Cara's Commentary & Community Chat, Wed., Apr. 1, 2009

NYU,

Would you be short GE, with its longer lived situation in the Mart to Market most likely priced in...I could be wrong on this.

...

Mark- That's what trading will be for me today. No edge- watching from the sidelines until one develops. Only positions right now are C, BAC, and SLW. Trying to build longer-term holdings in these. Targeting SPY 76.60 for re-entry into the buy-and-hold.

buy limit 43.25 pre open.

sell stop 28.50. Close + 10 day ATR. Scale selling.

long at 43.25. Now 43.10

taking a little off at 22.26 that i bought at 22.20. whopping gain there!

2nd
not seating out
will be in and out of FAZ

And then there's Vinod, back out in the water ;)

2nd- Nothing cooking on this side of the bay either. I've got SPY @ 74.00, but that's just splitting hairs.
Might make a small play if something looks way overdone.

in FAZ 21.90

Who went short GM this morning? It came as close to being a "no-brainer" trade that I've seen so far.

TOF- Darn near the high so far, nicely done.

I am no expert but I am told by my guy not to run two anti-virus programs on the same machine. They recognize each other as malware. FWIW.

long lvs and auy

Man, the Europeans sure know how to throw a party...er, protest.

Out of both a a profit...looking to get back in but it really makes no sense to post trades anymore theyre so lightening fast in a lot of cases.

Just my impression, but there seems to be some (unexpectedly) strong buying in financials right now? Be careful.

Shoot, it's already below where I sold it yesterday. GS, MS smartly higher.

both slightly up, very interesting

I am no expert but I am told by my guy not to run two anti-virus programs on the same machine.

Yep, bad idea. Anti-virus programs are also big resource hogs, so also you double-down on your pain if you try to run more than one. Get ONE well-known program and keep it up-to-date.

long eslr

It usually signals the beginning of significant counter-trend action. JMO. Be careful with FAZ.

Order Date Status Attempt Action
Buy 50 shares IBB at 65 Limit GTC 03/26/09 Filled

04/01/09 09:30 Filled 50 at 65

Buy 100 shares TBT at 43 Limit GTC 03/27/09 Filled

04/01/09 09:30 Filled 100 at 43

Sell 1,000 shares UXG at 2.25 Limit GTC 03/31/09 Open Cancel

Sell 200 shares TZA at 51 Stop Loss GTC 04/01/09 Verified Canceled

Sell 200 shares TZA at 54 Stop Loss Day 04/01/09 Filled

04/01/09 09:35 Filled 200 at 54.0099

Buy 150 shares FAZ at Market Day 04/01/09 Filled

04/01/09 10:03 Filled 150 at 20.825

Just waiting for a better entry.

Short side of issue on auction day has been a consistent winner.

Hmm perhaps that's why gold got hit this morning. Bid up $15 before the open, and slammed right after.

Photos (converging on London's financial district)
http://tinyurl.com/dl3cc4

Live Video feed
http://tinyurl.com/dz6rgk

EDIT: it is turning violent. a group in the crowd just smashed through the RBC bank lobby window.

Is the current rally in the financials warranted? I mean, we don't really know what the changes to MTM will be and how they will impact these companies, do we? In fact, we don't even know if they will remove MTM...I believe they (FASB) said they will look into altering the rules...

"Due to high call volume we are unable to take you call at this time. Please try again within one hour." Repeat, rinse, ....@#$%^&*()
S

Anybody trying to catch that knife?
I bought it indirectly today through IBB.

No problems w/ Interactive Brokers.

intraday head and shoulders? granted, i don't know much about TA.

Buy the runor sell the news.

bsi87- OK, thanks.

From Bloomberg two days ago:

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

Four days after U.S. lawmakers berated Financial Accounting Standards Board Chairman Robert Herz and threatened to take rulemaking out of his hands, FASB proposed an overhaul of fair-value accounting that may improve profits at banks such as Citigroup Inc. by more than 20 percent.

The changes proposed on March 16 to fair-value, also known as mark-to-market accounting, would allow companies to use “significant judgment” in valuing assets and reduce the amount of writedowns they must take on so-called impaired investments, including mortgage-backed securities. A final vote on the resolutions, which would apply to first-quarter financial statements, is scheduled for April 2.

