Cara's Commentary & Community Chat, Wed., May 20, 2009

ALOHA!!

WOW ... HEY Jeanne Garafalo, this looks like one big huge TEA PARTY to me! Every CALI proposition to raise taxes was defeated, even the Education Funding! WOW ... that used to be the mainstay of my business niche doing public works construction in San Francisco, CA bay area and it was the SACRED COW. I cannot imagine what the bidding wars must look like now. They probably need a couple school buses to do BID WALKS now!

CALI PROPS
Well here is the results of the latest proposition results with 100% precincts reporting:

N 1A "Rainy Day" Budget Stabilization Fund 1,327,400 34.1% 2,555,519 65.9%
N 1B Education Funding. Payment Plan. 1,452,535 37.4% 2,421,906 62.6%
N 1C Lottery Modernization Act 1,368,222 35.4% 2,493,770 64.6%
N 1D Children's Services Funding 1,324,252 34.2% 2,536,657 65.8%
N 1E Mental Health Funding 1,292,437 33.6% 2,549,361 66.4%
Y 1F Elected Officials Salaries 2,859,122 73.9% 1,010,457 26.1%

The little "N" and "Y" means if it passed or not ... "N" = NO and "Y" = YES.

The only proposition that passed was 1F, where elected officials salaries cannot increase during a budget deficit year. I guess that means "forever" unless the elected officials can get "jiggy" with the numbers like the US banks just did and hide the losses!

Can you imagine the idiot at Sacramento that named PROP 1A ... "RAINY DAY"? They should have called it "DAILY HURRICANE AND HUGE ASS AVALANCHE" ...

So if CALI is any example, the citizens are DONE WITH TAXES! WHAT A MANDATE! If that is the case then all GOVERNMENT at all levels must now close up their special little PROMISES SHOPS or get PRINTY! The US TAX REVENUES continue to collapse with no end in sight, yet OBAMA now has spent $7.603TRIL so far in FY2009 according to the latest May 18th US TREASURY DAILY STATEMENT. That works out to be $950BIL USD per month or $32BIL USD every day or $1.3BIL per hour! These people who now run our country are SPENDING ADDICTS! They're in some SPENDY EUPHORIA DEATH SPIRAL ... Someone call 911!

This pretty much confirms our move to HAWAII ... My wife and I left California because the taxes were too high and the State was always broke and asking for more taxes. So as the elected officials keep spending they have driven out some of the best businesses and business people. My company was churning out millions in revenues every year and I was personally paying the State of California six figure income tax revenues every year. All that corporate tax and individual tax revenue is gone now. I sold and I ... M-O-V-E-D!

If you go to this website which I follow somewhat Tim Iacono has officially disclosed to his readers that in ten days he is moving out of California. He says this about himself.

"Tim Iacono

About Me
I am a retired software engineer and, in addition to writing this blog, I am also the founder of the investment website Iacono Research and the author of a weekly newsletter that focuses on investing in natural resources."END

The most productive of my long term friends who had businesses in California have moved out. Two that I know have moved to Nevada(less taxes). These people are small business people who are very successful at what they do but do not care to blindly hand over hundreds of thousands of their hard-earned cash to the State Of California's giant black hole of DEBT! Not much we can do about the US GOVERNMENT, but we can move to States with much friendlier tax brackets.

I believe that CALI will see much more BRAIN DRAIN ... I would think there would be many Presidents of countries lined up a mile to throw GOOG ten and twenty year tax incentives just to relocate to their country.

At some point the tax hell deterrent trumps the "cool"!

ALL OUR BEST THINKING ...

Curse me Bill, but I forwarded today's commentary to the White House.

My family received yesterday's excellent update of where we are at.

The President's groupies can take today's commentary any way they want to.

ALOHA !!

Bill ... seems as if the SEC has been a bastion of fraud from day one! If you put any confidence in "management" or as you say the "jockeys" then having Joseph P Kennedy appointed as the first SEC chairman should have been a major RED FLAG!

Here is part from a prior post of mine on the SEC subject ...

May 14, 2009 ...
The official SEC website publishes info about what the SEC does and its history. Here is the reason the SEC exists according to the SEC.

"The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

As more and more first-time investors turn to the markets to help secure their futures, pay for homes, and send children to college, our investor protection mission is more compelling than ever.

As our nation's securities exchanges mature into global for-profit competitors, there is even greater need for sound market regulation.

And the common interest of all Americans in a growing economy that produces jobs, improves our standard of living, and protects the value of our savings means that all of the SEC's actions must be taken with an eye toward promoting the capital formation that is necessary to sustain economic growth.

The world of investing is fascinating and complex, and it can be very fruitful. But unlike the banking world, where deposits are guaranteed by the federal government, stocks, bonds and other securities can lose value. There are no guarantees. That's why investing is not a spectator sport. By far the best way for investors to protect the money they put into the securities markets is to do research and ask questions."END

Now lets look at who was the first SEC Chairman appointed by FDR in 1934 ...

JOSEPH P KENNEDY

Here are some briefs I compiled about Kennedy so that we may establish his impeccable credentials for policing WALL STREET.

"In 1919, he joined the prominent stock brokerage firm of Hayden, Stone & Co. where he became an expert in dealing in the unregulated stock market of the day, engaging in tactics that would later be labeled insider trading and market manipulation. In 1923 he left, and set up his own investment company, becoming a multi-millionaire during the bull market of the 1920s."END

Now lets see how he played the stock market during the ROARING TWENTIES and how he fared during the Great Depression.

"Kennedy formed alliances with several other Irish-Catholic money men, including Charles E. Mitchell, Michael J. Meehan and Bernard Smith. He helped establish the Libby-Owens-Ford stock pool, an arrangement in which Kennedy and colleagues created a scarcity of Libby-Owens-Ford stock to drive up the value of their own holdings in the stock, using inside information and the public's lack of knowledge. Pool operators would bribe journalists to present information in the most advantageous manner. Attempts to corner stocks were made that would cause the price to go up, and bear raids could cause the price to collapse downward.

Kennedy later claimed he knew the rampant stock speculation of the late 1920s would lead to a crash. It is said that he knew it was time to get out of the market when he received stock tips from a shoe-shine boy.

