Bill Cara’s Blog for Oct 27, 2010 [See post-close report]

October 27, 2010 by Bill Cara Bookmark and Share

Morning Call [7:35am ET] From its history as a bastion of 19th century Victorian morality, the city was called Toronto the Good. Today, the city is known as one of the world’s great melting pots, a heterogeneous society that mixes race, religious beliefs, culture and sexual orientation as well as any. Except for a couple months of nasty winter weather, it’s as fine a place to live and work as you could find.

Last evening, the people, fed up with liberal spending, elected a new mayor, the highly controversial Rob Ford. City politics is about to change. As Canada’s largest and most important city, what happens in Toronto as Ford cuts the budgets to the bone will be carefully watched by every politician in the province and the country.

It’s about time.

http://en.wikipedia.org/wiki/Rob_Ford

In capital markets this morning, there happens to be some currency-related volatility, but not much happening. A stronger US Dollar has pushed equity, crude oil, and precious metal futures a bit lower.

blog_oct_27.1.gif

Have a good day.

CTA Trading Desk Post-Close Report

Good evening. Patrick here. [6:50pm ET]

Another day, another early morning decline bottoming on hourly support as traders bought early weakness looking to sell tomorrow into the Fed’s Permanent Open Market Operations. Hip, hip, hooray – POMO is going to make our day!

Every day from September 1 forward the S&P future has managed to hold its 20 exponential moving average, each dip towards the upwardly sloping line being an ideal entry point for initiating longs. Didn’t quite get there today but traders targeting that area for a potential reversal would have been prepared to pull the trigger and scale into longs (or cover shorts) as the S&P future neared 1165 (print low 1067.75).

Once again the equity market was able to retrace the bulk of its losses (S&P-0.27%, nearly +1% off its print low). This is constructive behavior; buyers are clearly not yet sated, eager to add to positions on any dip no matter how short and shallow.

Bulls remain in control and it appears the market will continue to mark time ahead of the midterm elections and the Fed QE II announcement. Instead of money leaving the market, sector rotation seems to be the strategy de jour. Today it was the Semiconductors (SMH+2.16%) turn to lead the charge, chip stocks rocketing higher on the heels of Broadcom’s blowout quarter (BRCM+11.66%).

US Bonds (TLT-) continue to be under pressure; TLT closed under 100, a technical negative with 98 now critical support (50% retracement of the April to August rally). The Bond bull market ran for 30 years – if the top is in the move towards higher interest rates will be a multi-year affair and become a serious drag on economic growth.

Have a great evening.

Login or register to post comments Bookmark and Share Comments Cara 100 Ratings Changes Submitted by Bull Hunter (1528 comments) on Wed, 10/27/2010 – 08:39 #72856

Good Morning.

No POMO Scheduled For Today

7:00 – MBA Mortgage Apps (+3.2%)
8:30 – Durable Orders (durable goods 3.3% vs 1.8%) ex-trans minus 0.8% vs +0.2%)
10:00 – New Home Sales
10:30 – Crude Inventories

Cara 100 Earnings:

PG – (1.02 vs 1.00)
WHR – (1.02 vs .88)

After The Close – GG

—–

BRCM – PT Lifted from $42 to $45 @ FBR. Outperform

EXC – Exelon Downgraded to Sell from Neutral at Goldman. Price target $40

——

“Giving money and power to government is like giving whiskey and car keys to teenage boys.” — P. J. O’Rourke

Login or register to post comments Currency Volatility? China/USA: RMB/USD Structural Imbalance Submitted by 4ever (100 comments) on Wed, 10/27/2010 – 07:53 #72857

Paul Tudor Jones has written an excellent article that we all should read and gain a full understanding of. I hope everyone gets a chance to share it with others as well.

http://dealbreaker.com/2010/10/ten-years-ago-paul-…

Here in Texas we have a couple of unbearably hot summer months, but other than that, is a great place to live as well(as long as it’s away from the major cities).

Have a great day.

Login or register to post comments Night Of The Living FED Submitted by Bull Hunter (1528 comments) on Wed, 10/27/2010 – 08:22 #72859

Just in time for your Halloween enjoyment:

http://tinyurl.com/2vu7q8t (pdf)

Login or register to post comments Re: Night Of The Living FED/ BAC closed @ 11.37 Submitted by 2nd_ave (4865 comments) on Wed, 10/27/2010 – 08:37 #72860 (in reply to #72859)

The market is not moving in my direction. Taking BAC off the table while it’s catching a bid. Still bullish about its ST direction, but pulling back behind the semi as we approach the morning curve seems prudent.

Login or register to post comments natgas move Submitted by davefairtex (2417 comments) on Wed, 10/27/2010 – 08:42 #72861

For those who think natgas really took off overnight – all that happened was the front month future expired, and we now have another 60 days of contango to get eaten away as the futures price slowly descends towards the spot price.

Henry Hub Spot price: 3.29
Front Month (Dec) Futures Price: 3.79
Difference: 0.50

That’s a big contango – a 15% loss if the spot price doesn’t move.

Login or register to post comments CS Global Equity Strategy now Overweight for Mining Industry Submitted by Bill Cara (1855 comments) on Wed, 10/27/2010 – 08:51 #72862

We upgrade mining to overweight (from benchmark) to reflect:

•QE2 helps: a) negative real rates give a powerful boost to commodities; b) QE2 should force the BoJ, BoE and (eventually) the ECB into QE – and cause an asset/liquidity bubble in GEM; c) the dollar is likely to weaken further – and 80% of the time the dollar weakens, commodities rise.

•Global IP momentum close to a trough: Mining has the highest beta of any sector to the ISM new orders and typically troughs before the ISM. We expect the ISM and global IP momentum to trough in November.

•China is reaccelerating. We expect growth of 9-10% next year, with investment growth of 8.8%. Despite accelerating wage growth, inflation near-term looks containable. Copper import and steel demand growth could accelerate from recent lows. Monetary policy is set to remain far too loose.

•Valuations look reasonable: Miners’ 12m forward relative P/E is in line with its norm (with commodity prices suggesting 12-month EPS expectations could be revised up by 10%+). The FCF yield is 8.6%. Mining stocks are discounting a 30% decline in commodity prices on Credit Suisse HOLT®, more than the forward curve. Analysts’ long-term price assumptions look cautious, with iron ore and copper prices 59% and 42% below spot. Price relatives, fund flows and positioning are not yet extreme.

•Our main concerns on mining: China’s investment share of GDP, at 46%, is at a peak, and for most commodities the highest-cost producer is breaking even, incentivising the supply-side response. Our analysts’ top picks are Rio Tinto, Xstrata and Freeport. We like cheap equipment producers, given the surge in discretionary capex (Weir, CAT).

•We stay underweight IOCs: FCF yield is sub-market, with close to zero volume growth. IOCs are increasingly at a disadvantage against emerging market competitors and we struggle to be bullish on the oil price. We continue to prefer the consumer plays to the investment plays (capital goods, mining) on GEM (hence our overweight of luxury goods, consumer staples, STAN). We also like domestic plays in the commodity exporters (Sberbank, Banco do Brasil). We continue to think gold will reach $1,500/oz.

Login or register to post comments A view from the top? Submitted by kim. (12 comments) on Wed, 10/27/2010 – 08:52 #72863

Note the negative divergences forming here….

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=1&mn=0&dy=0&id=p82457096844&a=205583007

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=9&dy=0&id=p93799075317&a=212201794

What is interesting here is the projected turn dates? Can you say CRASH? [LOL]

http://stockcharts.com/h-sc/ui?s=$SPASX200&p=D&yr=1&mn=0&dy=0&id=p94184224797&a=210103821

Login or register to post comments Cara 100 Update Submitted by Bull Hunter (1528 comments) on Wed, 10/27/2010 – 08:59 #72864

ABT – Abbott Downgraded to Hold from Buy at Argus citing increased competitive pressures for key products, including Humira and Trilipix/TriCor.

BRCM – PT Lifted from $43 to $45 @ RBC. Outperform

CHRW – PT Lifted from $65 to $77 @ RBC. Outperform

Login or register to post comments Today’s support Submitted by kim. (12 comments) on Wed, 10/27/2010 – 09:03 #72865

Areas I am to watching today are the 1177 and then 1168 pivots supports along with the 13-day EMA @ 1174. If they do not hold, which I expect they will, then looking for support at 1150 area.

Login or register to post comments RBY Submitted by gforce (400 comments) on Wed, 10/27/2010 – 09:13 #72866

Better pick up some; they are practically giving it away!

FD:
I am not buying, just saying.