By letting banks use internal models instead of market prices and allowing them to take into account the cash flow of securities, FASB’s change could boost bank industry earnings by 20 percent, Willens said. Companies weighed down by mortgage- backed securities, such as New York-based Citigroup, could cut their losses by 50 percent to 70 percent, said Richard Dietrich, an accounting professor at Ohio State University in Columbus.

While helping lenders report higher earnings, FASB’s changes may hurt Treasury Secretary Timothy Geithner’s plan to remove distressed assets from bank balance sheets, Dietrich said. Allowing companies to hold on to assets without writing them down could discourage them from selling the securities, which would work against Treasury’s objective to resuscitate markets, he said.

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

XLF just can't break the wall at $9.15 in the last few days, it may today. But if it can't before the MTM announcement, there could be a selloff unless something better than expected happens. That scenario is unlikely imo.

NOT a trading advice.

you have mail

"Why is my gut instinct telling me to short/fade this rally when my intuition says to buy the dips?"

Try more fiber.

This is trading advice.

BDI - Maybe shipping companies are dropping their prices to get things moving?

If it dips below 19.00

"Why is my gut instinct telling me to short/fade this rally when my intuition says to buy the dips?"

tof- Interesting how you differentiate between gut instinct and intuition. I would go with your intuition. Why? Gut instincts are tinged with emotion. Intuition is informed with a higher level of thought.

I dont expect this to last too much longer.

just my opinion.

Repeat comment from late last night. I checked out www.bestfreecharts.com after Alphatrends mentioned them in a video about vwap indicator. I'm just a TA wannabe but I now have my holdings in a folder and am inputing a watchlist. From discussion here I know I need to see 15 minute and 5 minute charts with a little more ease than IB does it, no complaints about IB though. I love them and am sure I am only scratching the surface there also.
Re: Gut feeling, I was already short(with faz, now underwater) and still feel short is the place to be(just not financials) so I started a small position in SRS
fd, long GMO, WHY,HGU,KRI,LYM...yes overweight in several respects! LOL
peace from Whidbey

When you pull back in timeframe you see the trend. Try SPY for 6 mos or more, 12 mos will surely show it.
For that to change we need to break above the resistance laid down since October.

I think the daily says the same more or less.

2nd - I think I'm going to go with my gut, which as you say is the same as my intuition. Relaxation of MTM is my reason for buying, but this will compete directly with the banks willingness to sell assets under PPIP.

There will be beneficiaries of the relaxation of MTM...i.e., those institutions that aren't banks (and therefore aren't impacted by PPIP). I think MBIA may fall into this category. But those institutions holding bad assets that need to sell will simply continue to hold on to them as a result of easier MTM rules. That means bad assets stay on the banks' books, which means less lending gets out into the economy, which means this rally may be topping out short term...

CDE long breakout over a buck

back to the beach

2nd
I want Buddha to smile toward me
Brought –OEWPL at 4.90 and looking good

just opinion, looking at individual stock volumes today vs avg volumes.

Check out c, bac, gs, jpm, goog, ibm, amzn, gg, su. etc. you can go on and on.

shark_attack
Digging gold in a mine or what?

Indeeed, we've used AVAST for over five years now with enormous success. The program plays well with every type of software we've added which is more than I can say for the costly Norton or McAfee products.

I would love a rally. i just dont see one yet. the lack of volume is telling me so.

looks like we are in the bull mood for the rest of the week :)

Because everyone now thinks we will?

Ha! Craig shoves a stick in our spokes, bringing us back to reality! :)

This is the kind of action I like: USO down 3.3%, ERX up 7.5%. As I said yesterday: "laggards one day, leaders the next day." ERX is not an absolute leader today but a leader relative to its fundamental -- oil price. Tomorrow, the oil price may very well rebound and push ERX even higher, even if the general market will be down.

For investors' sake, I really hope they don't change this. Allowing banks to mark these assets at whatever they believe they're worth only adds more opaqueness to the marketplace.

bigwad1,

What do you use to monitor options trades?

VR

If anyone wants to get in touch with FASB members to show your displeasure with the relaxation of mark to market rules, which will only add opacity to our markets, you can reach them here:

http://www.fasb.org/talk/emailadd.shtml

The more I think about this rule change, the more it bothers me. This is not what we need right now...changing accounting rules to help out the banks (which not only screwed the whole world up, but are already getting our money through taxpayer assisted bailouts) will only inspire less confidence from the rest of the world.

