[7:45am ET] Listen up students; the word of the day is “Backwardation”, as in permanent backwardation as in what is likely to happen to the gold futures market, which occasionally happens when buyers are concerned that supplies will not meet demand, which Professor Fekete has pronounced is now the world we live in.
Normal backwardation is a futures market term describing a situation where the amount of money required for future delivery of an item is lower than the amount required for immediate delivery of that item. For example, immediate delivery of gold may cost $1,000 an ounce, whereas delivery in two months only costs $900 an ounce, with that $900 to be paid at time of delivery. It is a peculiar situation, because no rational person would buy gold for $1,000 an ounce today, when they could enter into a contract to take delivery for $900 in two months time, except when they do not believe their counterparty will be able to deliver at the $900 forward price, or if they needed to use the gold immediately (more likely to occur with a soft commodity such as grains). Thus backwardation is a signal that the item in question is in short supply. [Contango is the opposite of backwardation.]
For those who will be attending Cara Bahamas 2010 Conference, Dr. Antal Fekete will be our honored guest and the major speaker on Sunday January 17. Kaimu has graciously helped make arrangements for him to visit us direct from Hungary. Many of us find his work to be extraordinary, so it will be a great opportunity and a pleasure to be his classroom student.
Yesterday Dr. Fekete wrote another important article for the Gold Standard Institute, which I will reproduce below, called Dress Rehearsal for the Last Contango. I encourage you to read some of his other recent articles.
http://www.goldstandardinstitute.com/html/essential.html
August 24, 2009.
By Antal E. Fekete
The Gold Standard Institute
Canberra, Australia
Monday, August 24, 2009
http://www.goldstandardinstitute.com/I have written about "the last contango in Washington" before. The phrase covers the gold crisis that has been brewing under the surface in the world for 60 years due to the insane gold policies of the U.S. Treasury. As a result all newly mined gold, surpassing the quantity of all gold ever mined prior to 1947, has gone into private hoards, from which it will be next to impossible to coax out. The measure of this act of disappearance of gold is the vanishing of the basis, or the last contango.
In the technical jargon of the futures markets, the basis is the spread between the nearest futures price and the cash price in the same location. The gold market has always been a carrying-charge market -- a contango market -- due to the monetary metal status of gold. This means that the gold spread has always reflected the carrying charge, the opportunity cost, of carrying gold, most of which is foregone interest.
But a strange phenomenon has been manifesting itself for 35 years, since the inception of gold futures trading. Rather than remaining constant, the basis as a percentage of the rate of interest has been vanishing and now has dropped to zero. At the same time gold holdings registered at the Comex-approved warehouses have been dwindling. Both indicators point toward a shortage of monetary gold that appears irreversible.
The support of the paper gold markets is at stake. Without cash gold backing it up, paper gold trading is not viable.
When the gold basis goes negative, that's the end not only to contango but also to gold futures trading as we know it. Permanent backwardation in gold has never ever been experienced -- unless we imagine that there is a gold futures market in Harare. Gold is not available at any price quoted in Zimbabwe dollars. In that sense the last contango has first occurred in Zimbabwe.
Whatever paper trading of gold is still going on in the United States, it is at best a dress rehearsal for the Last Contango in Washington, which will be followed by the regime of permanent backwardation.
The meaning of this is that physical gold cannot be purchased at any price quoted -- this time, yes, in U.S. dollars.
The U.S. dollar rubbing shoulders with the Zimbabwe dollar?
Mainstream economists and financial journalists shrug: "So what? We are not watching the basis of frozen pork bellies trading either when we make monetary policy." These gentlemen betray a lack of comprehension of the nature of the present financial and credit crisis. Whatever else it may be, this crisis, first and foremost, is a gold crisis with an incubation period measured in scores of years. It is about to reach its climax.
The world appears to be totally unprepared for it -- witness the silence surrounding the gold nexus.
Even the so-called sound-money Internet sites misread the situation. They are talking about an imminent breakout of the dollar price of gold from its holding pattern below $1,000 per ounce. Such breakouts have occurred from time to time since 2001, when gold broke through the "resistance levels" of $300, $400, etc. The coming breakout is not distinguished by the fact that $1,000 is an even rounder figure than the previous round figures that have been surpassed. It is distinguished by the fact that we are confronting a world event the like of which has never happened.
It has never happened that gold was unobtainable at any price. It has never happened that all governments have defaulted on their debt obligations simultaneously.
Still, we have to explain the relevance of this to the credit crisis. It is no secret that the bonds, notes, bills, and other obligations of the U.S. government, or any other government, for that matter, are irredeemable. That is, they are redeemable in nothing but more of the same. For example, the bonds of the U.S. Treasury are redeemable in Federal Reserve credit, which is itself irredeemable and is "backed by" the self-same bonds of the U.S. Treasury. Why is it, then, that these Treasury obligations are in demand where one might think that redeemability is a sine-qua-non of issuing them? What makes people participate in this shell game? How can such a crude check-kiting scheme mesmerize the entire population?
Come to think of it, the sight of this Ponzi scheme would shudder the Founding Fathers of our great Republic.
This is not an easy question to answer. But going through all the alternative explanations one by one, we come to the conclusion that the debt of the U.S. government is still redeemable in a sense, however limited or restrictive it may be. The debt of the U.S. government has a liquid market in which it can be exchanged for Federal Reserve credit. In turn, Federal Reserve credit can still be exchanged in liquid markets for physical gold, the ultimate extinguisher of debt, albeit at a variable price.
But if you break that final link, when gold is no longer for sale at any price quoted in U.S. dollars, then the rug will have been pulled from underneath this house of cards, and the international monetary system will collapse like the twin towers of the World Trade Center. And this is the situation that we are confronted with.
Look at it this way. There is a casino where the lucky gamblers can gamble risk-free. Their bets are "on the house." This casino is the U.S. bond market. There is only one catch. The pile of the winning chips in front of each gambler may become irredeemable at the exit when the hairy godfather waves his magic wand.
As the gold markets enter their phase of permanent backwardation, all rational basis for holding U.S. Treasury debt -- or any debt, for that matter -- will disappear. There will be a mad rush to the exits, and holders of debt will trample one another to death in trying to cash in on their winnings.
In July I attended the Santa Colomba Conference 2009 at the Palazzo Mundell near Siena, Italy. There were 50 people in attendance by invitation of Robert Mundell of Columbia University, recipient of the Nobel Memorial Prize in economics 10 years ago. They were mostly officials of various treasuries and central banks, ambassadors, bankers, professors of monetary economics, authors of monographs, and editors of financial journals. Paul Volcker, a former U.S. Treasury official and chairman of the Federal Reserve Board, was present.
Prior to the conferernce I circulated several papers among the participants. I was trying to show that the cataclysmic nature of the present credit crisis could not be understood without trying to understand gold, the ultimate extinguisher of debt. We are all passengers on a runaway train on a down-sloping track, the brakes of which (gold) have been dismantled at the top of the hill. The train is picking up speed beyond any safe limit, and a crash appears inevitable.
Our gracious host and the chairman, Professor Mundell, made two references to gold during the two days of the conference, asserting that, apart from wartime, the gold standard has been the most crisis-free monetary system in history. (Of course, all monetary system have a habit of breaking down during wars.) Yet not one participant picked up the ball dropped by Mundell. They kept talking about "green shoots," the recovery of the stock markets, and coming bailouts and stimulation packages. As to my papers stating that this crisis is a gold crisis, I got just one bit of feedback, in private. Apparently the rest of the participants have been turned off by the four-letter word "gold." It was not worth their while to read the ramblings of this loner on the problem of "putting spent toothpaste back into the tube."
One of my papers was an open letter addressed to Volcker. In it I asked whether there were contingency plans in the Treasury or Federal Reserve to meet the coming crisis of permanent gold backwardation.
Volcker declined to answer my question, in public or in private. I am inclined to think that there are no such contingency plans other than "muddling through," as they have in all previous monetary crises. None of the policy-makers sees the uniqueness of the coming and predictable crisis, or the need to confront it with a comprehensive plan. There is an overwhelming unwillingness to admit that the international monetary system as now constituted has been built on quicksand. It is a mere makeshift that took its origin in the last gold crisis of 1971. Cracks have been papered over as they appeared after every subsequent crisis. Every opportunity to sit down and work out a permanent solution was passed up. This seems to have worked well enough in the past. Policy makers see no reason why it would not work in the future.
Yet the Last Contango in Washington will be different from all previous crises. It will be elemental, devastating, and apocalyptic. It will destroy virtually all paper wealth and render virtually all physical capital idle. It will involve hordes of unemployed people roaming the streets, caring for no law and order, pillaging homes and institutions. It will destroy our freedoms. It may destroy our civilization unless we take protective action.
On the positive side, it will sweep away the complacency of the managers of the regime of irredeemable currency and fundamentally weaken the sway of Keynesian and Friedmanite economics as it has a stranglehold on the teaching of economic science.
The Last Contango in Washington will eclipse the Great Depression of the 1930s. Be prepared.
-----
If you wish to thoroughly enjoy a few days in the sun in mid January around the Martin Luther King Jr Day weekend, come join us at Grand Bahama (Our Lucaya Resort in Freeport). You will learn a lot, and you will have a truly enjoyable experience. My whole family and in-laws plus kaimu, Vad, Aussie Back Home, SuperGeorge from Manila, Pascal, Pierre, korvus, Matt our new server guy, Geoff and Patrick from Chicago, Tony, Jack from Toronto who does all our corp communications, Jim Watt, and William Woods and the MANNA team, will all be there.
Have a good day.
Comments
When does backwardation begin? Has it begun?
Will it destroy the PM miner stocks along with the rest of the market in such an event or are we on the cusp of Nirvana in PM trading?
Cara 100 Ratings Changes
Good morning.
Upgrades:
COST - to Market Perform @ William Blair
DEO - to Outperform @ Bernstein
GOOG - to Buy @ ThinkEquity. PT Raised from $400 to $550
Last Contango
I have enjoyed this site tremendously. I do find myself wondering the point in a traders blog of constantly promoting and harping on and on about the good and mostly evil of Washington politics, economics and so forth. So who gives a hoot if Armageddon comes, will it really matter at that point. Maybe Kaimu will be safe in beautiful and isolated Hawaii but basically who cares at that point.
I'm sorry Antal but in my opinion (and this is an open blog right) this article belongs in the loony bin and that is probably why Volker and anyone else with their head screwed on straight didn't give it a passing thought. It's simply crazy to dwell on things like this because they can't happen. The rich and powerful players out there who control it all won't let it unless they can make some money on it and then for a little teeny while and as sure as rain they will bring back down to earth like they did with the Hunts in 80, Oil in 2008, etc.... it's a big game. We just need to learn how to play it.
My thought is to focus on the here and now today. how can I make money today. Sure maybe it is smart to carry some gold and silver and you will probably make some good money eventually but if this thing Antal suggests you might as well put a gun to your head because sure a day someone else will be trying to steal whatever you got!!!
There are two sides to a trade and I'm taking the other side on this one.
Re: Last Contango
playthegameorgetout,
We are all here to "play the game". These articles are important to some people, and may be considered "looney tunes" by some. That's what makes a market. I'm not going to listen to Volker or Bernanke as much as I will listen to independent persons like Antal Fekete, but I try to listen to them all. In fact, I try to cover it all in these pages.
Re: Last Contango
play, you might appreciate comments from the following economist, which was posted in Ron Sen's blog yesterday. He made the point that mainstream economists have models that suppose equilibrium, which in a sense is what you're supposing here, if the powers that be are all that powerful and able to control the PM market while it is in their interests (I don't know if the present crisis is their/your idea of control and equilibrium but it's pretty looney to me).
http://globaleconomicanalysis.blogspot.com/2009/08...
Vad made a similar point about oil somewhere here or in his blogs. Analysts or talking heads said oil will keep on going last year for whatever reasons, and assumed that pushback, or reversion to the mean wouldn't happen (apologies if not paraphrased correctly Vad). Well, what happens when you hoard gold, remove it from the market? What mean is there to return to? What happens when global investors consume gold quicker than it can be dug out of the ground? Who gets the gold left in the ground in such an event?
In your question on Armageddon, I guess it will mean, to poorly quote Vad's little boating/scalping story on his blog, whatever you choose to name it.
Note of interest in $vix
consolidation, testing trend reversal in near future?
Reminding myself to make some meaning of the $vix indicator. From Stockcharts:
"A rising stock market is viewed as less risky, and a declining stock market more risky. The higher the perceived risk is in stocks, the higher the implied volatility and the more expensive the associated options, especially puts. Hence, implied volatility is not about the size of the price swings, but rather the implied risk associated with the stock market. When the market declines, the demand for puts usually increases. Increased demand means higher put prices and higher implied volatilities."