It has been noted that during the Depression Kennedy vastly increased his financial fortune by investing most of his fortune in real estate. In 1929 Kennedy's fortune was estimated to be $4 million. By 1935, his wealth had increased to $180 million. According to Time Magazine, Kennedy survived the crash “because he possessed a passion for facts, a complete lack of sentiment and a marvelous sense of timing."END

Appointing "inside traders" to govern the SEC in 1934 was the first misstep ... the missteps continue to this day.

"There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved."
- Ludwig von Mises

You may get a stiff neck from looking over your shoulder while using. Perhaps the back of the receipt could feature a coupon for chiropractic services... or self-defense classes.

LONDON, May 20 (Reuters) - The euro rose on Wednesday, while the dollar hit its lowest level against a basket of currencies in more than four months as slight gains in U.S. stock futures prompted some investors toward perceived riskier assets.

I see the opening will be exactly what I was trying to avoid. Glad I stayed out of the way. I'm going to wait for a better 'signal' than instinct to get short. All cash right now.

(Sorry for the duplicate posts- just moving them to the correct session.)

Despite the USD crashing through the floor over the past few days, the NY cartel has still been able to keep gold below the $930 mark. The battle continues this morning. When this defensive line is finally abandoned for higher ground, expect extremely coiled gold to make a major upward move. Tick Tock Tick Tock!

full scale assault taking place on the US dollar this morning,
USD index down to $81.70 as i write.

if gold can breach the walls at $930 and up along w/ some better than anemic volume on the shares we move into full-scale breakout territory.

if if if.

...

long gss as investment

2nd -

Or at least decriminalize drugs or eliminate the disastrous 3-strike law that has landed so many petty drug dealers in jail, at enormous social cost and taxpayer expense.

Not just decriminalize - that's a half measure. Full legalization brings the added benefit of a taxable business, all above board. Let Philip Morris put the drug cartels out of business.
Prohibition, version 1, trashed the Chicago police department, version 2 has almost destroyed countries.
Yes, drugs are bad, but the best way to reduce use is social pressure - how many tobacco smokers around these days? Not too many public drunks either.
Added advantage of full legalization - quality control.
FD - like my 2 glasses of wine daily - for health reasons, of course.

The banks gave their toxic paper and got money. Now, they want to pay back the money. Who is left holding the toxic crap?

USD index to 81.62 as per Kitco's charts... what a drop in the past 24 hours.

wonder if this holds through the session as gold jumps to $940.

TLT/bonds seem to be holding yesterday's levels though. wonder if something is about to be leaked through the media that is especially dollar bearish...

Well I got this mornings mkt move wrong. Again the lesson is go with the trend until it tells you it has turned. Sold most of my TZA at a loss this morning. Still holding faz, which is near my purchase price.

The 7am MBA purchase report http://tinyurl.com/p3c3xd was not good, but this mkt eats bad news for breakfast and powers on. The EIA petroleum status report will be up at 10:30am.

Today, I have a viewing to go to for a relative and other chores.
Good trading and good luck to everyone!

You were reading my mind Dr. Cosa!

Whenever we see this it isn't long before the Fed or Treasury makes some announcement. I see UUP is wandering back a few pennies...

ALOHA !!

number2son posted ... "I don't share Kaimu's glib satisfaction ..."

Jeez mate, its not glib satisfaction its called "planning the plan and trading the plan". So much emphasis here is placed on "short term trades" that the long term "trades" like paying off debt and positioning hard asset hedges against wealth confiscation become invisible strategies. After the TECH BUBBLE burst my strategy shifted towards long term monetary trends and away from stock market momentum trading. Of course "long term" anything is so NOT SEXY in America!

"Riding out in Hawaii" was a very long term plan that started in 1996.

I understand the basic human condition ... short circuit the 9-5 job and jump to McMansion Bahama beach life! Just look at what the SEC publishes on their website about that.

"As more and more first-time investors turn to the markets to help secure their futures, pay for homes, and send children to college, our investor protection mission is more compelling than ever."END

Hummmmmm?? Okay SEC, thanks for your protection services ...

I find that mentality very dangerous yet it pervades the American psyche now.

Far fewer little guys will succeed in the end, even with the SEC's "help" to tame HB&B! HA!!

During the collapse of the German Mark in the 1920s there was huge rampant stock market speculation. In desperate times everybody wants to win the Lotto! The winners during that monetary collapse were out of the Mark and the major cities and preferably Germany.

If your wife's school is not in the Mt. Diablo Unififed School Dist, the San Jose Unified or Pittsburg/Antioch Unified or Vallejo/Fairfield Unified or Menlo College or Stanford then chances are I didn't build her classroom! If you are on your way to prison then the ones I built are Ione State Prison, Corcoran State, Vacaville State, Folsom and Yolo County. The nicest jail cells are at Yolo County(its like a mall), so I recommend committing crimes in that vicinity! And if you work at the Benicia Water Treatment Plant, Mare Island or Sea World then I did those also! The punchlists were signed off years ago, so no complaining please!

From what I recall of California politics PROPOSITIONS have been the mainstay for decades! No CHANGE there ... What has changed about California?

That's why we moved ... You know ... hows the definition of "insanity" go? Something about repeating the same mistakes ...

I try to abandon sinking ships ...

IT IS ...

number2son, agreed

Let these petty drug dealers out of the prisons. Legalize pot and tax it.

Prison Facts:
http://webb.senate.gov/pdf/prisonstwopager.html

Ka-ching!

"Bofa raising more capital" is apparently more important.

reel those suckers in boyz!

Canadian dollar just broke above it's most recent high in November. Don't tell me we're headed back to parity??

waiting to see if POG rises or is suppressed this afternoon.

UXG has lagged other miners until now, and picked up 10% this morning. It might appreciate further than the other juniors in the coming 24-48 hours.

Going out this evening, so want to see a little moolah after such a frustrating month.

Interestingly, it took UXG 5 minutes to appreciate after POG started shooting. That's four minutes and 50 seconds with which I can jump back in again if I'm in front of the screen.

ALOHA!!

Not only are the human statistics of prison grim but the actual costs are rampant. In 1988 when I was doing Corcoran State Prison(max security)the cost of one jail cell was $175,000USD(total cost of prison divided by total jail cells)and the cost to imprison one inmate for one year was $30,000USD(total annual cost to run Corcoran divided by total inmates). That was 21 years ago.