Here you go, Craig. The last time I posted this one was 2007, when we were about to go down. This time, I think we're about to go higher.

http://www.youtube.com/watch?v=G9bt3bmnsPY

I use etrade options chains.
You can see real time calls puts greeks straddles collars marriedputs strangles etc.
You will have to have an active account.

...

20% of allocation

Perhaps another equally or more important concern would be that FASB is an independent private sector organization. So why should Congressional chairman Kanjorski have oversight when it's the job of the SEC to work with FASB in determining the rules? So some big investment banks start monkeying around levering up the planet with no regulation whatsoever while funneling cash into elected official's pockets and we trust any of this? I don't buy any of it, we don't know 1/10th of what's going on and M2M won't change anything one way or another because it's all under control of you know who. This is all a show for our "benefit".

These guys are all screwed up when it comes to mixing up a cocktail of unethically conflicted interests.... Just pitiful, I don't believe a word of this nonsense anymore.

Does not actually appear that the majority of Americans are disenchanted with his performance - Wall Street is still seen as the villain, according to the recent Washington Post/ABC News Poll.

http://tinyurl.com/cqy8gv

Like you chickenpookie, I don't believe a word either. They are so conflicted so many ways they no longer have any clue of which way is up. Windbags trying to get some face time that's all.
S

In Faz this am 19.48 out a few moments ago @ 21.17.
Thanks to all here pointing out the MTM rule change vote.
As Mr. Cara says risk management...
whichever way the MTM vote goes tomorrow. I will be on the sidelines.
also TA advice here helps me to trade better.
Bear E

"Wall Street is still seen as the villain, according to the recent Washington Post/ABC News Poll."

Probably just because the public isn't fully educated on the erotic symbiotic relationship between HB&B and the beltway criminals.

No, you just bring up the month or months of any particular option/options.
You can see any option information you are looking for, but no alerts that I know of.

FAZ,skf,even srs ouch

Mark- I have to go with my instincts here. If it's wrong, it's wrong. FIDSX/FSPTX/FSENX in equal allotments.

I've been gone a few days so don't know if anyone posted this:

Big Banks' Recent Profitability Due To AIG Scam?
http://tinyurl.com/cfunfv

It makes for great reading (if it's accurate).

2nd.
Right or wrong certainly admire the conviction and the quick trigger.
Good luck,
Bob

GRYM,
With all due respect, I wish to disagree with you about Obama being a master playing the Media. You see thru him. I do not believe him. The emperor has no clothes! I hold the term master to someone that has a lot of experience at something and does it with ease and fluidity. Alas today is April fools Day!
Bear E

2nd- That's all I have, and the ability to listen carefully. Thanks for the heads up. While you were doing the cha-cha with the 3Xers, I bought big blocks of XLI and XLB before I left. Played TNA at the close..In 17.69/out 18.42.
Got to run.

Thanks, Bob.

Cornerstone- I wouldn't say that. You're not a gambler. I am ;)

I found out a little more info on the meeting taking place tomorrow to discuss mark to market accounting.

Primarily, they will be discussing the possibility of issuing two sets of income statements:

(1) a standard income statement that includes gains/losses based on assets valued according to an estimated recovery value, which can be derived by taking into account whether or not those assets have losses on them and how long they have been in a loss position (e.g., a mortgage that is not being paid off for x amount of months), as well as what type of recovery value can be estimated.

(2) a comprehensive income statement that incorporates true mark to market values and not mark to estimated recovery value. This will be no different than the current standards.

From a regulatory standpoint, the tangible common equity that regulators require banks to hold will be based on financial statements in (1) above should these proposals pass. Investors will still be able to see how crappy the assets are when they are marked to the market and compare those to the assessed values by the banks. They will be able to analyze the difference between the realistic income statement and the fantasy income statement.

Essentially regulators are relaxing their standards so they can keep banks in business longer because they dropped the ball on regulating them. They will use the standard financial statements (and not the comprehensive financial statement) when determining if banks meet their required reserve ratios/tangible comment equity requirements.

Pascal, I really enjoyed your presentation.

I've seen many media websites show the picture of protestors in London behind a banner saying, "Capitalism Has Failed". I would like to know what this community thinks of this assertion.