So complacency has seen its nadir late July? Put action in options dead cold but tantalizing us with change? Hmmm, that'd be Taleb's moment to hedge, wouldn't it?
Re: Last Contango
As Bill says...good to look at all sides. Having said that, he does get at a nexus that provides a paradoxical conundrum. I'm not sure I have a handle on it myself, but when my 13 year old nephew, who has not even a neophyte's understanding of the situation asks me, "Why are these pieces of paper (Federal Reserve Notes) worth anything?" I became concerned.
Fekete asks a question that about which I've often wondered...when all governments are in debt, and need to raise more debt, from whom will they borrow? Which raises the question, what is the value of what I borrow, from someone who has to borrow to lend to me? I wonder...perhaps it's neither a gold or monetary crisis, but a crisis of how we exchange value, and what represents value.
As I said, when a 13 year old, who cares much more about his Xbox, than economics asks that question...I wonder.
Repost to a new day:
Les (and those who monitors the topic): please see
http://caracommunity.com/content/caras-commentary-... and http://caracommunity.com/content/caras-commentary-...
Especially last one, I believe it carries very important lesson for an aspiring chart reader.
Last Contango
Rome, Argentina, Zimbabwe, Weimar Republic
Governments/powerful people do collapse. They have collapsed. Just because the shell game continues does not mean it will continue indefinately. Maybe the wealthy are currently in control. Maybe they also have their own secret vaults in their homes. We all have our family secrets. Sometimes there are things people just don't talk about. Sometimes there are things governments don't talk about.
Armageddon is a strong word. This one suggests there will also be nuclear devastation. And, maybe, the human population will be wiped off the face of the earth. The End Times, etc. Does Armageddon happen if paper money collapses? No, I believe what will happen is that countries with assets will survive. Those with the ability to farm and manufacture things. Those without debt. One thing for sure, it doesn't sound like it will be the U.S.
Re: Last Contango
From Twiggs diary today: "Even a purely moral act that has no hope of any immediate and visible political effect can gradually and indirectly, over time, gain in political significance."
~ Vaclav Havel
These things (depreciation of currency and currency inflation) don't happen precipitously, they happen over time or they bring social unrest, which the powers that be will work very hard to control or mitigate. They happen gradually and indirectly, but over time gain in political significance.
This is why we hold physical gold, silver, platinum, palladium, copper, etc.
It isn't to make money, it's to keep money, ie: purchasing power. Just look at Zimbabwe. Their paper money is worthless so they are forced to mine and pan for even the smallest amounts of gold to buy basic needs like bread. The powers that be are smart, they tax us and use our resources now to build military's capable of keeping civil unrest physically under control. See/feel 9/11. It's won't be Armaggedon, but it will be it's own little hell for a lot of people. PM's are the hedge of hedges.
What are you looking for in additional trend lines Vad?
something like this?
http://tinyurl.com/mrxmnd
or the attached?
Cara 100 Update
PG - PT Lowered from $60 to $58 @ Caris & Co. Average
Off shorts: -0.7%/ Tithing at the Graifer Church: -3.85%
That's the cumulative cost of trying to time a reversal the past 7 weeks.
Back in cash.
Gold and its value...
Taking the scenario to its ultimate conclusion...who's to say the countries with the life-giving resources will accept gold in exchange...especially if the resources are in short supply? Really, to some extent, the demand and value of gold will be less than the much needed resources. In the end times if you are looking to survive...what can you really do with gold besides look at and admire it? Life-giving resources is where the high demand and thus the value will be.
Cloud Computing
My company is not at the stage of requiring Cloud Computing, but since I received a couple requests for what I thought, and I don’t know much, I thought this might help.
https://www.sun.com/offers/details/CloudComputing.xml
In 25 pages, Sun offers a free guide to Cloud Computing that:
1. Defines cloud computing and its benefits
2. Explains the different types of clouds (public, private, and hybrid)
3. Describes the architectural service layers (e.g., Software as a Service)
4. Details the underlying virtualization technologies
Re: What are you looking for in additional trend lines Vad?
Les... all of the lines you have drawn on both of those have right to exist - ALL of them are drawn according to the original source you used. The matter to ponder is not how to draw them, that's peanuts... but think of implications of the fact that the same technique applied at different points in time leads you to different and contradictive results.
The uptrend shown by the upper line in your first chart got broken long ago, in the beginning of May. Uptrend shown by second line got broken mid June. Would reversing to the short yield any profits in either of those cases? What does it tell you about current line showing uptrend still intact? What does it tell you about the method itself?
Little hint: Make things as simple as possible, but not simpler (Einstein)
Sorry, we will have to continue after hours
Re: Gold and its value...
Hammer1,
Thank you. That's the very reason why countries like Canada, Russia and Brazil ought to be especially careful in guarding their natural resources.
Re: Gold and its value...
Fekete has posted a fairly consistent message for the past few years about gold and has addressed backwardation/contago before.
a similar event took place late last year and early this year i belive and the usual round of gold-bug economists were hammering about how it meant gold was on the precipice of something that as usual never occurred and the story bled out in the media. few if anyone asked the question months later with gold $150 lower how they could have been so dramatically wrong without providing rationale other than "manipulation"!!!
contango/backwardation in gold is a non-issue, simply because we have no proof that it has produced or could ever produce the kind of scenario envisioned by so many.
i believe Prof. Fekete write quality reports and does not have an ulterior profit motive, but that being said I suspect he suffers from what far too many economists currently face, and that is what i call "maverick" syndrome. it seems economists are lining up to get aboard the Maverick train, wishing to be the one who called the crash, the rise and the sucess of gold.
if you read the papers and blogs enough you would find dozens of people claiming to have forseen the crash of last year, the decline of gold along side equities and the eventual rally of the US dollar. the peter schiff's of game had it half right, they called the crash but still lost alot of their clients money because everything they said that would go up went down too. so in reality none of them foresaw it in the sort of visionary way they imply.
but we all know there will be no shortage of men in nice suits lining up to claim they went against the grain, they were mavericks and made the call. Mr. fekete has made macro economic calls for some time so it is more difficult to ascertain his accuracy. ultimately should gold skyrocket he will be right, but he will not be alone by any stretch.
gold is doing its thing, im still looking to be a buyer on any small moves down, should the RSI 7 take a big hit in the next few sessions Ill know that the upmove is over and a move below $900 might be in play, ill have the ammo to reload down there too. as it stands dozens of gold-bugs have been cheering golds imminent breakout the past 3 months, every move above $955 is met with cheers and excuses when it fails to make a run. watch carefully, watch volume, if the shares dont move on volume its your signal that big money is not buying in . period. plain and simple.
Re: Gold and its value...
An example of guarding natural resources here in a piece in the telegraph today.
http://tinyurl.com/ludqoy
"World faces hi-tech crunch as China eyes ban on rare metal exports "
A draft report by China’s Ministry of Industry and Information Technology has called for a total ban on foreign shipments of terbium, dysprosium, yttrium, thulium, and lutetium. Other metals such as neodymium, europium, cerium, and lanthanum will be restricted to a combined export quota of 35,000 tonnes a year, far below global needs.
From reading this it seems they want to keep them for their own use to develope their own economy and industry.
Re: Gold and its value...
Exactly Hammer1. That's the reason EWZ is up 76% this year alone (due to the collapse of the USD vs R, and the resources involved as Bill states as well), also the reason why China is buying a huge chunk of Africa, and so on. You can eat on golden bowls, plates, and cups, and with golden forks (or chopsticks) but you cannot eat them.
The gold market is too small. As for the USD, investors in the US may continue seeing "gains" in the US market (in USD) and be happy about it, in reality the story is quite different.
FED to report on loans
Looks like the FED is going to have to disclose where the money went according to this Bloomberg article today.....
Aug. 25 (Bloomberg) -- The Federal Reserve must make records about emergency lending to financial institutions public within five days because it failed to convince a judge the documents should be exempt from the Freedom of Information Act.
http://www.bloomberg.com/apps/news?pid=20601087&si...
The Four Worsemen or the Flub Four?
Two buy alerts and two pretty close...
SRS
SDS
TZA
QID
I guess that's what makes it a horse race...certainly not a recommendation
Cara 100 Update (Final)
PG - estimates changed at Barclays. Raised PG's 2010 EPS to $4.05 from $3.72. 2011 EPS estimate cut to $3.93 from $4.10. Maintain Overweight rating and $60 price target.
Debasement
"The supply of foodstuffs in the cities declined. The people in the cities were forced to go back to the country and to return to agricultural life. Consequently, the emperors made laws against this movement. There were laws preventing the city dweller from moving to the country, but such laws were ineffective. As the people did not have anything to eat in the city, as they were starving, no law could keep them from leaving the city and going back into agriculture. The city dweller could no longer work in the processing indus*tries of the cities as an artisan. And, with the loss of the markets in the cities, no one could buy anything there anymore."
Ludwig von Mises – Human Action
from: http://www.gold-speculator.com/quinn-advisors/8626...
Crude...
Anyone watching this? Shot up to 74.96 on the CCI, then got hammered back down to Red for the day. Maybe we are setting up for a "sell on the news" day.
FD- 5% short across the board.
Re: The Four Worsemen or the Flub Four?/ Pale Rider
I have other names for these four.
Not to make light of anyone's predicament. I am certain there are traders (a few who used to blog quite a bit here) who have seen total portfolio destruction due to the ultrashorts. Make no mistake- the ultras make for a brutal playground.
Liking the volatility/trading ranges
I think it bodes well for an imminent sell-off that lasts more than a day. Of course, I'm a converted Graiferite, so I can't say when.
TBT
Must not have gotten the play book.
COF
COF looks ready to keel over. Bought Sept 35 puts this morning @ 1.35. They got an upgrade to "overweight" from Barclays yesterday (this after the stock ran from a low of $7.80 back to $37!) and the stock promptly gapped up and sold off.
Still riding the airlines long.
Re: Pale Rider
Casinos are brutal playgrounds also. So we've come full circle. The capital markets are casinos. Ultrashorts are the equivalent of playing table games with 3x odds.
Made a nickle in FNM much earlier today
The stock market...It's like being at a convention of pickpockets!
Re: Last Contango
playthegame,
"The rich and powerful players out there who control it all won't let it unless they can make some money on it and then for a little teeny while and as sure as rain they will bring back down to earth like they did with the Hunts in 80, Oil in 2008, etc.... it's a big game. We just need to learn how to play it."
You are right in there with Bernanke, Greenspan and all those who believe in the ability to perpetually control the markets.
Bernanke is "playing the game" alright and thinking HE is the one who can do it.
The only problem (ours) is he is playing with our money and all he has to lose is his reputation (probably a big deal to him), but frankly I couldn't care less how he is remembered.
I seriously doubt he can do it — even with all the illegal and unethical backing he is receiving. He may as well believe he can disregard gravity. Most economists make one very large mistake — the human element.
Re: What are you looking for in additional trend lines Vad?
Yeh got you Vad. The trend line I've drawn there is a copy of the lesson I learnt from the URL I posted, in as much that I've used a major dip, like in March 2007 (this trend line the analyst actually used to predict trend reversal leading into this recession) as a 'route marker' for the trend line.
As you've suggested, each trend line has a right to exist and thus must be objectively studied against volume, momentum change etc in order to determine 'reality'. Those major dips and peaks appear to provide some certainty in drawing the trend.
How do you see the 'big picture' in trends and reversals?
Bernanke Reappointment
The conspiracy theorist in me has to wonder whether the timing of Obama's reappointment of Bernanke has something to do with the fact that the Federal Reserve is being forced to release "sensitive documents" in the next few days per the Bloomberg vs Federal Reserve case.
Perhaps making the reappointment now is intended to avoid greater scrutiny/complications once the information is released (which may shed a bit of unflattering light on some actions/events at the Fed)?
Re: Cloud Computing
Here is a link to some white papers and other info in regards to the "Cloud"
"By helping enterprises avoid capital expenditures, meet demand in real-time and speed time-to-revenue, cloud services can unleash IT from many constraints. Jeff Shafer, Director of Hosting and Application Services at AT&T, explains how cloud services represent a once-in-a-generation, disruptive paradigm shift for the consumption and delivery of IT." http://bit.ly/1589oN
http://www.corp.att.com/search
Re: Bernanke Reappointment
I was wondering the same. Was this announcement pending and imminent (this week?) or was it out of the blue?
Re: Bernanke Reappointment
Dang Billy, you must be a good carpenter, always hitting the nail on the head. I noticed a few days ago news stories about Obama wanting to not be disturbed on his vacation. Of course, I was thinking to myself if I was in his shoes I wouldn't be taking any vacation. Then, today there is a news story about how Obama decided to interrupt his vacation to make the announcement.
http://tinyurl.com/ld889g
Then, I saw your post and the lights came on and the dots were all connected.