Here are some of Corcoran's notable inmates:

* Juan Corona, who murdered 25 people in 1971. He was transferred to COR from the Correctional Training Facility in 1992[19][20] and now lives in COR's Protective Housing Unit.[6]
* Charles Manson, who was transferred from San Quentin State Prison to COR in March 1989.[21] In May 2007 he was denied parole and will not be eligible for release again until 2012.[22] He lives in COR's Protective Housing Unit.[6]
* Joe "Pegleg" Morgan, leader and co-founder of the Mexican Mafia. He was at Pelican Bay State Prison prior to being hospitalized at COR from October 1993 until his death in November 1993.[23]
* Sirhan Sirhan, convicted assassin of United States Senator Robert F. “Bobby” Kennedy. He was transferred to COR from the Correctional Training Facility in 1992[20][24] and lived in COR's Protective Housing Unit until he was moved to a harsher lockdown [at COR] in 2003.[6] He was denied parole in March 2006, and his next parole hearing will be in 2011.[25]
* Dana Ewell, convicted triple murderer, who ordered the murders of his family in 1992. Currently he is serving three life sentences and is appealing his sentences.[26]
* Mikhail Markhasev, convicted murderer of Ennis Cosby, son of entertainer Bill Cosby.[27] In 1998, he received a sentence of life without parole, plus 10 years.[28]END

Please note that Charles Manson will be up for parole in 2012 ... When we were working on Vacaville he was in the infirmary and the inmates poured lighter fluid on him and tried to lite him, but they put him out in time.

I am all for legalization also ... so was Bob Marley, but the DEA isn't!

RE:>I am all for legalization also ... so was Bob Marley, but the DEA isn't!

here here. Entertain these fantasies if you will, but drugs means control and I'm not convinced from the actions of government throughout history that governments are ready to give up that sort of control.

Money for enforcement they can spend. It is after all your money.

Well you guys have to go back to CA.

It will blow your mind more than the weed IN the stores.

Kaimu, with your recent foot accident you are certainly eligible for a prescription.

I think within reason, the people have taken back their rights.
No jury, no need for a prosecutor to bother. You would be hard pressed to find twelve people to convict in California. All it takes is one to throw it out. Within reason...

'nuff said.

Says deal valued at $395 mln
Says deal accretive to cash flow on a per-unit basis

May 20 (Reuters) - Pipeline operator TC Pipelines LP (TCLP.O) said it would buy North Baja Pipeline LLC, a subsidiary of natural gas transportation and storage company TransCanada Corp (TRP.TO), for $395 million in cash and common units.

http://bit.ly/100A0L

As you can surmise, I sold the GSS at a nicely profitable 2.08 off my buy price of 2. And a good thing too. Now when to re-buy......Hard to say.

Geithner's appeal for "rules of the road" to ensure against "manipulation, deception and abuse" takes equivocation to a whole new level. Rules are for game-players, the HB&B crowd for whom he speaks. The focus of government must be law enforcement. These recent initiatives make it even more apparent that HB&B intends to marginalize the SEC in order to buy time until wars, assassinations, and other geopolitical crises push the problems they have caused to the back burner of public awareness and the demands for accountability evaporate.

What the people demand is a restrengthened and empowered SEC where those who violate securities laws and commit fraud are punished with appropriate jail time. It is only when those fraudsters within the HB&B community go to jail that American-style capitalism and market confidence will be restored.

This breakdown today in SPX and XLF is too easy. I'm going to guess there will be a "difficulty" coming later today or tomorrow. If it goes down hard at the close, I will take profits in the stuff I shorted today.

never posted about the USD three times in one day, but look at it: 81.12
and little to no word on why.

a sudden plunge as money pours into stocks?

a harbinger of a USD index below .80 by the weekend? id normally say thats crazy but with such a large dump today i wonder what is going to happen overnight as the other half of the world awake to a crapped dollar and higher gold...

a fierce take down in gold just to keep the bugs on their toes, or an all out rush for the exits above $960, bringing us to $1000 sooner than many think?

shares are finally showing moxy here. and never one to be happy w/ the miners, ill add that we need some follow through for a few sessions to really say we have broken out, a day or two of price jumps a trend does not make.

good luck...

A slice of history.

http://www.youtube.com/watch?v=iRzr1QU6K1o

Maybe it's just me, but in the last 10 days or so I've sensed a different tone from Bill's comments regarding the financial markets and the Obama administration.

It appears to me that the words being expressed regarding these subjects is one of caution, to which I agree. Unless the general populace demands a different route, we are heading down a dangerous path. One where the president of the U.S. dramatically raises taxes, and then dictates who stays in business and who goes, and what employees will be compensated.

This is not how our system is supposed to operate. From the Gettysburg Address: "... that government of the people, by the people, and for the people shall not perish from the earth." It isn't happening in the current scheme of things.

Everyone needs to take the time to Google the names and contact numbers of their state and federal representatives, and call or fax them your opinion on these matters. They are supposed to represent YOUR interests and needs, not those of big business or selected monied organizations.

If you stay silent, these decisions will be made for you, and you'll have little recourse in time to come. The time for action is at hand.

Just one person's opinion, as always.

Sammas,

"Neither the wisest Constitution nor the wisest laws will secure the liberty and happiness of a people whose manners are universally corrupt." Samuel Adams"

There is really a lot of greed in the system today. I once heard a CEO say, he is like a hollywood actor or a sportsman and deserve to be paid $50 mill or whatever compensation, board has agreed.

Unless this compensation ratio is reigned in by market forces (shareholders, consumers etc & not by the govt), no permanent changes is going to happen.

More and more people will find ways and means to jump to the crook side to make quick money & today it is housing scam, tomorrow it will be another. GE story is a good one, how Jack Welch moved it from an industrial company to a financial company & screwed it (he retired rich though).

Unless rebate for providing liquidity on Canadian side works drastically differently from US, this doesn't make much sense to me.