Login or register to post comments Food for thought Submitted by gforce (400 comments) on Wed, 10/27/2010 – 09:33 #72867

I am spreading your idea because:

http://sethgodin.typepad.com/seths_blog/

Login or register to post comments PIMCO’s Bill Gross Nov Investment Outlook Submitted by Vadym Graifer (1559 comments) on Wed, 10/27/2010 – 09:46 #72868

US) PIMCO’s Bill Gross releases Nov Investment Outlook: Run Turkey, Run
– They say a country gets the politicians it deserves or perhaps it deserves the politicians it gets. Whatever the order, America is next in line, and as we go to the polls in a few short days its incumbent upon a sleepy and befuddled electorate to at least ask ourselves, Whats going on here? Democrat or Republican, Elephant or Donkey, nothing much ever seems to change. Each party has shown it can add hundreds of billions of dollars to the national debt with little to show for it or move our military from one country to the next chasing phantoms instead of focusing on more serious problems back home. This isnt a choice between chocolate and vanilla folks, its all rocky road: a few marshmallows to get you excited before the election, but with a lot of nuts to ruin the aftermath.
– Each partys campaign tactics remind me of airport terminals pre-9/11 when solicitors only yards apart would compete for the attention and dollars of travelers. Save the Whales, one would demand, while the other would pose as its evil twin Eat Whale Blubber, the makeshift sign would read. It didnt matter which slogan grabbed you, the end of the days results always produced a pot of money for them and the whales were neither saved nor eaten. American politics resemble an airline terminal with a hucksters bowl waiting to be filled every two years.
– Theres another important day next week and it rather coincidentally occurs on Wednesday the day after Election Day when either the Donkeys or the Elephants will be celebrating a return to power and the continuation of partisan bickering no matter who is in charge. Wednesday is the day when the Fed will announce a renewed commitment to Quantitative Easing a polite form disguise for writing checks. The market will be interested in the amount (perhaps as much as an initial $500 billion) as well as the targeted objective (perhaps a muddied version of 2% inflation or bust!). The announcement, however, has been well telegraphed and the markets reaction is likely to be subdued. More important will be the answer to the long-term question of will it work? and perhaps its associated twin will it create a bond market bubble?
– Whatever the conclusion, not only investors, but the American people should recognize that Wednesday, even more than Tuesday, represents a critical inflection point in determining our future prosperity. Of course weve tried it before, most recently in the aftermath of the Lehman crisis, during which the Fed wrote $1.5 trillion or so in checks to purchase Agency mortgages and a smattering of Treasuries. It might seem a tad dramatic then, to label QEII as critical, sort of like those airport hucksters, I suppose, that sold whale blubber for a living. But two years ago, there was the implicit assumption that the U.S. and its associated G-7 economies needed just an espresso or perhaps an Adderall or two to get back to normal. Normal just hasnt happened yet, and economic historians such as Kenneth Rogoff and Carmen Reinhart have since alerted us that countries in the throes of delevering can take many, not several, years to return to a steady state.
– The Feds second round of QE, therefore, more closely resembles an attempted hypodermic straight to the economys heart than its mood elevator counterpart of 2009. If QEII cannot reflate capital markets, if it cant produce 2% inflation and an assumed reduction of unemployment rates back towards historical levels, then it will be a long, painful slog back to prosperity. Perhaps, as a vocal contingent suggests, our paper-based foundation of wealth deserves to be buried, making a fresh start from admittedly lower levels. The Fed, on Wednesday, however, will decide that it is better to keep the patient on life support with an adrenaline injection and a following morphine drip than to risk its demise and ultimate rebirth in another form.
– We at PIMCO join with Ben Bernanke in this diagnosis, but we will tell you, as perhaps he cannot, that the outcome is by no means certain. We are, as even some Fed Governors now publically admit, in a liquidity trap, where interest rates or trillions in QEII asset purchases may not stimulate borrowing or lending because consumer demand is just not there. Escaping from a liquidity trap may be impossible, much like light trapped in a black hole. Just ask Japan. Ben Bernanke, however, will try it is, to be honest, all he can do. He cant raise or lower taxes, he cant direct a fiscal thrust of infrastructure spending, he cant change our educational system, he cant force the Chinese to revalue their currency it is all he can do, and as he proceeds, the dual questions of will it work and will it create a bond market bubble will be answered. We at PIMCO are not sure.

Login or register to post comments Cara 100 Update (Final) Submitted by Bull Hunter (1528 comments) on Wed, 10/27/2010 – 09:47 #72869

BRCM – estimates, target raised at Goldman. Shares of BRCM now seen reaching $48. Estimates also increased, as the company is gaining market share. Buy rating.

NE – Noble Corporation downgraded to Equal Weight from Overweight at Johnson Rice citing lower utilization assumptions and risks that include contract disputes and post-GOM moratorium environment.

RCL – price target boosted at Credit Suisse. RCL price target raised to $44.70 from $36.70. New hardware and passenger sourcing success led RCL to deliver an exceptionally optimistic 2011 outlook. Maintain Neutral rating.

Login or register to post comments Borg Warner Submitted by teamonfuego (2248 comments) on Wed, 10/27/2010 – 10:01 #72870

“Borg Warner says seeing growth in every part of the business

(flyonthewall)
This comment was made on the Q3 earnings conference call.”

Login or register to post comments I see people are buying NASDAQ on a dip this AM Submitted by jack black (920 comments) on Wed, 10/27/2010 – 10:09 #72871

IMHO it’s a mistake as an overdue correction is starting. I’m waiting on Vad on his reversal sighting. My short SLV/SLW is working at least.

Login or register to post comments SPX, TLT Submitted by davefairtex (2417 comments) on Wed, 10/27/2010 – 10:13 #72872

I’m seeing a clear negative divergence in RSI for SPX, immediately after that bearish reversal candle which is yet to be confirmed. Also and perhaps just as interesting, TLT has broken through its 100 support and heading down.

Login or register to post comments Re: I see people are buying NASDAQ on a dip this AM Submitted by Vadym Graifer (1559 comments) on Wed, 10/27/2010 – 10:24 #72873 (in reply to #72871)

I’m waiting on Vad on his reversal sighting.

jack, please don’t. I do not make calls for the time frame that I personally don’t trade and can’t update in time as outlook changes. This would be highly irresponsible of me. My calls are for intraday movements, and are made in real time in the chat room where I can keep things fluid. On this board you can count on me providing educational framework which you can apply to to your own picks and time frame.

Login or register to post comments Re: Night Of The Living FED/ BAC closed @ 11.37 Submitted by goldbug58 (146 comments) on Wed, 10/27/2010 – 10:31 #72874 (in reply to #72860)

Somehow I felt you are bottom-fishing with BAC…not that I have an easier dilemma, holding a little FAZ and DIA Dec 108 puts which are looking better today so I have a feeling I should sell em’ but soon as I do, that’s when the index will drop another 100 points or more…oh well I just sold the puts @2.14

Login or register to post comments Federal Reserve ‘Terrified’ of Deflation: El-Erian Submitted by kim. (12 comments) on Wed, 10/27/2010 – 10:33 #72875

http://www.cnbc.com/id/39853052

“El-Erian also explained PIMCO’s significant reduction in a key fund’s gold position from 10 percent to 3 percent. He said investing the precious metal “doesn’t make as much sense as it used to.” Because the price has moved so much and the trade is so crowded, he sees potential for a large technical retracement.”

Login or register to post comments Re: Night Of The Living FED/ BAC closed @ 11.37 Submitted by 2nd_ave (4865 comments) on Wed, 10/27/2010 – 10:37 #72876 (in reply to #72874)

You could say I’m bottom fishing- my usual attraction to beaten down stocks. However, I think BAC will eventually recover, and in this case had recovered to the point where a ‘Buy Alert’ had been issued. Of course, we all know it could hover around this point for weeks before it begins to climb.

Right now, I’m back in Capital Preservation mode.

Login or register to post comments Re: I see people are buying NASDAQ on a dip this AM Submitted by 2nd_ave (4865 comments) on Wed, 10/27/2010 – 10:42 #72877 (in reply to #72873)

I think Bill’s ‘RSI’ system works fairly well for entry points on what Vad calls the ‘right side-‘ you could probably tweak the system by substituting your preferred time frames. Let’s face it, all entries/exits are ‘guesses,’ and we do our best to make them ‘informed guesses.’

Login or register to post comments Re: I see people are buying NASDAQ on a dip this AM Submitted by Vadym Graifer (1559 comments) on Wed, 10/27/2010 – 10:54 #72878 (in reply to #72877)

It may come down to semantics but as far as definitions go, I don’t view entries/exits as guesses – simply because to me there is no predictions of the future involved, in the form of guess or otherwise. To me it’s rather pre-determined actions in recognizable situations.

There is big difference in a mindset. Absence of prediction frees a trader from emotional commitment to the outcome and prevents ego from springing into action. This in turn keeps him emotionally detached and objective, thus making it easy to apply a stop, reverse his view if situation changes etc.

Just look at all those who formed their opinion based on their predictions to see how stubbornly committed and inflexible they are, despite market proving them wrong for months and months. Blogosphere, TV etc are full of examples.

Login or register to post comments HRB Submitted by BillySundance (761 comments) on Wed, 10/27/2010 – 10:55 #72879

Not sure if anyone has been watching this one. Made a 9-year low last week on a combination of mortgage put-back concerns (which I believe are overblown) and a problem with loan funding.

It has been making a nice series of higher lows and higher highs since bottoming on 10/20. It’s bucking the trend today and making another high. With a 5.5%+ dividend and a long track record, I think this one may be worth holding for awhile.

I bought in at $10.67 a few days ago and added a little at $11.30 today.

Login or register to post comments Re: HRB Submitted by BillySundance (761 comments) on Wed, 10/27/2010 – 11:05 #72880 (in reply to #72879)

Also…HRB hit an RSI buy alert yesterday

HRB * 11.22 39.65 31.21 20.5 Buy alert (trig. 1 days ago [on 2010-10-26 at $11.22, +0.00% chg], after a 6 day AZ)

Login or register to post comments Re: I see people are buying NASDAQ on a dip this AM Submitted by jack black (920 comments) on Wed, 10/27/2010 – 11:49 #72881 (in reply to #72871)

Covered SLV/SLW shorts as I’m not sure how much higher dollar can go today.

FD: mostly cash.

Edit: it was excellent timing. I guess dumb luck. However, I noticed that my trades on PM and energy (both long and short sides) are usually winners while the other trades (equities, indeces etc) are usually losers. I guess I will stick to what I do well (and keep my day job).

Login or register to post comments Re: Today’s support Submitted by kim. (12 comments) on Wed, 10/27/2010 – 11:47 #72882 (in reply to #72865)

deleted

Login or register to post comments Re: PIMCO’s Bill Gross Nov Investment Outlook Submitted by Grym (2669 comments) on Wed, 10/27/2010 – 11:43 #72883 (in reply to #72868)

Vad,

Thanks for the info.

“Escaping from a liquidity trap may be impossible, much like light trapped in a black hole. Just ask Japan. Ben Bernanke, however, will try it is, to be honest, all he can do. He cant raise or lower taxes, he can’t direct a fiscal thrust of infrastructure spending, he can’t change our educational system, he cant force the Chinese to revalue their currency it is all he can do, and as he proceeds, the dual questions of will it work and will it create a bond market bubble will be answered. We at PIMCO are not sure.”