What makes any of us think we can time real estate any better?
David- Is it possible that your predictions about housing bottoming in late 2010/2011 will not play out?
If nothing else, consider that interest rates have as much to do with affordability as home prices. And rates are even less predictable.
SPNG
looking very strong. I believe the addition of Deloitte & Touche as their auditors was a watershed moment for them as it adds credibility that was lacking.
FD:
long at .142.
Re: Bernanke Reappointment
I say he is keeping his friends close but the "enemy" closer... and I am hoping he is giving these folks the "rope" they need to get caught... Obama might just be smarter than we think.. we shall see...
Re: Gold and its value...
SiO2 "The gold market is too small."
Nonsense. The paper supply is too large - vis Nemo's nephew.
No doubt gold has little use compared to a food supply, but its value rests in universal recognition that its not paper - i.e. cannot be created. So we recognize that attribute when we wish to trade, but barter becomes too complicated (I have corn, want shoes, shoemaker doesn't need more corn, wants fish, fisherman has adequate shoes, wants rope, ropemaker etc). No magic, just a practical reality over many generations.
Another useful attribute that derives from the universal acceptance is the preservation of value, so I can preserve the value of my perishable bumper corn crop by trading it for gold that will tide me through the poor crop seasons.
A simplistic view, perhaps, but that's all money is. We are conditioned to think of price in dollars, because government has dictated that that is the legal medium of exchange. Better to think of price in ounces of gold as kaimu frequently does when referring to the debauchery caused by the creation of the Federal Reserve Bank.
Edit: could just as easily have been silicon dioxide, but thats not quite as rare, except in its purest form, nor as malleable:-)
Re: Bernanke Reappointment
No, Billy. It has more to do with President "Change" being nothing more than a figurehead for business as usual.
Re: Gold and its value...
Re. ""The gold market is too small."
Nonsense. "
This has been discussed here a few times. Total value of global gold reserves is around $1.2T. http://3.bp.blogspot.com/_iV5yDiKxCdk/Sj_P4xUuiYI/...
The Fed has just been required to disclose where they put $2T. Derivatives, $490T. Sure paper supply is huge, but gold market is just too small and won't make a dent. The point was mainly to away from USD and other major currencies (and gold too).
BC
BC is testing the upper trend-line once again.
Re: Bernanke Reappointment
The Federal Reserve Bank complained to the federal court that "disclosure would harm borrowers’ competitive positions"... SCUMBAGS.
This is precisely why private-public partnerships don't work. When the taxpayer puts up the money and the guarantees, and pays the costs of mismanagement of the Fed via a lower Dollar, which leads to higher prices and higher interest rates, they have EVERY RIGHT to "full, true and plain disclosure". It's the bloody law in trading in securities. Why do these people think they are above the law?
When the head of the NY Fed doesn't want to pay his taxes, but can still be appointed Treasury Secretary, that's one insult; but when a material transaction of this kind is purposefully kept hidden from the public, it's time to revolt.
Enough of this nonsense. These people are lighting a torch to America.
I look upon this situation as an emergency. Congress must take control and ownership of the Fed and make it part of the Treasury Dept asap. From then on, every senior manager in the Administration must be subjected to quarter-yearly grilling by Congressmen like Dr. Ron Paul and Sen. Jim Bunning, etc.
Full, true and plain disclosure is the obligation and the right of all of us who trade in securities. If it's not, then we really don't have a capital market.
Bernanke should be fired. The whole Board at the Fed should be fired. But, Bernanke has been nominated to a second term and Sen. Chris Dodd stated "It's probably the right thing to do." If Chris Dodd wasn't getting mortgages that his constituents could never get, because of his standing in Congress, I might listen to the man. Otherwise, he too is a fraud.
Federal Reserve / Bloomberg
Anybody plan to pony up on the premise the FED produces plenty to please the public and the press?
Re: Bernanke Reappointment
Bill -
Here's a simple way to show support for Ron Paul's bill to audit the Fed.
http://www.auditthefed.com/
Re: Bernanke Reappointment
Dr., I think every independent blogger has to tell these people in the Admin and Congress and the mainstream media that we are going to massively revolt and turn the mood of Americans ugly unless they don't clean up their act. They have to start serving the interests of the people, and freedom of information is one of the most important interests we are supposed to have.
With all due respect to Ron Paul, he has been around for decades -- I heard him speak in New Orleans 25 years ago. The people who make and influence decisions in this country don't much care about Dr. Paul, but they do respect the growing power of independent bloggers. It's therefore up to each of us to spread the word, to help inform people what's happening to America because of these "players" in Washington and New York. We need to get our own team together, and fight back. Once the US mainstream media picks it up, then the world will know that Americans are ready to stop fighting other people's battles and start to fight to take back their own country.
To me, Dr. Ron Paul is the "Easy Button". This struggle isn't going to be easy. But, united, we can do it.
Re: Bernanke Reappointment
Bill,
"These people are lighting a torch to America."
I only hope the old saying about playing with fire blows back and burns them.
I think the protests being voiced at town meetings are basically the people drawing the line. We didn't like the TARP shoved through without being read and Obama's attempt to do the same with health care aroused a lot of people who were not tuned in before.
Obama is no dummy, but he has had a lot of political breaks during his climb to the White House. Bush's unpopularity was the biggest one to put him in. He is a good campaigner, but virtually has no experience beyond Chicago-style politics — same for Rahm Emanuel. He is using what always worked for both Mayor Daleys and is now in a whole new ball game where others also have CLOUT.
They have some powerful Democrats in Congress worried about the mid term election. Gibbs has been turning off some of the formerly friendly reporters with hi attitude. Bernanke may be the darling of Wall St. , but most on Main St. couldn't care less about him — Obama is front and center on the issues due to his promises going unfulfilled.
Remember GHW Bush's, "Watch my lips speech" and how people turned on him. Obama may be thinking about that a lot.
People are less predictable and although they have short memories many are hurting big time for the first time.
Not seeing change they can believe in, but the same old scams on an increasingly larger scale has a lot of people very angry with Obama.
Our Congressman Don Manzullo had to extend his town meeting from a single night to three and in a larger auditorium. Last night a man attending was shown on the TV blurb saying, "Forget solving the healthcare and spending all that money — the problem is jobs!" It was said in a serious, but calm and polite manner.
We are at 13+% unemployment here and the housing market is NOT showing improvement. More businesses are closing each day. Sales tax receipts are pathetic. A $10 million city loan, an increase in real estate taxes just announced, cutting library branches, city and county services are sore points locally. The cost estimates of gov. health care has people very angry.
At the end of last night's meeting the audience was asked to go to one side of the room if in favor of the health proposals and to the other side if opposed. Opposed was more than triple.
Re: Bernanke Reappointment
I signed that back a while. Great stuff and easy to do. Best of all, Ron's son Rand Paul is going to the senate for the state of Kentucky, and the constitution I might add.
edit: That bernanke stuff...how does that work anyway? Lets see, we can't tell you, but we know it potentially could be painful.
Can we get real please
and stop worrying about what ought to happen and who should have been the Fed chair, and what if aliens hadn't landed in New Mexico in 1947 and get on with discussing the trading implications of 4 more years of Uncle Ben? What does this mean for MY money? That's what I want to know:)
uptick rule still not in place?
Maybe it is so the HB&B can short the market with impunity once it turns...
Here's one thing
Had Obama switched to a Larry Summers it would have been seen as being much more stimulative and would have really goosed gold and oil probably.
For Obama this thing is a no-brainer...you don't change horses in the middle of a doo-doo stream:)
Re: uptick rule still not in place?
Hammer...I will agree for an uptick rule if you'll agree that you can only go long on a downtick.
VICL
and SVA both working out today.
Re: Can we get real please
shark, I think we are real here. How do you know Bernanke is in for 4 more years? He's been nominated, but maybe some Dem's will get smart and cause him to withdraw (to keep Obama from looking bad)? And if he's approved, who's to say that if Obama's proposed Healthcare legislation won't be scrapped and then to save himself in the polls, he causes the firing/resignation of Bernanke? There are too many possibilities to think like that. The probabilities were that he was going to get the nod, and we'd have more of the Great Reflation play. What else can the Fed do now? They are trying to keep Americans in the dark like mushrooms so that the truth doesn't come out as to how bad things really are. I think there will soon be line-ups at the federal court making demands for information, and the judges are going to have to make a decision as to the real legal rights of the people. So, in the meantime we trade day to day, but in the background we voice our disgust. When our voices get loud enough, even judges listen. There is either law and order in the land or there will be anarchy. Through it all, we'll still be trading day to day.
and again - double post
...
Get outta here - double post
subject heading says it all
What Lies Behind the CFTC's Revocation...
...of Exemptions in Agriculture Position Limits? (concerns DBA)
Earlier this year, in Egypt, a woman relayed the story of hungry kids that beat her husband to death not to rob him of his money, but to steal only the loaves of bread he was carrying (to view more videos of the endemic global problem of soaring food prices, please follow this link).
This is the problem that developed countries fear, and this is what is more than likely behind the CFTC and Chairman Gary Gensler’s decision to actively curb the prices of certain agricultural commodities, not a desire to return honesty and free market forces to commodity markets.
Will it work? Sure in the short-term, this tactic may be successful in depressing food prices; however, long-term, the actions of Central Banks to devalue currencies will certainly greatly contribute to the continuation of rising food prices.
This tactic is consistent, however, with the short-sightedness and the desire to delay the inevitable growing crisis that has driven every single decision of the international banking cartel of which I still view Gensler as a member.
Soaring food prices were beginning to be a problem not only in poor countries (a problem the international banking cartel of Central Bankers can ignore as evidence by Ben Bernanke’s claim of saving the world) but also in the US this year (a problem the international banking cartel can NOT ignor
http://seekingalpha.com/article/158081-what-lies-b...
Re: uptick rule still not in place?
Uptick rule is meaningless and won't prevent anyone, HB&B or retail traders, from shorting beyond a few cents of less favorable prices maybe.
Banning shorts altogether is more radical measure they, in their infinite wisdom, may try. Be thankful If they don't. You and I can short just as well with the same impunity... but if they do implement it, your options as a retail trader will be severely limited while HB&B will have zillion other ways to play the downside. Not even saying about how severe the drop is going to be in absence of covering shorts...
Re: Can we get real please
I agree with everything you just wrote.
I just got a call from my fund-manager friend who expressed surprise at the appointment, and had received info suggesting that the opposite was likely. Larry Summers was the name mentioned as being the possible replacement.
I do think that Bernanke is the perfectly natural choice...for a perfectly unnatural world.
How does this affect your gold opinion?
Re: The Four Worsemen or the Flub Four?/ Pale Rider
2nd, I haven't posted in a while because I've been too busy making up my 2008 losses and figuring out what I did wrong to take the time to write. I carried on a long thread in 08 on FXP. I have concluded that the ultras are a poor investment choice for anyone who is not already a successful short-term trader. In the end, I lost maybe 3% of my portfolio on that FXP trade; that's not a bad cost for such a useful lesson.
Overall, including the FXP position, by November 08, my portfolio was down about 35%. I sold almost everything except NOSOF and GXEXF near the bottom, and then between early December and February, I bought mostly miners, including GFI, GG, FCX, SLW, KGC and more NOSOF, plus BA, SU, AES. Basically I recovered everything that I lost, and am now up about 8% from my peak before last year's crash. I sold everything but the NOSOF and GXEXF 3 weeks ago and was about 70% in cash, but this week bought some corporate and muni bonds for income.
At any rate, as far as I'm concerned, the mathematics of the ultras don't work for me and I frankly won't touch them.
Re: Can we get real please
"How does this affect your gold opinion?"
With a prime rate of -0, gold still is not outperforming the S&P (my observation). From what I've been able to cobble together, gold is a gnat in comparison to the girth of the world's reserve currency.
FD: Long gold and questioning my sanity.
Re: What Lies Behind the CFTC's Revocation...
Great post Les.
"... more than 1 out of every 7 people in the world go to bed hungry due to rising food prices. The largest contributor to rising food prices is Central Banks’ monetary policy of devaluation of currencies worldwide."
"the travesty of the headline “We Saved the World,” a claim made by US Federal Reserve Chairman Ben Bernanke at the Jackson Hole, Wyoming banking symposium of global Central Bankers. "
(and they forgot ag99 too.)
And here people complain about music festivals being too loud, or bicycles going too fast on bike paths. Really makes you speechless, for lack of polite words.
Re: COF
I think I told Mark this a couple of weeks ago...I would look to short or buy deep in the money puts at $40/share. that marks resistance on a trend line starting about 2 years ago.
Re: What makes any of us think we can time real estate any ...
"David- Is it possible that your predictions about housing bottoming in late 2010/2011 will not play out?"