I think we've had too much dishonest capitalism & dishonest government. In the U.S., we're no longer a nation of laws and blind justice. It's increasingly becoming a matter of who you are and who you know. That sounds too much like Russia or China to me. Enemies of the state - beware!

capitalism is not perfect but it is the most successful social and economic system that is know throughout history. It rewards the smartest and quickest and provides opportunities to work your way out of poverty. It is a brutal system for the weak however and they rely on charity. But even charity does not work if everyone is poor.

yes vinod, but wasn't all or most of the progress made in recent years only possible because if it was financed out of phony money, money that did not exist? Wasn't it all a giant Ponzi scheme?

If the price of the "success" will eventually be paid by our children and grandchildren, was this successful? I don't know the answer, but a lot of things were not real.

BTW, was GM at one point the biggest company on Earth? (!)

Sio2, I think capitalism is better than the other evils, atleast it promotes individuals a candy to succeed, which in turn creates the thought process, effort etc etc for innovation & efficiency (do not mean financial innovation!!!). Who knows, maybe we are already drawing from our future generations in terms of life sustaining natural resources etc.

"we can put that check in a money market mutual fund that will reinvest the earnings into foreign currency accounts with compounding interest and...its gone..."

Bear E,

Well, I've watched him for years now. Voted for him once (actually voted against the other guy — I've done a lot of that) but never again.

He did manage to get elected, seems to still have the media on his side, so even if an increasing number come over to our way of seeing him, I expect he will manage to keep a significant poll number going for a while.

I have some hope he will not make it for a second term — the majority of Americans can't be fooled for that long. Tell me they can't!

OK, time for me to look stupid....again. When looking at the futures on Blommberg, it shows DOW 7720 +2. DOW close was 7761. What gives? My CME quotes are not like this. TIA

http://tinyurl.com/c23529

From the perspective of market bulls, the best (positive) reaction would be the non-event. A sharp sell-off would, of course, be a bad thing. A sharp rally, on the other hand, would be sold immediately. A mild sell-off/rally would clear the anxiety surrounding the 'event,' and set up the potential for a delayed (and more sustainable) rally next week.

Mark- You're probably looking at Jun09 futures?

7727 7782 7705 7754 +36
(ie, if 7754 is +36, then the previous close must have been 7718)

http://tinyurl.com/dz4jsf

bsi87- Just got back, thanks for your take.

Check out "The Dirty Dozen." Hilarious.

Mark- Yes, those are Jun09 futures, which previously closed at 7718. In your view (21:31) trading at 7764, up 46, right? Note that June futures prices are not calculated on the basis of today's close. For your purposes, all that matters is the color (green or red), and the percentage change- those two indicators are the best markers of sentiment at any point in time.

vinod- LOL. Actually, all of life is based on faith. Faith that the sun comes up each morning, that your diaphrahm contracts on auto-pilot, that drivers obey traffic regulations, that the laws of physics continue to hold, and that your perceptions/judgments of people/places/self are accurate.

2nd
I like it. We should use Faith base analysis beside fundamental and technical,
That will create lot of new job for Faith base analyst?

We can be the first ones in line for the job. I think we're both well-qualified, as we make faith-based judgments about stock prices every day ;)

Thanks 2nd- I thought they were trading for tomorrow, like oil, gold, etc. electronically. Damn, at least I hope I gave everyone a good laugh. I'm surprised I have ever made any money.

Now, I've got this fresh pack of cards here....

Nassau Conference #1 what a Blast!!!! and what a paradise destination to integrate with so many special SPECIAL people. To everyone out there you gotta mark the date for next year and do it! This is such an exceptional powerhouse team effort happening and such a unique opportunity to learn, meet, and empower yourself with the unique talents of the Caraista community.

Bill and Jim and the Cara team thank you for a SUPER conference and showing heart and soul in an indifferent world, and to all the participants, thank you for sharing.

2nd, I usually look up CNN money. Is this correct?

http://money.cnn.com/data/afterhours/index.html

The A to z indicator a play on words and a play at BS wall street indicators. CP you should patent the indicator now! CPS AA TO ZZs

TOF- Serious question...What difference would that make then if they do relax M2M?
Nice work today on FAZ. I'm a little worried about the futures action. Aren't we all expecting this? Seems very similar to last nights/this mornings action.

"That is either 1) a joke or 2) another thing I have no idea about."

It's neither a joke or something I know something about, I'm just playing with some numbers. Sorry if it's confusing, it confuses me as well... If only I were autistic?

