Cara's Commentary & Community Chat, Wed., Mar. 4, 2009

Little wonder this website is getting hammered by hackers...

Bill... Thank you for trying and I mean that. Thank you. What a sad, sad comment on the world we live in.

It's not an injustice by misadventure. It's a premeditated crime against a whole class of people. These are abject felons dressed up in suits and ties and judicial robes.

Infuriating!

Good morning.

There are NO Cara 100 Ratings Changes to report at this time.

Once again Bill I am humbled by your uprightedness.
We are all sheep willingly guided to the slaughter.

Time to do something about it however late in the game we are.
I will send your comments to my MPP & MP & PM and demand a response back of the course of action they are taking to correct this disaster for future generations.

Sounds like you could guide them some of the way back, are you open to that?
If so I will make that suggestion as your experience and perspective is relatively rare as proven by the present conditions.

Too late for us oldies but I’ll do it for the kids!
Suggest the same for all others in this blog.
It’s time we stood some ground before we loose more than just our fleece and pasture rights.
Naked in the barnyard – sheep Steve reporting for duty.

Enjoyed the thoughts Bill. Here's hoping that karma bites those who deserve it most, squarely in the hip pocket, because that's clearly the only place that hurts them.

Keep up the fight. The public's voice is getting louder and louder

Bill, we see fraud all around us and nobody in a position of authority is naming it as such.

Yesterday Bernanke expressed his "anger" in the committee hearing regarding the AIG situation. If this is all the anger he can muster as another $30B U.S. tax dollars is dumped into this rat hole we can expect no justice.

It has been openly stated AIG simply collected payments with nowhere near adequate funds to pay claims.

All I need apparently, is someone who can write insurance jargon as my partner, and I can become an insurer. If you will write the policies, I can do our letterhead design and take care of the ads.

Why is no one being arrested, indicted and prosecuted?

Lewis got $10M last year for his stellar performance. The bonuses collected by these managers of the biggest financial scam in all history have been publicized.

My next door neighbor, who is 90 and has saved and invested all his life, just lost much of what he intended to leave to care for his handicapped daughter who is unable to work. Many other friends have had their net worth cut 40 to 50% — this was their monthly income. Now those still working are losing benefits and their futures.

Is there no justice, or did he die along with his brother, Common Sense?

that'll bring some stock market attention to NGD. It lags substantially the other junior and middle players.

Yesterday Bernanke expressed his "anger" in the committee hearing regarding the AIG situation. If this is all the anger he can muster as another $30B U.S. tax dollars is dumped into this rat hole we can expect no justice.

And yet for all his fury and all his empty chatter about "transparency" he cannot be bothered to tell the American people who are the AIG counterparties receiving the $160B (and still counting) money from taxpayers.

If it ever does come out, and one of the prominent names happens to be Goldman Sachs, I swear as God is my witness I'm grabbing a torch and pitchfork.

'Is there no justice, or did he die along with his brother, Common Sense?'

Well put. May they both RIP

Yamana earnings after close.

"...keep your eye peeled. To get a better bead on how sentiment is lining up, watch for changes in the open interest and volume of the Yamana March $7 puts and the March $9 calls. Spikes in one or the other would indicate traders' expectations of the surprise direction."

http://tinyurl.com/bya4fp

Thanks doc.

Now is your chance to call in ask ask the world's greatest investor, Warren Buffett anything you want to..

"Hey Warren....Why were you trying to catch falling knives months, if not years before the market bottomed? For that matter, why did you ride that cupcake all the way down from the top? Warren, are you there?...Warren?
I don't think there's anyone on the line...

1st link should be full article

Now now CP, why the cynicism...?

"I don't think there's anyone on the line..."

No, he's waiting for the sound of your kneecaps popping after sending round the boyz...

I have AKP, PYK, KNM, ATLO and PUA on my "'stocks to short" watchlist. This is definitely NOT advice.

And here's our morning gold takedown, but it's a little late today. Maybe someone overslept?

Need some advice. I bought 900 shares yesterday for 1.91 CDN. I don't want to be an investor and be a shareholder of New Gold. At what price should I sell this stock? I calculate it should be 2.30 cdn, but it's nowhere near that price this morning.

Thanks for any advice

Sandra T

When Harper came out and ordered a 41% (America tax) tax on income trust after repeatedly saying he would not tax income trust I give up on Canada. He follow this proclamation up with 18 page report of black out pages to prove the income tax leakage for income trust. That day 35 billion was lost on the exchange.

I trust Obama as far as I can throw any politician, but I hope if the market does happen to rally in the near future, nobody terms it an Obama rally unless the rally is clearly a result of something he says or does.

With the HB&B no longer able to be leveraged 30 or 40 to 1, how long could it be for the market to get back to all-time highs? Or, is it even possible in our lifetimes? There are always comments made on "money on the sidelines". Does anybody really have a resource that would indicate how much money is out there waiting to be put to work?

Just curious...

CP

IMO this rally is nothing spectacular nor will it be... we have a 735 gap to fill still in the S&P and we could continue the rally to 775.

Joe6Pack is beginning to liquidate their 201k and when this little rally is over that process will begin. We have not see the fear spike yet (vix 80), when that happens it will be the end of wave 5 of 5 of primary one (we should be starting 4 up today).
Then and only then will greed come back because values seem to be good, until they are not later this year. We will then see the public follow smart money back into the market only to get burned again. Not the bottom coming but a bottom, sure why not.

Have a great day. Set your stops. These are my opinions, DYODD.

Last night I accompanied a relative to a support group for cancer survivors. They went around the room and recounted their stories. All were bright, articulate people, but burdened with the inability to speak normally. One remarkable man in his eighties has pulled out of sharp curves 4 times (the Holocaust, the Shanghai Ghetto, WWII, and cancer). Sitting at the table, it was easy to see they were very much alike- strong, decent, compassionate, understanding folks. One form of suffering/grief or another had reliably produced characteristics we all value. I can understand getting angry. But you need to manage it correctly.

Long Yamana on a lark...smallish pos.

Hammer, that is an excellent point. I have been wondering whether what the world has accomplished in recent years was mostly based on phony economic progress, be it the leveraging of the financials or a giant Ponzi scheme?

Re. "how long could it be for the market to get back to all-time highs? Or, is it even possible in our lifetimes? " Sure, inflation will take care of it. 14,000 10 years from now will be worth 3,000 today on an inflation-adjusted basis.

Buy index future at 6762.

now 6779, stop 6764.

does anyone have any insight to enervest diversified income trust in canada? currently selling at a 22% discount to NAV.

bobbyo,

"When Paulson had the first save AIG meeting. The only other 'private' person allowed at the meeting was the CEO of Goldman Sacs. Goldman Sacs recieved 20 billion of the first bailout money for AIG and they were paid at par.Meaning they took no losses from their dealings with a bankrupt company and probably made a profit. How come this is not common knowledge. Where is the reporting"

Where indeed?

We are hearing about newspapers going bankrupt. The War in Iraq has little coverage, but our people are still giving their lives there. My guess is all media are on tight rations. While the internet gives access to much we don't hear or see in MSM, much is undocumented and the volume overload is mind boggling.

I suspect much, if not most, of what is passed on to us is "researched" info Googled by those who write the News Alert TV scripts.

