Daily Trading & Social Commentary for Nov. 12

http://tinyurl.com/ybmfoqh

Ok, I want to make sure I come up with a solution to policing the comments that makes the most people happy. So I put a few options in a poll, and I'd like to know what everyone thinks. I'll close the poll sometime tomorrow (at my discretion, depending on when I feel like implementing a solution). If I've missed something or if there are other strong opinions, put them in the comments there. I will look at the results of the poll and all the comments before I make any changes. Please give me your input, because I really don't want to implement anything that will push away a large part of the community.

Here is the poll

In apparent refutation to GLD's sell alert, here's a story from the Telegraph about Peak Gold. Source: Aaron Regent, president of Barrick, as reported by Pritchard from the Telegraph.

I'm a sucker for peak everything stories. Yet I must wonder at the timing of this one - apparently the peak was reached in 2000, so it's not exactly fresh news. So why would Mr Regent emphasize it if they're trying to close that hedge book on favorable terms. Perhaps the hedge book is already closed?

"There is a strong case to be made that we are already at 'peak gold'," he told The Daily Telegraph at the RBC's annual gold conference in London.

"Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore," he said."

http://www.telegraph.co.uk/finance/newsbysector/in...

"When the Goldman Sachs’ CEO Lloyd Blankfein told the Financial Times of London this week that his bank was doing God’s work, there was quite a negative reaction."

It seems evident just who is Blankfein's idea of god. (Small G fits here.)

I too have looked for a time shift in updating...this would if possible, be very helpful. I do not know the moving parts or bottlenecks if any, so I did not want to ?...thanks for asking the needed question!

A bit more on "God's Work"...

And here’s what the Chinese allegedly uncovered:

Roughly 15 years ago – during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] – between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day. I know folks who have copies of the original shipping docs with dates and exact weights of “tungsten” bars shipped to Ft. Knox.

The balance of this 1.3 million – 1.5 million 400 oz tungsten cache was also plated and then allegedly “sold” into the international market.

Apparently, the global market is literally “stuffed full of 400 oz salted bars”.

http://tinyurl.com/yetz6qm

I have watched with interest the evolution and struggle related to the comments. I have read the rules and see where there might be some confusion.

The rules are all about what we cannot do. After reading them and considering what I have observed in the struggle here, I wonder what one can write. Is it only a matter of time before comments get shut down again? Then I see the poll and wonder if there will be a clique managing the comments whose good graces we must achieve?

I think it would be helpful to have a list that clarifies what we can do. Something that specifically identifies what kind of discourse is desired. Maybe something that clearly lists the priorities, goals and expectations of the site and of all of the contributors.

Ok, OK, so who cares, apparently I do not.

I am getting very excited about potential upward momentum our markets could have.

I picked up some FSLR and RIMM after hours...starter position only.
To me this is trying for a single and if it turns into a double or triple or home run, so be it...I will give it some breathing room and have set stops too.

Not advice...mostly giving myself a chance to anchor my thought processes and elicit dialog from others that may have a similar bent and/or other viewpoints

Comments welcome!

The odd thing about the latest rally is that alternative energy, and solars in particular, have been reluctant participants. And whatever strength they have had has been due to the rise in oil prices. That's not to say I don't believe in their long-term prospects. In fact, I think it is particularly strange given that this sector of the economy has continued to grow during one of the harshest recessions in generations. Maybe the collapse of ASPs (and Chinese dumping) has had something to do with that?

I like SPWRA in particular, but have no current position. I do have TAN in my retirement account.

I was going to wait for the correction in the broader market to play out before trying SPWRA again. Good luck with your FSLR, though.

Released on 11/13/2009 8:30:00 AM For October, 2009
Prior Actual
Export Prices - M/M change -0.3 % 0.3 %
Export Prices - Y/Y change -5.6 % -3.4 %
Import Prices - M/M change 0.1 % 0.7 %
Import Prices - Y/Y change -12.0 % -5.7 %

Highlights
Import prices went up in October, in what bears are certain to claim as early evidence of dollar-based inflationary pressures. Import prices jumped 0.7 percent in October driven by a jump in natural gas prices which soared 24 percent but are since on the retreat. Industrial supplies, which include metals, are extending their run of increases. There's even an unusual rise for finished goods with prices for imported capital goods up 0.2 percent which follows a long run of no-change readings. Prices for imported consumer goods rose 0.3 percent following a run of mostly negative readings.

