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Weekend Reading – Santa Clause Rally or Grinchy Finish to 2010?

I'm dreaming of a white Christmas – how about you? 

Of course too much snow ahead of Christmas is bad for retailers and airlines as flights and even (gasp!) trips to the mall can be canceled by a big storm.  This is a La Niña year, which means the Pacific Ocean is colder than average and that can lead to much more snow than we've had in the past few years.  Accu-Weather's long-term forecast already predicts at least 1 inch of snow for 50% of the country on Christmas Day (when did weather forecasting get this precise, one wonders?).

Accuweather’s chief long-range forecaster, Joseph Bastardi, said recently that a series of storms crossing the country before Christmas will deliver snow to the northern half of the United States. He also said the weather pattern is set up in the middle of this month to bring what he calls a “blockbuster” storm with 6 to 12 inches of snow and strong winds to the northeast.  All in all, it's just another of the many, many factors we need to stay on top of this holiday season.  

Of course the oil and gas crowd are loving the cold weather so far but that's due for a big flip as lots of snow from La Niña (and take this from an old ski bum) generally leads to a pretty warm winter overall.  Right now, heating oil and natural gas is being extrapolated based on our recent cold snap (much worse in Europe) to be enough to work off the massive inventory overload but we are right at the top of the 5-year range in natural gas inventories and it's going to take a bit more than a week or two of cold weather to reverse this trend:

Working Gas in Underground Storage Compared with 5-Year Range

Of course, this is nothing compared to the ridiculous over-supply of crude in the United States:


This is something you never hear covered in the MSM, as they give you their "news" between commercials for energy companies.  It should go without saying that GE, a company who has tens of Billions of dollars in profits riding on ever-increasing energy prices, is NEVER going to tell you anything but how scarce oil is and how lucky we are to be allowed to pay $100 a barrel for it.  

The fact that we have 10% more oil than the high end of the 5-year average or 20% more oil than the low end doesn't come as a shock to PSW readers – we track this stuff all the time but it should come as a shock to consumers, who are paying 50% above the last 5-years' average of $59.60 in the first week of December.  THEY should be paying US to take some of this excess oil off their hands!!!   

We are so swimming in oil that we are EXPORTING 2.1M barrels of refined products a day.  This is over a 100% increase in the past 5 years and a 50% increase in the last two years and is a favorite trick of the commodity pushers as it creates both a false impression of demand for crude by US consumers (+10% a day) as well as a false impression of use of that oil (consumption) as US refiners send fuel out to other markets and then they turn around and tell you that their is tight capacity – which is another total lie entirely.  Even if all this BS manipulation doesn't surprise you, does it at least make you angry enough to ask your brand new Republican Congressman to investigate?  You can contact you newly elected champions of the people right here – I'm sure they'll get right on it because it's not like the re-election of the Republicans directly resulted in a 10% jump in the price of oil as the speculators once again decided they can go back to raping the American people as they once again fall under the lazy eye of "friendly" regulators.

We are, in fact, using LESS gasoline now than we did in 1983 or, of course, any year since.  Gasoline consumption this year has been averaging 10% LESS than 2009 with 43.8 gallons/day delivered in September (the last month counted) by US refineries vs. 48.6M in Sept 2009 and 53.4M in Sept 2008 and 57.7M in Sept 2007 and 59.7M in Sept 2006.  Feeling ripped off yet?  We, as a country, have cut back our consumption of gasoline by 16M gallons a day (26%) in 5 years yet the price of gasoline is going HIGHER.  Not only that, but the US consumed an average of 60M gallons a day between 1995 and 2004 when oil was $20-30 a barrel and gas was $1 so we are now consuming almost 30% less fuel and paying 200% more for the privilege.  Are we, in fact, the World's biggest suckers?  Is the lack of regulation in America nothing more than a way for Big Business to rip off the American consumers (while paying no tax on their profits)?

