Cara's Commentary & Community Chat, Tues., Apr. 7, 2009

Good morning.

ADBE - Upgraded to Outperform @ RBC. Price Target Raised from $23 to $30

The noble thing to do would be resign but look @ who you are expecting to do the noble thing? The rest of the world is suffering the effects of the nations hangover and they are looking at pointing the finger elsewhere to rid themselves of the blame. Why am I not surprised??

You're right, without honesty we won't get self examination and certainly not nobility. Nah, we'll get the usual un-leadership. You know, Dick Parsons is no more grown-up than the average 5 year old, looking to blame some other kid when the teacher shows up.

I say give em' the ruler....the little liar. This is the type of little person that is a captain of our industry? No wonder we have integrity issues.

(a) bar: bank
(b) patron: patron
(c) bartender: loan officer
(d) shot: loan
(e) 100 proof: interest only
(e) cop: regulator
(f) good cop: Spitzer
(g) bad cop: the one who doesn't need you, and expects the same

Gimme a Stoli. And a round for the house- this community deserves one!

2nd
Finally it is moving my way
brought at end -OEWPR at 9.00. will nurse them all day have 10

Of course, once you start packing the .25, you'll have enough weight to keep them off your back...

vinod - where do you find information on the futures option chains? what is the symbol of the underlying futures you're trading? i don't know anything about futures, but i'm assuming they're very volatile.

8500 looks like a target per fib ext off the low and weekly trendline resistence

TN_blogger,

Appreciate the kind words. My pleasure.

Regards,
BH

now that's a crowded table

The sad part is....the fool believes the crap he spews!

I like that target, tbar. Just looking for the ultimate entry point.

bought more at $21.54.

tof- go to Yahoo Finance, type in ^OEX, and it will list the components of the S&P100.

teamonfuego

S&P 100 INDEX is OEX. just like S&P 500

Still in the park holding your one-night stand?

Vinod- still targeting a 5-handle on FAS. Your OEX puts are up 45%...

We will be having a "Tea Party" here on April 14th. Check your local area for the one nearest you. Let's show these guys we don't buy their "solution" and continued protection of the perps.

Our Tea Party was announced in today's paper and leaves a bit to be desired, but...

It will be "Green" — not green tea — but no bags, no dumping into the river. "Bring loose tea to dump into a can which will be properly disposed of."

I can picture the colonists if organizing by today's standards...

Notice to all rebels: There will be no costuming as Native Americans or other ethnic garb. No "hate" language on placards. No obscenities uttered or muttered. Please keep the noise to a minimum to avoid unnecessary disturbance of fellow subjects (including selected short ones).

Violators will be shunned and excluded from subsequent protest events. Have a nice day.

Tally Ho! :-)

I don't blame you. Nice move.

Still learning some of the more obscure order entry capabilities of IB. Today I've been reading about Iceberg Orders (which display only a set portion of the total order size) and Relative/Pegged-to-Primary orders, described as follows:

"The relative order provides a means for traders to seek a more aggressive price than the National Best Bid and Offer (NBBO). By becoming liquidity providers, and placing bids or offers into the book that are more aggressive than what is currently quoted, traders increase their odds of execution. Quotes are automatically adjusted when other market participants become more aggressive. For a buy order, your bid is pegged to the NBB by a more aggressive offset amount*, and if the NBB moves up, your bid will also move up. For sales, your offer is pegged to the NBO by a more aggressive offset, and if the NBO moves down, your offer will also move down. In addition to the offset, you can define an absolute cap, which works like a limit price, and will prevent your order from being executed above or below a specified level.

For relative orders with a "0" offset, the order is submitted as a limit order at the best bid/ask, and will move up and down with the market to continue to match the inside quote.

*The offset is the amount that will be added to the best bid (for a buy order) and subtracted from the best ask (for a sell order) to create the limit price at which the relative order will be submitted."

Here's a link to the IB TWS User's Guide:
http://www.interactivebrokers.com/en/software/tws/...

You need not be an IB customer to peruse the guide (but once you do so, you'll want to become one). Especially after you check their commission schedule (see link on their website, InteractiveBrokers.com).

No, I'm not working for IB; yes, I am a very satisfied customer (and at the moment a shareholder).

aha...ok, so it's an index and vinod is buying options on the index...gotcha.

Maybe in anticipation of the SEC meeting tomorrow re short selling road blocks?

Either that or hb&b dont want us on the ride up.

Vinod,
Thanks for the tip. I trade SPY quite a bit. But when a big move occurs, OEX could come in handy

teamonfuego - There are indeed options on futures such as the ES. For example the 810 ES puts expiring 4/17/09 trade under ticker ESJ9 P0810, while a similar put expiring 4/30/09 trades as EWJ9 P0810. As I read it, each put or call is for 50 contracts (danger!). Spreads look reasonable. I have no experience or expertise trading options on futures. Not advice. Do your own due diligence. ~OG

If 812 level doesnt hold, could go down to 780

""Everybody participated in pumping up this balloon. Now the balloon has deflated," he said Monday. "Everybody, in reality, has some part of the blame. But it's much more in the culture to find a villain and vilify the villain. Besides banks, there was reduced regulatory oversight, loans to unqualified borrowers were encouraged and people took out mortgages or home-equity loans they couldn't afford."