Sure it is. It may bottom in 2012. :) The market will not bottom until supply comes down permanently below 7-8 months in terms of the sales rate. In order for that to happen, the current overhand of houses that were foreclosed but not yet sold (the number of such houses in California has doubled since the summer of 2008 reflecting the general recent reluctance of banks to sell foreclosures). It definitely will not happen within the next few months, and I think mid-2010 is the earliest it can happen.
Tell me it is not so
Scientists Debunk UN “Global Warming”
Text size
Christopher Monckton
SPPI Monthly
August 25, 2009
A D V E R T I S E M E N T
UN exaggerated warming 6-fold: the scare is over
SPPI’s authoritative Monthly CO2 Report for July 2009 announces the publication of a major paper by Professor Richard Lindzen of MIT, demonstrating by direct measurement that outgoing long-wave radiation is escaping to space far faster than the UN predicts, showing that the UN has exaggerated global warming 6-fold.Report, page 3.
Lindzen’s paper on outgoing long-wave radiation shows the “global warming” scare is over. Thanks to recent peer reviewed papers that have not been mentioned in the mainstream news media, we now know that the effect of CO2 on temperature is small, we know why it is small, and we know that it is having very little effect on the climate. Page 3.
The IPCC assumes CO2 concentration will reach 836 ppmv by 2100, but, for almost eight years, CO2 concentration has headed straight for only 570 ppmv by 2100. This alone halves all of the IPCC’s temperature projections. Pages 5-6.
Since 1980 temperature has risen at only 2.5 °F (1.5 °C)/century, not the 7 F° (3.9 C°) the IPCC imagines. Pages 7-9.
Sea level rose just 8 inches in the 20th century and has been rising at just 1 ft/century since 1993. Sea level has scarcely risen since 2006. Also, Pacific atolls are not being drowned by the sea, as some have suggested. Pages 10-12.
Arctic sea-ice extent is about the same as it has been at this time of year in the past decade. In the Antarctic, sea ice extent – on a 30-year rising trend – reached a record high in 2007. Global sea ice extent shows little trend for 30 years. Pages 13-15.
oil shorts
Well after seeing how poorly oil was reacting to the drop in the buck (especially when compared with gold), I (re)shorted USO after being stopped out a number of times in the past few days - and this one might have finally taken hold. My APA short is once again positive.
After seeing the negative market reaction to the 10 am release of consumer confidence and case-shiller improvements I shorted TIF and JWN, but got stopped out on the subsequent rally.
Its interesting to me how badly oil is doing compared to everything else. Is this a start of a new trend? I'm torn between cashing out for the quick gain today, and betting on a continued rise of the buck (and continued oil weakness).
Re: uptick rule still not in place?
Uptick rule is indeed meaningless:
How easy is it for HBB to, for example: buy 100 (to uptick it), then sell 500 in the blink of an eye? Pretty easy...
Re: Cloud Computing
Not to throw cold water, but as Bill talks about cycles, this is next-generation outsourcing. What is different, is the sophistication of the applications and the cost structure, which makes it available to much smaller enterprises.
The industry Ross Perot started....that's all.
Re: oil shorts
You only tying oil to the buck dave, or commodity traders sentiment, which may differ with the agenda of HB&B's stock market capers?
Look at putting gas into your play while you're at it. I'm waiting for thursday's report to see if hnu.to has stabilised.
Re: COF
TOF, thanks for your input.
My put trade on COF is based on a few factors:
1) What appeared yesterday to be an exhaustion gap up, coupled with the Barclays upgrade that was met with a bronx cheer. The stock trended down throughout yesterday and has continued to drift downwards today, despite a generally green market.
2) Potentially uncomfortable news related to the financial sector (in general, not necessarily COF) that may be revealed in Fed documents that will be released soon (per the Bloomberg ruling). Also the idea that smart money may view the potential revelations as an event not worth holding into.
3) The trail of dead shorts surrounding COF and extreme fear of being short (the fear is much more prevalent IMO than when we were sub-1000 S&P)
With that said, position is small and the use of a put option is to avoid damage if there is a one way ticket up on the S&P.
Re: COF
Forgot to mention...
4) September is historically the worst performing month for stock markets
Re: Cloud Computing
agreed Nemo
And if the "cloud" is un-reachable because of a DDoS attack or the company goes bankrupt you will want to have plan B....
Plus the security and on and on....
Re: COF
Billy - I don't listen to people that say such and such month is a bad month for stocks. Honestly, what does that have to do with the current market situation? It does look like the markets are getting restless at these levels but I really can't make a read on it one way or the other. The only long positions I'm holding right now are SPNG, some SPY and I'm looking to buy some MS and AAPL. Otherwise, I'm waiting until I see some discernible trend I feel comfortable that I can trade on.
Re: Tell me it is not so
Sorry, it is so:
http://climateprogress.org/2009/03/09/richard-lind...
Treasury Auction / TBT
Today's auction went well I presume, but I'm thinking the coming long end auctions will cost the taxpayers and higher rates are in the porridge for the remainder of the week.
Re: COF
TOF - I am just considering September performance as one of many factors. However, I am not really listening to the conjecture of others, this is simply what the market has told me based on historical data.
Re: COF
TOF - My thoughts on the constant musings of historical this and that are essentially parallel with yours. What everybody already knows isn't worth knowing? Okay, if I'm lucky and this monster rally off the bottom does take a breather, I'll take advantage.
Meanwhile, it appears there's huge incentive being offered for capital owners to put their cash to work.
Trading what I see, not what I "know"...
VIX vs SPX
Outsized move in VIX vs move in SPX. Taken along with the rally in TLT and the pretty decent sized move down in oil, is this the start of something? SPX is still positive on the day, but VXX is up +2.45%
JPM and Madoff
Has any one heard about this? Could just be a wild rumor that's trying (without much success) to make the rounds, but the poster is someone pretty solid in general. Found this on Roubini's current blog of Aug 24 in the comments section. If it's true, it deserves a wide audience, so I took the liberty of posting this. I hope this does not violate Bill's rules:
"Can somebody/anybody find a link or more information about JPM Chase withdrawing their own money from Madoff four months prior to the Ponzi scheme being unearthed??? (which sped up the ponzi scheme’s unraveling)
Apart from the multiple trading/reporting violations (not reporting the fraud to the SEC, FINRA, etc…) by taking their own money out and not their client’s money, they failed in their fiduciary responsibility to act in their client’s best interest.
Apparently, JPM Chase did this with insider knowledge that they gained from taking over Bear Stearns… (JPM Chase was the cash custodian for Madoff. When they took over Bear Stearns, they gained access to the trading side of Madoff’s operation (which cleared through Bear Stearns) JPM Chase was able to see that not only was the cash side empty, but the broker side was not capable of operating either, and did not have the ability to make the trades they were making nor did they gel with the “profits”.)
I’ve been on vacation for the past couple of weeks and missed this story and haven’t seen it anywhere???? …and I’m kinda shocked I don’t see anything about it here???
If true, this is potentially the biggest insider trading scheme ever done!!! ….and there should be people lining the streets right now! Heads should roll! If Madoff created the largest Ponzi scheme, I’m sure Madoff’s cash custodial bank pulling their own funds (with inside information) would clearly put this at the top of the: “worst cases of insider trading” list.
All the best,
Miss America
Hide replies Reply to this comment By MA on 2009-08-24 11:35:03"
Re: Tell me it is not so
Before making any decisions, I'll wait for Al Gore's rebuttal. Actually, I still suspect the most immediate environmental danger we face is the proliferation of nuclear weapons (starting with the USA).
Re: COF
Billy - Honestly the only historical trend for the entire market that I have found to be very consistent is to buy stocks long term when the S&P goes at least 3% above its 200 DMA and to sell stocks when it goes 3% below the trendline. it moved 3% above in July which was my signal to go all in on my long term account. if the degenerate in my didn't try to time the markets i would just keep it all in the SPY but i can't help myself. so i started selling some of my long positions a couple of weeks ago when the SPY was at 1010. if i were true to this long term trend i would just buy stocks for the long term until the SPY goes at least 3% below its 200 DMA.
“We Saved the World,”
Let's not mention we caused the need to do so.
Today's news seems to be all hyperbole. Now that we've saved the world we've just announced the possibility of 30,000 to 90,000 deaths in the US from Swine Flu.
I guess this means the Obama health care plan had better to passed by phone vote rather than wait to reconvene Congress.
Brings to mind the play "Stop the world, I want to get off". I much prefer the old SNL news with Jane (the ignorant slut) once a week than this 24/7 stuff.
"Keep 'em scared and we'll get what we want."
gold
I am fairly certain that if the armageddon scenario mentioned here happens then the plan B will include:
- forced expropriation of gold and possibly other PM;
- nationalization of major natural resource companies;
- severe cap or total prohibition of commodity trading for retail investors;
- designation of certain organizations (I have hard time writing the word "companies" here for obvious reasons) to handle all remaining commodity market transactions;
and this will likely be a global event, not limited to US.
Unfortunately I see no reasonable safety in any investment vehicle including physical gold now. Certainly not for the low abiding entities.
Last Contango
This is not such an easy question. I may not agree with the timing, or the conclusions, but it is interesting to examine such an important assumption.
We go about our lives without really questioning that we will have a portable, abstract medium of exchange, and a store of value. Consider how much energy and productivity would be wasted if you had to worry about this, in addition to the business at hand.
The gold standard is no picnic for a growing economy either, almost automatically producing deflation - consider the impact of a fixed amount of money for an expanding amount of goods and services. So in an world of expanding opportunities, and of rising standards of living, monetary expansion seems necesary to support it. The shame is, we are abusing the priviledge, and I agree that correcting the will continue to be painful.
Re: Bernanke Reappointment
Bill -
Your blog is at the cutting edge of a revolution. Ron Paul may be your deputy someday.
Re: gold
"Unfortunately I see no reasonable safety in any investment vehicle including physical gold now. Certainly not for the low abiding entities."
What happened to all the talk about NASA's lunar exploration schedule, maybe we could lease them a landing site?
http://www.lunarregistry.com/land/
Re: Last Contango
"It's simply crazy to dwell on things like this because they can't happen. The rich and powerful players out there who control it all won't let it unless they can make some money on it...”
I think the writer is wrong. These things can happen, and they will happen. It is only a question of when. Check your history books. All Ponzi schemes ultimately come to an end, a collapse. The Ponzi scheme that is the debt load of American society will come to an end, most likely in a way that will cause massive dislocations and human turmoil. In other words, great pain. The "powerful players" won't be able to prevent it; they may postpone it but only for so long. At some point there has to be an adjustment. At the end of the day there is no free lunch. The "day" might take 100 years, but the bill for programs comes due. Default, devalue, cut or fund programs on a massive scale. This is the collapse. We don't know when it will come; it could be in 5 years, 10 or 100. The collapse will be hundreds of times worse than what we are going through now. There will be "blood in the streets", untold human suffering. It is a shame because all of this is probably preventable, if society had the will. Alas, our society and political structure won't take the necessary medicine, which consists of a drastic alteration in our way of life, for example massive program cuts or revenue increases (which would impart great pain), and massive set-asides to fund future liabilities, i.e. social security, Medicare, environmental damage, etc. Society won't do it. It would rather pass the bill to children. Spend now, pay later. How sad and depressing is that? How selfish is that?
Re: COF
Billy - "2) Potentially uncomfortable news related to the financial sector (in general, not necessarily COF) that may be revealed in Fed documents that will be released soon (per the Bloomberg ruling). Also the idea that smart money may view the potential revelations as an event not worth holding into."
I wonder, have you seen this article?
" By MATT APUZZO, Associated Press Writer Matt Apuzzo, Associated Press Writer – Mon Aug 24, 1:37 pm ET
WASHINGTON – Wall Street may have discovered a way out from under the bad debt and risky mortgages that have clogged the financial markets. The would-be solution probably sounds familiar: It's a lot like what got banks in trouble in the first place.
In recent months investment banks have been repackaging old mortgage securities and offering to sell them as new products, a plan that's nearly identical to the complicated investment packages at the heart of the market's collapse."
http://news.yahoo.com/s/ap/20090824/ap_on_bi_ge/us...
GS trading tips fall out
Tuesday, August 25, 2009 3:30:57 PM
The Goldman Sachs Group Inc Ticking lower after reports of Mass AG subpoena over dissemination of 'trading tips'
- Earlier in the week press reports indicated regulatory bodies were looking into how GS disseminated information in 'trading huddles' to select clients
Re: GS trading tips fall out
"Earlier in the week press reports indicated regulatory bodies were looking into how GS disseminated information in 'trading huddles' to select clients"
There must be too much interest in GS, share buybacks coming?
Re: Last Contango
I'm trying to understand how contango in gold futures leads directly to the End of Civilization as We Know It.