Let's look at health care, as another example.   Here's a nice chart from The Incidental Economist (via Barry) that neatly sums up US Health Care Costs vs the rest of the World.  That's just two countries above Canada and the rest of the World below their $3,700 per capita Health Care Spending while we are proudly over $7,300 per person, and that was two years ago, when things were much cheaper!  Even more interesting is the chart of Health Care broken down by Presidential terms but that chart makes it so blatantly obvious that Republicans have been selling this nation down the river for decades that I don't want to even put it up here or people may say I'm somehow biased.  

So we'll just move along and pretend that there's no real way to know who's responsible for runaway health care costs or spiraling commodity prices as it must be some gigantic coincidence that the Dems take control of Congress (along with the regulatory and investigative committees) in 2007 and the commodity boom finally loses some steam and then the Reps take control back in 2010 and – well, here we go again.  

As I've said before, I am trying really hard not to give a damn – let's just make our money and get out before it all hits the fan!  

Look at all these lovely countries we can move to and save 50% or more on health care costs.  Virtually none of those nations has anywhere near the debt levels of the US and most of them have great public transportation and more public services than we do so many, many fine places to retire (US ranks 15th, very sadly beaten by Columbia at 13!) after we join the commodity pushers and the Gang of 12 in squeezing every last dime from the suckers that are going down with this sinking ship.  If they can't be motivated to send an Email off to complain about it then they get exactly the government they deserve, right?  

Enough about what's wrong with America – let's talk about a much more serious economic issue – the misuse of cartoon bears!  It's only been a month since the Bernanke Bears hit the big time with their hit viral video, "Quantitative Easing Explained," which was brilliantly done and contained some great economic information presented in a humorous fashion.  There have been a couple of other good ones since but (and here is the BIG problem), there have also been dozens of bad ones.  The problem with using Avatars or even aliases on the Web is your work can be co-opted.  This is why you're reading Phil's Stock World – I protect my brand by being a known entity, something most of the major players do as well.  



Unfortunately, we don't know the name of the guy who did the original Bernanke Bears and, even more unfortunately, since he used a generic cartoon maker – ANYONE can use these characters to say anything they want.  Ordinarily, this is not a problem but now these bears have gained a certain amount of "credibility" so, when they tell you that the Fed is pumping money into JP Morgan in order to artificially depress the silver market and keep the dollar down – people actually believe it.   So much so, in fact, that has SOLD OUT of ALL products it has been pushing in it's own bit of Teddy Bear Propaganda.

 Of course, maybe they are not sold out – these are obviously (well, to us) unscrupulous, lying, manipulative bastards who should be waterboarded by the SEC or the CTFC or SOMEONE (at this point, I would even condone the use of JPM's storm troopers) for the blatant misuse of bear economists as well as the blatant manipulation of the silver market.  It's funny how the "smart" bear calls the other one a "sheeple" (and kudos to me for that catching on!) and then goes on to herd him off into the next foolish investment.  Amazingly, it doesn't occur to the brown bear to ask the other one why he wants to sell silver for $25 an ounce when it's a "sure thing" that it's going to $500.  What could the tan bear possibly be doing with the cash that will give him a 2,000% return when the dollar is crashing and silver is getting squeezed through the roof that he would want to give up his precious silver for?  

Like any great lie, there is a grain of truth to it.  The Fed is flooding the world with dollars, JPM is a known manipulator of silver and the historic gold to silver ratio is 16:1.  Of course, if you believe silver is going to $500, then gold is going to $8,000 based on that premise so it's still better to go long on gold.  On the other hand, I think that silver is actually priced right at $25 and it's gold that should be coming down to $400, not the other way around!  Of course, that's what makes a market, right?  Also, like any good rumor, it gets a lot of legs when the company the rumor is based on is known for not commenting and it's very doubtful JPM will be "clearing the air" about their exact position on silver to answer the accusations of cartoon bears.  