Obviously not the right man for the job, look to whomever appointed this guy and you're likely to discover another well-connected villain.

I sure hope Mr. Parson's isn't part of Obama's presidential advisory team, b/c on the surface, that would seem like a conflict of interest. A circular statement suggesting responsibility lies in the laps of the victims of mortgage fraud provides confirmation. The entire global economic system is the victim of the fraudulent practices of your financial institution.

Lending money to someone who has no means to repay isn't innovative financing, it's stupid, it's fraudulent, and it's the primary reason why the global economic system is on it's knees. The victims are spread across the Earth Mr. Parsons, who besides yourself are the beneficiaries?

Positive divergence in C all morning. GS and BAC just went green. XLF clawing its way back to break even.

FAZ and SKF breaking down.

Morning shake out?

I was holding out for 6.00 on FAS transition, should have seen C divergence as a tell and picked it up at 6.25ish. Probably missed an easy trade.

2nd already out of FAZ at 17.66 right at open.

average in at C right now around 2.60ish.....still contemplating exit on that trade, was hoping 3+ but may have to take what I can get if market tells lower........C has to many moving parts right now and is starting to make me uneasy.

Note that OEX is cash settled only, you can't buy shares as you can with SPY, for example. It also has an earlier expiration date than most options - I believe all cash settled options have an earlier expiration.

A variation on OEX is XEO which is also the S&P 100 index except it is a European-style option which can be very handy if you are shorting in that you cannot be assigned or called away before expiration. XEO is also frequently a bit less expensive than OEX according to the CBOE.

It's different enough to make it worthwhile to read up on what you're holding before jumping in.

I'll be honest with you. I think financials rocket higher, way higher. I just don't like being shaken down along the way.

Yest was the tell. Most networks and press were pushing Mayo's call for chaos in banks. Meanwhile M Whitney goes on record as saying there might be a directional shift in banks. they might make $0.01, but at least change from the blood letting. And that she wouldnt be short banks.

Yet Mayo got the majority of the written press. that was quite interesting to me. Add to that the lack of professional selling all day yest, and this am. leads me to believe it was a shakedown to get us all out.

I can be wrong as always.

And tomorrow SEC meets to make it harder for naked shorts for all stocks, not just financials. should be interesting 48 hours.

so it begs the question. When to enter FAS today? : ' )
2nd I dont think we see a 5 handle bud!

I figured we might get some further press on Mayo's comments coming into today after the "press" had a day to think of there "own" take. Hence, yesterdays short lived FAZ play. Went mostly according to plan. If Merideth is even turning coat 2nd might be right to predict rocket move, since she has been nuts on for a long long time.

Pz- I have positions in the underlying stocks and/or financial sector funds (mainly via FIDSX). Trying to limit FAS to intraday plays, but of course, there is the thrill of capturing successive gap-ups should I play it right.

Pz-

The bipolar relationship analogy holds for FAS/FAZ trades. I had a very enjoyable one in 1981.

Up talking till closing time in the second floor piano room at the (University of Michigan) Rackham Building (my favorite place to cram for exams and/or play the beautiful grand) one day, too busy for each other the next. Disappearing on her the day before she flies to Boston for her friend's graduation recital, then slipping through the locked doors of the New England Conservatory as a couple exits in time to catch the final minutes. On and on, man. I could take it for no longer than a year. But it was one of the most creative years of my life.

FAS is like that. I have to trade it wisely, and never forget what I'm getting into when I do.

ALOHA !!

100% RIGHT ON THE FIAT MONEY!!!

Quent and the Dr. WIN!!!

Exactly ... why do we need the US FED when we have the exact same BANK owned by the US TREASURY and WE THE PEOPLE?

Link to FFB: http://www.ustreas.gov/ffb/

GET RID OF THE US FED because we already have our own CENTRAL BANK ready and waiting in the wings!!

Will someone please explain why the FFB is not running this SHOW?

Once again my FLOW CHART only with the FFB ...

FFB >>> US FED >>> WE THE PEOPLE

Their mission statement says: "Today the FFB has statutory authority to purchase any obligation issued, sold, or guaranteed by a federal agency to ensure that fully guaranteed obligations are financed efficiently."

Lets add PRINT MONEY to that mission and DUMP the US FED!!

BEN any objections?

Vinod----“S&P’s have rallied 26%, the CRB is up 15%" . . . . . . . . “like a Cubs hitter that smacks a lot of home runs in Wrigley Field b/c the wind is always blowing out”

In April, early May, it actually blows in and some hitters stay “cold” until the shift in weather and wind patterns . . . just like the market . . . wind blowing in today before AA earnings after the bell . . . believe with most company earnings reports this quarter, trader focus will be on the statements about the next quarter, the OUTLOOK and what future earnings may be . . . will the wind position continue and pick up speed or will spring truly arrive is the question.