First it was Common Sense, then Justice, should we still expect honest, intelligent investigative reporting?

Agreed. It's the same old gang. Very disappointed in this aspect of the presidency.

Incidentally, stopped out at 6787 for lunch money.

EDC, you may be correct, but I don't think Japan pumped and printed several $ trillions. This will cause inflation *eventually*.

Inflation since 1929 (http://shockedinvestor.blogspot.com/2008/11/inflat...)is 1,112.0% (12.12X). 12X times say DJIA of 5,000 is 60,600. So, the number will be reached, it will just be meaningless.

Anyone see the crazy volume and chart on GE this morning? Looks like it could be short term capitulation?

It's hard to envisage inflation any time soon so long as companies have no pricing power, and there are surpluses in capacity, whether shopping malls or car factories, and certainly a surplus of unemployed workers. The only cost pressures I can foresee would be those derived from imports paid for with a depreciating currency.

Someone took an interest in this one today:
Total in-situ resources:
72B lb Copper, 94M oz Gold and 4.8B lb Molybdenum
It's an incredible deposit, but a number of years out once permitted. Happy Trading
(long NAK)

All time record high volume for GE was 10/2/08 519,738,000 shares

Today, we are already at 380,000,000 shares traded.

CDS on a an exchange would mean market pricing and transparency, which for the banks, insurance co's and now govt would be an unmitigated disaster. Won't happen till everything unwinds through this manipulated, slow, excruciating method first. Maybe in 2 or 3 years.

why couldn't we have passed legislation last September declaring CDSs void as against public policy (other than for a legitimate use, such as insuring against the face amount of a corporate bond one actually owns), and requiring the AIG's of the world to return the premiums, but not be liable for 40:1 leveraged defaults?

I totally agree that this should have been done. This is something I have been writing my senators/etc about. This is a less costly alternative to bailing out AIG (through posting collateral on their behalf).

>Yamana too. It rallied like a mofo yesterday when gold was crashing. Today, devastation. This bites.

I don't know options from my behind but it looks like the premium for march calls are dropping.

Upbeat consensus for earnings this afternoon?

Why it dropped from the opening highs like that I have no idea.

that would have to inform any decision to go long.

Of course, I don't know what the time horizon is/was. But I don't think anyone has a handle on the market right now.

Bill - I think you are overly optimistic on the general populus and it's ability to act. Also, I think the Big 3 (gov't, corporate, media) is underestimated in its ability to influence and control.

The populus has been conditioned to be compliant and that is not conducive to real change.

People may talk and act big but when push comes to shove, complaining is about all they will do. The independent individual is the true minority today.

Dave look at Yahoo finance videos. Some hotshot hedge fund manager made the call to buy GE YESTERDAY and did an about face today, saying its too expensive.

I think we should consider the possibility that these stocks will NOT drop until what we consider an appropriate valuation - this may be too devastating for all parties involved. You might be buying an expensive bottom and GE stock, like many others, will remain expensive, growth in stock price will be sluggish, for many years to come.

Interesting idea, teamonfuego.

I wonder what happens to the counterparties in that case though. I.e. AIG sells CDS to GS insuring some debt (say GM) for $20m, that insurance costs $1m, which AIG collects as a premium and hands over to execs as bonuses. You are saying the gov't should give GS the $1m back and have the $20m insurance coverage disappear.

How would GS feel about that? I dunno, since there are untold trillions of insurance coverage written against GM's $300b debt, I would think it's all worthless anyhow. But as long as GS holds on to this imaginary $20m insurance policy, they can probably pretend that the world is still a happy place. Take it away and suddenly they need to start recognizing losses.

Brings us back to the original problem, doesn't it? That everyone wants to pretend that the assets they are holding have value.

Makes me think they won't let GM die either, just zombify it like the banks. After all, if they let it die and wipe out bondholders, then those trillions in insurance policies will be exposed for the fraud that they are...

on what will likely be higher than average volume

Hard to understand, but his principles often pan out.

Bullish = three higher highs and higher lows, look for pullback 50% (or 5/8ths for some)

Bearish = three lower lows

Banks...gave bullish signal then promptly reversed.

How long does one continue the same failing treatment plan? The gallows humor in medicine asks, "why do they put nails in coffins? It keeps the doctor from giving more treatment." This is not meant to belittle honest efforts, but rather to add perspective.

Heck, I'm wrong all the time...and 96% cash.

Trading against sentiment is a general idea, almost at the philosophy level if you will... in order to turn it into actual trade you need a timing toolbox.

Isn't this something of legerdemain? The Enronization of the entire system. Sweep the debt under the rug...way over my head

Well, if you consider what is left of market cap on all the financials i would say yes. At least short term. Bull Market? thats another whole thing.

I guess my comment wasn't meant as a revocation of trading against sentiment all together, rather a realization that sentiment has found a new, much lower plateau. I don't expect to see upbeat sentiment for another year, thus there will never seem to be a good, sentiment-based point to enter short trades. Instead you have to look for less-gloomy and more-gloomy sentiment as entry/exit points.

Of the 7 open gaps in GLD, 2 have been filled and price has entered the open zone of the 3rd gap. Closing 5 of the 7 would be a dream come true. Whether we get that low is something we'll just have to keep an open mind about and watch the charts. The dollar has broken out and may have returned to it's more normal inverse relationship to gold. Take a look at the charts here:

http://www.traders-talk.com/mb2/index.php?showtopi...

.

didn't mean it as a tip Dave. I assume that this high profile about face was the reason for GE's unusual activity today.

As for the possibility that company stock prices will languish, it was simply a counter suggestion to the notion that stocks must continue dropping until the price is right. They don't necessarily have to - they can simply languish at this level until the earnings picture brightens up. You may well have bought at the bottom, or a buck away from it.

ALOHA !!

There is a very simple solution to Mexico's drug cartels and to America's WAR ON DRUGS ...

LEGALIZE IT!!!

I have been saying that forever!!!

RON PAUL was the only Presidential Candidate who agrees that it should not be illegal to consume drugs. BIG GOVERNMENT has no business controlling what people want to put in their bodies ... If tomorrow pot was legal and so was cocaine would everyone suddenly stop drinking and switch. Well, the people who drink and drug now don't have problems getting their drugs. Anyone ever watch the TV show INTERVENTION? Has any of the drug addicts on that show ever been unable to get dope? Most of the addict's problems shown on that show is they cannot afford to pay for their illegal drugs so they steal from family and friends!

The cost to US TAXPAYERS to police this WAR ON DRUGS(yet another war against a noun)is astronomical and it has made NO DIFFERENCE!!! If this WAR ON DRUGS had been successful then Mexico would have no problems now!

All drug related crime would vanish if you made the use of marijuana, cocaine and heroin legal ... In fact my guess is that any President who announced he plans to legalize drugs would be a target for assassination by the drug cartels of the World! They love that drugs are illegal ... THAT'S THEIR BUSINESS MODEL!

In the case of marijuana, hemp oil was used to start the first diesel engine. Hemp has a great commercial viability. The male marijuana plant produces the commercial products while it is the female plant gets you high! When you make marijuana totally illegal you throw the baby out with the bath water! Typical US CONgress intelligence!

Ask CHEECH!