See, rebate is being paid only for providing liquidity, which means passively bidding or offering, as opposite to hitting someone else's bids and offers - that would be removing liquidity and leads to additional fees. In practice, it means that in order to get rebate in author's example, market participant bids 3.45, offers 3.45 and waits for someone to take him on both sides of the trade. That someone is not motivated by rebates since he will be removing liquidity. Thus, volume is created by quite real buying and selling since passive bidding/offering does not create volume, only actual prints do. So, someone who wanted to buy got liquidity provided to him by "rebate hunter's" offer; someone who wanted to sell got liquidity provided to him by "rebate hunter's" bid. "rebate hunter" took his risk and got rewarded if he was right and lost money if wrong. Spread got tightened for real traders/investors saving them money. I would say, public interest is served.

I agree, however, having done and continuing to do the calling and faxing to
our representatives and media, is not gaining any traction. Responses have
been laughable and for the most part, completely off topic. So what do we do
now? Take to the streets? I'm getting a little long in the tooth for that kind of activity.

...(in at 5.06)...

Long SDS 57.55

S&P small double top 930.17/924.60
Advances 2520 to 1970 weakening
Declines rising

If SDS gets close to today's low of 55.80, I'm out.

Risk about 3%, time will tell.

which time did you buy it at 506? The first time it went there, the second time(coming down) or the third time, which was and often is the charm?

'Everyone needs to take the time to Google the names and contact numbers of their state and federal representatives, and call or fax them your opinion on these matters. They are supposed to represent YOUR interests and needs, not those of big business or selected monied organizations. If you stay silent, these decisions will be made for you, and you'll have little recourse in time to come. The time for action is at hand."

i understand where you are going here but, while i applaud the call to action in your suggestion and think that writing/calling cannot do any harm, i think you make a common mistake amongst good people: you expect others to behave according to YOUR values/morals/rules. those who are willing to perform the sort of acts that we see being played out before us will not play by your rules because they explicitly DO NOT believe in them. those individuals ARE acting in accord with their beliefs and are robbing us with every breath.

it is a lethal mistake--KNOW YOUR ENEMY

Waiting now for FOMC as an excuse to first whipsaw and then propel USD and markets... Which way? :)

Sammas

Fair enough.

What course of action do you suggest to exact a change in direction ?

Thanks in advance.

Since I can't short or sell options in ira accounts, I am seeking advice on how to play an upward movement in gold (not saying that I am expecting that or not).

I see a lot of discussion about different mining stocks. How do you buy the commodity itself (not physical gold). I tried putting in $gold in my ameritrade search window and it didn't find anything.

I would appreciate any help on how to invest in an upturn in gold be it miners or any other way.

thanks

I got an alert today I set exactly six months ago. It's related to this. Obviously nobody DOES know where the market is going to go - but I very much think Bill is one of the best people out there to listen to. Still I wanted to call that little bet anyways. It's all good fun.

http://www.billcara.com/archives/2008/11/caras_com...

Nov. 20, 2008, 7:27am ET Bill said,
"Why buy today when I can put off that decision until tomorrow? Isn’t that the opposite of saying on May 19, why sell today at Dow 13,000 when I could put that decision off until November 19 with the Dow at 8,000? Procrastination and opportunity: two words you ought to think about today. see Addendum

Exactly six months ago, the Dow Industrial index was +63% higher than it is today. I’d like to make you a little bet that six months from today, the DJIA will be at least +30% higher than it is today, which would put the index at 10,400 or more.

Of course, nobody knows for certain where the market is going from here, but I will say with a high degree of confidence that the majority of money to be made in the next six months will be long rather than short, and it will be made in equities, not fixed income."

While the DJIA is only slightly higher than 8k - it would have been a great idea to buy in November (or March) and sell around now (or later). Longer bets were the better idea. Right?

shark - why shouldn't gold, silver and palladium begin a big, sustained upmove versus the U.S. Peso?

During this recent rally, I believe we've had support from the big guys. The only interventions I have seen was perhaps 2-3 days ago which in retrospect looked like an attempt to momentarily slam gold prior to the move up, possibly to shake traders out.

When the price gets too high for comfort, I believe the Fed will come back into the picture, and we will see those nasty vertical red lines painted all day across the gold chart, and $gold will lose $20-30 points a day, absent any dramatic event which is not yet on our radar.

No apology needed Telestar3d this will certainly get kaimu stirred up though. I love Hawaii and have been many, many times in the past 30 years but I have to say between it and California the taxes and fees are so onerous my family has chosen other locales. My Sister and Nephew are Maui locals and it appears to get some infrastructure upgrades (road to Hana, new highway from Kahalui to Kehei etc) but I suspect it was the flood of dough from mainlanders financing it. You are dead on with the lack of infrastructure in your fine State overall, has been the same since the '80s. Too bad.

Telestar3d

What is more useful to constituents ? Re-paving a spare runway at an airport at a cost of $800,000 that has 3 commercial daily flights, or fixing tennis courts at a cost of $1.5 million.

Let's see, $800,000 to fix the backup runway (something NOT used) versus $1.5 million for something used and enjoyed by many.

John Murtha directed $200 million to this airport located in the middle of nowhere.

Hmmmmm .....

http://tinyurl.com/c34qyt

@ 1:51 in this video, the gentleman running this airport literally laughs in your face when asked if the money being spent is justifiable. This is your bailout money at work. No purpose, just waste. Absolutely ridiculous !

These are your tax dollars being pissed away by your elected leaders.

Just sold at $44.40 1/2 of SKF that I purchased last Thursday at $46.18. That was the largest single purchase of SKF I made since I started playing against this rally (about 5% of my portfolio, whereas all other SKF purchases were about 1.5% of my port), as I became a little too sure of myself (of my understanding that the market trend has turned down). I was immediately punished for making this larger than usual trade, as SKF fell to $41 on Monday and I was afraid to add to my position since I felt that I had too much SKF already. I don't want to be in that situation again, and so the small loss I took today (0.1% of my port) will allow me to have much less fear when buying more SKF should it drop down again. That is, if I see SKF near $40, then I'll buy back the same shares I sold today at $44.40.

For the N-th time I am shown that my market trading only goes well when I have the flexibility to do something EITHER when the market moves up or down. If I take a position that is too large and to which I am afraid to add when the market moves in some direction, I invariably see the market move in that direction, and besides getting worried about a large loss I am also unable to take advantage of that extra move.