"How did I find the FFB? They are one of the line items listed on the US TREASURY DAILY STATEMENT under TABLE 3-B and 3-C. Right between "unauthorized discounts" and "HOPE bonds"! HOPE? Oh please-e-e-e!! Will this insanity never end?"

kaimu- LOL. Well, of course. Reciting from Chapter 3 verse 3 in the Book of Unauthorized Disclosures, "Hope bonds all hapless investors together in the collective belief that the Almighty Fed will save their retirement portfolios from eternal damnation. Only bereft of all worldly possessions are they able to fully understand the workings of the Fed."

Won't bother translating FFB.

"Dear Sir/Madam,

I would like to bring to your attention what I believe to be fraudulent spreading of rumors by Optionmonster.com, a web site that focuses on unusual activity in the options markets. Last Thursday, they issued an alert that options activity in Forest Laboratories (FRX) suggesting that they may be bought out. The stock immediately spiked from the mid $21 range to over $23 in a matter of minutes after the release of their report. Later that day, one of the founders of Optionmonster appeared on CNBC to discuss this and there were also articles written in TheStreet.com (whose co-founder, Jim Cramer, also writes for Optionmonster.com) discussing this topic. Buyers of this stock bought into the idea that it might be bought out; however, this rumor has never been substantiated and since then the stock has fallen back to its previous levels, leaving buyers of the stock at a 5% loss and of the options at 50%+ losses.

This is not the first time that Optionmonster has spread rumors both on its web site, on TheStreet.com, and on CNBC like this that are unsubstantiated. I urge you to look into the practices of Optionmonster and bar them from issuing unsubstantiated rumors like this, which are detrimental to the retail investors you serve to protect.

Thank you for your time."

Craig- Highlighting three paragraphs from the following Bloomberg article re Soros:

"Hedge funds should be regulated like other financial firms, Soros said. It would be appropriate for authorities to monitor positions to see whether managers have “excessive exposure,” he said."

"Soros Fund Management LLC was fined 489 million forint ($2.2 million) last month for attempting to manipulate the share price of OTP Bank Nyrt., Hungary’s largest bank, the country’s financial regulator said.

"The Soros fund attempted on Oct. 9 to “send out false or misleading signals about a security’s supply and demand or its share price” and short sold OTP shares, the regulator, known as PSZAF, said in a statement late yesterday. The short selling caused the shares to drop 14 percent in the final 30 minutes of trade, the regulator said. Soros apologized for the trade and said the fund had started an internal investigation."

I'll see your 5 and raise you a 10.

You know, it seems to me that MAKING THE BET (note: not taking the bet, oh no! Think wheelbarrow, not briefcase) and going all in BEFORE you make the bet and then using a marked deck, seems so....I don't know, what is the word I'm looking for? CRIMINAL?

Craig- If you key off GS, what do you think?

Or you could just make a bet that volatility is going to go up during earnings season. Am thinking of buying long straddles on FAS/FAZ should be a nice play. Any thoughts on whether FAS or FAZ would be preferred?

FYI. Kaimu see my post (Mar 20, 2009 #18238):

http://caracommunity.com/content/caras-commentary-...

If you click the link and scroll down there is a pdf of a Law Enforcement brief (sorry but its the only place I know it exists). It clearly identifies white, christian, conservative, right leaning, ron paul supporters as likely bad guys.

This was not intended for the public to see. See the small print at the bottom.

Are you really surprised? What is liberty? There is more free (less rules) and less free (more rules) but there is seldom complete liberty (no rules). Of course, we all feel the oppression when the quantity of rules increase exponentially as the empire peaks.

I look to it to confirm the action in XLF, which for you would then confirm FAS crack. However, like FAS it can swing with the best of them depending on the news. My only concern is we're coming into earnings and the markets have to be the three monkeys; See no evil, speak no evil, hear no evil for a couple weeks. I'm not so sure speak no evil will behave and then hear no evil will have to do his job and everyone will see it.

Saying that I added a few shares of BAC earlier. Sometimes I forget GS and key off of you. Is that bad?

What did Bill contribute yesterday? I get to be the blind squirrel today.
Sometimes it's so obvious even I can do it.

good point. I forget that uncle Warren operates on a different playing field then the rest of us. He doesnt just go out and buy stock typically o. His original stake in GS was not similar to one you and I might take or even have available to us.

I'm out of my league talking about Warrants 2nd. check out the equation in the link below for deriving hte Value of Warrant

http://en.wikipedia.org/wiki/Warrant_(finance)

As to the volume ?.....if they operate on a secondary market I would say probably not, but just guessing.

Are either of you reloading this morning?