Elegant solution?! Geez, I can't believe Twiggs even put this up on his site. It boils down to this: keep garbage in holding company and spin off good assets in 100% owned subsidiary.

I'm sorry, but don't most accounting standards require consolidate financial statements of wholly owned subsidiaries? In other words this solves nothing...

ALOHA !!

Brilliant ... NOT!

If only we could use the GOOD BANK/BAD BANK on the US CONgress!!

We could separate out the BAD politicians from the GOOD politicians and have a GOOD CONgress! Then the BAD politicians would be held in the "BAD CONgress Holding Company" where it would be easier to blame them for everything!

When Lehman Bros went BK it turned out the only GOOD asset they had was their office building! How many legions of CPAs and lawyers and bank analysts would the US TAXPAYERS have to hire to sort out that mess? Sounds like CPA and lawyer welfare to me!

Please-e-e ... elegant my ass!

Fundamental questions need to be asked about this company. If this company has overleveraged itself, it may be insolvent on any true evaluation of it's assets. That means it is a $0 stock, with in my mind risk based pricing (it could easily trade in a range of $10-13, or $4-6 ...it doesnt' really matter).

In normal times, one might argue that it is a steal at $6, a buy at $9 and fairly valued at $13. But we're not evaluating earnings power or potential for growth. Something much bigger has gone on, that is based on the leverage at play and the assets underneath.

It seems clear that we are talking about an all or nothing situation. And the stock price is just going to price in fear about outcomes (of which there are many including some Govt intervention hocus pocus).

Hope is no strategy. Belief in the fundamental invincibility of a company is no strategy.

As a purely economic measure, it makes complete sense. A dramatically lower prison population, arms of the local, state, and federal law enforcement agencies released to other efforts (say, investigating banking and mortgage fraud, perhaps?), entire states released from the thrall of the narco-terrorists, funding for all sorts of illegal activity cut off at the knees. And the government can tax and regulate, improving quality (reducing overdoses and poisonings).

And it would definitely win the war on drugs, in that sense. Complete victory, kind of.

At the same time, having seen what drugs have done to the lives of some of my friends, I think its important to figure out how best to minimize actual use so that easier access (due to lower cost, and easier availability) doesn't result in a dramatic increase in drug addiction.

Thomas Lee, at JPMorgan writes: “Believe or not, retracing 12-year lows for the Dow is an incredibly rare event. Besides the retest of 1997 lows seen on Monday, this has only happened two other times, on April 8, 1932, and December 6, 1974.”

Given the rarity of the event, it is worth taking a closer look at the past instances: The 12 year low in 1932 was ~three months before the end of the bear market. In 1974, it was exactly the low for that bear market

I managed to screwdoodle at least 4 other people in Alcoa this afternoon!

Yeah!

I'm now convinced that the stock is reflecting the illegal cramming down going on in the credit default swap market for GE. The ratings agencies are watching the CDS premiums and using that as a gauge for how credit worthy GE is. And those CDS premiums are completely unregulated and manipulated by hedge funds.

THIS IS FRAUD AND MUST BE STOPPED.

encourage any GE long investor to pay attention to the link and the chart..

http://econompicdata.blogspot.com/2009/02/bank-lev...

My point is, what would constitute providing "proof" that it was a hedging transaction? If you are looking at things in retrospect, can't you just point to some assets you own that have lost value (MBS,CDOs,insert acronym here) and claim the CDS was intended to hedge it?

I.E. "I bought a CDS on Citi to hedge against my mortgage portfolio b/c Citi debt is heavily correlated to the mortgage market".

proudPapa,

"Negative news is the norm. People are starting to buy in to it, and so, I think we've entered the phase of self fulfilling prophecy. The negative sentiment affects behavior, exacerbating the worsening economic situation, breeding further negative sentiment."

On the other hand, if the building is on fire what should you do?

You don't want to yell, "FIRE!" But neither should you be mum and pretend there is no problem.

Isn't it better calmly pass the word and allow people to make an orderly exit?

Sure this fire could have been handled earlier in a better fashion with minimal damage, but simply trying to "change their mood" won't eliminate the dangers. Neither will pretending make the devastation go away for those who've lost big time.

To quote one of my favorite people, Woody Allen, "What we have here is a complete situation."

Trade for the short run, but plan for the long haul.

I lost a close relative to an overdose. Long before that, his life was dreck - a burden to himself and his family. Nevertheless, I advocate legalizing pot and cocaine, or rather, removing the criminal penalties, which is quite a different concept. Use the freed-up money to warn kids of the downside, same as we do today for tobacco. Put responsibility for following a lifestyle where it belongs.

But also realize that de-criminalizing drug use would NOT remove all ancillary crime. Junkies gotta have it.

Cash Buy 1,000 shares FAS at 3.5 Limit Day 03/04/09 Filled

03/04/09 12:56 Filled 1,000 at 3.5

Cash Sell 1,000 shares FAS at Market Day 03/04/09 Filled

03/04/09 14:19 Filled 1,000 at 3.642

Lots of work for small profits these days. I'd be better of staying 100% Cash.
I should be day trading something else today given banks are the clear laggard.

if you purchase a CDS with the underlying company being GE and the notional principal amount is $1 Million, then you need to own a GE bond or similar instrument worth $1 Million. You can do fractional amounts if you want to get exact (i.e., GE bond of $500k then half of the CDS is written off with the other half that is properly hedged still remaining intact).

Thanks EDC for the link...now watching my GE more closely than ever...in for only a trade for sure.
S

ALOHA !!

"And how would they pay for “legal” drugs? Who’ll pay for their health care and lost productivity when they are no longer employable? Would companies selling cocaine and heroin be permitted to promote the product through aggressive advertising?"

Who's paying now? Who pays for EVERYTHING in this country? Its NOT the US government!

Take a realistic look at the direct cost of the WAR ON DRUGS and then look at all the indirect costs like court costs, prisons and medical costs due to HIV.

As a former builder of California State Prisons I can say that I know the costs to incarcerate are higher than ever. When I was building prisons in the late 1980s, one of my prisons was the Corcoran State Prison. When we were done we estimated that the total cost to US TAXPAYERS was $175,000USD per cell(total cost of contracts divided my number of cells) and another $35,000 per year per inmate to guard them! Most of the inmates in prisons were all gangs and how do gangs make their income?

People die on both sides of the illegal drug business ... the addict and the suppliers. It does not have to be that way!

Doesn't anyone remember how PROHIBITION turned out?

No doubt there are those who will die from legal drugs as well as illegal drugs. A fact that BIG PHARMA is well aware of and so is Rush Limbaugh! Drinking is the number one drug of choice in America and the WOrld and has been for umpteen centuries. Addiction to drugs has been around for thousands of years. Somehow there is this mentality that if drugs are illegal that nobody will use them!

Go to this link: http://www.drugsense.org/wodclock.htm

Over $9bil USD so far this year and counting(in five months)spent on the WAR ON DRUGS!

Here is an analysis on what US TAXPAYERS would save and how much income would be generated by ending this WAR ON DRUGS, which is just another prohibition!

