes, I dont deny that we will have a high unemployment rate for many years, lower standard of living for Americans etc., and perhaps re-tooling of a significant percentage of working population with new skills. But doomsday, i dont think its happening at this juncture. Its probably reserved for future.

And compared to 1930 - we are selling globally now including food grains. Did we have that buffer then? What difference does that buffer make?

Grym -

Whoops. Agreed.

"Citi Seeks Approval to Pay Out Bonuses"
http://tinyurl.com/d4s9od

WSJ Preview:
Citigroup Inc., soon to be one-third owned by the U.S. government, is asking the Treasury for permission to pay special bonuses to many key employees, according to people familiar with the matter.

The request comes as Citigroup is grappling with broad government pay restrictions that could break apart its legendary energy-trading unit. People at that unit, Phibro, are threatening to leave because of pay caps tied to the U.S. bailout of Citigroup. Phibro has been the source of hundreds of millions of dollars in profits for the bank, and has paid out hefty compensation, including a roughly $100 million windfall last year for the unit's leader, Andrew Hall.

My summation of the rest:
- Phibro generated more than half-a billion dollars of revenue for the firm last year.
- In the Phibro situation, Mr. Hall, who runs the energy-trading unit, has been agitating to leave Citigroup to avoid the pay curbs, people familiar with the matter said.
- Phibro has long been an autonomous unit within Citigroup, and its employees are paid based on how much revenue they produce. The government pay restrictions, however, put a ceiling on that compensation.
- The bank is discussing plans to either spin off Phibro into an independent hedge fund or open it to outside investors, the people said. The unit currently only invests Citigroup's capital.

every index chart i am looking at shows we are hitting resistance. This $indu one is interesting. We would have a good trading opportunity once it resolves.

Vinod - here is an article

http://seekingalpha.com/article/131596-is-dendreon...

RE:>"Speed isn't everything when it comes to traveling in comfort."

Oh yes it is Terry!

Without cheap fuel the budget airlines would be stuffed. In probable fact, the continental airline industry would be seriously imperilled.

From where I am on the right side of Lake Geneva, to go to Paris I don't go to the left side of the lake to Geneva airport. At the centre of the Lake, there's a Paris bound TGV leaving Lausanne 4 times a day. 4 hours travel time to get to Paris. And that's a slow trip because the Swiss have yet to cut a straight line through the low alpine country connecting Switzerland to France. The future is definitely train.

travel to the airport, check in, security delays, take-off and landing delays. Sneaky fees that ending up making a cheap fair a lot more expensive. Why would you bother? Car - 6 hours, no thanks.

But I understand what you're saying. Fixing on stationary objects close to the train is debilitating at those speeds.

On the subject of transport, the Swiss electorate is getting cranky at the huge increase in transcontinental truck traffic passing through beautiful alpine country. So what do they do? Build the world's longest tunnel straight through the mountains! Drill baby drill - and we aint talking oil.

http://en.wikipedia.org/wiki/Gotthard_Base_Tunnel

Italy'll be a hop, skip and a jump away by train in 10 years.

from the FT:

London equities were steady on Wednesday, with financial stocks in demand after losses over the last two sessions left them looking undervalued.

The FTSE 100 ticked 14 points higher to 4,110.39, a rise of 0.2 per cent. As fears about the wider implications of worries about the capital positions of Bank of America and Citigroup in the US eased, bargain hunters pushed banking stocks to the top of the leaderboard.

“The big story from earlier in the week - swine flu - does seem to be taking something of a back seat, although any escalation of the situation still holds the risk that investors will be rushing for the exits and a sharp sell-off across the board could follow,” said Matt Buckland, dealer at CMC Markets.

This market is Dr Jekyll.

From Ambrose Evans-Pritchard of the Telegraph:

"Over the last couple of days I have been deluged by notes from City analysts and economists suggesting that H1N1 avian-swine flu poses no great threat to the global economy because the authorities showed during the 2003 SARS epidemic in Asia that outbreaks can be contained.

This is a misreading of the threat we face.

SARS is a coronavirus. It is extremely hard to catch. Just 8,000 people were infected worldwide during the entire epidemic (10pc died).

Today's H1N1 outbreak is an influenza virus, which is far more contagious."

Let's hope the virus doesn't mutate into Hyde.

http://ronsen.blogspot.com/2009/04/you-raze-me-up....

Biogen Idec caught my attention yesterday. Punched through RSI 7 day accumulation zone.

http://tinyurl.com/dl6hoa

Seems it got pummeled on bad PR and sales on one of its MS treatments - probably reported in its 10Q last week.

http://tinyurl.com/cf47g5

Since the market's in silly season mode today, might build on yesterday's gains.

swine-avian-human flu?

I remember that Bill Clinton's reply to some question was, "Yeah, when pigs fly."

Once again — "Depends on what is, IS."

Seriously: Last night I heard something which puts this into a different perspective than most media is telling. A pathologist said we normally lose about 100 people per day to the "ordinary" flu strains, so this at least so far is no reason to panic — simply guard against.

"And compared to 1930 - we are selling globally now including food grains. Did we have that buffer then? What difference does that buffer make?"

I think (no data, just a guess) we had far less export grain business if for no other reason we had less ag productivity by far.

How ever we were capable of being more self sustaining. We have frittered away far too much of our manufacturing capacity and forced those with knowledge into early retirement.

A couple of those Fortune 500 companies were my clients. They and nearly all the ones who supplied them already went through a period of "right-sizing, down-sizing, core competency" restructuring during the 1980s and '90s.

We are about to pay dearly for the "cheaper consumer products" we were told would be so great to import.

Les,

Should've taken the pie size as well.

tt