Good on 'em. This will only help Canadian banks retain their reputation of strength, and probably let them extend their lead as their American counterparts will continue to hide behind lies and let their balance sheets continue to deteriorate...

just my opinion of course.

edit:

"A lot of big Canadian companies are raising money in the U.S. and if there is divergence it would be viewed negatively," the person said.

How could balance sheet transparency and honesty in reporting be viewed negatively?!

Grym- Your comments re TTM:

"This is interesting, but will they be allowed without an airbag. I hate all these overly protective, for-our-own-good laws. This is totally voiding the natural selection process and giving us unlimited future Congressional material."

too funny ;)

Tempting. Although.... was actually looking at C and FITB this morning. Hmmm

7800 broken

ditto

ouch. my leash is tight.

...

...

...

found- LOL. Sometimes I like to give the dogs a little room to run ;)

ALOHA !!

"Howard Lutnick, the chairman of financial firm Cantor Fitzgerald, makes an interesting proposal in today's Financial Times. He says, in essence, that the US and UK governments should take some of the money they are pouring into fixing the system and just start new state-owned banks. The banks can be well capitalised with the huge funds made available from all the rescues in play, and with money from interested investors. Then they can just open their doors and, well, lend."

He's on the right track ... Let the existing banks go under, but I'll take that one step further! Howard, sorry mate, but we already have that! Its the FFB! Just make the FFB America's new "central bank" since they are already lending in a constitutional manner that is actually legal!!

I agree that the sale of US FED member bank "toxic assets" is fraud at best and never worked in Japan either. I just read that the top ten US pension funds are "mulling over" buying up these toxic assets($1tril USD worth) with yet MORE US GOVERNMENT guaranteed low interest loans. UNREAL! So when this all fails we US TAXPAYERS will be asked to bail out the US pension funds also. Tops among these pension funds are the State Of California Public Workers Union ... Hummmmm??? Government guarantees and a big union ... more government cronyism! Through all this discussion there is absolutely no mention as to what PLAN G28 is when this scheme fails.

DUMP the US FED and its member banks ...

Submitted by Lori Smyth (29 comments) on Mon, 04/06/2009 - 18:21 #20938

"Humungous Bank & Broker: It would appear Bill you may soon have to change this title as the whole bunch of them together are now worth about as much as 100 shares of Enron.........."

We can save the acronym (and throw in the Enron directors as well) by calling a spade a spade- I'll save myself an edit and use a Boston accent->'haughtless bums and baastids'

Oh and kaimu GETS it as well!
Am wondering when someone will have the intestinal fortitude to let these clowns go down? It is shameful the bondholders remain whole after the equity holders get a 90% haircut (in some cases 100%)and the taxpayer becomes THE risk taker? Agreed kaimu 'DUMP the US FED and its member banks ...' the sooner the better

ALOHA !!

" ... as homeowners default and banks then repossess the homes to sell them at deep discounts."

That line is total BS ... The banks are sitting on these homes playing the "MARKET WILL RECOVER" soon game! If they are selling at all they are NOT deep discounts. In Jan 2009 I met with the CEO of Eagle Management(private company)a Southern California based company that specializes in purchase and rehab of BANK AUCTION home sales. He told me in 2003 they were buying "blocks" of foreclosures at negotiated prices with the banks at around 30 cents on the dollar. Now he says, amid all this housing crash the banks are holding the prices around 60 cents on the dollar and NOT negotiating any blocks in the Southern California markets. His company is sitting on a lot of cash and will not buy until banks will at least match block sales of 2003. These are the same banks that refuse to lend and taking US TAXPAYER sponsored bailouts. More "I want my cake and eat it too" bank mentality! More US bank mentality is: Okay lets crush the US consumer(70% of US GDP) with 16% credit card rates as they all stand in line at the unemployment office as a nice way to say, "Thanks for saving us sukkah!" HA!!

WASSUP B OF A?

gotta love HB&B
just got notice that my BofA credit card will double in interest from 7.99 to 14.99% just b/c. Glad I dont carry a balance. How torqued would you be if you actually had few grand sitting in that card. Can I call them up and say the interest we are charging them for the bailout is now double?

Why don't you cancel their card and just use a debit from your checking account? Or get a credit card from a smaller less corrupt bank.

That's the way to pay them back!!!

Rob.

It does seem tempting but any money we take from them gives them more power.

Rob.

FL-
thats what I do for the most part. I use there card as a rewards gas card only.....pays back around 300 bucks a year and I am able to keep track of fuel costs. It costs me nothing since I dont carry a balance. But, your right, I should "can" them altogether for such shennanigans.

You don't cancel cards if you like your FICO score.
Cut it up, but don't cancel.

You strengthen the smaller banks with capital and weaken the larger banks with unsecured debt. The smaller sound banks aren't going to lend it as unsecured CC debt unless it's to someone that doesn't need it or can already pay it back. And if the S hits the fan and we all go belly up, it's unsecured to C or BAC! Tell em' to call Angelo for the $.

You want *your* money in your little credit union to be safe and sound with secured loans.....right?