The export side of the report also shows pressure in October with export prices up 0.3 percent and up 0.3 percent even after excluding a price dip for agricultural exports. Industrial supplies also show pressure on the export side with capital-goods prices up a noticeable 0.2 percent though consumer-goods exports fell a tenth.

The year-on-year rate for import prices looks benign at minus 5.7 percent. But the Bureau of Labor Statistics is noting that the index is up 8.1 percent since February. And the BLS is also saying that the price increases for imported raw materials and metals, including precious metals, are in fact "tied" to the dollar. Today's report does show some pressure and is consistent with inflation expectations evident in the financial markets
, namely gains in gold and other commodities. Commodity prices popped higher in immediate reaction to the report. Next week will offer two key readings on inflation, the producer price report on Tuesday and the consumer price report on Wednesday.

Thanks

Cara 100 Ratings Changes are helpful. I like to see them continue to be posted if your schedule permits.

Thanks
Sastocks

It's very helpful for me everyday. Recently, I have traded a lot in Cara 100 stocks.

Many thanks for your hard works.

Released on 11/13/2009 9:55:00 AM For November, 2009
Sentiment Index

Prior 70.6
Consensus 71.0
Consensus Range 69.0
Actual 66.0

Highlights
Consumer confidence is having a fainting spell. The Reuters/University of Michigan's reading on confidence, the consumer sentiment index, fell back a very steep 4.6 points to a very weak 66.0. Weakness is split between current conditions and the outlook. Inflation expectations remain subdued. Consumer confidence is declining even as manufacturing, housing and even retail report concrete improvement. The weakness is rooted in the still contracting jobs market. Equities and commodities dipped in immediate reaction to today's report. But note that movements in consumer confidence data don't always track movements in retail spending. The retail trade report for October, where the outlook is good, will be Monday's highlight.

Market Consensus Before Announcement
The Reuter's/University of Michigan's Consumer sentiment index for October rose 1.2 points from mid-month to 70.6 but was still down from September’s level of 73.5. Weakness in October was primarily in the expectations index which fell to 68.6 from 73.5 in September. The current conditions index actually edged up to 73.7 in October from 73.4 the prior month.

Keep it going.

Released on 11/13/2009 10:30:00 AM For wk11/6, 2009
Prior Actual
Weekly Change 29 bcf 25 bcf

Highlights
Natural gas in storage rose 25 billion cubic feet in the Nov. 6 week.

UTA is a smaller china secondary play that reports Monday and should do very well if CTRP is any indication.

The "Market" cheers up the low Consumer Sentiment.
Dow +90
SP500 +8
MCD +1.27 to 63.45, highest level, except 64.46 on 01/06.
AXP +0.33 to 39.82, almost 52-week high
TIF +0.41 to 42.26

and the list goes on.

BTW, today is Friday the 13th.

ALOHA !!

This chart puts the current DOW rally into perspective from a historical view point!

LINK: http://www.chartoftheday.com/20091113.htm?T

If you have not subscribed to this free service it is worth the effort as sometimes they come up with some very topical charts that fall into the category "a picture is worth a thousand words"!

So, that is what they meant by black friday...and just think, I was going to bet red today.

ALOHA !!

Just comparing two Democratic Administrations in terms of spending and debt according to the US TREASURY DAILY STATEMENT. Naturally Clinton was fortunate enough to be President during a TECH BUBBLE, which pretty much ended when he left office, but BUBBLE or not and surplus or not the spending and debt never abated during the Clinton reign.

The increases are staggering and points to the long term demise of the US Dollar, but then why should that be a surprise since any brief study of any Empire shows the same pattern of rampant debt destruction.

This shows the exact data for each FY(Fiscal Year)for the day of November 10th.