This, my friends, is EXTREME manipulation.  The same kind of ridiculous manipulation we had at the top of the meltdown in 2008 with idiotic statements coming out like "Oil $200,"  "Gold $5,000,"  "GOOG $2,000" and $1M for 1Br Miami apartments – all designed to chase the last round of suckers (aka "bagholders") into the market "before it's too late."  Well, here we go again!  Once it was sock puppets, now it's cartoon bears driving our investment decisions – I'm going to propose a show where I put 8 finger puppets in an "octo-box" to debate monetary policy – should be a big hit

As I said last week, we're now in a market that is driven by the latest rumor and I'm sorry to be such a Grinch but I've ridden this ride before and I know how it ends and so have you all but you just seem to forget every 6 months – which I find very strange but that's OK – it's my job to remind you and help to try to keep a little perspective on things.  There is nothing worse than "missing" an opportunity and that's what it feels like to us when the market ticks up instead of down and we're not playing but our friend Mr. Buffett sat out the dot com rally and he sat out the 2007 rally and he didn't make any major deals (much to the chagrin of his shareholders) until November 2007 through April of 2008 – when he decided to go on a buying spree.  Now, you may think he's old and slipping but who's been paying you $2.6M to have lunch with them?  

Getting back to 2007 – I've also ridden a ride where we thought it was over but it just kept on going up and up and up.  That happened in 1998-1999 as well.  The end-stages of bubbles can give you the biggest gains but boy do they pop hard and fast so it's a tricky thing to time.  We had a couple of "toe-dipping" plays on Friday that have massive returns if the market does move higher.  With the Fed and now the ECB pumping about $2Tn more into the global economy – the cartoon bears may yet have their $500 silver one day but let's just keep in mind that it's all fake and it's all being manipulated and it's all going to end very, very badly unless we create 10M jobs, reflate housing, refund pensions and stop global warming.  

OK, maybe that last one is a myth but the other 3 are VERY real and should not be ignored (like we do global warming).  

Market Tamer thinks we're trading in a range through the end of the year and this is still the top of it – that fits in with what I'm seeing but it's still all about the dollar in the end.   The real question is:  Can The Bernank drop the value far enough and can the Euro stay strong enough to get the Dollar back under 78.50, where it needs to be to pop the market higher?  I'm sure they will try their best this week and a lot is riding on the Irish vote so let's keep an open mind in either direction – that's what we're supposed to do when we're in cash.  If we're not going to be open to the possibility that the market could go either way – then why aren't we invested now?  

A cash call is all about uncertainty and this is one MoFo of an uncertain market!  


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  1. For 12 years I politely asked, then pliantly beseeched, eventually begged & pleaded, then ultimately commanded and finally  threatened the republicans I voted for to do any number of things that were promised in 1994, particklelerly the Term Limits clause of the republicans’ platform.
    That got me precisely nowhere. In fact they only got progressively worse, out corrupting even the despicable liberals and democrats. So I stopped voting for all of them.   I didn’t know exactly why at the time, mostly just out of my outrage and sense of betrayal.
    Glenn Beck, the most recent talking head to emerge from the ooze,  advocates using the democratic process for change. But, while using Thomas Paine to back up his argument, he rejects outright Paine’s call for violent revolutionm, a complete invalidation of utilizing the only genuine tool for change EVER proven to work 100% of the time, in the shortest possible time.
    Now I am wiser. I know that lobbyists (as surrogates for the Lord Blankfein’s and Jamie Dimon’s of this world) control the outcome of elections. No matter who is voted in, from whichever party, that they will all eventually succumb to the senior members on the Committees that truly enact the laws written by the men behind the curtain.
    There is only one solution, an impossible one to effect change: Violence 
    Without that, I am resigned to working the system for my own personal benefit. 
    Yesterday, I ran into a really great guy I lost touch with about 20 yrs ago at Home Depot. He has to be one of the most  diplomatic, caring, and liberal men I have ever met.  A really terrific soft hearted kid, he turned into a soft-hearted man who even that day was driving two of his tenants (he has made a living out of buying and then remodeling and renting out houses and apartments) to various places since they were elderly and did not drive to shop.
    After catching up on things and people like a couple of busybody quidnuncs for a half hour, the conversation turned to the latest news out of Wall Street and D.C.  He too was convinced that the only way forward is for the people to take to the streets in an all-out demonstration that included breaking things, and shooting some BenBernanks. He was thankful that he and his spouse have no children to bear the future burden of a country in serious decline.
    While it is always tempting for partisans, such as yourself to slam the party you despise, long ago I came to enlightment recognizing, as you seem unwilling to do, that there are only sociopaths and psychopaths running for office and that charisma and the cult of personality and celebrity have put into power the worst human  beings on the planet.
    I choose to indict them all, with my outrage directed specifically at the senior level bastards like McConnell, clinton, Rodham,  Dodd, Frank, Waxman, Pelosi, Bush, Cheney,Gore,  and other assorted old men and women who have been bought and paid for by the moneyed interests, the Establishment.  And if I were younger, my energies would be focused on how to get rid of the men and women at the top of the pyramid. On a regular basis.