Rob-
your starting to make me feel guilty.

Look at UCO go... Anyone holding 9-10 straddles, rollover started today and lasts another 3 days, which I take it is Monday. Probably the best period to be in them and this happens every month. I also have P7.50s.

ALOHA !!

Exactly ... refuse their credit and vote out the entire US CONgress and Presidential regime now in power! Imagine the message that would send to these criminals?

Good point Rob, bring your money back to your community ... that's RESILIENT COMMUNITY thinking ...

Speaking of criminals ...

Pretty soon the TEA BAG REVOLT will start just prior to TAX DAY(April 15th, next Wednesday) against the IRS ... Make sure you have some cheap tea bags on hand! Don't give them the nice Starbucks Chai Tea or Tetleys Premium! Used Lipton Orange Pekoe is my choice! HA!!

Oops did I say "used"? I meant "pre-owned"!! HA!!

TOF- Took a look last night...OK, in @ 21.57

Basically re-bought the shares I sold yesterday @ 20.60 for 18.85.
Edit: Added @ 18.56 at the close.

http://tinyurl.com/celzog

"The U.S. Treasury Department is planning to delay the release of any completed bank stress test results until after the first-quarter earnings season to avoid complicating stock market reaction, a source familiar with Treasury's discussions said Tuesday."

Every headline reads this way on major "news" sites. um, we all know earnings will suck. we have known this for months. i am a rookie but it feels like they are selling fear to steal shares today, in setup of some "they didnt do as bad as we thought" type rallying.

just my opinion.

Thanks! I know us little guys don't have one Iota of power compared to the big banks but each Iota standing together can add up to quite a force.

We better be careful though since we both voted for Ron Paul and are advocating extinguishing the too big to fail banks. We're both being put on watch lists you can bet.

It will be worth it if we can inspire enough people to take control of their finances and only support the banks who earn being supported. Then let these big banks come back begging for our deposits and I'll reiterate the three conditions they must meet to win my business.

It's time they relearn who's in charge. It's not the money changer. It's the money earner.

Rob.

Does any one have a schedule of this M2M thing? It was on vote last week but again no follow up this week.
I do not want to make commitment to either side of the market before the pending issue is over (the uptick rule as well). It is quite disturbing. Hard see how the market is going to react to it,even the move might be just temporarily. Since I am a short term trader, so I do care about those fluctuations.
Thanks every one.

Its already voted on. Banks who have their ducks in a row will report higher asset values vs going to a natural market price, in Q1 results.

Uptick rule change to be rolled out tomorrow....Plan? Implementation time frame?

hope we rally here, just punched a trade (short IWM April 42 puts) with an extra zero on the number of contracts I meant to buy...

I can be wrong so never trust someone on the web blindly.

Article
http://tinyurl.com/d3w5os

Watch M Whitney from yest. Note even the headline reads "Bearish note on banks" yet the sentiment was actually quite a reversal from Whitney's norm.
http://tinyurl.com/d2pfrn

I am simply watching volume and the reaction to AA earnings to tell me the story.

Thanks, vinod! OEX "demystified" :)

Hi David. I have a few articles about this http://shockedinvestor.blogspot.com/2009/01/perfor..., and http://shockedinvestor.blogspot.com/2009/03/option... which was in response to someone asking the same question here not long ago.

More recently, oldgoat bought bought XLF and FAZ straddles I think (discussed on skype), you can ask him too what happened.

If buying options is bad, selling them must be good :-) (as long as..., maybe people will beat me up for saying it again so I won't).

it seems I get a lesson or 2 in trading.

I have talked with a customer of mine, another local dissaffected. Came to a mutualjumping off point, so..... Am starting a "SERFS UP" movement
Ideas welcome from all strata (or stratum)
peace (may have to lose that wish in the future)

It seems like a headfake to me. Why are they shaking down C right at the end?

Feels to me, whatever they come up with will be largely taken by the market as non-event. Everyone knows announcement is coming tomorrow, drafts are flying all over, and market doesn't show any covering frenzy... One of factors to consider is, if changes are complicated and cumbersome enough, implementation time will have to accommodate the reasonable needs to adjust software, so there will be sufficient time to evaluate and react. Most likely, however, there will be not much to react on.

Great post!! I look forward to reading more from you. I have added a link to your blog in the blogroll of my Fiancnail Advice website - http://www.wealth-ed.com could you please do the same? Thank you for your time and consideration!!!

-Brian M.

Issueing stock overnight.

earnings 58.8 mil, or 0.13 per diluted share; cash position 2.5 Bil

http://ca.sys-con.com/node/911681

After hours immediately traded down below close of 42.95, then bounced up over 43, now trending down, trade at 16:30 @ 41.94

Haven't we been expecting an impact from the Alt-A loans and option arms starting to reset this spring through 2009 and in to 2010? I've read these loan defaults could be worse, but that was last summer. Also, more of these originated in CA? Anyone who knows more about the Alt-A's and option arms I'd like to hear it.