** FY 1999 **
MEDICARE - $24.6 BIL
SOCIAL SECURITY - $44.7BIL
DEFENSE - $11BIL
UNCLASSIFIED - $39.6BIL
OPERATING CASH BALANCE - ($16.5BIL)
TOTAL DEBT - $1.8TRIL

** FY 2010 **
MEDICARE - $66.1BIL
SOCIAL SECURITY - $77.3BIL
DEFENSE - $30.7BIL
UNCLASSIFIED - $52.4BIL
OPERATING CASH BALANCE - ($195.3BIL)
TOTAL DEBT - $6.2TRIL

What this shows me is it is clear that the US government under both the REP and DEMS has no intention of ever shrinking or cutting budgets. It also shows me that "embedded inflation" attacks the US government's bottom line just as it does each citizen. A toilet seat on a US submarine built back in 1998 cost $100 and now it is $400! The US government pays more like we do.

I have been critical of Nixon and Connolly for their HUBRIS with regard to
their attitude of EMPIRE and the US Dollar. Here are a few more modern day examples of the same HUBRIS OF EMPIRE ...

Sec Of State Madeline Albright 1995: "If we have to use force, it is because we are America. We are the indispensable Nation. We stand tall. We see farther into the future." Blowback 2000 Chalmers Johnson

Sec Of State Madeline Albright: When asked by Leslie Stahl in an interview in 1996 as to whether the sanctions on Iraq were worth the price after having killed half a million Iraqi children, more than Hiroshima, Albright replied; "I think this is a very hard choice, but the price - we think the price is worth it ..."

In 2007, Deputy Sec Of State Richard Armitage summarized US Foreign Policy by this comment ... "Look f_ck_r, you do what we want!" Recorded on page 44 of the ECONOMIST, "A Falling Star", 2007.

Then in terms of DEFENSE ... In the FT an article entitled "How The West Can Exit", dated Oct 5, 2009, US Special Envoy Richard Holbrooke said this when asked to define victory in Iraq ... "We'll know it when we see it."

Awe inspiring indeed!

God only knows what is said behind closed doors! For an example of what is possible behind closed doors just review the LBJ TAPES. LBJ sent tens of thousands of young Americans to their death just so he could look good for another year or so, long enough to pass the buck to the next President! Yet the message is clear to the rest of the World and no doubt the rest of the World is sick and tired of the US HUBRIS backed by unending DEBT and threats. The whole "Benevolent Dictator" thing is out the window, as now America is the lazy bum brother-in-law who comes to stay for a week and never leaves always greeting you with "Hey, can I borrow $20 bucks, man?" Its embarrassing. The amount of SPENDING and DEBT the US generates on a daily basis is just plain embarrassing! There is a big difference between "loving your country" and wanting it to become fiscally responsible and viable for future generations. IT'S A HUGE DIFFERENCE ...

With my brokerage account and MM paying virtually no interest, I opened up a savings account at Everbank that pays 1.5%. For a higher yield than that, albeit with higher risk, I have invested some funds in a combo of TIP and TLT/IEI. This combo yields around 3.5%. I figure that if deflation is here to stay, the treasury ETFs TLT/IEI will do well counteracting the drag caused by the inflation protected ETF TIP's falling value. Conversely, if inflation starts picking up, the price rise of TIP will counteract the price fall of the treasury ETFs. A long term chart bears out this balance, more or less. :-}

With chronically high unemployment, anemic growth in the US and a secular change in the US consumer mentality from spendthrifts to savers (IMHO), I can only see deflation in the near/intermediate term. Quantitative easing, stimulus programs and other federal forays into distributing free money may lead to inflation and indeed, hyperinflation sooner than I foresee, thus leading to Bill's TOG, but as of now, there are few or no inflationary signs. I will stay vigilant.

Recently, I read an opinion (do not recall where) explaining why gold prices are so high. It stated: The price of gold may or may not rise because of inflation, deflation, excessive money printing, political instability, wars, etc. etc. However, one thing that is sure to boost gold prices is bad government policy.

I found it very profound. Thought I would share.