Well, we are unlikely to hear anything about this from those who could try to do something about the problem — they are far more concerned with getting/staying in office than addressing the problem. (If they in fact even see the problem.)

Login or register to post comments SVNT – baz/tobyt Submitted by BillySundance (761 comments) on Wed, 10/27/2010 – 11:49 #72885

Was wondering if you guys had thoughts on this one? They had their Krystexxa gout drug approved by the FDA and then announced an auction of the company that didn’t bring the desired responses so the stock got whacked. Yesterday they announced they would go ahead with the first phase of marketing/distribution on their own.

I tend to think the huge drop in stock price has been driven by the number of “situational” and M&A funds that are in the market now trying to predict M&A activity and arb deals that have been announced. In this case I think the drop may have been accentuated by these funds that had loaded up in anticipation of a deal only to be blind-sided.

Anyways – I have averaged in to some shares at $11.76 over the last two days. I think it is good for a move back to $14ish short term.

Login or register to post comments QE2 may Disappoint Submitted by Dave M (214 comments) on Wed, 10/27/2010 – 12:07 #72886

The view floating around Asia is next week’s expected Fed announcement may disappoint the market in that the magnitude of QE2 may be smaller than most investor/traders have been anticipating, which is why the dollar is up today and commodities down.

Login or register to post comments Mortgage Ded for Cred Submitted by loannetter (844 comments) on Wed, 10/27/2010 – 12:13 #72887

davefairtex,
The tax deduction for homeowners may account for some people bothering to file a tax return these days. It’s just a way for average folks to expense their cost of investing. Owners of rental homes get to expense (deduct) their mortgage interest as an operational cost. Without this deduction (and evil mortgages) your home builders would be pressed to sell anything! The real estate industry is in bed with the IRS and one might argue that housing drives our economy.

US corporate tax deductions for the likes of the HB&B and pals deserve your scrutiny! IMHO

Login or register to post comments Saying No to QE2 Submitted by Dave M (214 comments) on Wed, 10/27/2010 – 12:22 #72889

Many people now believe that the Federal Reserve is composed of a group of persons who do the bidding of companies like Goldman Sachs (GS). Jan Hatzius, chief economist of Goldman Sachs, is spearheading the effort to insure heavy dollar debasement, claiming that the issuance of $4 trillion new counterfeit dollars will help the real economy.

Reading Hatzius’ justifications is like reading the ravings of a lunatic. If Hatzius were an imbecile, I would accept that. But, he is surely not. He is, instead, the living mouthpiece for a group of executives at Goldman Sachs, who are not satisfied with the amount of cash they have already managed to extract from the American public. They want yet more free counterfeit cash from the Fed to play with. It is not the first time this has happened. Firms similar to Goldman Sachs were also pressuring the Reichsbank of Weimar Germany from 1919-23 to engage in more and more quantitative easing. At that time, the German central bank obliged and the famous Weimar hyperinflation episode that scarred Germany for generations was the result.

Full article: http://tinyurl.com/27zype2

Login or register to post comments SVNT/baz/t Submitted by tobyt (86 comments) on Wed, 10/27/2010 – 12:24 #72890

this one does look interesting in here, from a chart viewpoint this was a heck of a way for it to till the gap between 14 to 18 it left several weeks ago while going up, it appears to have a good gout drug and is near the years lows and the bottom of the gap should be a magnet, I personally would buy 1/2 of the position I wanted longer term (whatever that means)in the 11.90s and sell a like amount of both sides of the 12 puts and calls for the next few weeks (nov exp) the $1.55/1.6 prenium received would be to much for me to pass up but I shoot for singles and am the worlds worst ST trader, best of luck and thanks for calling this one to my attention, as usual DYOD…….for sure tt

Login or register to post comments Midterm Elections and Goosing the Market Submitted by Dave M (214 comments) on Wed, 10/27/2010 – 12:43 #72891

It seems to me that the markets have been goosed the last two months in advance of the upcoming elections, as a way of helping the Democrats close the gap between them and Republicans/Tea Partier’s (and even Fox News has acknowledged the gap has narrowed). If thats the case, why do they need to goose the markets after November 2, once election results are in, regardless of who wins? Why take any drastic measures right away? As Westcoaster posted yesterday, after November 2, assuming both houses go to the Republicans, a more moderate Obama will emerge, a la 1994 Bill Clinton. Troops will be bought home in the next two years, military spending will go down, and jobs and the economy will improve in time for the 2012 election against Sarah Palin. It’s textbook – Obama in a landslide in 2012.

Login or register to post comments Re: SVNT/baz/t Submitted by BillySundance (761 comments) on Wed, 10/27/2010 – 12:51 #72892 (in reply to #72890)

I listened to the CC that SVNT did yesterday. Everything sounded positive except for the fact that they could not go into detail about the auction/sale process and reasons that potential acquirers may have been hesitant. Other than that they sounded pretty confident that they could go it alone in beginning the marketing/production process.

My best guess is that the stock price had simply gotten to rich as it ran quickly into the $20+ range and the potential offers would not have offered much premium beyond that point so management balked.

And as I mentioned, I believe a lot of “situational” funds are sprouting up to try and gain from the increase in M&A action. If just a handful of funds had loaded up a couple million shares each above $15 thinking this was a no brainer, it could really have accentuated the decline as the stock opened up at a crushing 50% decline after the mid-day halt Monday.

Will be interesting to see how this one plays out – lots of bagholders still jittery on this one due to the shock and awe of a one day 50% decline, so it may have to wade through the muck a bit longer. I could also see some upgrades coming in soon purely based on valuation.

At $11.95, I am internally calculating a potential 10% downside risk and 50% upside potential over the next month. Earnings CC is 11/2 so I think management will be better prepared to address analyst questions than they were for the impromptu CC yesterday.

Login or register to post comments Re: Mortgage Ded for Cred Submitted by davefairtex (2417 comments) on Wed, 10/27/2010 – 12:59 #72893 (in reply to #72887)

loannetter –

I agree, in the US, housing has driven the economy for quite some time now. Yet housing is simply a consumer product, no matter what you might think of it being this magical “nurturing home-creating love-infused” nursery. It required a whole lot of capital to build, and it produces nothing – just like a car, or a rolex watch. That’s fine if you can afford it, but we couldn’t, so we went deeply into debt to get it. And I dare say it was far larger, more grand than it needed to be.

Now guess what. Our factories are all somewhere else, because we poured our capital and other people’s too to build all those homes, and to inflate the price of all the homes that currently exist. And that tax deduction caused even more money to flow in, siphoning off tax dollars from renters to subsidize upper middle class homes.

So as Dr Phil would say, “how’s that working for you?” Are we happy with how it all turned out?

Login or register to post comments Re: PIMCO’s Bill Gross Nov Investment Outlook Submitted by bluesky (61 comments) on Wed, 10/27/2010 – 13:11 #72894 (in reply to #72883)

I had a real problem with what Bill Gross said. It’s true our politicians have been fiscally irresponsible for a long time. But isn’t it also true that the Banks made it much worse in a big hurry, and then gave the taxpayer a big push off the curb as the bus came rolling by? The big banks and brokers have been the ones pulling the puppet strings since 2007 to get me and my children (the future taxpayers)to make “finance payments” on the losses of their OUTRAGEOUS leverage, toxic security inventions, risky mis-management, and outright fraud! Sorry Bill Gross, but we don’t get the government we deserve – for instance we deserve WAY better than this current SEC joke of a regulator. Instead, we get corruption and lies at every level. We get everything the banks have captured in politics and the media. Don’t tell us not to blame Ben Bernanke and the Fed, as if to imply this isn’t their fault. It’s completely the Fed’s fault! All I can do is vote, and close all accounts with these large, corrupt banks. The average American had nothing to do with this crisis. Rather, there are specific people that can be easily identified and prosecuted. Let’s hear Bill Gross say something to that effect!

Login or register to post comments Re: SVNT/baz/t Submitted by baz22 (1439 comments) on Wed, 10/27/2010 – 13:13 #72895 (in reply to #72890)

could see $ 16 in next 2 months… have a few shares.

Login or register to post comments THE EXPERTS Submitted by kaimu (1857 comments) on Wed, 10/27/2010 – 13:41 #72896

ALOHA!!

PIMCO-BILL GROSS says …
Whats going on here? Democrat or Republican, Elephant or Donkey, nothing much ever seems to change. Each party has shown it can add hundreds of billions of dollars to the national debt with little to show for it or move our military from one country to the next chasing phantoms instead of focusing on more serious problems back home.

Wow … a very astute “expert”. I figured this out after Reagan’s first term and haven’t voted for either of the two party political monopoly since. Bill Gross is about ten years late to my table in terms of where to put devalued USDs and get the most return. You need giant returns just to make up for the huge “malinvestments” that both the US FED and the US Treasury are forcing down our throats, supported with applauds by the likes of Bill Gross who is one of the largest US DEBT peddlers in the World.

Is it any wonder he has no choice but to say this …
We at PIMCO join with Ben Bernanke in this diagnosis …

Then he goes on to do some major CYA here …
but we will tell you, as perhaps he cannot, that the outcome is by no means certain. We are, as even some Fed Governors now publically admit, in a liquidity trap, where interest rates or trillions in QEII asset purchases may not stimulate borrowing or lending because consumer demand is just not there.

Then Bill Gross the expert says this in the end …
We at PIMCO are not sure.

Then yesterday we hear from Warren Buffet, the Oracle, the sainted guru of Omaha. I am surprised the Queen hasn’t turned him into a “Sir”, citizenship be damned. At any rate even if the Queen hasn’t knighted him God has, meaning Lloyd Blankfein CEO of Goldman Sachs!

Warren Buffet claims that gold does not create value and he is right as it only has the ability to “store value”. Then I would ask if a USD creates value? And what is it that a USD stores? Next Warren concludes that investors need not waste their time buying gold since they would have been better off buying BRK.B. I pointed out that the US Treasury created a BRK.B every 8.8 days back in FY 2010 by issuing marketable US Debt, like a US Treasury Regular Series or 10 Year Bond or 20 Year Bond. If anyone was astute enough to connect the dots with those statements then they would realize while BRK.B may create jobs and profit the US Treasury was working over time in FY 2010 to make sure those profits were severely diluted in a floating currency sort of way.