David
I was watching SKF all afternoon and it had a very narrow range until the last ten minutes. It shot up $2 with 2 million shares. Looks like somebody is setting up for tomorrow.

Excellent point Eagle. During the last 15 minutes:

XLF: -1.7%
UYG: -3.5%
SKF: +2.3% (combined loss of 1.2%)
FAS: -4.3%
FAZ: +3.7% (combined loss of 1.4%)

Anyone caught with their pants down holding these things intra-day can suffer big losses too.

An astute observation. This rule will do nothing to discourage the more astute short sellers, yielding nothing for the powers-that-be.

That said, I don't hear anyone complaining about "aggressive stock buying", so clearly these clowns have an upward bias and an interventionist agenda.

Let's hear the kazoo salute the "free market".

Upward bias surely exists at all levels which is understandable even though contradictive to the market's nature. After all, it's upward move that increases the value of investments, pensions, all kinds of funds, so it's kind of hard to blame people who want the markets to go up.

As for onerous character of borrow-provisions... I don't know, I don't see it this way. If you sell something you don't own, you need to borrow it - what's wrong with it? And, if you borrow it, you must be able to return it when it's being claimed by its rightful owner.

Selling something you don't have and don't borrow (aka naked shorting) increases supply with no limit thus distorting the process of price discovery - which is not at its finest as it is with all the interventions.

Nice tool, SiO2. Thanks

Somebody mentioned a few days ago that when the premium gets to around 20% CEF has a habit of raising funds. I think it was around 17% when the post was made.

The market for the next 6 months:

            
           /\                /\                /\                /\
          /  \a             /  \              /  \              /  \
         /    \            /    \            /    \            /    \
        /      \          /      \          /      \          /      \
       /        \        /        \        /        \        /        \
      /          \      /          \      /          \      /          \
     /            \    /            \    /            \    /            \
    /              \  /              \  /              \  /              \
   /                \/                \/                \/                \

                     b

(a) we are here.
(b) Chickenpookie est (600 - S&P 500)

Regarding naked short selling, one thing I have never understood is why short selling is allowed to exist outside of general market rules that provide transparency.

Why is it that there is printed data of whom the largest fund shareholders are but not who is the largest short-seller? How come you have to make SEC filings when you have acquired a certain percentage of a company but not when you have shorted that same percentage of the company?

Why is there no transparent market for the cost to borrow shares? If shares of a certain company are difficult to borrow shouldn't it be reflected in a transparent secondary market where there is a fluctuating cost to borrow shares?

http://tinyurl.com/cc9d2e

FredC- What happened to my 'x'- it should be moved slightly (back) down the first incline ;) (I'm estimating 940 for the S&P500 at the first peak.)

Who's ester?

Nouriel Roubini, Eric Sprott:

http://watch.bnn.ca/the-close/april-2009/the-close...

Meredith Whitney, Ian Gordon:

http://watch.bnn.ca/squeezeplay/april-2009/squeeze...

And no screaming and yelling!

Only on BNN would you have an analyst on commodities who looks (and sounds) like Brittany Spears, decked out in evening wear, anxious to get off-stage for a late dinner engagement, making a whole lot 'o sense:

http://watch.bnn.ca/#clip158856

Yep...thanks to Vad, me and Jack reconciled (at least for one night) after a 30 year separation.

On this blog we see one angle of the corruption in the finance field. In looking further around, for example, in the tech field, we find systematic raids upon the infrastructure that are used in communication..

FBI Raids: http://tinyurl.com/d7dx53

Raids that appear illegal and not only illegal but pointless technically, done socially used to further enrich corruption in the corporate world. (read the comments in the Wired story, they have additional telling insights to the raid)

In copyright, we see whole countries, such as France and New Zealand as example implementing draconian internet restrictions: that will impact every person to stop a problem that really doesn't exist as it's portrayed. But will end up walling entire western countries tighter than China does at the consumer level rather than the national level.

We can use awareness to feel the fabric of society, to look at the trends. I read our posts here and add that into my consideration of trends. Since this blog closely follows the money, and money is power. The whole monetary system is being abused and we are the victims.

and so I sat here for 30 minutes just pondering

social equity

Bill: I don't think it is possible to have large scale social equity under the current or near term set of conditions present. Social equity in this system can only be had, when a person moves to the side of the larger system, and selectively partakes as required to support oneself (much as you teach in this blog by helping share advice to areas which this can be done within)

I remind myself: It's not for us to bring order to the chaos. But to simply walk to side and continue to be part of our community and help those this community. That in effect becomes our definition for social equity.

excuse my rambling, I was doing my 6 month reality check on social equity.

that's how I look after 5th Jack Daniels

An entire 5th? It wouldn't matter what you look like by that point...

How come all of a sudden I think I'm the grape at the table?
Trading positions now...TNA@(avg.) 19.21, FAS @ 6.11, ROM @(avg) 24.01 USD@ (avg) 15.33.
Hey, at least I put myself out there for everyone's amusement!