  2. Flip – As your old freind revealed; We have ALOT more in common than you think. I’m just glad you did not ask him the specifics on what he and other liberals like myself are really pissed about…..

  3. Phil – you said that folks might think that your somewhat biased ???? Your politcal writings demonstrate that you are completely biased.

  4. Well… I guess we should know by now… this form of government and capitalism does not work for the populace … and if your a Liberal or Conservative, (whatever those terms mean, but are used on the board often -  I, myself think labels are for people who have a problem expressing themselves with real facts and the ability to intelligently discuss… like the word Fu*k an expression for all occassions), you should eventually arrive at Flip’s conclusion.  I agree with Flip…. sometimes, figures in power or "neandrathals" never seem to get the message, no matter what the facts and outcomes tell you, so you NEED to send the message in terms they understand or will soon understand.  Regarding his list of notables, the one which "grinds me the most" is McConnell, not because he is a Republican but because at a time when the country needs leadership and a viable two party system the most, he has abdicated his responsibility to his country, his district and to his party for not providing meaningful and constructive leadership. In the past, government worked when positions were occupied by statesman.  What is so interesting with the internet and cable news (including parody) is one gets to view all this hypocracy in HDTV vision.  As for Phil being biased, we all are biased to some extent… the art is keeping a check on your biases to not be so opinionated to the point where you have the inability to learn.  Phil at least (in my opinion) presents facts for his arguments (biases, I guess).  For instance, he points out in today’s post that Repubicans (as a whole) are mainly responsible for the rising healthcare costs and the price of oil.  From my viewpoint, especially being informed these past two years (healthcare fight and BP disaster), I think Phil’s premise could have some legs to it… LOL  Regarding healthcare, by the mere fact the Republican party has offered no solutions to these rising costs for the past eight years (prior to Obama) says it all…. they have no credibility in today’s arguments. It is plain to me that under the current "free market system" the US healthcare system does not work to control costs. To conclude, our system of government is committee centric.  A good friend of mine, now a patent attorney used to sit in company meetings (industrial company) where the "board" could never make decisions on company direction but every one had an opinion…. so nothing evr got accomplished.  So, eventually he became chairman (benevolent dictator) and said, "this is what we are going to do"….. any meaningful opposing views….. none, then meeting adjourned.  By the time, this government is able to correct the country’s course….. the economic situation will be too far along to correct….. Maybe, we need to adopt a contest on the board to pick the total deficit number, percent of real unemployment etc prior to the next president taking office… All… have a good week !!!                

  5. Phil,
    Since I am 90% cash now I thought it would be a good time to look at what I might buy for a long-term investment if we hold our levels next week. I have spent the last 4 hours going over my watch list and your Dividend List. In total I have looked at over 50 stocks from these lists. After examining all of the charts, you would think we just had the quarter of the century. 90% of the charts appeared the same on a percentage gain basis. A scary percentage of these stocks are at 5 year highs (I did not go further back in time). To make matters scarier, many of these stocks that were at 5 year highs gained an additional 10% just last week. The ramping in the charts the last week was unbelievable. I shouldn’t have had to examine the charts that closely, since my shorts were already telling me the story, but it was amazing to see. Where am I going with this? After all of this research and with plenty of cash I can see no reason to go long in this market. I think I know now what a dog feels like when a pork chop is dangled in front of his mouth. They are trying to tempt me into buying, but so far I am holding the sit command (even though there is really nothing to worry about). A few of the stocks I did examine that haven’t followed the herd were BMY, JNJ, and PFE. I do not know if this is just rotation out of the drug sector.