Mark - I think relaxation of MTM is a significant thing. The problem stems more from the opaqueness of the underlying assets that these banks hold. When the package up hundreds of mortgages from multiple tranches, investors don't really know what is included in those securities of mortgages. So they are unwilling to bid a decent price for it.

However, after reading about FAS 157 further and reading how the current rules are applied, I don't think banks are nearly as impacted by this as many people are lead to believe. I listened to Robert Hertz's speech to Committee on Financial Services back in mid March and he clearly stated how assets with little or no liquidity for the most part are not being marked to market. Typically those assets are held to maturity and any such asset does not use fair value accounting (MTM). Rather they use an estimated value based on estimated recovery rates and cash flow.

FASB gave additional guidance on how to account for assets trading in illiquid markets and I looked at JPM's 12/31/08 financials to see what that impact was on them and here is what I found:

"Determining the fair value of an asset when the market for that asset is not active In October 2008, the FASB issued FSP FAS 157-3, which clarifies the application of SFAS 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial instrument when the market for that financial asset is not active. The FSP was effective upon issuance, including prior periods for which financial statements have not been issued. The application of this FSP did not have an impact on the Firm’s Consolidated Balance Sheets or results of operations. "

I also found this relating to their valuation of CDS's:
"For certain derivative products, such as credit default swaps referenced to mortgage-backed securities, the value is based on the underlying mortgage risk. As these instruments are not actively quoted, the estimate of fair value considers the valuation of the underlying collateral (mortgage loans). Inputs to the valuation will include available information on similar underlying loans or securities in the cash market. The prepayments and loss assumptions on the underlying loans or securities are estimated using a combination of historical data, prices on market transactions, and other prepayment and default scenarios and analysis. Relevant observable market indices such as the ABX or CMBX, are considered, as well as any relevant transaction activity. "

Here is another on their commercial RE:

"Commercial mortgage loans – Fair value of commercial mortgage loans is estimated by projecting the expected cash flows and discounting those cash flows at a rate reflective of current market liquidity. To estimate the projected cash flows, consideration is given to both borrower-specific and other market factors including, but not limited to: the borrower’s debt-to-service coverage ratio; the type of commercial property (e.g., retail, office, lodging, multi-family, etc.); an estimate of the current loan-to-value ratio; and market-derived expectations for property price appreciation or depreciation in the respective geographic location. "

Hey Kaimu you mentioned at one point that you were going to post your "buying gold from different places cost matrix" on the blog. Did you do that already and I just missed it or is it coming soon? :)

It was really fun meeting you - and all the other friends I met there too. Very worthwhile conference, both from a skill improvement standpoint as well as socially also. I can feel my discipline improving already...

http://tinyurl.com/a8qvjq

http://www.creditwritedowns.com/2009/04/us-banks-d...

Over $200 Trillion now...here are the top 4, which make up 95% of the total:

JPM - $87 Trillion
BAC - $38 Trillion
Citi - $32 Trillion
GS - $30 Trillion

Safe only if you take risk out of the equation, right? We've seen some pretty dramatic interest rate changes...

And "only" 18% is still $36 Trillion...

Thanks for those tips Kaimu, RE Aussie producers. I'm happy to see they've still got your approval. I've noted them for PM US dollar diversification.

Le.s

Si02, I'd appreciate if you could share your findings on how to safely take Direxion for a ride.

I've removed the CTAB conversation from the Skype list. I find the skype conversation rather intrusive. Bells and whistles sounding, along with the little beancounter that jumps up and down in the corner of the screen when a conversation requires my attention.

I must be getting old.

I'll most certainly be swing trading until I've finished this uni ticket. I don't have time to watch mr. market minute by minute. One of the reasons I've taken interest in your straddles.

Les.

ALOHA !!

Anyone here been to the website CRIMINAL STATE by Jeff Gates?

This guy is connecting dots to the failed USSR here in the USA ...

Link: http://criminalstate.com/

"As in Russia, debate is being framed around "sanctity of contract" to insulate from a deceived public a vast transfer of wealth into a few hands. Summers cited that sanctity to insist that A.I.G.’s financial products unit be allowed to keep their half-billion dollars in taxpayer-paid bonuses. Obama initially opposed the bonuses while an incensed House approved legislation imposing a 90% tax. Chicagoan Obama has since backed down. That tax could have set a precedent for a bilked public to recover other stolen wealth.