BTW, this grape has some pretty tough skin, so the press better be set high.

hehe, that's awesome nemo! I believe Jack was my first introduction to spirits, and you can imagine how that went. So yeah, it was about 15 years before we made amends.

Mack & CP, both nice charts, how about copper?

http://stockcharts.com/def/servlet/SC.pnf?chart=$COPPER,PMTBDANRBO[PA][D][F1!3!!!1!20]&pref=G

edit: try this on, forgot this site does not like $ or ! in the URL's
http://tinyurl.com/c3vmqb

David,
ISTM you reach two differing conclusions in your analysis. If I'm understanding you correctly, you conclude that you can pocket the same volatility with FAS but risk less collateral. However, at the beginning it seems like you believe selling puts on XLF is the right call.
FAS will reach your pain point faster than XLF during a decline but your collateral risk to play XLF is larger.
Did I read your analysis correctly?

Come on, man. At least you play the game. You ALWAYS play the (fair) odds behind the line bet. But it takes time to read the crowd, and after-hours didn't do it for me. No one stacks black and purple chips until a rhythm is established.

Such bladerdash from insider big whigs attempting to deflect blame from their sponsorship of the 'credit blow up balloon party' is incredible and incorribigle. Does the chairman think we are all that stupid?

ArG!!!! Darn, I forgot about the Copper turn. That is a majorly sweet chart, Quasi.

And CP caught this one right at the turn at the New Year - Platinum:

http://tinyurl.com/chzwl5

...

FD- I'm bullish as hell. But after getting played by the market last October, I'm determined to play every twist and turn/dip and rise (as best I can) on the path to higher portfolio values.

2nd -
Hmmm...so you're saying I can't crib off others' hard work and find some free lunch that has so far eluded the big money boys? Shucks. :-)
I agree with the overall thought that it appears options are fairly priced. I guess my bias is to protect my capital so a chance to pocket the same volatility premium with less at-risk collateral intrigued me - if that's the right thought to pull from David's info.

"So you're saying I can't crib off others' hard work and find some free lunch that has so far eluded the big money boys?"

No, I never said that. I like that idea, and would not hesitate to join you should the opportunity arise ;)

Mark- Fair enough. Just having fun with the grape press ;)

Me too. Funny reality... I make a lot of homemade wine. When grapes are put in a press, say 50 lbs are pressed, we use a cork screw (leverage). We crank this baby down as hard as we can to get every drop. Once finished, we release the basket to get rid of the skins. You have to pull the block of skins apart to get rid of it. And lo and behold, there are always a lot of grapes in the middle that are totaly whole! It never ceases to amaze me.

Meredith Whitney on BNN's "The Close." She is thinking short term possible rally on banks based on a one-quarter writeup due to M2M, but overall she still sees bank asset values declining based on home price drops. She talks about cost structures based on much larger activity levels, requiring large layoffs. Later on in the clip, she talks about the death of a thousand cuts, stemming from continuous revisions in bank "peak-to-trough" estimates:

"In 4Q08 they [the banks] thought it would be 31%. Now, of course, it's 37% already. So you get one more quarter of 'special reserves.' Then you get the next quarter of 'special reserves'...Its unfortunate that investors that get their hopes up that this is the bottom just get disappointed time, and time, and time again. I'm surprised there is still this willingness to give the banks credit and think THIS is the bottom, now is time to enter. I think there's going to be a group of investors who are tempted to get back in. I hope they don't."

Traders are another story, of course. But lest anyone think Meredith is even slightly bullish on banks for the buy-and-hold crowd, this clip should disabuse you of that notion.

However, there might be a trade in there for BAC short term, because they have good back office tech which might be able to recalculate their portfolio value based on the new M2M rules in time for this earnings period.

http://watch.bnn.ca/squeezeplay/april-2009/squeeze...

CP- A very SLOW vice. But I think I've got this played right for an opening hand. Expecting some more pressure tomorrow morning for those on the outer edge of the basket.

Interesting chart and trendline of the S&P Composite 1871 to present.

http://tinyurl.com/d6xss6

How Bear Markets End

http://tinyurl.com/d36c9u

The scary part is that the S&P is now trading about in-line with its long-term price trend after 15 years of trading above it. So even if we have put in the bear-market bottom, it is likely that the S&P will eventually trade below trend for a considerable period of time.

The U.S. Treasury Department is planning to delay the release of any completed bank stress test results until after the first-quarter earnings season to avoid complicating stock market reaction, a source familiar with Treasury's discussions said Tuesday.

The Treasury is still talking about how results of the regulatory stress tests on the 19 largest U.S. banks will be released, and may disclose them as summary results that are not institution-specific, the source said.

http://www.cnbc.com/id/30090718

So initially the goal was, raise confidence by increasing transparency and see where the bodies are buried. Now it would seem they are finding out that there are a whole lot of bodies! So instead of reporting accurately, they will say - what, exactly? "There are lots of bodies, but we won't tell you where?" Yeah, that will help confidence all right.