Link: http://leap.cc/dia/miron-economic-report.pdf

• Government prohibition of drugs is the subject of ongoing debate.
• One issue in this debate is the effect of prohibition on government budgets. Prohibition entails direct enforcement costs and prevents taxation of drug production and sale.
• This report examines the budgetary implications of legalizing drugs.
• The report estimates that legalizing drugs would save roughly $44.1 billion per year in government expenditure on enforcement of prohibition. $30.3 billion of this savings would accrue to state and local governments, while $13.8 billion would accrue to the federal government. Approximately $12.9 billion of the savings would results from legalization of marijuana, $19.3 billion from legalization of cocaine and heroin, and $11.6 from legalization of other drugs.
• The report also estimates that drug legalization would yield tax revenue of $32.7 billion annually, assuming legal drugs are taxed at rates comparable to those on alcohol and tobacco. Approximately $6.7 billion of this revenue would result from legalization of marijuana, $22.5 billion from legalization of cocaine and heroin, and $3.5 from legalization of other drugs.(More)

By far the biggest consumers of drugs in the World are Americans. There is a reason for that. Address that issue instead and keep BIG GOVERNMENT out of all our lives in America and the rest of the World! This financial crisis will only make illegal drugs and their consequences worse.

Look how many innocent Mexicans and Colombians died so some addict can get their next illegal fix! When I worked in homeless shelters for four years we hardly saw anyone during the first part of the month when their welfare and food stamp checks came in, but when they spent their welfare within two weeks the shelters were full. What did a majority of those homeless people spend their welfare money on that I saw? Drugs(booze included) and sex! There is always a certain percentage of any country's population that will become addicts. Better to educate and rehab than spend FIAT to police the World on a less than diminishing return for US TAXPAYERS as well as US drug usage ...

I am sure the lawyers and judges and police and border patrol and prison guard unions would object to LEAGLIZE IT! There's always a "special interest" with their hands out in FIATWORLD!

As we US TAXPAYERS run the gauntlet!

Basic Materials +5.52%,Capital Goods +4.53%, Conglomerates,Energy +5.94% Happy Trading

http://finviz.com/groups.ashx?g=industry&v=210&o=name

2nd

Try this: http://tinyurl.com/4d9kq

for up to the minute live snapshot of sectors.

Looks like Oil Services (+8%); among countries-South Korea

2nd

Try this...

http://www.finviz.com/map.ashx?t=sec

Any real buyers today? DXD seems tempting here.

"And how would they pay for “legal” drugs? Who’ll pay for their health care and lost productivity when they are no longer employable? Would companies selling cocaine and heroin be permitted to promote the product through aggressive advertising?"

Why, you looking to open business?:)

Kaimu, the people getting doped for free are already goners. They probably can't work (although I'm not sure about that) but at least they're putting less pressure on law enforcement and insurance costs.

I am increasingly convinced that drug laws are another tool used to keep the citizens in line. Don't do this, don't do that, we need more police, don't think outside the framework we provide for you blah blah blah...

Positions in materials, energy, technology, and China for a bounce...(and thanks to Luggie, r saunders, Seamus, and QT for the information)...counter-counter-trend trade ;)

Remember a few days ago we mentioned change of mark-to-market accounting as potential boost for the market move? This was posted on wires at 3 pm:

(US) HOUSE FINANCIAL SERVICES SUBCOMMITTEE IS REPORTEDLY EXPECTED TO HOLD HEARINGS ON MARK-TO-MARKET ACCOUNTING ON MARCH 12 - UNCONFIRMED REPORT
- Reportedly SEC accounting chief and FASB chief will be asked to testify before the subcommittee.

Look what FAS, GS, STT etc did right after. Interestingly enough, market was not jazzed about financials before that and they lagged badly. Focus switched right back to them at 3.

... if they say they do abolish it, serious upward move is in cards.

making another modest bet the market does not hold up going into the close. Already stopped out twice today on that bet, although I am ahead on the day.

Here is what I just read in the front page news on finance.yahoo.com:

"Investors showed relief after release of the Federal Reserve's beige book, an assessment of the U.S. economy by region. The central bank said the economy has slowed further in the last two months and that the outlook for a quick recovery is bleak. Investors were relieved it wasn't worse."

What could be worse than a slowing economy with a bleak outlook for recovery? :))

Thanks Vad.

While I could see this making for a bounce, what's the longer term implication? I don't remember the exact history of this, but they essentially put M2M on hold until this year some time last year, and look where it took the market: up on relief, back down on eventual re-implementation of m2m.

So what, probably market up on relief, but eventually m2m has to be realized, doesn't it? Be it 10 years from now as it was in Japan, or next year when they 'revisit' it yet again. Fundamentally doesn't solve anything does it?

Thank you Bill for all your effots in putting this blog together.
Also a thank you to Bill's team and those that post.

When the SPX gapped down this week I found this on the weekly chart.

Dec31/07 Breakaway gap at 1475.83.
Oct6/08 Measuring gap at 1097.56.
Mar2/09 Exhaustion gap at 729.30.

I Agree with 80% of what you say since I work in this very field of helping get people treatment.

A real issue is certain drugs can never be made legal, Meth for example can never be made legal since it shreds and destroys the brain. Pretty simple.

Some drugs can be made legal as their effects are not as dangerous.

The true trick is creating education programs and responsible boundaries that limit their use in inappropriate circumstances. To use positive peer pressure rather than legal constraints to educate people within.

We can say: legalize drugs, but the reality is it still would take careful planning and thought for implementation.

The real problem with drugs: Drugs are a method to alter one's state of being. You can't just release that into a population without training and wisdom to balance these effects of the drugs. Look to any culture that uses the more powerful drugs, and you will find traditions, shamans and other social mechanisms in place to help make sure people have guidance in the use of the drug, in order for it to be a positive experience rather than the destructive one. The power of drugs cuts both to good and bad and it takes some wisdom to guide this process.

The real problem is this. Our culture isn't mature enough, nor does it contain respect or educational structures to allow for responsible use of drugs.

The current system is not right, going to jail for smoking pot is just plain stupid for the government to enforce. However, an intelligent structure needs to be placed into the process of legalizing drugs or otherwise we will see a different set of problems.

I purposefully don't propose any solution, in time pot and few other drugs will get legalized. the motion and process in happening now and that wont change. (look to California or a few states for examples of this legalization process) I also just advocate for some wisdom in the process as it unfolds.

Probably not. Deep implications of this is not what I am qualified to evaluate I am afraid. Just reporting what market wants in order for those who exploit short-term movements to be prepared.

Legalize. Educate. Provide help to those who wish to quit. Give it away to those who insist on killing themselves. Anything is better than what we have now.

Providing fortunes to the cartels — more money than any country can top in enforcement attempts.

Our house was burglarized by a drug addict in 1983. When our high school-aged son and his girl friend came in a little ahead of my wife and me, he took off out the back door. When he was caught by police two months later he was armed.

Neighbors behind us were held hostage and beaten by two guys who heard he had a coin collection — he did not.

If anyone breaks in while I am home is is going to get a .45 in his middle. I'll take no chances with the life of my wife or my own.

This can all be avoided by changing it from crime to health problem.

Casey, you're the man. Your post resonated very strongly with me. Like you said, I haven't broadcast it, I'm just doing it.

About a year ago I decided I was going to start working part time and traveling more. I sold my condo, sold my car, gave away the stuff in my storage unit, sublet my apartment, and now I'm living half the year in Thailand, trading, training in martial arts, and generally doing my own thing. I was working part time writing software for my old company, until they ran out of money and laid me off. But that just gave me more time to trade.