Kaimu,
If you haven't already, I hope you'll watch the movie Burn After Reading by the Cohen Brothers. Priceless. Yes, and you are right, it is galling to us outside to look in to how far America has strayed from "principles to live by" that it fought for. The joke in Canada is, we hope America builds a wall along our border. We'll defend it from this side.

Telestar3d -

"...the Fed is simply immobile for at least the next two years."

The Fed can alter the reserve ratios of financial institutions and profoundly contract monetary supply. The Fed is, I assume, behind the banks' 'extend and pretend' game allowed by the FDIC, OTS, and that other regulator I can't think of right now. That is, in effect, an easing of reserve ratios without a declaration of such. Fund rates are only one of the Fed's small but powerful arsenal of tools.

The only thing that could immobilize the Fed would be an ACT OF THE U.S. CONGRESS.

ALOHA !!

By studying money flows you can make money!

You may want to tunnelvision into one stock or go wide on the BIG PICTURE, but whatever way you go there is one irrefutable fact and that is that politics(US Treasury) combined with monetary policy(US FED) dictates what investments will be profitable and if you can be ahead of that curve then you can ride the trend. The US Treasury Daily Statement is nothing more than a daily record of the largest money flow machine in the entire World. For me NOT to watch that is like learning to skydive without a parachute!

A new addition to the money flow is this new military venture that started with Bush and continues to grow with Obama. Officially known as AFRICOM, we are now moving US military control into Africa. While the Communists in China use their massive US reserves to buy up commodity production, thanks to the hapless US consumers who bought the "credit estate" bubble, the USA wants to secure Africa with military "aid". China exerts its influence in Africa via financing and outright ownership. I am sure this causes consternation at the IMF and World Bank behind closed doors as this is direct competition for debt slavery.

AFRICOM is short for AFRICA COMMAND ... a military command post set up a year ago. Obama resoundingly supports this Bush military intervention as he has committed $278MIL to the effort so far in the FY 2010 budget. When Bush initiated the US AFRICA COMMAND-AFRICOM "transition team" it was funded with $50MIL USD, so now it has grown to nearly $300MIL.

LINK: http://www.africom.mil/getArticle.asp?art=1644

Scroll down to where the comments are at the bottom and read Annie Hunter in Moss Point where she questions AFRICOM and then the AFRICOM PR guy gets onto her and refutes all she says. Wow ... in all my research on US government websites I have never seen a PR guy get onto a commentator like that. Usually there is no comment at all. That's a first and worth a read! It shows you people are not trusting government much. I wonder why that could be?

Anybody see here what is going on? Our government has bought into the military industrial complex hook-line-n-sinker. We are now engaged in perpetual war. This is very EMPIRE!

Now how do you profit from all this EMPIRE? Well, you can bet on the US Dollar's demise which I have been doing since 2001 or you can join in the military expansion and buy stocks like LMT and GD. I have continually recommended LMT as they have one of the biggest piece of the EMPIRE pie(money flow) in terms of military adventures both past, present and future. Add in that they own most of the US Congress.

When I did some research on LMT I came across a private company based in Australia that LMT loves. The company is called MARAND PRECISION and it is family owned and started by an immigrant to Australia back in 1969.

LINK: http://www.marand.com.au/site/index.php?cat=marand...

Another major private Australian company I came across in my research was WELLARD. Yet another agriculture behemoth created by an immigrant to Australia back in the 1970s.

Two fabulous "real wealth" companies, the complete opposite of a Goldman Sachs! I would be a buyer if these companies ever did an IPO.

FD: I own no LMT shares but because my wife used to work at GD she does. I prefer XOM and CVX since Napoleon was wrong, an Army travels on its "gas" not its stomach!" Hummmm??

Bloomberg reports on APEC conference in Singapore: US exporting bubbles manifesting in unsustainable asset prices. Asian nations want to stay pegged. (US: "Dollar's your problem. Deal with it.") Tug of War.
http://www.bloomberg.com/apps/news?pid=20601087&si...