I understand if there's no way to convert dollars into actual goods, then that's a bad thing - there's no way for casino players to turn their winnings into real things.
But if the US gold futures markets were to vanish, other markets (London, for instance) would still trade and fix the daily price of gold for the world. And based on exchange rates, we'd still be able to buy gold.
I get that Dr. Feteke's interpretation of gold contango means the market thinks there is some risk that the gold will not be delivered, so there's a premium put on holding gold now. But until an actual failure to deliver occurs, how does just being in contango signify anything more than just the market's guess that risk is increasing?
Another way of saying this is, gold contango is reflective of the difficulty of obtaining a "risk free rate of return". Short term US treasuries used to be the standard for a risk free rate of return, but since they're trading at near zero, and since the perceived risk of a US default has increased, it seems to me gold contango is just telling us that US treasuries are no longer risk free.
But I still don't see how rioters in the streets must necessarily follow from a riskier US treasury.
Re: JPM and Madoff
i found these>>
A Madoff Clawback From JPMorgan? (JPM) http://bit.ly/XNOfa
"According to the Post's sources, Cotchett could go after JPM -- and other big banks -- because it lacked due diligence by investing its clients' money with Madoff. The bank has also been accused of protecting itself, with respect to Madoff, while leaving its clients exposed.
This comes after another victims' lawsuit in April that accuses JPMorgan of aiding Madoff by maintaining his checking accounts and trading with his brokerage firm after knowing the operation was a fraud in September 2008.
As we've speculated, it may have been JPMorgan's decision to withdraw money from Madoff feeders that ultimately led to the chain of events that brought down The Ponz.
As the famous Watergate question goes: "What did the banks know, and when did they know it?"
Tailored Returns - Barrons.com http://bit.ly/QaZeb
Re: Cloud Computing
I also like the productivity enhancing value add.
Re: SPNG
TOF thanks for the updates. I am long @ .1405 for a small position. Failed to add earlier...common failure of mine, its either long once or out. I hope to get confident enough to add when it pulls back to my basis. Illustrates the importance of entry price. I like this stock, 3rd time in for small gains. I have raised my stop which makes me feel safer. Smaller entry position is making be feel a little better if I walk away from the trades for a few days.
Maintaining my stops a littel better now.
Stopped out of FNM yesterday for a small gain
Peace from North Puget Sound
Re: COF
CP - Interesting article and not all that surprising the bankers are finding new ways to sell the same crap. One of thing that puzzles me is why any investment that requires you to hire outside consulting firm to even understand what you are buying could be worth the risk (not to mention reliance on rating agencies,etc).
I think there could be a number of wild cards in the Fed FOIA releases which may shed light on which financial institutions were:
A) Coziest with the FED and thus able to receive favorable lending terms, etc.
B) Blowing hot air when they claimed (after the fact) that they were involuntarily forced to take FED loans, etc and would have been just clean as a whistle without them.
Perhaps my biggest concern is that the FED found this request worthy of using legal defense to avoid from seeing the light of day in the first place.....Which means HB&B thought the same thing.......which means?
Re: Last Contango
"Spend now, pay later. How sad and depressing is that? How selfish is that?"
If we just brought home the money we spend on maintaining our empire, we could take care of those less fortunate and rebuild our society.
Re: Last Contango
So is there were an ETF that buys gold futures contracts, and gold were to be in backwardation (edit), then the investor would benefit every month on rollover. It would be the opposite that happens with USO, UNG, GAS, et al. where investors always lose 5-20% every month on rollover.
A ETF that would favor the investor? No wonder GLD (supposedly) holds physical gold.
Re: Last Contango
I assume default is in the mix there somewhere Davef, for us to see blood on the street. If the greenback continues to function as its master would have it and gold simply becomes an otherwise unattainable commodity, joining the club of rare earth metals that cost exhorbitant sums of money then everything would perhaps more or less continue to function normally.
Thanks to Dr. Ron and Mish
Ben Bernanke...Why are we still listening to this guy? (and what the F is Obama thinking?) And can't we just gag Maria Bartoromo? Steve Leisman calls himself an economist?
http://www.youtube.com/watch?v=HQ79Pt2GNJo&feature...
Need more laughs? Where's our half a TRILLION dollars?
http://www.youtube.com/watch?v=00ECLxK2YTs&feature...
http://www.youtube.com/watch?v=XKSKWSnhCwI&feature...
Bernanke sucks? He says he can suck!
http://www.youtube.com/watch?v=KIaEjgXZR04&feature...
Re: Tell me it is not so
TN,
So do you think this is bad news? There have been a number of climatologists who disagreed with the warming. Some have even been predicting a cooling.
Like most issues, when someone says "everyone agrees" we need to take it with a grain of salt.
However, I see no reason to think we shouldn't continue to lower emissions. Humans and other living things are probably not going to be able to evolve to the point where we will be able to breath without oxygen 24/7 if we keep polluting at the present rate.
Whenever I see the erosion on a century old building due to hydrochloric acid I think I may as well go back to my 2-packs of unfiltered Camels — at least I enjoyed the killing process more than the acid rain way of going :-)
Anyway I like snow!
Some products may benefit — shovels and snowblowers,furnaces
and some will not — air conditioners, swimsuits
Re: Tell me it is not so
CP,
I agree once it is discovered (rediscovered) that China may turn out to be the next USSR and new cold war. I sure hope not — my outfit went on 24-hour alert when the Berlin all went up. I was in a chemical unit and our secondary mission was CBR (chemical , biological, radiological) decon. As I remember it was promlematic that we could find enough pure water to do the decon process — duh!
The numerical superiority as in Korea would immediately call for more nukes — at least tactical — bet on it.
Re: Tell me it is not so
CP,
I agree once it is discovered (rediscovered) that China may turn out to be the next USSR and new cold war. I sure hope not — my outfit went on 24-hour alert when the Berlin all went up. I was in a chemical unit and our secondary mission was CBR (chemical , biological, radiological) decon. As I remember it was problematic that we could find enough clean water to do the decon process — duh!
The numerical superiority as in Korea would immediately call for more nukes — at least tactical — bet on it.
Re: Tell me it is not so
No, pretty much the opposite...global warming was not reasonable do to sun spot theory especially. I could see the purpose however, to motivate others to develop alternative energies.
Re: Tell me it is not so
I consider what always has happened to the earth is climate shifts over the oceans and land masses... some will feel a warm up others a cooling down and vise verse over the thousands of millions of billions of trillions of years... not the whole earth at once jumps to "warm"... not sure how that got started..
some other thoughts to think about... I believe the "Sun Spots" play a very crucial roll as well... not just Human pollution (but as we all know we must stop the pollution NOW; we as humans have almost no time left to impact this event)..
Another Little Ice Age? Solar activity and climate change
Some scientists are suggesting that the slow return to a more active phase of the solar cycle may portend a general decline in solar activity. If sunspots shut down, does that mean that we could stop worrying about climate change?
http://bit.ly/pDDMC
Re: Last Contango
Dave,
I think he meant that would be due to unemployment. But I long ago expected the UAW or AFL/CIO and surely the Teamsters to blow up over the off-shoring and — nothing.
I suspect this was because, like the Nazis who took people to camps in small categories, the jobs left the same way. Today we have a broad ranging job disappearance, so it may lead to more violent reactions at some point.
Re: Thanks to Dr. Ron and Mish
Craig - the whole reappointment situation reeks of a play that was called in from the sidelines.
"Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and out-of-the-box thinking that has helped put the brakes on our economic freefall," said Obama, with Bernanke standing by his side.
It's almost to say "Destiny led us to the brink but sheer will power and "out-of-the-box" thinking has led us out!" Thank goodness we have a financial savior like the FED looking out for us! How would we ever manage to leverage ourselves to the gills and depreciate our currency without you Ben!
Re: COF
Billy - "B) Blowing hot air when they claimed (after the fact) that they were involuntarily forced to take FED loans, etc and would have been just clean as a whistle without them."
So true, I can't get my arms around the concept of actually lending such taxpayer girth to an organization that doesn't need it. I wonder if it really didn't take place, we were just told so to distract while the dirt was being swept under the carpet?
Bullishness Index Reaches Highest Overbought Lvl Since Inception
http://ronsen.blogspot.com/2009/08/can-four-worsem...
As Kaimu would say, "it is what it is."
Re: SPNG
photo - no problem. i like this one more and more. makes me wonder why i didn't just stay in it and hold it from the beginning....would have saved myself much thinking and commissions...
Re: Bernanke Reappointment
I think it qualifies as "out of the blue". Bernanke's term isn't up until February. "Why now?" is a good question for which I have not yet heard a good answer.
Re: What Lies Behind the CFTC's Revocation...
Thanks for the link. Wasn't up on all of that. I did notice the price of sugar and shortages thereof in some of the news. Very little backing. From what I've been able to glean, it's being driven by two things: 1) monsoon related failed crops in the asian subcontinent and 2) ethanol demand, especially from Brazil. Somehow I don't think it's going to lead to weight loss here in the US...
REALITY
ALOHA !!
Reality is in the eye of the beholder ...
If I were to show the Founding Fathers a menu from the Cheesecake Factory they would exclaim, "My God, is this Zimbabwe?" To them it would be unfathomable that anyone would pay $6 for a slice of cheesecake! In that era you could live well on 10 cents a day ... Now if I bring this up into the modern era I can show proof that in 1970 a Filet Mignon served at the PlayBoy Club cost $3.50 and a oceanfront room at the Outrigger Reef Hotel in Waikiki cost $18 per night. So who is it among us who actually believes that life has changed for the better? I was alive back in 1970 and I did stay at the Outrigger Reef Hotel in Waikiki and I stood there and watched my Father pay $18 at checkout. You may ask, how can you remember that? Well, my Father gave me the receipt as a souvenir and I still have it. Then lets talk about the Dallas Health Insurance Company back in 1952 when for $5 per day you could get a private hospital room. I just paid $300 for an office visit. I could have stayed in a private hospital room for 60 days back in 1952 for the same money.
Most here will say, "So what!! That was then and this is now!" But that is my point. Nothing in "real terms" has changed ... The US population has not even doubled since 1970. In 1970 the US population was 200million, now it is 304million. Isn't it possible for an oceanfront room at the Outrigger Reef Hotel to still cost under $40? Not even supply and demand for the basics in real terms has changed, just there is more people to feed. Does a human being require substantially more calories than a human in the cave man days or during the Great Depression or even back in 1970? NO ... So why have costs risen so dramatically since then? I mean an oceanfront room at the same Outrigger Reef Hotel in Waikiki now costs over $300 per night not $18 and that's even during the Greatest Depression since the 1930s, or as some pundits call it, Great Depression 2 ... Like I have said before, wake me when prices get down to 1970 levels!
Whats CHANGED is government has gotten bigger and in the process of turning our lives over to Big Brother our money has gotten a heck of a lot less valuable!
I beg to differ ... the elite ARE NOT in control ... WE ARE! The only reason they exist is because we "allow" them to. As proof why not take a stroll down memory lane back to the Vietnam War era. The elite were in control then running their DOMINO THEORY and creating this huge EVIL EMPIRE of EVIL DOERS and back then they were labeled COMMUNISTS. Back then it did not matter how many American kids died for that cause so long as the elite at the time got their way. As a refresher the elite during the beginning of the Vietnam War were JFK and LBJ, then came Nixon. What happened then? What happened was that some of the youth then looked around and saw that only the youth were paying the price and they questioned the elite as to WHY? It took just a few of those disenchanted youth to get off their sofas and take to the streets before soon the elite realized they were in trouble. THE PEOPLE WERE RIOTING! At first it was just the youth and then the older Americans joined in and even Vets, then numbers were so large that the people's anger overpowered the elitist's agenda. The elitists capitulated like the paper tigers they really are! As soon as WE THE PEOPLE decided we were done with the government's agenda things changed very rapidly and by 1975 we were out of Vietnam. Had there not have been a popular uprising I believe we would still be in Vietnam with our bases and the total dead would be much higher than the 60,000, we settled for. So, NO, do not tell me the elite are in control. They are only in control so long as we say they are! If it were not for their "riot insurance", like Social Security, Medicare and Unemployment WE THE PEOPLE would have ended this a long time ago. When you sit down and think about it, the elite are taking our own money and paying for our sedation ... our Valium! Entitlements are Valium for the masses ... Marx mentioned religion as the opiate ... nah ... its money!