Every time Bill talks about the Bahamas, the weather, people, environment, inside I feel like saying the same thing about Thailand. Its just as nice, in a different sort of way. Especially if you like thai food, thai people, and thai martial arts.

My current problem is, I get caught up in winning the game of the market, so now the challenge is figuring out how much is enough, so I'm not owned by very thing that freed me from my job.

I'm still struggling with that last part.

Wow, I'm guessing from the relatively dramatic sell off at the close that there's not so much conviction to this rally...

kp84: Thanks

I was thinking of the commute from China to Florida. Florida is a long ways away from China. Our world has gotten so small... and that makes me think

yet we are still fighting holy wars over heart of place. Despite place being so connected now.

Some day this silliness will stop when we realize its all part of the same heart of being human.

Until then - Cheers to everyone here! At least we squabble and have fun doing it here as family.

The M2M debate, food for thought:

Suspend Mark-To-Market Now!
Newt Gingrich 09.29.08, 6:05 PM ET

On Monday, Congress voted against passing the bailout package for Wall Street. The stock market reacted immediately, falling almost 800 points. It is clear that something needs to be done, and in the coming days, a new package must be constructed that has the support of the American people that both deals with the liquidity crisis and sets the stage for long-term economic growth.

However, there is an immediate step that could be taken right now that would calm the markets and dramatically reduce taxpayer risk in any future government intervention.

http://www.forbes.com/2008/09/29/mark-to-market-op...

Me thinks this enables our finest the opaqueness for which they are famed, at least temporarily. Perhaps tax breaks are what they were after, but the situation became much more than they were bargaining for.

let me get his right Newt,

the market needs help because it has been lacking in transparency and running on leverage it should be imprisoned for. So, let's throw the mess a little help and allow them to remain opaque?

I get the feeling that the powers at be are forcing politicians hands by driving financials into oblivion (GE) under 7USD....etc.....until the mint is running at wharp speed and the laws allow for robbery to be fully legalized and over looked!!! When the Dow is under 6000 look for politicians to get really "creative"....it ain't going to be pretty.....

Who started the rumor on GE anyway? Whose next?

GE. Owned it, intended to average down as I still think it has so much to offer. Now I know as traders we are not suppose to fall in love with stocks, but I just could not invest long term with a company which parades Jack Welch, Jim Cramer, and Larry Kudlow in front of me and asked me to believe anything they say. And yes I admit it, I do watch CNBC.
How come no comments on the fact that Bill is still adding GG, and has added UXG? And how come no love for RBY?
Long UXG, RBY, TC, INTC, RDC and no GE. My retirement account mutual fund owns enough of it.

"Florida is a long ways away from China."

You could just fly to Vancouver- better food and less pollution than HK. As for China, walking down certain streets in SF/Oakland/Cupertino comes close enough for me.

If they get rid of M2M, mine as well get rid of GAAP.

Why bother with any rules...

Rumor for GE, shorts see a spade, when they see a spade. Spades are spades... until they are protection because of fraud.

"making another modest bet the market does not hold up going into the close. Already stopped out twice today on that bet, although I am ahead on the day."

Was right for once, short at 6972, cover at 6880: made a few bucks

So what's the change in policy, smoky?

You are not rambling, Casey, I know what you are talking about.

Interesting. I have been feeling like I have been spending too much energy trading. I could probably reduce my risk greatly, and still do well enough to live comfortably (at least here in Thailand), and reduce my level of stress as well. I could stay mostly in cash (or gold), have a few stocks, write a few short puts or calls every few weeks and call it a day. Why don't I do that?

My ego wants to win back all I Iost in 2008. It has such a hard time letting go. It wants to win the game. And it punishes me when I make mistakes.

But what am I trying to win? What exactly is this prize? My needs are simple, my life has very low overhead. It makes no sense at all, when looked at logically.

I must give this more thought.

This one is interesting... keep it in the back of your mind and see.

1) The SP based on Elliott Wave prediction [computer software] has a high probability of hitting 660 within the next 2 trading days.

If you pull up an hourly chart of the SPX. Compare today's candle print with that of Feb 23-26. You'll see very similar looking bear flags. The SP back then fell 90+ after breaking out of this flag. The sell off at the end of today seems to be setting things up for the next big fall.

DYODD

In the 80's, I was involved in a sociology program and did exstensive study on the criminal justice system, specifically for jueveniles, in the state of Alabama. It was a watershed experience for me....

I came across a number of very successful programs designed, implemented, and executed by the University of Alabama that were intended to reduce recidivism rates among juvenile offenders. They worked but were never implemented by the state. Implementation of these programs was vehemently opposed and from the most seemingly unlikely of places. Turns out the programs were killed in the legislative process by the judicial system itself.... judges, criminal defense attorneys, prosecuting attorneys, and the union interests of the incarceration system. They lobbied against the programs using the hardened platform that these individuals were criminals that did not deserve to be "treated" to psycho-social educational forays by right-wingers at the expense of a left-leaning law-abiding citizenry....They did carry a cost, but the cost was front-loaded; with the reduction in crime and repeat-offenders, the would ultimately reflect a considerable reduction in long term costs to the state judicial and incarceration systems, not to mention the addition of more up-standing, hard-working, tax-paying, contituents.

Regardless of their platform, in reality what they were doing was defending a well-established political network of cronyism in the state judicial system that was not interested in changing the status-quo in any way, particularly if it meant a potential reduction in their business model.... they were protecting their racket.

The drug war is a bureacratic racket and will be vehemently defended by a very entrenched and self-interested cross-section of private and institutional entities regardless of what is right, real, or necessary.

teamenfuego

I definetly agree with you that these CDS contracts need to be regulated and transparent. As far as I know these things are still trading in the backrooms and we have no way to know if proper capital levels are being maintained to service the contracts in the worst case scenarios. We should be priveleged to market data and ownsership of these contracts.

And as far as I am concerned, AIG has already been taken over by the government so the liabilities of AIG's CDS portfolio should be made available as public information. If we are going to fund all their liabilities we may as well fully nationalize the piece of junk and get some of the benefit.

QT,
What are your sorces, as I would like to back test them.
Are you reffering to this or similar:
http://wallstreetexaminer.com/blogs/wessels/wp-con...

http://www.theglobeandmail.com/partners/free/globe...

Looks like the only people who will prosper on GE will be the debt-bond holders, this guy Kevin Oleary does have a good point about preferring to own corporate debt as opposed to stocks in this environment.

Is there another classic bear trap being sprung again.

http://tinyurl.com/c6zo8u

Wow. Thats the best UBS commercial ever!

It would read something like this...
"The world has changed, the markets have shifted and the Global tides are fighting against you. But the relationship of your wealth and our global expertise will help your wealth evade taxes. Thats UBS. You and Us, minus Taxes"

http://www.bbc.co.uk/blogs/thereporters/robertpest...

MtnGntx

Having work in the field, I can back and verify what you say. It's also true big business is also entrenched in the whole system and actively resists true effective policy change.

I have seen over and over again various big business interests destroy programs that would have save millions of dollars and help thousands in treatment...

As Kaimu would say: follow the dollars...