You are right. Why people are not in the streets protesting is beyond me, but we can attest that trying to get politicians to do anything other then what they want is like driving 100 mph into a wall.

In Hawaii only 61% of the population votes and the Democrats control the union vote (the constituents)and thus the cycle continues.

shark- Based on the intraday chart, I would say it was the first time (I made the purchase at the time I made the post). I can't watch the ticks at the day job, so the buy was based more or less on the weakness I saw in the indexes at the time + a bet at least a few bulls would panic/sell out and ask questions later. I took the bet off when it was clear a massive sell-off was not going to happen.

Alberio,
I was wondering if we could use the "Bookmark comment" feature for this as well. I guess not. I keep going back to Bill's Daily reports & weekly reports (specfic ones) & also his daily commentary in chat. Thx for ur response tho

brand-new on Denninger site:

http://anti-federalist.org

I advocate voting for The National Initiate for Democracy at WWW.ni4d.us.

The NI4D would make us lawmakers just as the voters in California and several other states. I for one am tired of pleading and begging my congressman to do the right thing. Mendicant democracy can be improved by creating a fourth branch of Gov and empowering ourselves.

SDS out small gain

I kind of figured that, but just wanted to make it clear to those who think I am too gloomy.

A couple years ago I carried on a short correspondence with Irwin Stelzer at The Weekly Standard magazine. He said, "You are too gloomy; remember a great nation can tolerate a lot of ruin."

I have noticed his columns are much more in tune now with what I wrote then.

WW2 is one of my interests. I visited Dachau in 1994 and couldn't help wondering how people could have let such a terrible thing happen. I think they must have been a lot like we are now. First it was only the low paying jobs (think Jews). Then it was only the manufacturing sector (think homosexuals). Then it was low prices for the consumer (think slave labor).

Eventually it (absolute elitist/government control) began to infringe on everyone — by then it was to late to stop it.

I honestly believe this situation is insidious and becoming universal. If we're lucky it won't end in another war.

i know many here follow Jim Sinclair, today's post is the most chilling i have read from him in over 4 years:

some clips without charts:

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

Dear Extended Family,

This is without a doubt the most important piece of information we will present to you this year. What you will read ahead addresses the pivot point of the literally thousands of missives we have posted here on www.JSMineset.com telling you this is coming. It is happening here and now. Be prepared and stay strong.

We are approaching the beginning of the final drama in this unfolding OTC derivative meltdown. This is the beginning period for the 5th leg of Alf Field’s correct analysis.

This is the re-acceleration of the long down wave in Martin Armstrong’s Business Cycle analysis. This is the approach of the acceleration of the gold price into my price objective of $1650 by January 14, 2011.

Sure the US dollar will be defended at the .8100 level that has been put out there as support by the major investment banks TA departments, but it will not reverse what is now in place.

Yes, the COMEX gang is too short of gold for it to launch here, so the battle to prevent it will be Titanic, yet fail miserably and soon.

You can see the shorts of the junior gold shares doing everything known to mankind, from dirty tricks to pounding on any small gold reaction to destroy share prices, but they too will fail miserably and soon.

All the paper gold and share demons will accomplish is an increase in their short positions. They will not get the panic selling follow through to cover that they so desperately want.

Martin Armstrong’s business sentiment cyclical analysis suggest that on or slightly after May 18th the underlying problems that have been overshadowed by media reports of green shoots will again impact the mind of the marketplace.

That is in perfect accord with the US dollar taking out major support in the .8100 - .8200, giving respect to the fact that major Forex traders are convinced that .8100 means something that it does not.

You ask why now?

In summary It Is Now and all positions should be held, putting trading on HALT.

Agreed Grym and I believe the US Bill is hoping will rise up to stop this madness doesn't exist. APATHY is the word of the day and like you describe it won't be one thing that tips the balance but a conglomeration of things akin to the boiled frog. I worry the longer the graft continues it becomes the new norm. sammas is correct that you need to vote (support) the things that support you and your beliefs.

"...remember a great nation can tolerate a lot of ruin."

um, why would it want to again?

(rhetorical; understand that it was not your comment)

2nd
out -OXBRE at 14.60
and TZA at 27.42

Recent moves in the Yen bear watching. The technical damage of the recent lengthy pull back are almost all repaired on the weekly chart. Any further moves up against the dollar, and the interest rates on Japanese bonds are going to skyrocket.

This will also affect the standing of the carry trades, who the "Japanese housewives" have been betting on. Its Goldman Sachs, if you ask me, but then what the heck do I have to base that it on?

Sammas,

Being a card carrying member of DENSA, I haven't yet figured out where
to vote my dollars in. Sure, I've got some PMs for insurance, and for the
most part lucky to have no debt other than a mortgage, but question still
remains as to where to invest the rest. Currently in PMs, physical and
miners, some ag, some oil.

Unfortunately, a large chunk of savings is in IRAs of various types and I
cannot get my head around Kaimu's liquidation as I would take a huge tax
hit (close to 50% between state and fed).

danielj,

My experience with legislators exactly, but continue to talk to people about what you see and what you've written to congress. I was early and got no where, but many more people are showing dissatisfaction with government all the time.

Covered my BAC short at market close. I'm assuming they'll run it up tomorrow. A few other folks did this as well, from what I can tell.

Sold 2000 INTC, 1400 MSFT, 1400 GE, 200 BA, 1000 VZ, 700 TGP, 800 DUK 500 VALE and 400 IBKR today at around 7:00 a.m. this morning. Bought 2000 SLV and set a stop that I will watch very closely. Kept my GIX. I'm listening to Bill's words from the wise posted the last several days. VOLUME STINKS and I do believe the recent run up has been HB&B using mom and pops accounts to prop up the market. I thought I would take some pressure off and watch for awhile.

Hi All - Nice run up today on this hog I have held forever. Fairly impressive new intercepts addding to 9+ Moz of Au reserves due for initial production in 2nd Qtr. It's a 50/50 deal with the Egyptian government w/ preferential capital return to operator Centamin. Kaimu - also listed ASX @ CNT. Happy Trading

Grym - "You are obviously not one of those who has lost his job. This "manufacturing giant" has been losing size and weight for nearly three decades. I've watched the closing of at least a dozen companies and their buildings are like giant brick carcasses."