All that said since Warren Buffet insists that gold offers little to no value I beg to differ with his “enlightened one”. Since 2001 I have made a fortune not just off gold but off silver as well. See Warren Buffet used to own COMEX Silver but he was forced to sell it off. He used to bet heavily against the USD by the billions in the FX market, but God showed him the light of those errors. Most in the “enlightened World” of the FX/COMEX will tell you gold is a commodity like cotton or pork bellies. Lets say it is, still if you want “bang for your buck” then you would do well to look at that commodity and then to invest in companies that “create value” from that commodity. Lets go with Warren’s premise and see who came out on top over the past two years since the financial meltdown in 2008. Was it Warren? Was it Bill Gross? Was it any of the experts you see on TV or read about every day on the internet?

Here is your answer …
LINK: http://tinyurl.com/2crwg57

Look what happens when you take the road less traveled …

So who is that down at the 0% and 20% gain? And then who is that up at those 100% and 1500% gains? Those who put their hard-earned money with Bill Gross barely had any return and those who put their chips in with the Oracle are happy to report their gains have better than doubled the rate of unemployment(official version).

Warren you should have kept your silver at the very least. Your BRK.B shareholders must be envious. If only your BRK.B shareholders had a piece of this …
LINK: http://tinyurl.com/2bvr5ur

Oh look what the wise Oracle did here …
LINK: http://tinyurl.com/2bpd6xc

He must have had a “senior moment” and clicked GS instead of GG … Which one of those “Gs” took TARP money? Which one has created the most shareholder value Mr. Oracle?

In the end the “experts” are just that … they are experts at conning you into believing they are “experts” and you are not. Which of the vast supply of “experts” can we thank for our sovereign insolvency? Hummmmm …

After reading Bill Gross’s political diatribe I am convinced he could easily qualify as a RON PAUL supporter. But wait … look who butters his buns! You cannot be a Toyota dealer and piss off the factory! Yes, Massah …

QUESTION AUTHORITY!

IT IS WHAT IT IS …

Login or register to post comments Re: SVNT/baz/t Submitted by baz22 (1439 comments) on Wed, 10/27/2010 – 13:22 #72897 (in reply to #72895)

although a tad more risky, am adding ‘ isis ‘… Rnai about to come off the back-burners.. like their partnerships, and partners can easily become parents !!

Login or register to post comments Evolving Gold – EVG Submitted by Luggie (246 comments) on Wed, 10/27/2010 – 13:30 #72898

Hi All – Nice intercepts reported today with one of the litter. It will be a while before the project completes a compliant report of reserves, but in a measured way they are marching along to becoming a real company. Happy Trading

Login or register to post comments Buying Opportunity? Submitted by 2nd_ave (4865 comments) on Wed, 10/27/2010 – 13:52 #72899

I think so.

Login or register to post comments Re: Buying Opportunity?/ All Aboard Last Call Prior To Tuesday Submitted by 2nd_ave (4865 comments) on Wed, 10/27/2010 – 14:03 #72900 (in reply to #72899)

Opening a small position in SSO (20% of allocation), will add on the expectation of further selling into the close…

Login or register to post comments GG earnings after the close Submitted by nebish (67 comments) on Wed, 10/27/2010 – 14:03 #72901

I, for one, am expecting to be shocked and awed ala Gulf War II (remember, Tommy Franks?).

The real question is: is Wall St/Bay St expecting that too? If so, will we all be disappointed.

All hedge books have been officially closed for quite some time now (Anglo Gold Ashanti was the last hold out). So far, the majors have been right to close their hedge books (remember the controversy when NEM did it at $1100/oz?).

If this Q ain’t a blowout for GG, I’m not sure what it takes. This should really look like XOM’s report when Oil was at $140/bbl. We shall see….

Login or register to post comments REDF Submitted by teamonfuego (2248 comments) on Wed, 10/27/2010 – 14:17 #72902

REDF reports earnings before open tomorrow. In case you don’t know, they are one of the largest search engines/portals in India. India recently had a broadband internet spectrum auction to help bring broadband internet to the masses quickly. Currently only 9 million people have a broadband connection in India (versus a population of about 1.2 Billion).

REDF has been around for a while, yet revenues haven’t gone up because the internet population and e-commerce in general has not grown in India. However, a lot of money has been pouring into e-commerce ventures (see MMYT) over the past 12 to 18 months and with the broadband spectrum auction, it appears that e-commerce is set to explode.

Rediff.com used to be a very clutter search portal. Advertisements filled up its home page. In Q3 2009 they decided to get rid of all of the advertising on their home page and make the site design more sleek and minimalist. Revenues initially dropped but they have since grown sequentially for the past 4 quarters. Attached is a screen shot of how revenues have grown recently. I’ll be looking for continued sequential growth and growth in its registered user base, which is around 93 million people (this is the # of subs to its email service, which is mostly used by mobile phone users).

FD:
Long stock at around $4.20.

AttachmentSize rediff.jpg 40.47 KB Login or register to post comments Re: SVNT/baz/t Submitted by BillySundance (761 comments) on Wed, 10/27/2010 – 14:25 #72903 (in reply to #72897)

SVNT popping now, up to $12.29 – could be a nice end of day for this one. Weak hands seem to have been fully expunged…..

Login or register to post comments Re: Midterm Elections and Goosing the Market Submitted by Grym (2669 comments) on Wed, 10/27/2010 – 14:29 #72904 (in reply to #72891)

Dave M,

I agree the elections are boosting the market and expect a drop following no matter the outcome.

From Bill last week or there abouts…

“Then [post Nov. 2] I think all systems will reverse. The $USD and bonds will rise, the Euro, Loonie and Aussie will fall, and prices of Crude Oil, Gold and other commodities will fall along with the S&P 500.”

“…after November 2, assuming both houses go to the Republicans, a more moderate Obama will emerge, a la 1994 Bill Clinton. Troops will be bought home in the next two years, military spending will go down, and jobs and the economy will improve in time for the 2012 election against Sarah Palin.”

Just my view of Obama, but I think he is far more attached to his philosophy than Bill Clinton ever was. Clinton was far more pragmatic and wanted to be liked. Obama doesn’t really care whether he is liked as long as he gets what he wants. The health care and bonuses are examples of “My way is THE way”.

Bringing home the troops would increase the focus on the sick job conditions. Instead of an improved economy before 2012 I think conditions will be even wose which Obama will use to show the increased Republican representation was a detriment and he will possibly get a second term due to the inability of a revamped congress to do anything.

Palin may run against Obama (Hope there is someone better.) the surprise would be if Hilary goes for it. Only someone with a crazy desire to be president would want to tackle the problems which continue to fester — Soc. Sec., Medicare (if Obamacare is repealed) JOBS, inflation/deflation (I see both at once.) pension and other massive debt… endless list.

I don’t like this view, but still think it likely.

Login or register to post comments Re: RBY Submitted by frip99 (8 comments) on Wed, 10/27/2010 – 14:35 #72905 (in reply to #72866)

News:
http://www.proactiveinvestors.com/companies/news/9…

Login or register to post comments toby, you’ll love this.. Submitted by baz22 (1439 comments) on Wed, 10/27/2010 – 14:40 #72906

going into ‘ vvus ‘… like the odds on ‘ post-approval ‘ studies ( heart relate & pregnancy )…

Login or register to post comments Re: Midterm Elections and Goosing the Market Submitted by goldbug58 (146 comments) on Wed, 10/27/2010 – 14:45 #72907 (in reply to #72904)

Defense spending (contractors) is already being cut; Robert Gates announced his spending cuts back in July / August and of course encountered immediate resistance. Obama has suggested eliminating the tax break for contractors overseas; as both decisions directly affect me I pay some attention (not that big a deal to me if I wind up going home).

Now, I don’t know about bringing troops back from Afghanistan; but Iraq is already essentially a skeleton crew with all combat troops withdrawn.

As for this administration, I draw comparisons to Jimmy Carter versus Bill Clinton; in the sense that both Carter and Obama were skilled campaigners but will be remembered as lame-duck Presidents.

Login or register to post comments Re: toby, you’ll love this.. Submitted by baz22 (1439 comments) on Wed, 10/27/2010 – 14:48 #72908 (in reply to #72906)

got it at $ 3.50 down ( additional phase III required ) and $ 14.50 up ( approved with post study requirements and strict label and moniter for pregnancy before or during use )..

Login or register to post comments Re: Midterm Elections and Goosing the Market Submitted by Dave M (214 comments) on Wed, 10/27/2010 – 14:52 #72909 (in reply to #72904)

Grym,

Well I’m glad that I’m absorbing some of Bill’s commentary! I’m speculating that the next two years shift more to direct economic stimulus, rather than goosing the stock markets. By this, I mean massive infrastructure spending on roads, mass transit, etc.

Login or register to post comments Re: Midterm Elections and Goosing the Market Submitted by NYUGrad (2964 comments) on Wed, 10/27/2010 – 14:53 #72910 (in reply to #72891)

they need to goose it to keep the ponzi scheme going.

nothing structurally has changed since the collapse of lehman et al.

most people dont go to the dentist until it hurts too much. so if reform is the dentist, we are all being given novocaine administered from our homes.

Login or register to post comments Re: natgas move Submitted by DavidV (45 comments) on Wed, 10/27/2010 – 15:02 #72911 (in reply to #72861)

dave, I think the futures take precedence over the spot price. They are actively traded and hence their current price is the BEST guess for where the spot price is going to be at the expiration. So if no new information comes to the market traders, then we should expect the spot price to rise to meet the futures.

Login or register to post comments Portugal in news again Submitted by NYUGrad (2964 comments) on Wed, 10/27/2010 – 15:23 #72912

Political upheaval rocks eurozone debt markets

http://bit.ly/c5QZFY

“Hopes of a budget deal in Portugal collapsed after marathon talks between the minority government of socialist premier Jose Socrates and conservative leaders ended in acrimony.
Finance minister Fernando Texeira dos Santos said failure to agree on budget cuts will “plunge the country into a very deep financial crisis”.”