It all works until the DEBT crushes the future, like all other past Empires, this one is built on Crony Socialism. Fekete is right in many respects as there comes a point when debt buys no more growth and I believe he is telling us we are there. At this juncture it becomes the C WORD. Look all that our money is based upon is our government's ability to secure credit in the future, like they say at the US Treasury website "faith and credit". The "faith" that the USA can get more "credit"! That is all any global currency is backed by. The currencies are "irredeemable", they're just debt derivatives. This is why I have decided to report on the DEBT that the US Treasury issues in my weekly TAX REVENUE BREAKDOWN report. Some $8.2TRIL USD of US DEBT issued in FY 2009 so far, as of August 24th. More tomorrow, literally! Follow the DEBT ...
Is everyone agreed that without Unemployment Benefits there would be riots in the streets of America? Can we agree on that? Lets imagine 15 million people who have lost their jobs since 2008 as of June 2009. Each worker on average has 2 immediate dependents and that does not count friends and relatives, but if we just count dependents then that would be close to 30 million Americans with no ability to pay bills so they can eat and have a roof over their heads. We already have close to 40 million Americans who now live below the poverty line. so that makes around 70 million disgruntled people and if you add in the friends and relatives that are connected to these 70 million then the numbers grow even more. Do you think the elite in control do not understand that? I have gone through some past US TREASURY DAILY STATEMENTS and come up with this:
COST OF UNEMPLOYMENT(only on US Treasury side):
2000 - $20.1BIL USD
2005 - $32.6BIL
2008 - $42.3BIL
2009 - $101.3BIL(as if Aug 24)
I see a trend ...
Now the State costs are not included and the cost to businesses and the domino costs of businesses having to constantly retrain.
But there is a noticeable trend in the Unemployment Benefits cost(the riot insurance). The costs are rising and they are rising dramatically, up 240% since 2008. I am now seeing the daily cost for benefits running between $500MIL and $1BIL per day. Not to mention all those "severance packages" from 2008 will be running out or are already out. Typically employees with "severance packages" have more bills simply because they live LARGER!
So what is "normal" ... what is "reality"? Is it living in a World where prices rise constantly as they have over the past 50 years? If so then now we are facing "abnormal" times. Our beliefs in what is "real" and what is "ethical" are being challenged every day, like no other time in our lives.
I believe the entire system has been one big inflationary ALICE IN WONDERLAND, where people actually buy homes for $300,000USD built back in 1950 that sold for $10,000 back then. And most now believe that $300,000 is a bargain! How many times over has the bank sold that same house for ever higher prices? At least 2 times ... I mean the house was built only once yet it was sold many times over, not the house itself, but the bank kept selling the mortgage many times over. So if you add up what all the various owners paid for that $10,000 home it must be near $1mil over a 50 year period. Well, probably more given the interest paid over a 50 year period on ever increasing mortgages. What a deal for the banks ... the MAFIA is envious! Is that the "Real World"? Then lets consider how many times over that same house has been paid for on just "property tax" over a 50 year period! So the AMERICAN DREAM is to be mired in DEBT you entire life and never "actually" ever own anything! That sounds like DEBTOR'S PRISON without the bars! Is that the Real World we have created for ourselves, the World we have allowed the elite to create for us? There was a time in America when you paid for property and never had to pay property tax. So when we look at BIG GOVERNMENT and rationalize how "great" it has been and how wonderful our lives have been as a result, how do we know? We have never known anything else? Then what is it you really own anyway? What do you really own? From the money in your wallet or purse to the house you live in ... what do you own? As far as I can see all you own is bank receipts ... pieces of paper that entitle you to share in the collective debt of America. That is what a FRN represents. So when you say you went 100% cash, you are really saying you went 100% debt. Someday, it won't work and Fekete is describing one way in which he sees it "not working". I think Americans have gone off the deep end in their visions of what is real and so we are the Reserve Currency of the World and none of that bodes well for the World either. If Russia were the Reserve Currency then the shoe would be on the other foot. In "real terms" it all ends or like Keynes says, "In the long run we're all dead!" Speaking of Keynes ... this was his prediction back in 1931 of the future economics, "For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight." The Future, Essays In Persuasion. Who let Keynes in the door?
I want to know how the heck did Fekete get an invite where Volcker and the global central bankers hang out? No wonder they dissed him, the mirror is very ugly! HA!!
ITS THE DEBT STUPID ...
IT ALL WORKS UNTIL IT DOESN'T ...
Re: Bernanke Reappointment
My position, as you can probably ascertain from my previous post is, give Ben Bernanke the broom and send his sorry a$$ down the road with Timmy and Hank under each arm and a load of bankers under their arms. That said, this is about the timing Clinton had with reappointing the biggest dumba$$ to ever grace the planet, Alan "Ayn Rand" Greenspan, the king of duped bubble blowers.
I'm not cynical about the timing, although it may be a hint of what is to come, which I'm not particularly hopeful of.
I'm pretty much of the opinion that whoever is now or has been in office needs to find another line of work and regular citizens should get used to serving in government.
I'm for "health insurance reform". I think we should have one payer and we should all negotiate as one pool so we can TELL our vendors what we will be paying for care, drugs, etc. There is a reason Canada has the same drugs for less cost than we do. They have one payer and they name the price. If we are worried about government doing that, then we should have an elected health board or we should be able to vote for a company on a reasonable timeframe basis (say the term of a Senator) that does it not-for-profit. Note: Not-for-profit is not the same as non-profit. They need to make enough to pay employees and costs, but not shareholders or dividends, and only up to the expenses incurred. And WE vote to approve the company. If this is about cutting costs, saving money and providing basic care for everyone, then let's get to it. Cut the middle men out, bargain as one pool, and if you want additional care and can afford it or your employer provides it, no problem, it's a free country. We could be one big insurance pool with one payer.
I'm surely open to ideas or concerns but I've pretty much had it from both sides. The answer is to put it in the hands of the people every three years.
I'll bet there would be companies lined up like they did for Medicare.
Re: Tell me it is not so
"Arctic sea-ice extent is about the same as it has been at this time of year in the past decade. In the Antarctic, sea ice extent – on a 30-year rising trend – reached a record high in 2007. Global sea ice extent shows little trend for 30 years."
You are kidding with this post, right? Little trend with artic ice? Do you enjoy reading junk science? Have you seen any of the satellite images published in the media in the past 5 years or so showing the extensive loss of sea ice in the Artic since the late 60's? Have you heard about 'state sized' chunks of ice floating out to sea? Have you heard about glaciers retreating in every part of the world? I guess it is a big media hoax. Perhaps some "basement" doctoring of images, false stories, etc.
I realize we are straying with these non financial posts but I felt compelled to respond. People, read some books on this subject like I did, pro and con. I think after doing so it will be very clear to you which side has the stronger thesis.
Frank
Re: SPNG
TOF
Are you looking in my brain? Those were my thoughts exactly as I was typing. But, I have to be content to be the timid lil brier rabbit nibbling at the middle of the good patch. I don't have much otherwise I'd be Bills client.
By the way, as long as I have invoked our hosts name....
Thank you pisan. For the insight that often goes over my head. I stay quiet in the back of the blog.
Thankful
Peace from North Puget Sound
Re: Bernanke Reappointment
Craig,
I guess Greenspan still holds the record, but Ben may give him a bit of competition before this is over.
Why Bernanke reappointed?
Couldn't it be that those who have been in on this charade from the time of Bush/Paulson, etc. all have enough knowledge of buried bodies to make it too risky to let them leave?
Books are usually written by the disgruntled after they leave. Keep your (potential) enemies close.
Re: SPNG
Great minds think alike! In due time hopefully everyone will be big enough to be Bill's client. My goal, however, is to have enough saved up to buy my own laundromat and/or dry cleaner within 2 years. I love those business models and don't really like working for the man.
Re: GS trading tips fall out
Isn't the State of Mass. suing to get the GS records of the "trading huddles"?
This could be the start of something.
Re: REALITY
Kaimu,
Excellent post. Thanks.
"Is everyone agreed that without Unemployment Benefits there would be riots in the streets of America?"
Rome made sure their citizens had bread and circuses! All this diversion happened to keep the people from focusing on the collapse.
That must be the equivalent of unemployment benefits and cash for clunkers.
96% Draw Down/ Survival Guide
Let's say I started July with a $1m trading account. After six weeks of body blows and concussions I'm down to my last $40,000.
After a walk down to San Andreas Lake and back, here's what I would do.
Let me start with a couple of thoughts, both of which are (IMO) absolutely true, and suspend them as a kind of backdrop to all of my other thoughts. Since they generally accompany suffering/despair of any kind, I'll just call them Corollary A and Corollary B:
(a) There are things we cannot do, or will not do, until we are forced to do them.
(b) Sometimes losing everything is the price we pay to save our souls.
In no particular order:
(a) I would immediately cease trading. True, many great traders lost it all (some more than once) and traded their way back. But the odds that I can do the same (at least, at this point in time), is zero.
(b) Be straight with the wife and kids. I would tell them exactly what happened. That I was directly responsible. That I am truly sorry. And that effective immediately, things have to change. Starting with me. (Corollary A)
(c) Thank God I have a loving family, a job I'm good at, and excellent health. All of which are more important (separately and together) than my account balance.
(d) Realize that the mistakes I've made, and the circumstances I find myself in, are in no way unique. Millions (if not hundreds of millions) have stood at this crossroad. Albeit alone when it happens.
(e) Make the easy changes. This would include changes I might normally not o/w make (Corollary A), but which in fact lead to real (in some cases, great) financial and emotional benefits. For instance, start eating right, sleeping right, driving safely, spending more time with the family. That in and of itself may add, let's say, $2m in future savings/benefits. Which may entirely offset my current loss.
(f) Make the hard changes. Take a hard look at myself. Forgive myself. Forgive others. Give to others. Make sacrifices. Realize what's really important. (Corollary B)
Now, we don't have to lose it all to do any of the above. But from experience, I know it's difficult to motivate myself without pain.
All I'm saying is, if you've lost it all in the past few weeks, or last year, or whenever- it's not the end of the world. For some of us, it can be the beginning of a better life. Even if you're only down 10%, I hope some of this helps.
Re: Bernanke Reappointment
Grym, if you tell the truth and do the right thing do you need to worry about tattle-tale books? :>)
There's your sign....LOL!
I'm voting for anything NOT R or D or 'incumbent'. That way we can avoid the books about liars by liars.
2012 should be a killer year for a third or fourth party. We owe it to ourselves to not listen to a single trumped up argument the R's and D's come up with to divide us once again. No guns, no abortion, no tax arguments, no religion, no science arguments....none of it. All D's, all R's and all incumbents gotta go....a clean sweep.
Re: Bernanke Reappointment
Craig,
Would the mainstream media permit it?
Re: 96% Draw Down/ Survival Guide
Yeah, but after today it's not reasonable to tell me I can't trade my way back!
Maybe for some but today was one of my better days.
I'm hoping my horrorscope is right....:>) so far, so good.
I think I'm getting the Vad mojo. Today I was HIGgy again. It was like body surfing for cash. Now I know everyday may not be like this, but I'm beginning to see that it can most of the time.
You have to pick strong trending charts from strong sectors with potential breakouts. Buy on the breakout. Use 1 min charts and RSI to trade breakout charts. Buy RSI in the teens/bottom of BB, sell in the high 70's-80's RSI/top of BB's.
Don't try to be a clairvoyant or outguess the darned thing. Trade what you see and cut losses immediately if it goes against you and wait for the entry again.
Trade one chart, one equity, up to 10% of port, no more. If you miss a set, wait for another. In between sets go in and hug the wife, you'll have time.
Re: The Four Worsemen or the Flub Four?/ Pale Rider
allen- Thanks for checking in, and I'm glad to hear you were able to trade your way back to new highs.
You know, sometimes it comes down to a single decision. Winning big/losing it all can hinge on a small loss, which is held far too long +/- successive additions to the position, until it wipes you out.
I don't disagree with your decision to leave the ultras alone. It was the ultralongs that allowed me to trade the portfolio back to early 2008 levels- I need to recognize luck when I see it, and not overstay my welcome. As for getting back to the '08 peak- I doubt it happens this year. I'm not even close. 2008 was a banner year for me, with a 35% return through September 26- a date I will not soon forget.
Re: Bernanke Reappointment
We're going to have to turn them off Bill. If you pay for cable/satellite, cancel them and use you tube or get direct feeds on the web. At least we can balance those with blogs and get two or more sides to a story. They're nothing more than hired lobbyists anyway. WE are the ones that **make** them mainstream...right? The only legitimate use they have is to cover news WE make. We have to make that unavoidable, kinda like the healthcare protesters. They are useful in that they are illustrating to regular viewers what works. The squeaky wheel gets the grease. We are going to have to get more people in the streets, as waiting for public gatherings scheduled by politicians is THEIR game and they will make sure to have more of their supporters on site.
Viral you tubes can help. Everyone should be sending that Bernanke you tube to all their friends and family and ask why Obama is appointing this chump again.
Another opportunity to question the existence of the Fed and the reporting of CNBC and Bloomberg too.