That's what happens when the public votes to send jobs out of country. The concept was sold as a good thing for America and Americans, believing their representatives, bought into it hook line and sinker. So while these jobs were moving OOC and tax revenues were falling, what was the answer from political elites? You guessed it, raise taxes.... Wage increase performance became negative as jobs were more difficult to obtain, except of course for governmental employment, where growth remains in many cases.

If they must continue growing government, let them print money to accomplish the goal, I cannot support any concept of tax increase. Looks like a majority of Californians finally agree with me, it's about time now that the state is BK!!!

Why that was mom and pops managed accounts getting another shot in the rear more than likely.

Given that the 2009 standard of fuel efficiency is 25 MPG, how on earth is the Obama team going to deliver on their expectation of a standard fuel efficiency of 35.5 MPG by 2016 by means of 5% annual increments in fuel efficiency starting in model year 2012?

In the months and years to come we will see the spin doctors morph this expectation into a 35.5 MPG based on C.A.F.E., the industry anacronym for Corporate Average Fuel Economy.

Say your company now produces vehicles with a CAFE of 25 MPG running gasolene. Say you develop a line of electric or non-gasolene driven vehicles and by 2016 you lose half you market in terms of vehicle sales but have half of your sales being electric ( zero MPG ) and half remaining gasoline ( 25 MPG ) you are a much smaller company - but you have attained the 35.5 average MPG number.

This 35.5 MPG number won't be met by propeller-heads figuring out how to equip new vehicles with a black box that makes this technologically feasable in this time frame. It will be done in Washington, not Detroit.

"And where would that be? You are forced into a 401k. How much say do you have over taxes? Can't believe CA was asking for higher taxes after already being the most taxed state ! People don't have options. Where to put money - either buy a farm and guns or put money into foreign stock markets and move there eventually !"

"Being a card carrying member of DENSA, I haven't yet figured out where
to vote my dollars in. Sure, I've got some PMs for insurance, and for the 
most part lucky to have no debt other than a mortgage, but question still
remains as to where to invest the rest. Currently in PMs, physical and
miners, some ag, some oil. Unfortunately, a large chunk of savings is in IRAs of various types and I 
cannot get my head around Kaimu's liquidation as I would take a huge tax
hit (close to 50% between state and fed)."

i apologize for not having easier solutions, but this is not exactly a paper-cut that we are all dealing with here. the choices required to push back against decades of poor action are difficult. in my view, the consequences of not doing so are unacceptable.

it does seem as though the primary issue is where to invest.

if you are DEflationary, then physical cash seems perfectly reasonable. if you are INflationary, especially hyper-inflationary, then you can provide fairly sound insurance with some simple out-of-the-money calls that would be very inexpensive. if you are currency collapse, then you can hold physical PMs. obviously, one could engage in all three as well. all told, your sum total in the "financial markets" = negligible.

the only reason that anyone 'needs' to invest is because of inflation. were it not for inflation, then anyone could simply save a portion of their income.

real quick: do not know of any 'forced' 401ks and one can always set the contributions to ZERO; Roth contributions can be withdrawn tax-free. please check with your accountant, of course; they do not have anything to do now anyway ;) also, excepting the 10% penalty tax on traditional 401k/IRA, the tax hit you mention will likely be the same when you withdrawal in "retirement" age, unless, of course BARRY and Co. decide to raise the tax rate on that stuff....nah. you could also hold it in the event that you lost your job, in which case, the tax scenario changes significantly due to lower marginal tax rate with less income.

Totally off topic... directed at Kaimu or any other people on this board who have been to Hawaii. I'm planning my Honeymoon there - any suggestions on hotels / resorts? thanks so much in advance..

PS. love the action in gold this week - glad I loaded up last week....and my long lost HRG play actually has come back to life. Go figure.

Dave, sorta with you on this. I sold covered calls on my SLW and EGO earlier. Sold cc on GG today. If this is the TOG, guess I will miss part of it, but I have been whipsawed too many times waiting for it. At least I will make a good return off the covered calls. My one regret is that I did not get into calls and puts earlier. Still holding a few things on which options are not available.

ALOHA !!

On May 19th the US TREASURY was spending(outlays) 5.2 times revenues(receipts). Recall I mentioned in the height of the GREAT DEPRESSION when FDR was spending madly on job works programs he was only spending at a rate of 2.4 times receipts.

Since someone here mentioned a German concentration camp that brought my focus to WW2 when the entire world was at war against the Germans and Japanese. Some 61 million people died during that six year WAR(1939 to 1945), yet even with all that stuff like D-DAY and the constant battles waged globally every day FDR was only spending 2.05 time receipts in 1945, even less than the GREAT DEPRESSION era, however the size of the Budget expanded 10 fold to $93BIL USD. The difference was that every US citizen was committing his present and future capital to freedom and the elimination of Nazi Germany and Imperial Japan in an effort to win WW2. Who was the powerhouse behind winning WW2? GM ... GENERAL MOTORS! Now look where all our capital goes ... to enormous WELFARE DEBT in order to support insolvent banks and politically corrupt unions. WELFARE = DEBT not WEALTH! This is EMPIRE sized DEBT!

If we were forced to fight a WW2 today we could not. We have exported all the manufacturing required to win such a global conflict. We could nuke the World to death though, but forget a ground war!

OBAMA has spent $7.612TRIL USD so far in FY 2009. What's a $3.6TRIL Budget going to SPEND like if 2009 was a $1.2TRIL? Who needs a crystal ball when you have the US TREASURY DAILY STATEMENT?

I stand by my past statements ... this is the US EMPIRE unwinding and the road to monetary collapse.

5.2 times receipts is not the bottom of US TREASURY spending. I have been seeing over 6%. This is not sustainable and nor does this resemble anything close to fiscal responsibility. As a World Reserve Currency the US Dollar has put in a dismal performance.

GOVERNMENT IS ONLY AS HONEST AS ITS MONEY!

ALOHA !!

sammas posted ... "IRAs of various types and I 
cannot get my head around Kaimu's liquidation as I would take a huge tax
hit (close to 50% between state and fed)."

That will be known as DEBT ATTRITION ... People are already being forced out at the bottom of the market and then getting reamed by the IRS as they get kicked out the door! When it comes to a house and food, retirement will have to wait.