As I mentioned, nothing structurally has been changed or fixed. here or abroad.

Login or register to post comments Re: Midterm Elections and Goosing the Market Submitted by Grym (2669 comments) on Wed, 10/27/2010 – 15:35 #72913 (in reply to #72909)

Dave M,

“By this, I mean massive infrastructure spending on roads, mass transit, etc.”

This is where (IMO) any taxpayer dollars should only have been spent. We had the bridge collapse in Minneapolis and others I see look about to do so.

A small detail and perhaps not applicable to large projects:

About 30 years ago my wife’s cousin (at that time working for NASA) suggested that my annual patching of the concrete apron on my garage floor would last much longer if I added a small amount of Elmer’s glue to the Sacrete mix. (He gave me a long scientific reason which I immediately forgot.)

That was the last time I needed to do the patch.

I often wonder if it would work as well on the Interstate.

Login or register to post comments Rob Ford Submitted by Dave M (214 comments) on Wed, 10/27/2010 – 15:38 #72914

Bill – “Last evening, the people, fed up with liberal spending, elected a new mayor, the highly controversial Rob Ford. City politics is about to change. As Canada’s largest and most important city, what happens in Toronto as Ford cuts the budgets to the bone will be carefully watched by every politician in the province and the country.”

Its quite ironic in that in the same week liberal Toronto votes in its most conservative mayor in decades, that Calgary (aka Cowtown), center of Canada’s oilpatch, generally thought of as the redneck capital of Canada, votes in a man named Naheed Nenshi, who is young, funny, educated, a visible minority and a Muslim. What a switch.

Mr. Ford is not thought of as being progressive – he wants to rip out Toronto’s electric streetcars (the largest such system in North America), and replace them with diesel buses . For those too young to remember, GM and Standard Oil pulled this off in the US in the 1940’s (see Great American Streetcar Scandal):

http://en.wikipedia.org/wiki/Great_American_street…

Login or register to post comments Re: THE EXPERTS Submitted by shamblin (3 comments) on Wed, 10/27/2010 – 15:39 #72915 (in reply to #72896)

Aloha Kaimu!

Thank you for your delicious riposte to yesterday’s personal attack. As we Canadians like to say: “Touche, eh!”

Y-E-S!

And thanks for not only the data that you provide this assembly, but your selfless effort in tracking, sorting and posting it.

Login or register to post comments Re: Midterm Elections and Goosing the Market Submitted by Grym (2669 comments) on Wed, 10/27/2010 – 15:39 #72916 (in reply to #72910)

NYUGrad,

“most people dont go to the dentist until it hurts too much. so if reform is the dentist, we are all being given novocaine administered from our homes.”

I believe this is so too.

Unfortunately my dentist is experiencing this clearly. His business is down 20% from his average this year.

Note to D.C. — Skip the novocaine — send scotch 😉

Login or register to post comments Re: natgas move Submitted by jack black (920 comments) on Wed, 10/27/2010 – 15:53 #72917 (in reply to #72911)

Since you mentioned this, I like what UNG charts are doing. I would like higher low though on daily charts (I saw it on intraday charts so far) before jumping in as I was fooled by NatGas more times that I would like to say.

Login or register to post comments Hyperinflation brings the Submitted by boughtmypoints (39 comments) on Wed, 10/27/2010 – 15:46 #72918

Hyperinflation brings the benefits of wiping out unaffordable debt, unaffordable (retirement) entitlements, killing balance of trade deficits as imports become unaffordable as they become priced in valuta, but ironically providing increased levels of employment as stores and factories cope with the daily rush of people to convert paper currency into anything of value. The resulting economic hangover is nasty but not any more so than one engendered by the alternate deflationary path. But the legacy is the elimination of dollar debt and the emasculation of the middle classes.

Goldman Sachs would only be leading the cheerleading for QE X if they are actually mired in debt or have switched their real assets out of dollar denominated instruments.

So long as the U S is committed to its counterfeit dollar policy, I don’t see any meaningful reduction in military or social spending. Only with the introduction of a new convertible (the non convertible U S rouble is always a possibility!) currency will the U S empire be compelled to retrench.

The other indebted nations will just play tag along with U S monetary policy at a “safe” distance.

In Italy this week and life goes on with gas/petrol at 8 USD per gallon.

Login or register to post comments Re: Midterm Elections and Goosing the Market Submitted by NYUGrad (2964 comments) on Wed, 10/27/2010 – 15:56 #72919 (in reply to #72916)

Hi Grym,

at this point i have almost given up on reform. I might just start trading futures contracts intraday full time in 2011.

After all, the markets are not truth nor justice discovery mechanisms. I have already missed this ridiculous rally. on the next pull back i might go back into this market intraday.

But i would prob only focus on ES and NQ intraday, and currency + gold stocks for swing trading.

sitting in depreciating cash at the moment.

Login or register to post comments 1225 or Bust/ Manifest Destiny Submitted by 2nd_ave (4865 comments) on Wed, 10/27/2010 – 16:05 #72920

The bulls circled the wagons and fought off the bears. The train’s headed for the Pacific and I don’t see anything getting in the way between now and Tuesday.

Login or register to post comments Re: natgas move Submitted by DavidV (45 comments) on Wed, 10/27/2010 – 16:04 #72921 (in reply to #72917)

jack black: technically, the chart of UNG over the past month is built up of the same repeating blocks: sideways or slightly upwards motion Mon through Wednesday and then a strong dump on Thursday of Friday following the storage report. So the recent minor upticks in UNG will only become sustainable if UNG does not get dumped tomorrow or Friday.

Login or register to post comments China Consumer profile Submitted by westcoaster (336 comments) on Wed, 10/27/2010 – 16:21 #72922

Since they will end up with most of the $1-4T, it might serve us well to understand the Chinese consumer and what American companies will attract their RMB’s:

http://www.minyanville.com/businessmarkets/article…

Login or register to post comments update on ECU.TO Submitted by DavidV (45 comments) on Wed, 10/27/2010 – 16:28 #72923

I just spoke on the phone with the investor rep from ECU.TO to get an update about their situation, and I liked what I heard. They will announce new drill results in a month or so from a high-grade area that was detected in 2008. Also, while their 2Q revenue was around $4.4M, they are planning to stop experimenting with their mills now and run them at the full efficiency mode with high-grade ore, so as to get around $9M in revenue in 4Q.

As for 3Q, the results of which will soon be announced, their total shipments were 418K silver equivalent ounces, up from 315K in 2Q (because of the gold pyrite sales). Also, they are making semi-annual payments of $1M for mineral concession liability (to acquire a piece of land), and they made that payment in 2Q and hence it won’t appear in 3Q. So, the way I see it, unless they made a lot of new spending in 3Q, they should have a positive EPS in 3Q already and an even better result in 4Q. Maybe THAT will attract some attention to ECU, since they have been posting slightly negative EPS for a while.

I think ECU is a winning lottery ticket long-term (over the next couple of years) because of their internal growth AND, obviously, because of the long-term uptrend in gold and silver, which has become an even more sure thing with QE and competitive currency devaluation.

I already have 1/4 of my portfolio in ECU (my core position). Over the past couple of days I added 5000 shares of ECUXF at $0.67 and then 5000 more at $0.65. After today’s conversation, I placed buy limit orders for 5000 shares of ECUXF at $0.63 and $0.61. These recent purchases will be my “trading” position, which I will sell during the next spike to around $0.8 in ECU.TO.

Login or register to post comments Re: 1225 or Bust/ Manifest Destiny Submitted by teamonfuego (2248 comments) on Wed, 10/27/2010 – 16:30 #72924 (in reply to #72920)

2nd – I agree. I raised cash for a day just like this and put it to use. Moved 50% of my remaining cash into the SPY Fund and the International Fund (of which 23% is the Nikkei).

LVS – BLEW OUT earnings. Absolutely crushed. The whole casino sector is getting a boost after hours. Maybe I won’t regret not selling my BYD options earlier in the day.

Also, just because you sold the BAC $0.20 lower doesn’t mean you can’t buy back in. This thing was 70% higher just 6 months ago. Did the world really fall apart since then?

Login or register to post comments Re: 1225 or Bust/ Manifest Destiny Submitted by teamonfuego (2248 comments) on Wed, 10/27/2010 – 16:29 #72925 (in reply to #72920)

….

Login or register to post comments SVNT & ruminations Submitted by tobyt (86 comments) on Wed, 10/27/2010 – 16:30 #72926

OK billysundance $ baz22, you are quickly running me out of $$$ for this mo……I capitulated and bgt the dec 12s on SVNT and sold this mo 14s for a $1.2 debit, watching the ASTM w/amazement on its massive volume/pop today……great call baz…. this market sure reminds me of mid 1987 where it also appeared one could do no wrong…….I mortgaged my house and put it in the market back then, between austin RE losing half its value in the next three years and the pillaging of my stock acct I went from a mid six figure net worth to a minus high five figure one………no more margin or debts this time around…hopefully I have learned somehing in the past twenty-something years……its going to be the last 90 degree day of the year???? (my mother used to say man proposes and god disposes) so I am going home and lazing about the rest of the day for a change…..thanks to everyone for their inputs and especially bill’s invaluable advice

Login or register to post comments Re: 1225 or Bust/ Manifest Destiny Submitted by Les (3594 comments) on Wed, 10/27/2010 – 16:31 #72927 (in reply to #72920)

I was very lucky to be covering the last short on CCL just 5 cents above the low of day as selling followed yesterdays sympathy gap up with RCL. Market strength continues to impress. Still, out before with 1pm with satisfactory wins. The market showed its hand a little more clearly this morning. Less shakeouts and invalidations.

Here’s hoping the Pimp Co. boss is right and the Fed’s hand tips the market to a readable inflection point next week. Off to France Jura tomorrow for a quick break – http://en.wikipedia.org/wiki/Jura_wine – c u’s Friday for the open.