The real issues remain obscured in the outrage over executive pay while the entire economy is being “reset” in plain sight. The policy changes proposed by Summers & Co. will create a uniquely American-style oligarchy. As taxpayers are stuck with the mortgage, our creative financial sophisticates will get the house. Is this the future that Americans want?

Another intelligence “dot disconnect” may be in the works. While Secretary of Homeland Security Janet Napolitano cites our porous borders as the primary danger, intelligence agencies confirm that our weakened economy poses the top threat to national security.

How was U.S. security improved by enabling A.I.G. to make massive payments to foreign banks? How is our national interest served by taking us deeper into debt in order to bail out complicit bankers while creating a Russian-style oligarchy? If those simple questions were asked, the answers would lead us to those who orchestrated this greatest heist in history. And to those now enacting policies destined to make a bad situation worse.END"

What about his book ... "Guilt by Association: How Deception and Self-Deceit Took America to War"?

I just found this info but I will review it ...

Also today I was thinking about criminal entities and their relationship to GOLD. It is logical to think that if China and other states are concerned over the US Dollar then why wouldn't the GLOBAL MAFIA want to own GOLD?

I have a very good friend who works for the ACC(Australian Criminal Commission). The ACC investigates global criminal entities like drug cartels and MAFIA and how they move money around the World. As a "Senior Financial Investigator" who has been doing this for some 30 years, he would know. I have never delved into this aspect of the criminal underworld before, but I am sure it exists. Who knows how widespread it is?

During the CTAB 2009 Conference I asked half jokingly if any of the audience was from the US Federal Reserve Bank? US Treasury? IRS? CIA? It didn't occur to me to ask if anyone was from the MAFIA ... HA!! Definitely the MAFIA has been involved with the US stock market so why not other markets? I doubt the MAFIA wants to be stuck with tons of US Pesos either! Hummmmmm???

Anyone who attended Bahamas will attest to the immensely positive vibe which radiated through each and everyone of us; from CTAB members to guests. Definitely a lifetime memory! Thanks to all for the experience!!!

As for markets:
Short-term rally in play, possible morning back-fill due to over-night rally, support at 800 (S&P) --> resistance at 830 (S&P) Break-out would target upper channel 855-875.

Sergio

Mark- I was able to re-enter FSPTX/FIDSX/FSENX at 1.7%, 3.8%, and 7.9% discounts to where I exited last Thursday. So with equal allotments in all three, it averages out to timing a 4.5% 'gain' on the buy-and-hold half (could have made it a 9% 'gain' buying back in at Monday's close). However, these funds only trade EOD, and they slap a 0.75% trading fee for positions held less than 30 days.

So basically, you're trying to make money by predicting closing prices (if you sense a trend change early in the morning, you're out of luck), and even when you time things right, they try to make you second-guess your exit with the trading fee.

It's never a fair game.

High-speed Les- Is it possible we're going higher due to the principle of maximum frustration? Almost everyone is expecting a retest of the low. Ergo, we don't get one. Instead, the market forces those waiting in line to board at 7200 to catch a speed boat and climb aboard at 8200 before the ship hits the open seas.

Les- There are endless stops. This game never ends.

Here's another link in the control over people.

It's a Cato institute interactive raid map of police activity in past years.

Imagine how much more intensive their activity is to become as people suffer the effects of unemployment, dislocation and poverty.

http://www.cato.org/raidmap/

The map shows five incidents in my state and I went back to 1997 and could only find examples of two incidents...which were pretty lightweight by civil rights preservation standards. More attributable to idiot neighbors than bad cops. That's just my state though. If I have to go back over ten years then it isn't current enough to freak me out.

Bill's Commentary today is very disturbing to me because he is right on the mark.

As is Bluesky…

"I think we've had too much dishonest capitalism & dishonest government. In the U.S., we're no longer a nation of laws and blind justice. It's increasingly becoming a matter of who you are and who you know. That sounds too much like Russia or China to me. Enemies of the state - beware!"
-------------

First of all they make a distinction between an economic system and a government. Capitalism and democracy are not synonymous although they have been long associated in the US and in varying degrees in other western nations.

Capitalism in itself is neutral, but the current reallocation of assets — mostly from the U.S. middle class to the upper class (under pretense of raising the world's poorest class) is a perversion of it like we've never seen before.

I believe we are currently the victims of a takeover (still in process) by elitists who are skillfully using our government to gather excessive amounts of capital for their own purposes. Money and power have always been synonymous.