Keep your fingers crossed, I actually might be fortunate enough to help shift some of that now. The politics are in state of flux now, and all the rules have been "shifted" at the moment. We will see. We are at a fundamental tipping point for change right now. Anything is possible. I say this not from what I am watching but becuase what I am doing...

As a side note to everyone here. The politics right now is sensitive and amazing. Right now a call to your congressman or senator, will have more impact than any other time probably in our life time.

If you feel strongly about something... Write a respectful but well thought out letter now... Trust me on this... It might make more difference that you can ever guess right now.

Right now is the time to call your congressman or senator... A tipping point in politics is happening right now. Just my observation after being in the beltway all last week. This is a once in a life time opportunity, I am not joking around or saying this lightly.

If you think drugs should or should be legalized for example... seriously send in your opinion now. If you want health care reform... or financial reforms etc... send it in.. The future is being set in concrete in the next few weeks. Which really means right now is the time to get your opinion heard. It really can make a difference right now.

Re: Here is my email that I have been writing to congressmen/senators/etc for a while now...please pass this on...hopefully enough noise can be made to at least get the media to begin asking questions.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Dear XXXXX ...
------------------

Perhaps also mentioning in any letter/email that the losers in this fraud are the millions of investors (citizens?, voters?) and pension funds whose assets are being systematically wiped out by this fraud, and it continues to happen right now under our noses.

And, it is being effectively funded by the very bail-out process which was intended to fix the economic problem.

Maybe I'm naive, but it would seem to me that any people's representative who took up this cause, and who happened to have a positive impact could count on support from the electorate well into the future.

ALOHA !!

G'day Casey ...

ITS STILL THE MONEY STUPID ... I do not mean that to you directly, its just a takeoff on ITS THE ECONOMY STUPID during the Clinton years!

What we all have been voting for is for BIG GOVERNMENT to take care of us all and our BIG GOVERNMENT has foolishly agreed to! The truth of the matter is that NO GOVERNMENT can take care of all its citizens.

What was Reagan's solution to the mental asylums in America? Open the doors! Well, for years these mentally ill people all on psycho drugs roamed the streets along with the Vietnam Vets. Now these people are being taken care of via "OUTPATIENT TREATMENT". My wife was involved in that until the funding stopped!

With SS and Medicare sitting on $100.2tril of unfunded liabilities along with all the other costs of EMPIRE it all boils down to WHO GETS THE FUNDING? Right now the US Banks, AIG, GM and the defense contractors are first in line. People have always been expendable here in the USA!

I wish people would wake up and give up on BIG GOVERNMENT and instead focus their attentions on RESILIENT COMMUNITIES ... that's where we take care of ourselves and abandon government! Right now hundred of special interest groups are all in a free-for-all to grab as much TARP and STIMULUS cash as they can!

All these very important issues including SS and Medicare and even going to War with Pakistan or Iran are all UNAFFORDABLE!

I have said about the IRAQ WAR right from the start that we CANT AFFORD IT! The Tres Sec then O'Neill said the same thing and Bush fired him! The GAO US COMPTROLLER David Walker said the same thing on 60 Minutes and has resigned, never to be heard again! DOES ANYONE HERE REALLY THINK BANKS AND DC have our best interest at heart?

There never was a NANNY STATE ... it was and always has been a NANNY STATE just for BANKS! The POLIT-BANK ... These banks were never interested in a "level playing field" or "making a profit" or "customer satisfaction" or "community"!!! PLEASE-E-E-E !!!

Remember the TV commercial for Bank America where they claimed they were a "community bank" helping people with their "dreams"! This was before they didn't need TARP! This was when I was still living in the Bay Area(SF)and my wife was working for BAC. We always used to GAG when that commercial came on TV! HA!!

While a private banking cartel owns our money supply WE THE PEOPLE will never see true freedom! The DEBT will enslave us and our kids ...

ITS THE MONEY STUPID!!

"The next change will happen and it will seemingly come out of nowhere...

The nowhere is: Invest in your own life, work to stay healthy in body mind and spirit. Invest in family and local community and disconnect from the larger bullshit that drains us all."

Casey,

long time no see. Paragraph above reminds me why I love your posts. Spoken as true Taoist - as far as I know about Taoism :)

Obama said yesterday, stock is good buy and The Dow jumped 150 points
Look like he knows market better than most expert?
On CNBC’s “Closing Bell” FM contributor Jon Najarian told Dylan Ratigan he sees a catalyst out there that could lift XLF much as 100% - and as soon as next week.
Now everyone is going to come out from hiding and going to make this type of call.

They have just abruptly turned negative. I don't see any negative news on Bloomberg...

So WGW gets bourght, what likley effect will this have on the price?. Is there likley to be a wave of optimism or pessimism from this? Short term positive (ie looking at the movement yesterday and today) long term means what?. Seems this thread gives New Gold a hard time but aknowledges recent price performance. Do I hang in there or reduce or dump all?. It explains alot about the recent volatility but am a bit confused about the future here.

David--here is the article

These Stocks Could Skyrocket 100%, Says Jon Najarian
Posted By: Lee Brodie

On CNBC’s “Closing Bell” FM contributor Jon Najarian told Dylan Ratigan he sees a catalyst out there that could lift banks [XLF 6.89 -0.09 (-1.29%) ] as much as 100% - and as soon as next week.

The catalyst involves mark-to-market accounting; which has been blamed for forcing banks to record billions of dollars in writedowns.

According to Reuters, a U.S. House Financial Services subcommittee is expected to hold a hearing on mark-to-market accounting rules as soon as March 12. The SEC's chief accountant and the chairman of the Financial Accounting Standards Board, will be asked to testify, the report said.

If that meeting results in the government relaxing mark-to-market rules, Najarian thinks the stock market could explode.

He says, “if the government relaxes mark-to-market for 12 to 18 months you could see financials move 100% in a matter of hours.”

And he goes on to say, “In fact, I hope you’ll replay the soundbite because if the government relaxes mark-to-market accounting a number of banks stocks will be unbelievable values at these levels.”

But that's not all. Najarian thinks the move could not only light a fire under banks, but the entire market. “If that Reuters report above is right there’s a very good chance the entire market will get a big lift.”

Again, the date to watch is March 12th.

Bobbyo, "Where is the reporting"? Gone the way of All the President's Men.

Yesterday, our local news reported a local bank receiving a cease and desist order for 'engaging in unsafe lending practices' by the FDIC and our WA DFI. The next day, the editor downgraded the headline to an 'other stories' link...he says it was not for fear of annoying their biggest advertisers (bankers) but because the woman who was rescued falling off a dock into water was more recent news. Another urban paper reported on the elaborate MORTGAGE FRAUD committed by a 'loan officer' implying he was acting alone without mentioning that he was an unlicensed convicted criminal with history of fraud working for a MORTGAGE BANK, not a broker. News is what and whom you believe.

Thanks, vinod... Somehow, the market futures don't seem to reflect the euphoria...

Excuse me if I don't dive head first into the market since China has a real stimilus plan. We do a stimilus plan the market goes down. They do a stimilus plan and the market goes up? Maybe we should elect the Chinese Premier as our next president.

Financial's rally 100% by pretending they have assets meanwhile WFC credit rating is being cut. Maybe the 100% financial rally on 3/12 will just get us back to today's levels!