Login or register to post comments Re: natgas move Submitted by jack black (920 comments) on Wed, 10/27/2010 – 16:32 #72928 (in reply to #72921)

You could right about it, but UNG is bouncing from RSI(14) of 30 levels on both daily and weekly charts. Last 4 times it happened in the last 2 years there was a serious rebound.
I also see some encouraging uptick in natgas sentiment (from absolutely rock bottom) in the last week despite falling prices.

Cotton and other soft commodities are exactly the opposite: 97-98% traders bullish. When will this bubble burst? There is some BAL selling today, so maybe soon?

Login or register to post comments Re: natgas move Submitted by Chris (5 comments) on Wed, 10/27/2010 – 16:35 #72929 (in reply to #72911)

Front-month NYMEX natural gas futures contract expire three business days from month-end, i.e. Nov10 futures expires today. So it’s strange that Nov10 traded today but the graph in Les’s posting this morning quotes Dec10 contract for today’s trading.

Futures call for a rateable delivery of physical gas daily throughout the month. Spot or cash market is for next day’s delivery.

Login or register to post comments Bondwatchers? Submitted by loannetter (844 comments) on Wed, 10/27/2010 – 16:44 #72930

Grym,
Are you hanging tight til the Tuesday or adding to your basket now?

Login or register to post comments Re: SVNT – baz/tobyt Submitted by Johnny (862 comments) on Wed, 10/27/2010 – 16:57 #72931 (in reply to #72885)

WOW. Thank you Billy. I jumped on that boat and am still riding. Since I post infrequently and get so much from this blog here is what I am trading. Hopefully it’s a help.

I like BBY – Best Buy. Bought and sold it once and bought back in today.
Long Prophecy PRPCF, though it dropped since the management keeps privately selling 2x shares below market. I didn’t call them yet, but may drop this one, due to lack of the ‘C’ word.
Long PMVGD PMI Goldcorp.
Long UXG since yesterday when Bill mentioned it.
Own Mar and Jun 2011 puts on FXY that are just turning green.
Own large position of Vanguard precious metals fund VGPMX.
Small NE & MITSY position.

Recently traded XOM, TZA, DZZ, GG, MSFT, AEF, EWH, EWM, XLF, GDXJ, CYB.
May have missed my chance to short VMW and CRM.
ISIS looks interesting.

Congratulations on Nasdaq Bill. As usual, your post today was superb.
Always great people, ideas, expertise on this blog!
J

Login or register to post comments Re: natgas move Submitted by BillySundance (761 comments) on Wed, 10/27/2010 – 16:58 #72932 (in reply to #72929)

Keep in mind that natural gas, although it has many uses, has no value if it can’t be stored (at a justifiable cost) or used immediately. Fact is, rig counts are not falling due to a variety of factors including high oil prices. The dynamic has changed in that high oil prices are keeping it profitable to continue to drill for liquids and the by-product is additional natural gas supplies. In other words, they are making enough on the liquids alone that the price they can get for the gas is of lesser importance.

Also, from my understanding, many of the drilling leases in the U.S. have stipulations that require drill activity to begin by certain dates or else they may become restricted or voided. This is also adding to the abundance of natural gas.

You may catch some oversold bounces in UNG, but fundamentals are and remain to be very bearish for the domestic natural gas market. We need the winter from hell followed by major supply disruption next summer to even start clearing out this oversupply. And UNG technicals, as they are with all leveraged ETFs, are meaningless and unreliable.

Login or register to post comments Re: SVNT – baz/tobyt Submitted by BillySundance (761 comments) on Wed, 10/27/2010 – 17:06 #72933 (in reply to #72931)

Johny/Tobyt – Glad to hear you guys got in on the SVNT! What a day!

Login or register to post comments PBS Frontline Submitted by NYUGrad (2964 comments) on Wed, 10/27/2010 – 17:11 #72934

http://to.pbs.org/92BoCM

Login or register to post comments The Fed’s impending blunder Submitted by Les (3594 comments) on Wed, 10/27/2010 – 17:25 #72935

http://blogs.telegraph.co.uk/finance/ambroseevans-…

Gotta wonder if QE2 will be made reality. When the crowd of bubbleheads are all pointing to massive expansionary policies and the end of the $USD, I have to question whether it’s going to happen. Just thinking out loud.

Login or register to post comments Re: natgas move Submitted by Dave M (214 comments) on Wed, 10/27/2010 – 17:27 #72936 (in reply to #72932)

For those interested, an article from todays Globe and Mail with some TA on HNU.TO:

Is natural gas poised for a recovery?
http://tinyurl.com/2u2z6jo

Login or register to post comments seen today Submitted by davefairtex (2417 comments) on Wed, 10/27/2010 – 17:29 #72937

* Intraday rally attempt in TLT failed, closed at the day low. Broke support. 3rd lower low. Got TBT?
* SPX slowly grinding lower. MACD rolling over, lower highs, lower lows on the 15 min intraday chart.
* BAC generating a buy signal. Good volume. Do you feel lucky, punk?
* Did $GOLD form a higher low today at 1318, or is this just a dead cat bounce on the way through 1300?
* $SILVER:$GOLD trend intact, shows risk is still being bought
* $USD continues moving up, but closed weak, 0.20 off the highs.

Friday Wildcard:
First look at 3rd Q GDP. Think it’s good news? Will the headline be
“To the Moon, Alice, to the moon!”
or
“Government Data Catches Up with Consumer Metrics after Only 3 Months”

Login or register to post comments Goldman Sachs’ Suckers Bond Trade Submitted by Dave M (214 comments) on Wed, 10/27/2010 – 17:56 #72938

Are you still unsure whether we’re in the midst of a giant bond bubble? Well, Goldman Sachs sure isn’t. Today, it is selling $1.25 billion in 50-year bonds to retail buyers at a yield of 6.125%.

Do you believe that Goldman would be selling these bonds a week before the Fed meets if it thought interest rates were heading much lower? If you think so, I happen to have some fresh 100-year Mexican bonds to sell you -– and those have about the same yield as the Goldman paper.

How many times must investors be warned? Always judge Wall Street by its actions, not necessarily its words.

Evan Newmark, WSJ, Oct 26, 2010

Login or register to post comments MORE LAWSUITS PLEASE Submitted by kaimu (1857 comments) on Wed, 10/27/2010 – 18:26 #72939

ALOHA !!

Just what the LIABILITY BUBBLE needs … more lawsuits please!!!

So AMBAC is suing Bank America …

Ambac filed suit after a review of 6,533 of the home loans — just a fraction of the 268,000 loans included in 12 mortgage-backed securities it insured for Countrywide. The review found more than 97% of the loans didn’t meet the guidelines Countrywide had said they’d followed in assembling the bonds, according to the complaint filed Tuesday in New York State Supreme Court.

LINK: http://www.smartmoney.com/news/ON/?story=ON-201009…

Hummmm 97% … who wrote the 3% … hire them, fire the rest!!!

First it was MBIA,now AMBAC. Who’s next to sue … AIG … FNM … FRE?

Aren’t we lucky to have such “experts” at the US FED in charge of our banks and money? Righteous … No wonder Bernanke and Paulson forced BAC to buy Countrywide! Makes you wonder what their reason was for Merrill Lynch …

You can be guaranteed there are more liabilities coming our way … Its the life blood of our monetary system.

Login or register to post comments GG Submitted by Johnny (862 comments) on Wed, 10/27/2010 – 18:42 #72940

http://tinyurl.com/2em48pq
GOLDCORP EARNINGS INCREASE AND DIVIDEND DOUBLES ON RECORD OPERATING CASH FLOW

If this doesn’t light a fire under the miners…
J

Login or register to post comments Re: GG Submitted by Dave M (214 comments) on Wed, 10/27/2010 – 18:54 #72941 (in reply to #72940)

Will depend more on what gold does tomorrow – right now GG is only up a penny afterhours. When you see the weekly chart, it is still well below 2008 levels, as are other majors such as Agnico Eagle, Barrick, Kinross.

http://tinyurl.com/22vsvqd

Login or register to post comments Re: GG Submitted by Johnny (862 comments) on Wed, 10/27/2010 – 19:38 #72942 (in reply to #72941)

Dave M,
Your guess is as good as mine. GG is up 0.10, GDX +0.18, GDXJ +0.51 at the moment, but that’s not saying much. I use $XAU as correlation. $XAU is attached at the hip to GDX and together with $GOLD they ‘have been’ a team. I expect gold to be weak for the next 3-5 weeks and the miners have noticed.

However, great earnings, QEII, money rotating out of bonds and possibly even other equities may slow the effect. When things turn I expect miners to take off.

FD: I am overweight in PM and miners, mostly trade positions with some day trades, hence my bias.
J

Login or register to post comments Re: Bondwatchers? Submitted by Grym (2669 comments) on Wed, 10/27/2010 – 19:58 #72943 (in reply to #72930)

Loannetter,

I was stopped out on TLT with a .006% loss. But I’m hanging on to my GNMAs (VFIIX) and my 10-yr zeros. Sitting on about 15% cash ready to buy if gold continues to pull back. Possibly not too long a wait to start to tiptoe into TLT again. (Still have a cushion before bailout time.)

My expectation is that the 10-yr will stay below 3% and then begin a return to lower 2s once again. Nothing has really changed and I see this as another move based on hype and hot air.

Even at my age I am still amazed at the way people buy the propaganda from local, state and national politicians and the media.

Example: Our city is $5.5 million behind the budget and cutting police force as violent crime (forcible entry at gun point) is on the increase. Our school system is $41 million in the hole (state hasn’t paid their share in years). Still the incumbent (replacement for our latest criminal from the statehouse) Quinn just “gave us” $8 million which will go to riverfront beautification.

Estimates are his largess will boost the Illinois debt from $13 trillion to $17 Trillion, but people are thrilled.

I see it as only a short time before the fear and reality are back in full force driving bonds up in value once again. Eventually something MUST be done to adjust all these imbalances. It won’t be pretty and it won’t be over quickly, IMO.