Using the same techniques as the greatest despots throughout history they are melding them with the latest technology to spread their influence globally.

This is not to say this is a global conspiracy (yet), but using the "Big Lie" technique (Hitler, Stalin, Mao were experts) and the instant communication available today, they can funnel the masses into a manageable unit.

When I say THE big lie, I mean actually using several. The best lies are those which contain a grain of truth.

Global warming — could be a short term condition, may be a massive shift, could be man made or due to some other natural reason.

Too big to fail… "Banks must be saved at all costs to prevent a systemic collapse." "Too complex to explain." Says who? Those who benefit by all out rescue.

Yes, we have a global economic crisis. Yes we have global pollution. Massive health and nutrition and terror issues. By creating fear, a sense of urgency and in some a sense of guilt — they are able to divert attention from what they are taking from those of us who have had a better living standard and pretend to be helping many others. In the process they will gain immense wealth and power.

Using the "crisis mentality" of the day, they are trampling the principles of our nation's Constitution. When Bush instituted open season on spying it was due to the crisis of 9/11. Obama is using the excuse of economic collapse to override the Constitutional protections to free enterprise and private property — robbing future generations to justify his own ends.

Unless we put a stop to this, I think it will end in one of two ways — neither is good.

1. A world oligarchy overseeing the rest of us.
2. A world war.

I really believe they need to keep it down, sell off even, if we are to (ultimately) go higher from here. Ideal scenario is hitting resistance at 8000 and pulling back.

Mark- There are no ETF options in the retirement accounts I invest in at work (although my wife and I do have those options in our self-directed IRAs). I'm actually quite fortunate to have pretty much the full array of Fidelity funds to choose from, which includes their 'Select' sector funds.

The market feels complacent.

Another thing. What makes stocks go up? More buying than selling, right? WRONG!

This canard is the biggest steaming pile of nonsense going. The only thing that makes stocks go up is a change in mass perception of them.
THEN buying strength becomes the immediate catalyst for the rise, but remember this dynamic FOLLOWS the perceptual change.

(of course, for every share bought another is sold. If you question why anyone would sell a good stock too cheaply, well, just review the history of your own trades:)

ADBE - estimates, target increased at UBS to $25. Estimates also raised, based on signs of stability in the product channel. Buy rating.

Is anyone else listening to the FASB meeting? From the sounds of it, it seems like the changes are minor if anything at all. They are saying that the current model that is in place will not really change, its more that they need to clarify their rules. For example, a bank is currently allowed to use something other than fair value on an asset that is intended to be held to maturity. So if they can make an argument for intent to hold to maturity then they don't have to mark to market. They intend to provide further clarification on how to determine if an asset is going to be held to market.

They are wondering though, that if a change to the credit profile of the asset occurs, then shouldn't there be some sort of impairment to the value of that asset...and if so, they are talking about how to advise banks to assess this impairment event.

"BAC C GS AIG USB WFC MBI PFG JPM FITB
Insane? ! ."

The market has been insane for many months now... IMO.

BAC could fall off the radar if the merrill lynch 3.6 billion performance bonuses are brought to light. Ron Paul and Dennis Kucinich are demanding answers from the us treasury and fed on Who was on first, and What was on second.
Strong sell BAC, the next bonus scandal.
Paulson needs a prison cell next to Madoff!

Well the FASB bent under pressure and changed the rules to allow banks to use "significant" judgment in valuing assets where markets are inactive

http://tinyurl.com/d4ca6k

"William Isaac, chairman of the Federal Deposit Insurance Corp. from 1981 to 1985, has called fair value “extremely and needlessly destructive” and “a major cause” of the credit crisis. Robert Rubin, the former Citigroup Inc. senior counselor and Treasury secretary, said Jan. 27 the rule has done “a great deal of damage.”

We may have a knee-jerk rally over this but when the euphoria is over we'll go down hard as this may be the final blow to confidence in our system. The reality is that these banks are already holding these assets at an average of 95% of the original price. That's the extent of the write-downs many have taken so far. I think the reality of the losses so far are in the 10-15% range. Those losses aren't coming back no matter what these banks pretend they're worth. And when commercial loans start defaulting those losses will expand to 20-25%. The reason the market is inactive for these securities is because noone wants them at the prices the banks are willing to sell them, even though people who would buy them know their approximate value.

Rob.

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