Re: 96% Draw Down/ Survival Guide
Craig- Well done. You're on your way to celebrating Vad Mitzvah in the Church of Opinionless Trading.
As for me, I may need to fast for two weeks while meditating on the (lost) wages of the sin of clairvoyance.
Re: 96% Draw Down/ Survival Guide
2nd - Great post. Having just turned 31, I'm ignorant when compared to most of you on this blog; however, I have experienced what you described above twice already in my life and I wouldn't trade the experience for anything in the world. I don't have a family yet, but I do have the perspective of what it feels like to have lost everything financially. In the midst of your despair, the knowledge you gain not only about your financial decisions but about your self helps shape you to become a better person if you allow it to.
The first time I went broke, I made enough money in the markets to try trading full time and I went on to lose all of my money in 1 year. The 2nd time I went broke, I made enough money in the markets to run a business full time, which subsequently required me to pump in so much money that I lost all of my savings in a year. What have I learned since then? Here they are:
(1) Most importantly and it probably goes without saying, you can go broke but still be rich if you have a great family, great friends and an open mind.
(2) You can always come back from being broke and become successful.
(3) You may actually need to go broke in order to ultimately be successful.
(4) Its better to be honest with your self and understand why you went broke so that you don't do it again.
In the 3 years since I last lost everything, I have turned around my business (which is now a side business) and made a good deal of money in the markets, both of which have gotten me closer to my goal of being a full time business owner in 2 years.
Re: 96% Draw Down/ Survival Guide
2nd, it only took four years....:>) Look Ma, no 2X4!
TFO...oh man, I wish I learned what you learned when I was 31, I'd be on the beach having a brewsky (or more likely a rum) with Bill right now....now it's serious business!
Although lately it's like playing space invaders or Asteroids for cash.
A little tense at times but it can be fun!
The public option
One thing I worry about is a private/public option that is like fannie and freddie where they are set up like a private and have the backstop of a public company. I still think we need to repeal the McCarran-Ferguson Act the made insurance companies exempt from anti-trust. Also, think back before we had employer provided health plans wasn't life much simpler and the system worked fine. Then came employer plans which were created because the government had placed wage caps on companies and offering free health insurance was their way around the cap. Unintended government consequences again.
Re: 96% Draw Down/ Survival Guide
teamonfuego-
Not bad for a 31-year-old. Actually, after a certain point (high school, maybe), 'ignorance' loses its correlation to age.
I like your third point- "(3) You may actually need to go broke in order to ultimately be successful." The (ideal) time to do it, of course, is when you're young and before you start a family.
The truth is many painful experiences reveal their value only with the passage of time (in some cases, I suppose, after death). It's impossible to appreciate them beforehand without a little faith.
Re: 96% Draw Down/ Survival Guide
"oh man, I wish I learned what you learned when I was 31, I'd be on the beach having a brewsky (or more likely a rum) with Bill right now.."
Craig- I like the Dear Abby reply to a grandmother who once wrote saying she was concerned about starting college because she would be 50 when she graduated. Abby's reply- "And if you don't go to college, you'll still be 50 in four years."
You can enjoy a mojita on the beach just as much at 61 as you can at 31. Probably more so than you would in the Hamptons, where it takes 3-4 mojitas just to numb your conscience.
Re: SPNG
Teamon,
I don't mean to rain on your entrepreneurial spirit - but buy a laundromat/dry cleaner? Water useage is under great environmental scrutiny - have you factored in the cost of technology that may be needed to meet new standards? State-of-the-art dry cleaning chemicals & equipment are expensive but necessary to meet environmental standards. Energy costs are skyrocketing. Those who use these services will do so only as long as there is room in the wallet after other more non-discretionary items are accounted for. Let us know why you see a big opportunity here. I am genuinely interested.
Re: 96% Draw Down/ Survival Guide
Ugh, painful memories you invoke, LOL... All your points are great, I just don't know if all of them are universal. I clawed my way back from worst situation in a somewhat different way. I found myself having lost 75% of my trading account which was minuscule to begin with - just 40K, and at that point in time I was down to 11. Wife and two kids to take care of, money to live on for maybe 4-6 months, no other sources of income and NO RIGHT TO WORK - I still had a visitor status, and my immigration case was making its way through the intestines of immigration/security bureaucracy in no particular hurry. Let me try and go over your points one by one and try to describe how I acted in that regard... maybe will present another angle and help someone with personality closer to my type.
(a) I would immediately cease trading. True, many great traders lost it all (some more than once) and traded their way back. But the odds that I can do the same (at least, at this point in time), is zero.
This wasn't my case as to that point I felt I got all the necessary lessons from the market and made all the right conclusions from them. I just paid for them a bit too much in terms of what I could afford to pay.
(b) Be straight with the wife and kids. I would tell them exactly what happened. That I was directly responsible. That I am truly sorry. And that effective immediately, things have to change. Starting with me.
OK, this I didn't do, and didn't even think of it for a second. I function differently. I "encapsule" myself and start resolving the problem, not making it their problem too. Maybe that's an approach I retained from business times in USSR and problems with mafia folks were not something I would consider sharing with family - why frighten them beyond what's necessary for them to know in order to stay safe, to understand why we have those bodyguards around, why kids are being driven to school which if just a shirt walk away...
(c) Thank God I have a loving family, a job I'm good at, and excellent health. All of which are more important (separately and together) than my account balance.
Didn't have a job or right to it at the moment, and just HAD to make trading work - come hell or high water. Loving family is great but I must feed them so account balance was kind of crucial :)
(d) Realize that the mistakes I've made, and the circumstances I find myself in, are in no way unique. Millions (if not hundreds of millions) have stood at this crossroad. Albeit alone when it happens.
Interesting... i didn't have this feeling, rather felt that my situation was very much unique and I had no someone's experience to refer to in dealing with it. I can see how this feeling can be soothing but I wonder whether it would take away my edge at the time, my sense of urgency, this infinitely sharpened perception of everything happening with me as a trader... Then again, I function well under extreme pressure, it could be different for other personality type.
(e) Make the easy changes. This would include changes I might normally not o/w make (Corollary A), but which in fact lead to real (in some cases, great) financial and emotional benefits. For instance, start eating right, sleeping right, driving safely, spending more time with the family. That in and of itself may add, let's say, $2m in future savings/benefits. Which may entirely offset my current loss.
I guess it's just a very different situation... having nothing to fall back onto, I was all in trading, in applying the understanding I derived from the lessons I learned...
(f) Make the hard changes. Take a hard look at myself. Forgive myself. Forgive others. Give to others. Make sacrifices. Realize what's really important. (Corollary B)
Forgive myself - some variation of it was present, good call. I guess in a form of "stop beating myself for all those losses, stop being angry with myself, look forward"...
Back to happy memories! Hey... these hard ones become happy ones now too, in a some circular way... become part of what I am I guess :)
Thank you for the post 2nd_ave, thoughts and memories provoking.
Re: 96% Draw Down/ Survival Guide
Vad- Your story reminds me of an anecdote I once read about Paul Newman (or maybe it was another actor, it doesn't matter). At one point in his early acting career, he wasn't doing well. But he had a family to support. He ended up one day in the boiler room, and had his moment of truth. I think he told himself it was now or never, and he had to do whatever it took. We know how things turned out.
Re: Last Contango
RUATR8R, your acronym haunts me "Are You A Traitor"???
As a coincidence I attended a Transition meeting in my neighborhood comprised of local farmers, greenies and tinkers contemplating the downward curve after peak oil (think no gas or electricty) occurs and how folks will cope on a local level. It's an international movement! Those who figure out how to get food to those who need it and the rest of us learning to spin our own wool might become more essential than we think. EVEN in America. Wonder how many folks in Kaimu's turf are creating their own currency as well as sharing food stuffs? I actually think a lot of Americans will rise to the occassion. The potluck by the way was fabulous.
Re: Gold and its value...
Dr. Cosa, I thought John McCain was the original Maverick? You mean there are others???? :)
Vad- Bear roast/ Does it have to be well-done?
"My feeling is, it's in progress. Skewer they put through the bear today must now be put over the fire and turned a few times so the roast is perfect... I would be surprised if today's upward move was all they could squeeze. New highs, pain exceeding what shorts can tolerate, volume suddenly coming in, fueling higher and higher move, turning into parabolic spike... when I see it I am confident we are putting top in."
Vad- Your post above is from August 12. For a moment this morning, I thought the spike was in play (didn't DIA print 96.82 for a second), yet it fizzled out. What's your take now?
Re: Gold and its value...
loannetter- James Garner was the original Maverick ;)
Re: SPNG
Terry check out this review of Suds and Duds.
http://preview.tinyurl.com/mq6khg
or goog it
Re: Vad- Bear roast/ Does it have to be well-done?
Let me put it this way: I still haven't seen that last spike, but the way things develop I am more willing to accept that top can be reached without it, with just a sizzle rather than with full-blown roasting to well-done.
But (there is always but) - the way things go and if we reverse to a downtrend in such fashion, I won't expect too much downward move... rather some spooky sharp drops, then fast and furious recovery and new highs. Just as "sell in May and go away" would be a disaster this year, who is to say "September is historically the worst month" won't turn just opposite too...
Re: Vad- Bear roast/ Does it have to be well-done?
Vad- I've been thinking about this a lot lately. The last big move down was pre-internet trading. Yes, I know the big guys move the market, but would this have an effect non the less? Sorry, man. I can't do what you do.(or at least try) I have to make some calculated bets and go to work. TIA
Re: GS trading tips fall out
Hey, this situation reminds me of the NY AG and his campaign to get the banks to pony up for all those stranded Auction Rate Securities. The Feds were doing absolutely nothing. My family certainly owes a debt of gratitude to that AG - we got back over $100k which would no doubt still be sitting illiquid in that Smith Barney account if things were left up to the tender mercies of HB&B and their cronies in the Federal Government.
Perhaps our best hope is the states. And Bloomberg too!
dr. cosa on gin and tonic
Dr. Cosa and Gin and Tonic
it was one of those moments, one every man has from time to time, or at least one hopes.
difficult to explain and even more difficult to convey our local hero felt that odd sense of admiration so often felt before men of great design and even greater grandiosity.
a raven-haired yet political minded woman of immeasurable beauty intruded in our conversation rather abruptly (is there any other kind of intrusion?)
and ventured some rather remarkable points, making me look quite the fool. (the first of many such instances that night)
my good friend and colleauge offered complimentary words to our uninvited guest, the kind than reminded me of such comments in general. we were somewhat surprised an attractive woman could muster the gall to interrupt a doctor of the highest order mid-sentence and proceed with well-read enthusiasm to offer her own points of view.
i wondered out loud if fate had brought me to this woman, or if my own ineptitude allowed me to yet again show up drunk to a social gathering of like-minded medical professional's, well beyond my element.
she suggested my change from doctor to drunkard so swiftly was Kafka-esque. naturally i had no clue what she meant as i spoke so little rumanian
Von Clausewitz once said "no military leader has ever become great without audacity", if only i had recalled that before she waltzed away.
i would proceed to drink ever-more that night, oblivious to the storm clouds gathering.
gin is no friend.
dr. cosa MD
Re: REALITY
kaimu -
Great post. You said:
"I mean the house was built only once yet it was sold many times over, not the house itself, but the bank kept selling the mortgage many times over. So if you add up what all the various owners paid for that $10,000 home it must be near $1mil over a 50 year period."
I ran some numbers. Assume mortgage terms average 6% interest, 20% down, 30-year amortization, 10-year balloon (refinance) on that $10,000 home appreciating to $300,000 over five decades but with the final decade 100% financed with no equity maintained. Mortgage would be $8k, 66k, 124k, 182k, and then 300k in the final decade. In previous decades, equity is assumed to be maintained at 10% of value with some minor appreciation pocketed along with the income tax break on the interest. The major equity build-up in the final decade would be lost in the current market crash.
This is a conservative group of averages. Down payment could be 10%, not 20%, in the first four decades and interest rate could average higher when considering the peak 18% rate in the 1980s, for instance.
Using the given conservative average estimates, accumulated interest would be $372,594 + $248,977 debt balance for a $621,570 total fiasco for the past and current bagholders. That's over 6000% paid out on the initial cost of the home and going much higher since 40% of that outlay is existing debt. And this doesn't factor in the loss in depreciated improvements requiring more and more maintenance.
Brutal no matter how you cut it.
Cheers.
FTWR
Mark - Did you see the move?
Re: 96% Draw Down/ Survival Guide
A card from my daughter....
One mojita, two mojita, three mojita, floor.
Re: FTWR
Si, my flightless friend. My UTF order about 3 weeks ago @ .39 missed by .01. Honestly, I keep in touch with these guys constantly. Unless they are being bought out, or obtained a huge contract, it doesn't make sense. Wouldn't it be interesting to see some news tomorrow?