Login or register to post comments Re: natgas move Submitted by DavidV (45 comments) on Wed, 10/27/2010 – 20:17 #72944 (in reply to #72928)

“I also see some encouraging uptick in natgas sentiment (from absolutely rock bottom) in the last week despite falling prices.”

jack black: where do you find (or how do you evaluate) the sentiment figures for natgas? Thanks!

Login or register to post comments Gimme Shelter/ Mad Bull My Lai Submitted by 2nd_ave (4865 comments) on Wed, 10/27/2010 – 20:25 #72945

http://tinyurl.com/ybavlcy

Ooh, see the fire is sweepin’
My very street today
Burns like a red coal carpet
Mad bull lost its way

Bears need to clear the roads, drop off the (foot)bridges and head for the underground tunnels.

My Lai morning.

Swapped positions into the close- sold the SSO, opened OAKBX in the buy-and-hold.

Login or register to post comments JPM Manipulating Silver Prices Submitted by Johnny (862 comments) on Wed, 10/27/2010 – 20:23 #72946

http://tinyurl.com/358tvhk
JPMorgan, HSBC Accused of Manipulating Silver Futures
By Joel Rosenblatt and Bob Van Voris – Oct 27, 2010 8:12 PM ET
“JPMorgan Chase & Co. and HSBC Holdings PLC were sued by an investor claiming they manipulated silver futures and options prices in violation of U.S. antitrust law by placing “spoof” trading orders.

The investor, Peter Laskaris, alleges that starting in March 2008, the banks colluded to suppress silver futures so that call options, or the right to buy, would decline, and put options for the right to sell would increase, according to the complaint filed today in federal court in Manhattan. The collusion was also intended to maintain prices at levels at which some options would expire as worthless, Laskaris claims.

The banks placed so-called spoof trading orders, or the “submission of a large order which is not executed but influences prices and is then withdrawn before it reasonably can be executed,” according to the complaint.”
J

Login or register to post comments Faux is in the hen house or was that DOG house? Submitted by gforce (400 comments) on Wed, 10/27/2010 – 20:57 #72947

Sure, this development has nothing to do with dissing Ron Paul or manipulating Freedom in a negative way:

http://www.bloomberg.com/news/2010-10-27/fox-ratin…

Login or register to post comments Denver Gold Show 2010 Presentations Submitted by knifecatcher (334 comments) on Wed, 10/27/2010 – 21:01 #72948

http://www.gowebcasting.com/conferences/2010/09/20…

3 days worth of compaany presentations to review!

Link courtesy of rank10 at BPT.

KC

Login or register to post comments Re: PIMCO’s Bill Gross Nov Investment Outlook Submitted by Illini (455 comments) on Wed, 10/27/2010 – 21:44 #72949 (in reply to #72894)

Amen, ditto, agree and right on. As an aside, it is irresponsible for him to blame the voter who has only two bad choices in this corrupt two party system.

Login or register to post comments Re: SVNT & ruminations Submitted by baz22 (1439 comments) on Wed, 10/27/2010 – 21:48 #72950 (in reply to #72926)

been there, also, toby.. perhaps the one caveat is the prices -( IBD was great at pumping the ‘ buy high – sell higher ‘ B.S ) – more realistic, with many more years of data being accumulated ( talking bio’s ).. along with the surprises, there will always be the blow-ups ( I’m not telling you, or the board, a durn thing you’ don’t already know – just reminding myself – re: my ‘ vvus ‘ purchase this afternoon – guess it really will be a ‘ buy and hold ‘ either way !! ).. I love the biotech sector because of the mystery and the potential .. I trade the other sectors, but am more comfortable with the bio’s.. I will never have enough time, or intelligence, to learn what I need to know, but, this is what makes everday so damn valuable. The ebbs and flows of people’s decisions on the small caps are a thing to behold. I remember you saying you ‘ use ‘ to be a CELG – AMGN type of guy !! – well, heck, toss in DNA, GENZ and some others, they all were in the sub $ 5 area at the start.. I only wish I had enough time to witness the true medical miracles that these totally dedicated people at their respective companies will eventually bring about. Really, thats what its all about. I like the ‘ good guys ‘… take care, baz.

Login or register to post comments Did we knowingly ask for this? Submitted by gforce (400 comments) on Wed, 10/27/2010 – 22:08 #72951

Well Chuck didn’t:

http://dailypaul.com/node/147752

Login or register to post comments Re: Did we knowingly ask for this? Submitted by knifecatcher (334 comments) on Wed, 10/27/2010 – 22:23 #72952 (in reply to #72951)

Oh so sad. How did it come to this and how far is it going to go?

Login or register to post comments Gold and Silver ETF Confiscation Risk Submitted by Dr. Strangelove (814 comments) on Wed, 10/27/2010 – 23:20 #72953

We know FDR confiscated gold in 1933 (executive order 6102) and that Nixon closed the gold window in 1971 to stop the French from draining U.S. gold vaults. Now jump forward to today. It’s a fiat currency world without gold backing but we know the Chinese long to replace the USD with the renminbi as the reserve currency of the world and to do this, a massive increase in its gold inventory is required and underway.

No audit of the U.S. massive gold inventory has been allowed in centuries. Congressman Phil Crane tried it in the early 1970s and it turned into a media event at Fort Knox but wasn’t a true audit, just verification that the vaults weren’t empty. So, how could the U.S. president grab a large hoard of gold overnight with the swipe of a pen today to shore up a run from the today’s debt burdened unbacked buck and reverse the gold defaults by FDR and Nixon? Easy. Just confiscate/exchange the concentrated, large and growing U.S. held ETF inventories for paper promises …. and less pitch forky than forcing retirement accounts into dubious gov’t bonds.

I hope some journo picks up on this risk and writes about it with a nod to Dr. Strangelove. Of course, if it’s all paper gold promises in these ETF vaults it could be a way for the president to stop a default on the Comex and save JPM and the other bullion banks AGAIN.

From FT:

http://tinyurl.com/26blw4p

“The gold price has also benefited from the introduction of exchange traded funds five years ago. These funds allow investors to purchase gold bullion as effortlessly as a share of stock. In the second quarter of 2010, investors bought more than 274 tonnes of gold through ETFs. Their holdings now exceed 2,000 tonnes, and are the sixth largest in the world after the official stocks at the International Monetary Fund and the central banks of the US, Germany, France and Italy. At current growth rates, these ETFs could rank third by the end of 2012.”

Got physical gold?

Login or register to post comments Re: natgas move Submitted by jack black (920 comments) on Wed, 10/27/2010 – 22:50 #72954 (in reply to #72944)

sentimentrader.com weekly sentiment readings. Subscription only.

Login or register to post comments Fed-UP Submitted by Johnny (862 comments) on Wed, 10/27/2010 – 22:54 #72955

http://tinyurl.com/2bbjubh
Obama’s Solicitor General Told Fed Not to Appeal, Banks Say
By Bob Ivry and Greg Stohr – Oct 27, 2010 2:40 PM ET

I never cease to be intrigued by the arrogance of the Fed and bankers. Here we have a request for information and the almighty Fed, once again gives the ever haughty, disingenuous rejoinder “[The Fed] would be harmed if the central bank is forced to disclose lending records,…” “Bloomberg sued the Fed in 2008 after the central bank refused to disclose names of recipients of emergency loans from four programs in response to a request under the Freedom of Information Act, or FOIA.”

In August 2009 “a U.S. District Court judge ruled in Bloomberg’s favor”
In March 2009?2010? “an appeals panel upheld the lower court.”
Finally October 22, 2010 ““The Clearing House was informed on October 22, 2010 — two business days ago — that the solicitor general declined to authorize” the appeal, the banks’ group said in the court papers. Katyal declined to comment.”

There is more for those interested. I believe the list has already been posted here, so this may be old news despite the recent date.

The US secret central banking cabal at work!
J

Login or register to post comments Fantastic India – China discussion tonight on ‘ On Point ‘ Submitted by baz22 (1439 comments) on Wed, 10/27/2010 – 22:55 #72956

and the surrounding areas ( Burma, Sri Lanka, and the island area that could become the ‘ new ‘ Dubai )…. http://www.onpointradio.org/2010/10/kaplan-monsoon…

Login or register to post comments HB&B – Up Yours! Submitted by Jack Handey (20 comments) on Wed, 10/27/2010 – 23:19 #72957

I just can’t believe what this is turning into lately. I remember Bill’s early rumblings several years ago about the harmful conflicts of interests between regulators and HB&B. Look where it’s all lead since then! It’s popping up everywhere now. Is capital safe in the US anymore?

Login or register to post comments Pushme-Pullyou Submitted by Ross (389 comments) on Wed, 10/27/2010 – 23:32 #72958

The good news is that a fozen package of brussel sprouts at Kroger are still 88 cents. The bad news is that 4 years ago that package was 16 ounces…a full pound. Eighteen months ago my one pound package was reduced to 14 ounces. My last package purchase contained……………wait for it………12 ounces BUT IT WAS STILL ONLY 88 CENTS A ‘UNIT”. Some silly 5th grader with a calculator will tell you that the price of brussel sprouts has increased 33% but the squints at the BLS will assume that ‘new’ brussel sprouts are more better for your health cause…..well they didn’t even notice the slight of hand.

Inflation always begins or accelerates with the monitization of cost push price pressures. The oil price shock in the very early 1970’s bleed over and was monitized through our Ag structure, transportation systems, and materials sector which led to wage and price controls when the admitted inflation was a modest 4% per annum. Goodness glory what do you think happened next?

Every union muther, cop and plumber demanded a wage increase…..Demand Pullyou. And the vicious cycle repeats as long as they can pulp one tree, splash ink on it and call it a billion dollas.

I say screw the silver manipulation inquiry. Lets look at the interest rate manipulations where the FED creates money at the behest of the treasury which is then lent to banks, por nada, and used by them to buy new debt (and rollovers) FROM the treasury to keep interest rates at zero or close thereto and provide your Federable Gummit with the cash they need to pay benefits to people that don’t want to work or can’t find work at the current minimum wage.