Hi Bill,

Coincidentally, just a few hours after your commentary on how to completely destroy shareholder wealth in a profitable company (Stelco ) by running it through the Canadian "re-structuring" circus, U.S. Steel ( Canada ) Ltd, announced the closing of it's two steel mills in Ontario, with the loss of thousands of jobs. U.S. Steel recently acquired Stelco for a little over one billion dollars ( yep, the minimum value you put on it in 2005 when it was deemed worthless by Farley, Stephen & company ).

According to a CBC Radio interview today with the Hamilton East MPP, Paul Miller, the Stelco CEO Rodney Mott walked away with over $60 million in compensation for his efforts in the takeover which remains as one of Canada's largest financial frauds of recent years. This sets the stage for the final act where US Steel eventually restarts the Nanticoke mill and permanently closes the Hamilton mill, thereby allowing the redevelopment of hundreds of acres of prime waterfront harbour lands into a giant commodities superport and deep-sea terminus. That oughttabe good for a couple of hundred jobs for the locals, not to mention the ongoing work for the fleet of lawyers running this game!

I'm with you bobbyo. So what if they announced this deal? We already heard of the big commodities acquisitions for 20 years worth supply of oil and whatever else. This is already old news, and a stimulus announcement is just a continuation of that news. And yes, China is getting great prices on their commodities, but as always, doesn't mean the prices can't get cheaper. Ultimately I think this pans out as a non-event, non-market mover.

They still don't have a local consumer, and now no European or American consumer. So what, are they going to join Japan with bridges to nowhere?

As for the supposed rally on or after March 12, I think this actually sets up nicely for a rally up to the hearings and then the next leg down...

David- Take a look at CME.com. You can get real time quotes on futures contracts, volume, open interest, charts, news....on and on. My time is very limited and I got sick and tired of refreshing, searching, and all. They have a free 2 week trial. I have set up my screen and can follow exactly what I want as an app. I have Macbook Pro with VM fusion so I can run XP. I can split screen "Street Smart Pro", "CME-e-quotes", Cara, and a live feed from Bloomberg TV. I am NO computer guy at all and got it all figured out quickly.
Take a look, it's free.

Jon Stewart is absolutely dismantling CNBC with one of his before and after video expose's...... pretty much got everyone, Santelli, Cramer, Maria, Fast Money, Squawk box, full on clown suit curtain pullback. We might have to wait for the video, but it's killer.

The best Daily Show EVER!!!

Thanks for the pointer, Mark. To get my energy future prices I use http://www.bloomberg.com/markets/commodities/energ....

Oregon's PERS (public employees retirement system) lost 44% in 2008 and now has $43billion, and at the end of 2007 PERS was 100% funded. If in two years the fund the hasn't increase enough to be 100% funded (up 80%, not happening)again, the employer (tax payers) are obligated to make it 100% funded. This is Oregon's version of Madoff scandal. Nobody is talking about this here in Oregon.

I don't dispute that commodities and commodity companies have more intrinsic value than many other sectors. I just don't think this stimulus announcement is anything special enough to move the market or commodities/producers in any significant way.

Also, if this turns out to be a very protracted recession, there won't be any significant aggregate demand for commodities and they will continue to languish. Don't forget that the producers are leveraged to the materials, so at $1.50/pound of copper, the producers have intrinsic value, at $1.25 they go bankrupt (numbers made up, just making a point).

edit: Also, if US$ goes down, commodities go up, including inputs, so doesn't help producer as much as one might expect

Hey, it's the least I can do given the work you share with the group. I used to look at Bloomberg. I like to look at the futures for the S&P Mid-cap 400. So far tonight it has only traded 2 contracts while the Dow, 95 contracts, S&P500, 1,077 contracts. This might answer your question of why the quick flip today. I use this as a indicator of the strength of the futures move. That's one of the reasons I bought BAC after hours and sold Pre-market today.
Can't hurt to take a look.
Edit...and if you look very closely in the upper right and corner, I'd swear that is Rick Santelli.

Eh, Russia had large foreign reserves. Those are almost used up.

China had large foreign reserves, how much have they committed to bailouts now?

Guess I'm not sure what you are arguing. Is it that base metals will rise? And/or base metal producers?

I just think that China is built to export to the west. West implodes, hence china gets hurt. I thought decoupling was already debunked...

I have no experience with buying corporate debt. I do remember reading it was the cool thing to do during the depression.

I guess you're getting the other side of the debt deflation trap by buying bonds. You also get paid pretty well in the interim while you wait it out. And if things improve, your bonds improve. They seem to have less downside risk, and the upside is substantial, but not infinite.

ALOHA !!

Here's your first red flag right across the bow from the Chairman(woman)of the FDIC! Think about it ... this is the MIDDLEMAN again. So, US TAXPAYERS fund a BAILOUT of US Banks and the FDIC earns fees from these banks, so why do we need these banks again? If a bank was legit would it not EARN revenues off interest from borrowed funds, the same CAPITAL that depositors have provided? I find it hard to imagine even a legit bank believing that somehow its the BANK'S money! IT NEVER WAS THE BANKS MONEY!

BANKS ARE IN THE LEVERAGE BUSINESS not loans ... they are the MIDDLEMAN skimming fees from depositors like the Mafia skims the Vegas casinos!

READ ON:
Bair Says Insurance Fund Could Be Insolvent This Year

2009-03-04 — bloomberg.com

Federal Deposit Insurance Corp. Chairman Sheila Bair said the fund it uses to protect customer deposits at U.S. banks could dry up amid a surge in bank failures, as she responded to an industry outcry against new fees approved by the agency.

“Without these assessments, the deposit insurance fund could become insolvent this year,” Bair wrote in a March 2 letter to the industry. U.S. community banks plan to flood the FDIC with about 5,000 letters in protest of the fees, according to a trade group.

Smaller banks are outraged over the one-time fee, which could wipe out 50 percent to 100 percent of a bank’s 2009 earnings, Camden Fine, president of the Independent Community Bankers of America, said yesterday in a telephone interview.

“I’ve never seen emotions like this,” said Fine, adding that he’s received more than 1,000 e-mails and telephone messages from angry bankers.

Bair rejected arguments that the agency should use government aid to rebuild the fund. The FDIC has authority to tap a $30 billion line of credit at the Treasury Department and legislation pending in Congress would boost the amount to $100 billion.

“Banks, not taxpayers, are expected to fund the system,” Bair said. Asking for taxpayer support “could paint all banks with the ‘bailout’ brush.”(end)

Okay ... yeah ... I can see you wouldn't want to "unfairly" paint all banks with that BAILOUT BRUSH!! HA!! Just so the FDIC isn't painted unfairly the US CONgress has moved up the $30bil "credit line" to $100bilUSD! Come on Sheila ... pull your head out ... WHO FUNDED THE $30bil "CREDIT LINE"? These people are just INSANE!!! That's a good idea ... lets not call it a BAILOUT any more lets call it a CREDIT LINE! That way it sounds as if the banks EARNED IT and not the US TAXPAYERS! What is the US TREASURY if it isn't WE THE PEOPLE? Is it OPRAH?

SCAMS-R-US!!! Ahh ... its deep!