FWIW...FCX's move today should be considered.
Re: FTWR
Mark - I'm not quite sure what "should be considered" means, as an entry or exit? FCX just bounced off the upper trend-line for the third time, from what I see. Even though the broad indexes were up, momentum has slowed across the board of 50 or so I'm watching (profit taking?).
So we may get a minor pullback here, enough to allow the shorts to get their panties in a wad and ZH to fire off a few articles about how terrible the economy is.
From my perspective, the global economy is improving. Odd thing is, the real estate market in recession-proof DC kinda sucks worse than I've ever seen before from what I hear.
We're a lot better off now than this time last year...
Re: Last Contango
People do surprise. Both in positive and negative ways. I'm harmless as far as my acronym. I think I was so disgusted with the whole meltdown that I felt it was appropriate. It is a valid question. How did Madoff get away with it for so long? Now JP Morgan is "rumored" to have pulled their money pre-collapse? Does anyone know as to the validity? Why only one SEC person? Are all of these things Ponzi's? Why not the wife? You scratch my back and I'll scratch yours? It all smells so bad. Yet, the general public is okay with 150? Now the other guy (accountant) is being investigated/prosecuted? Just two guys?
Someone on this blog found me on facebook via my email. I thought about accepting but I've since deactivated the account because of time constraints. Some of you seem to prefer anonymity. I haven't been on here long enough to know all of you. Bill mentioned he thinks we should all be speaking up so those in power will know we are serious. I agree. We should come together to advocate for free markets.
I've got lots of capable friends. Some of my neighbors don't seem that way. What I don't see scares me the most. The human spirit is really amazing...I don't doubt Americans will rise up when they finally see the writing on the wall. I don't like seeing people in pain. I'm a planner. I've got five young children who are all passionate and gifted. I don't want to bring them up in a country where I see so much uncertainty. Our government is spending their money and my grandchildren's money. As an individual I want to fight. As parent I want to take flight (deep down it is the survival instinct). America is great. I just want it to be the best once again.
Re: FTWR
CP- It seems to me we have been rising on a 3 legged stool. The chair type to be clear. Energy, Finance, Tech. Energy took a hit today. I keep thinking about my clients that are happy where their stock prices are. To me, that seems like a top is in. I also agree with Vad that if there is a pull back it will be mild. Too many Fund Managers have missed this rally and their jobs are on the line. Thus, I suspect, new money waiting. MF are all (OK, mostly) buy side.
I also heard on the radio today an interview with the woman who is in charge of the CCI survey. My take away from it was her comments, loosely, was...Don't make the mistake that the rise in the CCI today as a signal the buyer is back. In fact, most surveyed are less concerned about their jobs, but more concerned about household incomes. She cautioned on expecting to much from the consumer in the months ahead.
Yes, we are in a large re-stocking phase now, but if there is no one on the other end of that movement to buy product, well...?
As far as FCX is concerned, in my business copper is king.
Re: FTWR
Fair assessment. Copper- Yes, it's in the center of an ascending channel and looking reasonably strong. Nothing to worry about at the moment until/unless today is a precursor. Aug copper down slightly today but subsequent contracts were up considerably more.
The trend seems intact.
RIP Ted Kennedy
Ted Kennedy has passed away.
Re: dr. cosa on gin and tonic
Great story! Throw in some mescaline, ether and Richard Nixon and you would be closer to DR. Thompson.
Bob
Re: SPNG - Question for VAD
TOF/Photogray
SPNG is looking interesting. On the daily the BB's have tightened nicely, Parabolic SAR is likely to flip from sell to buy and the spike yesterday may well be a harborer of moves to come in the near future. It's not showing a breakout signal that I recognise on the 15 min. chart.
VAD, is the V bottom SPNG made yesterday a bullish signal for you? My own $.02 is yes, recovered strongly and on increasing volume.
The daily chart is showing the breakout pattern I've come to recognise and love. I've never played such a large, one month break out pattern but if the chart signal works, SPNG could see a decent run up in the coming days.
Worth watching.
DYODD etc etc
Re: REALITY
ALOHA !!
Dr Strangelove posted-"Using the given conservative average estimates, accumulated interest would be $372,594 + $248,977 debt balance for a $621,570 total fiasco for the past and current bagholders. That's over 6000% paid out on the initial cost of the home and going much higher since 40% of that outlay is existing debt. And this doesn't factor in the loss in depreciated improvements requiring more and more maintenance. Brutal no matter how you cut it."
So thats the AMERICAN DREAM we have all been lusting after all our lives and our parents lives and our kids future lives. The dream of never ending debt ...
I go back to my original comment and you wonder why must it be this way? Who died and made banks GOD?
So many PONZI con games I doubt we can count them all.
I still have yet to hear anyone come up with a reason why the US FED should exist another day, even with the reappointment of Bernanke!
If we are financing $6.5TRIL USD then why bother with INCOME TAXES any more? For what? The amount of taxes they collect don't even come close to paying for 1/4 of the outlays.
$8.2 OUTLAYS
(1.7TRIL TAX RECEIPTS)
---------------
$6.5TRIL FINANCED
Now if the US government was really interested in boosting consumer spending then why not eliminate income taxes?
The real world has nothing to do with NON-GAAP budget deficits! And which budget do they refer to the "on-budget" or the "off-budget", they keep two sets of books? They issue "non-marketable" fiduciary paper to the last remaining solvent trust funds left in America and they have the audacity to call those "securities"? How much of that "special garbage" did the US Treasury issue this FY 2009? $40.6TRIL USD worth!
This whole con reminds me ... Its like that old Bugs Bunny cartoon where he and Yosemite Sam are dividing up a pile of gold coins. Bugs Bunny is Goldman Sachs ... He starts out saying, "One for you and one for me!" and each get a gold coin. Then Bugs says, "Two for you and one, two for me!" and bugs gives Yosemite Sam one gold coin and places two coins in his own pile as he counts "one" ... "two", so now Bugs has three coins and Yosemite Sam only two! Next Bugs continues counting as Yosemite Sam has yet to catch on to the Wabbits trickery, "Three for you and one, two, three for me!" Bugs gives Yosemite Sam one more coin for a total of three and he gives himself three more coins each time he counts one, two, three. So now Bugs has six gold coins and Yosemite Sam only has three. Bugs pile grows exponentially after that. By the time Bugs is done counting, his pile of gold coins is huge and Yosemite Sam only has a tiny pile. It is only when Yosemite Sam sees the two piles next to each other that he finally sees the scam and gets mad at the Wabbit for cheating him. That seems to be the problem ... the central bankers, like Bugs, appoint themselves to count the money but never let WE THE PEOPLE see their "pile" on the table next to ours, so we never really know just how bad a deal we have gotten over the decades. Our only clue is they have the mansions and the private jets and we have the double wides and the public bus system!
IT IS WHAT IT IS ...
Re: SPNG
Terry - I've done a lot of research on those businesses and you're absolutely correct. One major drawback is the water useage. Well, more so for the laundromat.
Vad, there is a multitude of options on your
preferred news source. Which one are you relying on?
https://www.tradethenews.com/subscribe.asp
energy or equity text
JL normally doesn't play under a dollar, but he has SPNG as
an overnight hold. Watching for entry point today.
Re: SPNG - Question for VAD
Les,
not my type of stock but purely from chart, FWIW: looks attractive, break of .18 would be a buy signal.
I use equity audio.
Re: 96% Draw Down/ Survival Guide
teamonfuego,
Now that I see your background, I am going to comment about the one stock you seem to be writing about often -- too often I think. Spongetech (SPNG.OB) is a little penny stock that trades over-the-counter that leads most chat boards in number of entries. That ought to tell you right there, this is not about investing (even speculative investing) or trading, but gambling on a stock promoter.
http://tinyurl.com/lenrd9
How can you take seriously a company that spends shareholder capital to issue news releases of the kind this promoter does, including six "important" releases in the past five days?
Aug 24: http://tinyurl.com/nr528a (Appointed public auditor to help make this a world-class company)
Aug 24: http://tinyurl.com/lv6aep (Announces new website to help investors)
It's great that you are a young person who is learning stuff here, but I am going to recommend that you stop listening to promoter's stories and start learning the art and science of how to trade the shares of high quality companies. I just don't want you to end up as a person who buys lottery tickets as your retirement plan.
If you are going to be honest with yourself, as you say, try discussing serious trading concepts here. If you want to stick to the SPNG, why not share with us an ongoing record of all your trades and why you made them, why you closed them, what you learned from the experience, etc. I'm sure there will be some experienced people here who will give you some help along the way whatever path you take. Good luck.
I hope you appreciate my words here because I have seen too many young people not survive the challenges of capital markets because they used them to gamble.
Re: REALITY
Kaimu, RUATR8R,
"Is everyone agreed that without Unemployment Benefits there would be riots in the streets of America?"
In "Brave New World", Huxley gave the people movies with wild stimulating effects and Soma to keep them mellow.
All I have is cable TV with re-runs and propaganda and must buy my own scotch.
That's OK, I get the local news and have more time to read.
My Social Security will get no increase, but my Medicare deduction will be larger. (Well, anything I get is more than I ever thought would still be there by 65.) It's so hard to protest with people in walker trying to carry pitchforks.
"Always look on the bright side of life". (from The Life of Brian)
Re: Bernanke Reappointment
Craig,
I have voted for alternative candidates, (John B. Amderson in 1980, Ross Perot) but would really like to have someone I "could believe in" who had a chance of winning.
The two parties have had a lock on elections all my life. Perhaps when enough people have had enough of this rigged game we'll see a voters' revolt. I think the massive hit to savings and job losses may combine to give us a choice by 2012.
Judging by my area with high unemployment, cutting of services (including emergency facilities now being flooded with people who've always been hard workers) increasing real estate taxes, inability to sell houses to move for a job — things are reaching the point where local and state politicians are in jeopardy.
We have a ways to go, I don't think it is quite widespread enough to get national change yet, but getting there.
Re: SPNG
Teamon,
For me, the takeaway from the article on Suds 'N Duds was the closing statement "laundry just got fun". Find a boring business or activity which is segmented ( no chains, franchises etc ) and differentiate by making it fun to be there, or fun to do what they do. Thanks for sending the link !
Re: SPNG
Terry - that is exactly my goal with the laundromat should i get into that line of work...
Re: 96% Draw Down/ Survival Guide
Bill - Thanks for your concern on this one and it is the reason I asked you in the first place if you are ok with me discussing it. When I originally invested in it I only put $1,000 into it. It happened to grow quite a bit and since that time the amount of money I have traded in it has only been "house" money. I found the company when I was watching New York Mets baseball games and saw their ads so I went to a local CVS and tested out the product (a car wash and wax sponge). It worked and I felt comfortable enough to put only a small amount in it, knowing full well that penny stocks not traded on a respectable exchange are subject to a lot of fraud and risk.
I'm an open book on my trades and I have posted all of my other trades here for people to see. I think 2nd or Mark or anyone else can back me up on that. I'm currently only in SPNG and SPY, which I bought when it re-tested its 200 DMA back in mid July. I have lost money most recently in MS, TSFG, HBAN, RF, and MTW but I was stopped out on all of those at small losses, having learned through experience (and reinforced through this blog) to set stops so that my emotions are taken out of investing/trading.
IMMR
IMMR, in case you aren't aware of the company, has patents on technology called haptics. Haptics is essentially feedback that you can feel when touching a touch screen device. I've posted on this board a few times in the past that I think this is going to be at the center of the technology revolution I see coming over the next decade, which is touch screen devices. It is one of the themes that I mentioned a week or so ago that I'm looking to invest in. And I believe that IMMR has the potential to be a significant player in this field.
IMMR has had its fair share of setbacks and is by no means a "Safe" investment. They are operating at a loss and don't appear to be close to break even. They do have $80 Million in cash and are debt free (not bad for a $115 Million company). They recently announced that their medical devision has been improperly accounting for their revenues for the past few years after doing their own internal audit. This dropped the price of the stock, which appeared to be in an uptrend, from approximately $5 to $4/share.
Their licensees include NOK, LG, Samsung, Sony. They recently signed on CY and IDTI so it looks like they're focusing on working with semiconductor companies to get their technology imbedded in chips that are used in a host of different devices.
Technically, the stock is in an uptrend starting from March. I think it is a good time to invest in it if you believe in the long term theme as there is a cloud of doubt surrounding the accounting issue, which they recently announced was most likely only a timing issue rather than accounting errors, which could have pointed to more serious issues with internal controls.
Anyway, I'm looking to put some money into it soon. I believe the market this company is in will be very large in the future. I think the iPhone device, which I've posted about recently, is a game changer and is speeding up the adoption of touch screens in all kinds of devices.