On the US TREASURY DAILY STATEMENT that is on TableII under line item "Individual Income And Employment Taxes, Not Withheld". On May 19th $327MIL USD worth were cashed in. Total for FY2009 is $249.1BIL USD. The DEBT ATTRITION line item ... Hummmm????

Bill said today: "As opined, losses in the $USD are needed to hold US equity prices at these levels or push them higher"

If I understand him correctly, he is suggesting that the USD is being sold - and has been for a while, presumably by the Fed - in order to tank the buck, which supports equities, and just happens to raise commodity prices along with it, more or less as a side effect.

Presumably this won't go on forever. Perhaps it will only last until all the banks have fed at the trough. Perhaps our friends who sell things in euros will eventually object, too.

So when this selling of dollars stops, and it must, the forces underpinning the market rally will be removed, and the market will tip over for real - not just one or two percent, but a nice dramatic move down. This seems like a reasonably likely occurrence, if a consistently weaker buck is all that's holding us up now.

In the meantime, we have a commodities (and gold) rally on our hands. "Dance while the music is playing" but don't get caught without a chair. :)

I have a question. Will gold and commodities drop too if the dollar is no longer being sold? Seems like they would. Sounds like everything gets pressured, not just the financials. Perhaps treasuries go up again?

AHA. Perhaps this is why there is no intervention! The Fed understands the gold rally stops as soon as they turn off the spigot!

interesting this happens to coincide more or less in time with the Martin Armstrong business cycle stuff.

My closing thought for the day.

TELESTAR3D - Thanks so much for the congrats and information! helps plenty. Was leaning towards Turtle Bay, heard great things...and the more people I ask...the more suggest it.

CP,

Right on the button. Even when Reagan was talking tax cuts my self employment tax went up more than enough to cancel any benefit.

What an amazing learning experience this last 18-23 months has been! Is there ANY corner of the Capital Markets (i.e. equities, debt, credit, currencies, etc) that hasn't been spun around 360 degrees, revealing all the working interconnections, risks, and reward potential? Oh, to live in interesting times! I hope the current crop of studying MBA's have been paying attention and weren't cloistered away reading dusty tomes and debating boring case-studies, because if they were, I fear they've missed out on an opportunity rarely seen by a generation. And could we have been any luckier than to have been able to share our experiences of it here at this forum? I bet these pages have raised-up some monster-smart future traders of risk, whatever their time-frames and goals might be.

On a lighter note, here's the currency page I check daily:

http://tinyurl.com/qz7ade

While it clearly shows an accelerating weakening of US$ since mid-march, and is obviously the source of a lot of angst that is being reflected in the discourse recently, I think (hope?), rather than being a sign of the world's revulsion to the US$, it is just another leg in a nascent global financial recovery that PRICE SERIES have been flashing since Nov '08. Gobs of wealth parked in $US - through fear - faced the prospect of little or no return. The world didn't end. Rail at the corruption or injustice of the system all we want, I think that money has been busy as a beaver since then: correcting, first, debt prices, then certain promising equity markets (i.e. BRIC), then commodity prices, and now currencies are on the mend as fear recedes. I sure hope all you US$ holders took the opportunity to diversify globally back in late '08. And the kicker to all this, if I understand it properly, is that once the world, ex-US, starts to feel a little wealthier, they'll be banging down the door for US (and Japanese?) equities which have been the global dog's breakfast YTD.

Anyway, DYODD, I'm just trying to keep my head above water and learn, learn, learn. I really just throw out these ideas here like a kind of rough draft for a term paper so that the really sharp crayons around here can raspberry me :P

Kaimu,

what do you make of the daily statements lines:Public Debt Cash Issues & Public Debt Cash Redemptions, where the issues are on the deposit side of the Treasury balance sheet in the Fed account and the redemptions in the withdrawal? in other words, how would you state what these lines are for in the simplest terms?

btw, the referenced comment was me quoting someone else :)

"So what's a good play here? Going long the USD?"

Joe, as Vadym choruses repeatedly, "what's your time-frame?". Barring some US financial meltdown, US$ index is likely to find some strong support in the 77.50-80.00 range, but it may, or may not, be only temporary strength. If found, what after that? What's the upside? Rather than trying to play your currency (if indeed you are an American), why not try to play themes based on its weakening (or strengthening) Global purchasing power? Investigate correlations with US$. Of course you'll find gold, but what of other, dare I say it, less selfish capital allocations?

Turtle Bay, if this is your choice look at the bungalows. There are about
10-20 of them and they are like studios right on the bay as is the hotel. There is a small road to the area by the bungalows that not too many people know about that parks about 10 cars and you are lucky in you see three cars parked there. We have stayed there a few times as the tennis courts are about two minutes walking distance and I was playing tournaments. You will be happy with this choice and have fond memories all your life. Aloha.

http://tinyurl.com/rbxxtl

There is always a bullish bias around Memorial Holiday. We will know tomorrow. Need to keep eye on Monday’s gap too.
To my knowledge we just finished the last major secondary share offering, there aren't any major ones left. Today’s sell off has to be the timed.

I'm unfamiliar with Berk's Bollinger Band Sell Signal. What's the idea? Is it relevant in screwed-up, extreme markets like we've experienced recently or is it basically a buy low, sell high type gizmo that works in normal markets?

I don't think it's myopic to enlarge a particular indicator for the benefit of teaching the signal to all. Thank you for the original post, and I look forward to watching the $VIX tomorrow and potentially placing another took in my kit.

http://dailybail.com/home/there-are-no-words-to-de...

*Disclosure I'm an attorney. Cross examination is the crucible for truth. This is the best example of Cross X I've seen in a while, especially for Congress. The distinguished gentleman from Florida is a former prosecutor and he makes a fool of the Fed's Inspector General

Mackinaw - "Is there ANY corner of the Capital Markets (i.e. equities, debt, credit, currencies, etc) that hasn't been spun around 360 degrees, revealing all the working interconnections, risks, and reward potential?"