The truth is out there. But the people in power really don't want YOU to see this truth unless its good news, and unfortunately, it's not.

Your Tax Dollars At Work

How quaint that we should believe the prognostications of a young woman with all the charisma of an undertaker who can spout ad nauseaum exactly what the banks would like us to believe about China.

At the very least, China has deminished in our eyes as the saviour of western civilisation and our ideology of free markets based on cheap labour in foreign lands, to a communist country that has lots of money and buys stuff simply because.

GIVE IT UP. Its at least the umpteenth attempt at the defibrillation of the recently collapsed commodity bubble.

Dr Strangelove, The cases I've heard of getting these deals are folks in or very near default--and by virtue of having a lawyer or loan modifier on their case. Vee Haff VAYS (apparently) of not getting foreclosed. I hear Chapter 7 followed by Chapter 13 works like a charm. On the other hand if you had an Indymac or National City predatory Arm you probably got out because they admitted guilt in advance....handy!

April 7 (Bloomberg) -- Marc Faber, the investor who recommended buying U.S. stocks before the steepest rally in more than 70 years, said the Standard & Poor’s 500 Index may drop as much as 10 percent before resuming gains.

The measure may decline to about 750 and rebound after July, Faber, 63, said in a Bloomberg Television interview in Singapore. Global stock markets are unlikely to fall below their October and November lows, he said.

makes sense, if 780 breaches 750 is the next level

ALOHA !!

LOOK!! DA PLANE !!!

Here we have basically what I have been describing here to the PARTY FAITHFUL for some 25 years now! This is why I voted PEROT and RON PAUL ...

If you vote DEM and REP this is what you get!

From Glenn Greenwald:

"Rubin, Summers and Greenspan succeeded in inducing Congress -- funded, of course, by these same financial firms -- to enact legislation blocking the CFTC from regulating these derivative markets. More amazingly still, the CFTC, headed back then by Born, is now headed by Obama appointee Gary Gensler, a former Goldman Sachs executive (naturally) who was as instrumental as anyone in blocking any regulations of those derivative markets (and then enriched himself by feeding on those unregulated markets).

Just think about how this works. People like Rubin, Summers and Gensler shuffle back and forth from the public to the private sector and back again, repeatedly switching places with their GOP counterparts in this endless public/private sector looting. When in government, they ensure that the laws and regulations are written to redound directly to the benefit of a handful of Wall St. firms, literally abolishing all safeguards and allowing them to pillage and steal. Then, when out of government, they return to those very firms and collect millions upon millions of dollars, profits made possible by the laws and regulations they implemented when in government. Then, when their party returns to power, they return back to government, where they continue to use their influence to ensure that the oligarchical circle that rewards them so massively is protected and advanced. This corruption is so tawdry and transparent -- and it has fueled and continues to fuel a fraud so enormous and destructive as to be unprecedented in both size and audacity -- that it is mystifying that it is not provoking more mass public rage."END

Link to Greenwald article: http://tinyurl.com/degsmk

What Greenwald fails to mention when he says "these Wall Street firms" is that these firms are the exact member banks of the US FED, which is the same as saying that these banks ARE the US FED!

ELIMINATE THE US FED ...

RUBIN was the FATHER of the stated "STRONG DOLLAR POLICY" developed during the Clinton era, which was nothing more than having central banks sell gold to suppress the price of gold to make the US Dollar(and by collaboration all other global Fiat)look ... strong!

GOVERNMENT IS ONLY AS HONEST AS ITS MONEY ...

ALOHA !!

vinod ... Whats new? Not only has CRAMER failed to predict bottoms but he was touting BEAR STEARNS as a BUY on Friday and it collapsed over the weekend!

There should be a counter CRAMER show called "MAD "REAL" MONEY"!! Where gold and silver and commodities are touted!

Or a TV SHOW where all the losers who bought all CRAMER'S ... BOTTOMS and BUYS can mouth off to CRAMER and call the TV SHOW just ... "MAD"!

In actuality I would not be too put off if both Roubini and Cramer just SHUT UP!

In keeping with the theme:

http://www.theatlantic.com/doc/200905/imf-advice

nice music....

LOL

Bladerdash is my preference in the case of "Mr. P"!

If it lands on his balderdash — that's all the better :)

I voted for Perot and got 8 years of Clinton — just as I voted for Goldwater and got LBJ (and the 500,000 troops in Viet Nam we were warned Goldwater would send.)

Unless we can change the Congressional stranglehold they have on us, little else will change for us.

Add to the list of guys in the revolving door of public/private sector — Henry Paulson and Greenspan.

Also add another personal benefit they bag...
Each time they make the switch they are excused from paying tax on their investments which leave the market "to avoid conflict of interest".

Yeah, sure.

Paulson saved a $200,000,000 tax bite on his Goldman shares when he went from $45 million to $147,000 annual pay at Treasury.

As long as they control the money — they define what's "honest".