Hi Telstar - The chart probably does not reflect many adjustable rate holders have already entered fixed rates over the last year in the low rate environment we are now in. Of course there is still a problem with many loans that are underwater or income & credit challenged borrowers that will hit the bank books in due course. In summary a large percentage of all resetting loans will not be a default in my estimation. Many borrowers enjoying resets now are going to lower rates, i.e. a typical five year fixed resetting to the sum of the one year libor (~1.1%) and the fixed margin (~2.25) now have a new rate of 3.375% for the next year or until they pull the trigger on the safey of a 30 year fixed. Happy Trading

@Bull Hunter,

I am really sorry for misspelling your name Bill Hunter instead of Bull Hunter.

Best Regards,
giasong

Bull Hunter i find it very helpful and marked your comment with all the stars i could! ;)

He thinks he sees some shorts setting up. Any opinions?

edit: he also thinks SRS is a potential bottoming stock and that RIMM is everywhere, so he will stay away from it.

I could not help myself...I sold FSLR for a quick 2% profit, but will reacquire it on a pull back if it allows...still in RIMM, but I have a reasonable stop at 60.00

If interested: http://tinyurl.com/ye6s4tq

Have a wonderful weekend all!

Check back for that commentary you all.

Bridgewater, now the world's largest hedge fund, builds portfolios from "multiple non-correlated return streams". Leverage is only 4:1. Ray Dalio also has impressive insights into the crash and current aftermath. Here are a few sources on his wisdom:

enlightening 18 minute audiocast: http://www.pionline.com/article/20090406/FREE/9040...

If you don’t know his style, it’s best to read this before listening:

http://cnnmoney.printthis.clickability.com/pt/cpt?...

check this out: In 2001 he had his investment team build a "depression gauge" into the firm's computer system, line by line in the code, to adjust the portfolio's strategy and risk profile if the economy ever entered a massive deleveraging period ... On Sept. 30 of last year, just a couple of weeks after the failure of Lehman Brothers, Dalio logged into his system and saw that the computer had flipped the switch. Bridgewater's black box is now operating on high alert.

The above are from March, April, 2009, and show an impressive discipline and insight as to what’s likely to happen over the next few years .

Also, his February, 2009 interview in Barrons was very good:
http://www.google.com/imgres?imgurl=http://4.bp.bl...

Thanks for sharing this video suggestion, Bill; I'd never heard of Chevalier des St. Georges. You've given me a nice seed for a lesson plan which I hope will inspire some of the wonderful International students I teach.
Cheers.

Hey Strangelove, first off, I run on the premise that the FED will not even think of raising rates until unemployment peaks and begins to turn down. This is how the FED has acted historically and I do not expect them to change stripes this time around.

I’m sure you have noticed that the banks are taking all the free money and hoarding it on their balance sheets. Why should they lend out to weak borrowers when they can just buy the 20 year treasury and make 3.5% spread for basically doing nothing. They also know that many commercial real estate loans are coming due which they have on their books and the CRE assets do not support their outstanding loans. This is another reason why they are not lending so their capital reserve ratios do not fall to levels which cause the FED to declare insolvency and have them liquidated or taken over.

This leads me to conclude that although he FED could alter/raise reserve ratios to contract money supply, it does not have a snowball’s chance in hell of happening anything soon. Last I checked the FED is trying save the banks not put them under.

The whole point of quantitative easing is to increase the velocity of money in circulation and raising reserve ratios is in opposition to quantitative easing. The FED St. Louis’ adjusted monetary base has recently broke out to new highs. What one needs to understand here is that rather than curtailing liquidity in the system, the FED is again aggressively injecting it.

Why is that?

Luggie, thank you for your insights, I will keep that in mind when looking at that graph. Here is another graph, slightly different.

"Anybody see here what is going on? Our government has bought into the military industrial complex hook-line-n-sinker. We are now engaged in perpetual war. This is very EMPIRE!"

This is one possibility. But it is also unwise to seek isolationism. Someone will fill any power void and we have certainly seen a lot of outright butchery between Africans in recent times.

Another aspect to consider is the spread of radical Muslim activity in Africa.

The terrorist attack at Ft. Hood serves as a reminder that whether we "want war" or not it can be imposed on us from many locations.

We need to keep an open mind, but be watchful.