I think not! At least if there were an area left untouched, it has escaped me. All too much for this chicken to take in so quickly, I'm counting on osmosis. ;)

kaimu - It seems there are more than one side effect from low treasury returns:

"

FOR IMMEDIATE RELEASE

May 20, 2009

PBGC Public Affairs
202-326-4343

PBGC Deficit Climbs to $33.5 Billion at Mid-Year, Snowbarger to Tell Senate Panel

WASHINGTON—The Pension Benefit Guaranty Corporation posted a $33.5 billion deficit for the first half of fiscal year 2009, PBGC Acting Director Vince Snowbarger will tell the Senate Special Committee on Aging at a hearing today. Based on unaudited financial numbers as of March 31, the deficit represents an increase over FY 2008’s $11 billion shortfall, and is the largest in the agency’s 35-year history.

“The increase in the PBGC’s deficit is driven primarily by a drop in interest rates and by plan terminations, not by investment losses,” Snowbarger states in his written testimony. “The PBGC has sufficient funds to meet its benefit obligations for many years because benefits are paid monthly over the lifetimes of beneficiaries, not as lump sums. Nevertheless, over the long term, the deficit must be addressed.”

The $22.5 billion deficit increase was due primarily to about $11 billion in completed and probable pension plan terminations; about $7 billion resulting from a decrease in the interest factor used to value liabilities; about $3 billion in investment losses; and about $2 billion in actuarial charges. "

http://www.pbgc.gov/media/news-archive/news-releas...

Yet if low rates are causing this problem, then how about the gain treasuries have produced?

Hi Shiva,
You can bookmark any comment in the blog including Bill Cara's clicking "Bookmark this". Same for the Bill's opening comment of the chat. This will add it to your bookmarks in the Blog(check the menu Site Index/Bookmarks/My comment bookmarks).
You also can bookmark comments using your browser instead. Click a title of the comment you like - the browser will add # and the comment's number at the end of the URL. Now use your browser's bookmark capabilities(Favorites or star icon for IE, Bookmarks for FireFox, etc.).
Unfortunately you can not bookmark specific parts of the WIR or Daily report using browser(to make this possible the WIR's template should be changed to support bookmarks inside the WIR) - only whole WIR or Daily report pages can be bookmarked.

I went long EDZ which is a triple Bear of EEM. Hoping that Asia sells off some after digesting the FOMC meeting released earlier today.

Chart: http://finviz.com/quote.ashx?t=EDZ&ta=0&p=d

As with other 3X funds, I do not plan to hold it for more than a day or two and be out before the trend reverses.

http://tinyurl.com/munger-interview-sls

>>>
If you're used to growing 3 to 4 percent per year and you go to no growth at all for 10 years, which is roughly what happened in Japan, then, as human tragedies go, that's not major. That's not the rise of Hitler. It's painful, but it's quite endurable.
<<<

No comment on inflation though. Could it be extrapolated that he expects none, or not a significant factor? Stagnation without inflation?

MT

here Sammas, go torture yourself. I no longer attempt to pose or know the answer to such an arguably simplified question.

http://www.bard.edu/bluecher/lectures/last_lecture...

This guy is the husband of Hannah Arendt - a noted power theorist.

http://www.iep.utm.edu/a/arendt.htm

Note the following subheading - the tripartite of:

The Vita Activa: Labor, Work and Action

Perhaps in response to your thoughts I can best articulate a response that imitates the closing remarks of Blücher.

That system is us, as artificial and self-destructive as these two suggest.

RE:>AHA. Perhaps this is why there is no intervention! The Fed understands the gold rally stops as soon as they turn off the spigot!

logical thinking Dave. Put activity in GLD is concentrated at the 88-90 range. The equivalent call activity is spread more thinly at 92-96 and 99-102. I'll have a guess and suggest that GLD finishes Jun in the 88-90 range, if not lower. That's my angle following the money.

http://ronsen.blogspot.com/2009/05/building-practi...

I'm shocked, simply shocked this prediction emerged immediately AFTER Bank of America sucked up their $10 billion from our pension funds yesterday. Is this a green shoot? I think maybe not.

Herbert Hoover was widely mocked for his phrase "prosperity is just around the corner." I suspect the same thing will happen to Ben Bernanke and his "green shoots" once this baby tips over, as I think it will.

Why we (the country) give Bernanke any credibility at all, after his string of poor predictions, is beyond me. And, why the President is even considering giving such a poor prognosticator regulatory control is even more astonishing.

Come into my parlour, said the spider (Washington Post) to the fly (Mom & Pop) ....

"The financial system, frozen solid for the past nine months, is in a spring thaw. And it's happening even though many of the Obama administration's major rescue programs have yet to get off the ground.

"The improvement reflects the combined impact of a wide range of actions, many of them taken with little public attention, according to government officials and private economists. But more important than any single program, the sources say, is a deepening confidence from financial markets that the government is prepared to take aggressive action -- a confidence that Obama officials have repeatedly worked to cultivate in speeches and public appearances."

It's clear to me that they're saying whatever it takes to get what they want done. I mean, I think they are not bad people, just scared and very intent on restoring the status quo ante. But there's no reassembling the broken crockery on this one.

May 21 (Bloomberg) -- U.K. corporate bonds fell the most in six weeks and the cost of hedging against losses on government debt jumped, after Standard & Poor’s cut the outlook on the nation’s AAA credit rating to “negative.”

The Markit iBoxx Sterling Non-Financials index of bonds sold by U.K. companies fell as much as 0.9 percent, the most since April 2, to a one-week low of 94.24, and was at 94.75 as of 11:26 a.m. in London. Credit-default swaps tied to U.K. government bonds rose 5 basis points to 78.5, Deutsche Bank AG prices show, signaling a drop in perceptions of credit quality.

http://www.bloomberg.com/apps/news?pid=20601087&si...

Sammas,Les,

Sammas' question:

"i keep reading in various places about how "the public" is going to suddenly become active due to whatever the latest round of grave-filling, government policy is being put into effect. at what point do we realize that "the public" is not going to do any such thing?"

As one who is not a patient person, I am as tired of waiting as anyone. Many of my friends still think I'm imagining things and a "conspiracy nut", but in the past year there has been a definite increase in individuals and then groups who are finally becoming aware those at the top are the cause — not the cure.

When is the public going to do such a thing?

When they come to see this scam being perpetrated has gotten personal and is affecting THEM!

The American Revolution took eight years. One of my ancestors fought along side Washington the whole time. At least we're not facing that. This is OUR country — Never give up — never give in!

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