How do you get markets to clear??? You allow markets and labour to be priced at free market rates.

If there are no free markets, perforce they cannot clear.

One last observation if you will from a geezer married to the financial markets since 1967. The debt markets are the biggist bubble in the history of the world. Why would anyone lend money at 3% to a company (government) that is in FACT bankrupt?

What a sham. What a Ponzi scheme that Madoff would be ……screw it. You can know the rest.

Login or register to post comments natty comments Submitted by Port2013 (35 comments) on Thu, 10/28/2010 – 00:45 #72959

I posted these comments elsewhere and I though there might be an interest seeing it here.

My thoughts on Nov.

I think I read somewhere that Nov is expected to be cold then the rest of the winter is mild. Most of the arb storage players have probably rolled out of their Nov positions so that may support the cash prices a bit. Utilities can’t really arb so much plus they have to balance their loads based on historical burns and what they think the weather forecast looks like. I still think the utilites would have more baseload supply than normal because the Nov contract settled at 3.292 and that’s pretty low. I would hate to take out a lot of my storage gas at the $3.30 level. On the flip side, if we have a mild Nov, cash prices are going to tank and they will probably take the Dec contract down with them. Utilities will probably have to sell gas in the cash market cuz they probably wont’ have any room in storage.

And storage facilites come with different requirements. Some storage operators will force you to take some gas out each month (I’ve never worked with one of these but this is what my peeps have told me). Some storage operators have a seasonal requirement that you draw your storage down to a certain level by the end of the withdrawal season. Some storage operators don’t require any injections or withdrawals.

Tomorrow I’d like to see the Dec contract down about $.10 or so before the number, then maybe a spike down after the number and that’s when I’ll buy my Dec or Jan $5.00 strike calls. If the Dec contract is trading flat or up then I’d probably do a 5/6 call spread. I’m just not sure if I want to do Dec or Jan.

Login or register to post comments Grym Submitted by jet8400 (180 comments) on Thu, 10/28/2010 – 00:54 #72960

I am not saying you should be foolish. All I’m saying is, understand if you will and take if you need.

Login or register to post comments 800% Submitted by kaimu (1857 comments) on Thu, 10/28/2010 – 02:01 #72961

ALOHA!!

In my US Treasury Statement reports here I have often shown that net tax revenues need to rise 800% just to keep up with current debt issuance and spending at the US Treasury. A sizable REVENUE DEFICIT that virtually renders any fix via increased taxation as pure fantasy from a PAY-AS-YOU-GO stand point or any stand point including “morality”. Why throw good “capital” after bad by raising taxes? Let the people who earn their wages keep their wages since anyone with eyes open can see that banks and politicians have failed miserably at fiscal and moral responsibility. Why should the US Congress be given infinite chances to perform in a responsible manner?

Amazingly enough I read this from the good Professor Kotlikoff tonight …

Boston University economist Laurence Kotlikoff says U.S. government debt is not $13.5-trillion (U.S.), which is 60 per cent of current gross domestic product, as global investors and American taxpayers think, but rather 14-fold higher: $200-trillion – 840 per cent of current GDP. “Let’s get real,” Prof. Kotlikoff says. “The U.S. is bankrupt.”

Writing in the September issue of Finance and Development, a journal of the International Monetary Fund, Prof. Kotlikoff says the IMF itself has quietly confirmed that the U.S. is in terrible fiscal trouble – far worse than the Washington-based lender of last resort has previously acknowledged. “The U.S. fiscal gap is huge,” the IMF asserted in a June report. “Closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 per cent of U.S. GDP.”

This sum is equal to all current U.S. federal taxes combined. The consequences of the IMF’s fiscal fix, a doubling of federal taxes in perpetuity, would be appalling – and possibly worse than appalling.

Prof. Kotlikoff says: “The IMF is saying that, to close this fiscal gap [by taxation], would require an immediate and permanent doubling of our personal income taxes, our corporate taxes and all other federal taxes.

Then the good professor goes on to list all of RON PAUL’S PRESIDENTIAL CAMPAIGN platforms which are required in order to bring America back into fiscal, monetary and moral compliance to the Laws of Nature. Within 24 hours I now have Bill Gross, the IMF and Prof Kotlikoff validating the RON PAUL campaign platforms. I see no mention of Obama or McCain platforms … I mean what sort of a platform is “HOPE”? Or McCain’s … “97 YEAR DITTO”!

“America’s fiscal gap is enormous – so massive that closing it appears impossible without immediate and radical reforms to its health care, tax and Social Security systems – as well as military and other discretionary spending cuts.”

Finally I get validation from the mainstream, that even reluctantly includes the IMF. Remember Obama’s State of the Union speech in Jan this year? He offered up spending cuts totaling $20BIL! He even got applause for such an asinine statement! Brilliant … All I can say about the current spineless leadership is that they are all “experts” at only one thing … “getting elected”.

The professor goes on …

One way or another, the fiscal gap must be closed. If not, the country’s spending will forever exceed its revenue growth, and no one’s real debt can increase faster than his real income forever.

Prof. Kotlikoff uses “fiscal gap,” not the accumulation of deficits, to define public debt. The fiscal gap is the difference between a government’s projected revenue (expressed in today’s dollar value) and its projected spending (also expressed in today’s dollar value). By this measure, the United States is in worse shape than Greece.

LINK: http://tinyurl.com/2acvunp

THANK YOU … GOD ALMIGHTY !!!! RIGHT ON PROFESSOR KOTLIKOFF!!!!

Here it is again folks …
FISCAL GAP
The fiscal gap is the difference between a government’s projected revenue (expressed in today’s dollar value) and its projected spending (also expressed in today’s dollar value).

“Fiscal gap” or as I call it a TAX REVENUE DEFICIT. That was what guided all entries into currencies and mining shares back in Q4/2008 and Q1/2009.

Here it is in plain view for all to see over at the US Treasury’s latest Statement for Tuesday, October 26th:

TOTAL OUTLAYS = $11.6BIL USD
NET TAX REVENUES = $316MIL USD

A REVENUE DEFICIT for the day of $11.28BIL USD, a 3600%+ deficit. Every day the US Treasury runs a TAX REVENUE DEFICIT. Some days it is less and some days it is more and in fact some days net tax revenues are “negative”, meaning more refunds were issued than revenues deposited. What remains constant and forever on the increase at the US Treasury no matter what net tax revenues are doing is outlays and marketable and non-marketable debt issuance.

Thank you & MAHALO to Professor Kotlikoff and welcome to the lonely World of ex-US Comptroller/GAO David Walker. They will ignore you until you go away.

Does it take a PhD in Economics from Princeton to see this stuff? Apparently not …

IT ALL WORKS UNTIL IT DOESN’T …

Login or register to post comments LAUGHING ALL THE WAY! Submitted by kaimu (1857 comments) on Thu, 10/28/2010 – 02:43 #72962

ALOHA!!

Dave asked awhile back about why bankers are laughing all the way to … their banks! Here it is in SLOW MO!!!

LINK: http://mises.org/daily/4787

We’ve only had 294 failures this cycle, but it is a big deal: adjusted to current dollars, the Depression banking crisis was $100 billion, the S&L crisis was $923 billion, and the current crisis is nearly $8 trillion.

A great article that spells it out from an Austrian Economist point of view and not the usual corruption at the US Treasury and the US FED.

The gist of this article can be spelled out in one word once again … “malinvestment”. The huge sums of capital being diverted to saving the banks could have been used more productively by paying down debt or building infrastructure. Saving banks that continually fail to properly take prudent risk management is just plain immoral. What Mr. French leaves out of the equation is the “double whammy” of malinvestment meaning that as capital has been diverted to saving banks and preserving bank exec bonuses more additional debt must be issued to make up for tax revenue deficits in order to maintain not only political entitlements, but also military, foreign aid and infrastructure. Lost capital is simply that … “lost”! But “double lost”!!! Malinvestment renders taxation obsolete.

So who has the biggest bonuses in the worst, immoral monetary crisis in history? If these guys aren’t laughing its only because they are trying to keep a low profile as they buy up all the real estate in Uruguay!

Login or register to post comments Re: Gold and Silver ETF Confiscation Risk Submitted by davefairtex (2417 comments) on Thu, 10/28/2010 – 03:00 #72963 (in reply to #72953)

When asked by the police “why do you rob banks”, Willie Sutton responded, “Because that’s where the money is.”

These days, gold is NOT where the money is. Back in the 30s, gold was used routinely as a backstop – rich people had hoards of gold stored in local banks, “paid in gold” was written into contracts – gold was everywhere.

Now, “the money” is in 401ks and IRAs and pensions. If the government wants to seize money, my guess is, they’ll go to where the money is. They’ll establish a government pension program that will “never lose money”, and everyone with a private pension, a 401k or an IRA will be automatically “bought into” the government pension plan using their existing balances.

Will the government grab GLD? Perhaps. But I’d be more worried about your IRA than your shares of GLD.

Login or register to post comments Re: LAUGHING ALL THE WAY! Submitted by loannetter (844 comments) on Thu, 10/28/2010 – 03:22 #72964 (in reply to #72962)

And we are crying about a few billion to home owners in the form of mortgage interest tax deductions (money they paid to banks by the way) when these same august financial institutions have so far received 2.3 TRILLION from the Fed?

Login or register to post comments Re: LAUGHING ALL THE WAY! Submitted by jet8400 (180 comments) on Thu, 10/28/2010 – 04:12 #72965 (in reply to #72964)

I think we’re getting somewhere. Try your best to have an understanding of imperfection though. If you know from a statistical point of view something will occur. Why not expect it to happen and try to detter or at least lesson the blow if it is bad news? Sometimes the news is shocking! For all you know it could possibly be part of a plan you have no control over or knowledge of. Not until it all works out do we see chaos as majestic. We cannot dictate the future of our nation past our own actions. We can however be like Hayek and give warning. Then it’s on those who chose to take on the responsibility. Some take it gladly and others….

tick tick tick tick

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