Man, that makes me sick. If you ask me they should have given the 1.5 trillion in tarp money to the FDIC, and then fed the banks to the wolves.

edit: by that i mean use the tarp to protect deposits, and that's it, full stop!!

How much money are we printing at the Federal Reserve? Note this Al Gore-esk graphic demonstration on the Fox News Chicago by Glenn Beck on what happened after Nixon eliminated the gold standard, wars, Y2K, 9/11 and the effect of the Bailout...a must see!

http://www.youtube.com/watch?v=lNS8IY_Td14

Sorry, but this FDIC problem could have been seen a mile away.

The treasury will have to make good, or its all over. Worse than AIG or Citi failing.

I don't think it will happen and I'm betting on it.

If I'm wrong, then that will be the least of my, and your problems.

http://ronsen.blogspot.com/2009/03/knock-on-wood.html

Mighty Mighty Bosstones
Relative strength
SPY
"Broken China"
Dollar wedging?
Gold at support
Mamis-Meisler NYSE breadth oscillator update

Focusing on 60 minute charts today...

Have a good one.

"Sorry, color me cynical :)"

No........ color yourself WISE!

There is something to his phi turn dates [from 2008 - Jan 2009]. But his Elliott Wave count has not been correct. Followers beware of his newsletter.

This is what I learned from EW analysis is this:
Here is the next wave: up.
And alternative scenario is: down.

EW has a point, I even noticed myself that major sell offs have a rhythm, like the 4 waves down before a reversal.

If EW person aligns himself with the given market move, the results can be astonishing, but likely only for a limited time.

Anyone knows other EW gurus besides McHugh?

Edit: never mind the gurus. I just read about Prechter, how his EW count worked in 1980's and then did not in 1987 and how his followers were wiped out.

Proudpapa, vis-a-vis abandoning M2M - it does solve some political issues, like Obama getting reelected in 2012.

Acknowledging Kaimu's argument that this is about power, if I were Democrat and looking to maintain power I'd be looking for ways to appease the voter. Lifting M2M would give a nice lift short-term to the market. I know squat about CDS' but my guess is that these should ideally (from Washington's point of view)be frozen until after the next election.

Correct me if this would in fact be impossible.

We know from Japan's experience that massive government spending picks up the stock market WHILE THE TAP IS TURNED ON. When Tokyo turned off the tap, the market collapsed again. TARP 2 spending is planned for 2011, along with increased taxes on the rich (something to please joe six pack as he ticks the ballot box). So GDP should show positive growth as we head into the next presidential election - Obama and the Democrats are back in.

We know that the Swedish have briefed Washington about their banking crisis.
Here's a transcript of an Ozzy doco speaking to some of the central characters involved in the Swedish affair (cut to the chase 1/2 way down the page):

http://tinyurl.com/cjn9jg

The Swedish government gave the special authority designated to unwind all the bad positions the banks were in 15 years to sell the assets at the best price possible. They did it in 5 and the taxpayer paid very little out of their pocket. Obviously, with global growth in the ditch, this time it may take somewhat longer to unwind these positions.

So for the second term we could perhaps see M2M reinstated as global growth regains momentum. M2M is probably more palatable to the market and the politicians by this point, ditto CDS'. Given the heavy tilt towards consumption in the American economy (70%) significant drag could be conceivable. Yet in the following analysis ("Paradox Squared")the author suggest less consumption by Americans may produce greater GDP, a phenomenon witnessed in the 1950's and 60's:

http://tinyurl.com/yg2vms

Don't ask me how that sits with Japan being in the doldrums following the cessation of public infrastructure spending - perhaps the US consumer will be ready to kick in their share of GDP by 2015-16 (the Japanese consumer is old and reportedly niggardly in their spending)

So somewhere between the government stimulus, the drag placed on the economy by the unwinding of CDS' and the reinstatement of M2M, Obama and his team would be hoping for market stability (not to be conflated with growth) in the following 2 presidential elections. It looks like they've got 2012 planned, as TARP 2's rollout date suggests.

If market stability is reinstated towards the end of Obama's second election (note Japan and the great depression were double dip recessionary periods) then Obama goes down in history. That's the sort of exit I'd be looking for as a politician.

What does gold have with all this? Not sure. Maybe some flight to safety as the following quarters earnings are released (sure to be worse than ever). Do we see gold reinstated as backing for fiat? Maybe, at 10% backing so maybe 5000USD per ounce as part of an inflationary effort to reduce the debt.

Do the Chinese continue to buy US T bills? Why not, they're in this together. The Chinese have found some use for US dollars, spreading the risk around to trading partner states. It wouldn't suprise me if the Chinese unload more of their USD in credit lending. Lord knows the East Europeans will need the cash soon.

This talk of gold and t-bills is pure speculation on my part, but I see less likelihood of gigantic gains as some gold bugs are suggesting. There seems to be a more historically tried and true method for resolving financial crisis than some radical change of our economic or monetary systems.

Kaimu, I reckon the politicians might outwit you yet!

That's GREAT NEWS Bill!

He did more in a half hour than anyone could possibly ask for.

How is it that a comedy "fake" news show is the true beacon of our free press?
No matter, they hit it out of the park. With your help it it would be off the charts!

I love those before and after clips.....what a great tool in today's video clip political dialogue denial. They're taking away the primary tool of politicians and bankers. Lies.

"Man, I can't even tell you why..."

:)

My outlook on the day is a little more positive.

I'm mysteriously positive like yourself 2nd, despite the ugly pre-market conditions.

Lot's of stuff happening now, rumours swirling (M2M), very turbulent...

I like it.

Odd,

Prechter's count called the 87 crash two weeks early. His analysis didn't do so great in the 90s though.

I would argue no one understands EW more than him, as Frost and him wrote a great book.

Many trading blogs have EW counts... take what the market gives us.

Thanks QT. Even I could read today's potentiality in that chart.

So what do you fundamentally-minded jamooks make of the Yamana results yesterday?

In addition, Banwa, it also appears that yesterdays bullishness has disappeared into thin air, like a good buzz. What a difference a day makes. Even Alcoa went up. I should have known somebody was getting into the perfectly legal medical marijuana again. Hey Bill Mahr last night, one of my best friends brothers is his head writer, Bill Mahr says:

"If they taxed marijuana they could raise what?...a billion in taxes?....
..just from my house alone:)..."

bobbyo, EDC, proudPapa — I'm you folks on this.

Toxic assets which are of ? value. Mark to what market?

Calls for more transparency coming from every direction. Broad generalities of (long term) "hope" from Obama.

Then... out of the EAST comes a stimulus package and a cheer rises from the depths of despair!

China? They don't call it the "Mysterious East" for nothing!

We know (or should by now) that Microsoft and the MSM have given in to government monitoring, filtering and total control of incoming info. What makes anyone believe outgoing info is gospel?

What we got yesterday was the equivalent of "Yes, Virginia, there is a Santa Claus."

People will believe what they WANT to believe — until it fizzles.

Vinod mentioned personal savings rise recently. Very true, and the trend is up long term, bad for economy. However, short term, the spike is unsustainable. This is the fuel for the next bear rally:

http://bespokeinvest.typepad.com/.a/6a00d8349edae9...
http://bespokeinvest.typepad.com/.a/6a00d8349edae9...