  6. Flip
    Whoa !!— please no VIOLENCE – there are better ways to resolve this problem we all share. I express my opinions as a "Sundsy Editorial" and do not intend to offend any that might disagree ( Phil included ). I am a conservative when it comes to government spending – our elected official have spent us into a hole that is IMPOSSIBLE to escape, and a debasement of our currency is inevitable. I am a liberal when it comes to a desire for freedom. Again, these freedoms are disappearing on a daily basis.So where does that place me in the heirarchy of descriptives politicially? I guess Liberterian, as I think the government is bloated and for the most part, it needs to be drasticially downsized.  How about forming a new party – "The Government is just too damned inept party" Our current Congress is comprised of "horney, bored housewives", and "totally ill-prepared, failed men", who are psychologicially compelled to seek power. There is not a one of them that I would consider for a job in any of the companies I have run…. so why are they running our government?

  7.  Phil
    I have been working on some plays for next week, and would like to submit a question, and a request for guidance.
    The currency markets have been volatile lately. mostly influenced by the de-leveraging efforts by so many government entities. Relative to each other, the currencies are positioning for a better balance between themselves. I have been studying the YEN, and I see some opportunity. The currency is in its 5th Elliot wave, and if history repeats, it is due for a significant drop over the next 12 months….. I am thinking a drop of 50% is possible, and maybe probable. The carry trade is unwinding. The Yen has been "rallying" for three years, and in the past, the Yen rally has not gone beyond the three year pattern.  The BOJ does not have to intervene to weaken the Yen, as market forces will do it for them.  Some of the currency "gurus" have expressed interest in shorting the Yen, and I believe this dynamic will happen "all at once", once the cards start to drop. It will be quick, as the shorts will have to cover. I can see the USD/JPY climb up to the 100 – 110 level over the next year. I trade in the FX markets, and will have some plays in this pair over this period of time, but I also am looking at the etf’s FXY ( long ) and YCS ( ultra short ) 
    Considering the time frame I have outlined, and the theory presented, do you have any appropriate trades that could take advantage of this scenario – in both taxable and non-taxable accounts. Thanks in advance !

  8. Perhaps the two party system is what is antiquated and what needs refreshing. We are made to believe that we are either one or the other rather than the just Americans. We have lost sight of what we stand for and refuse to look at the past for direction. Rarely do I ever hear anyone site solutions relevant to our constitution. Rather we hear selfish opinions, or the rhetoric of zealots we blindly align ourselves with. Anyone can have an opinion, but without a foundation or principles we are nothing. Honestly, do we have to recreate the country every time we have an election?

  9. To all who think our liberty can be repurchased  with more rhetoric:
    "The tree of Liberty must be refreshed from time to time, with the blood of Patriots and Tyrants".  T. Jefferson
    You can forbid, abhor, denounce violence, but in the end, all that will get you is a perpetuation of the status quo, the only changes made, infinitesmal at the margins.
    From all that is now known about who actually owns this country, who it is designed to benefit exclusively at the expense of 310,000,000 in this country alone, and to think they will change the system simply by the verbal expression of outrage without the backup of explosive power, is to go on just shlepping, muddling through 

  10.  Flip
    It is very obvious – you are very intelligent and have the skill to express yourself with eloquence in a prolific pattern… however I must disagree humbly, as spilled blood must always be the last resort. Our elections still have the ability to create change when the population is distressed – case in point is the directional change that became reality last November. A force ( tea party) was created when the President and Congress jammed through legislation that was unpopular with the majority. The system and its constitutional foundation still works – the flawed operation of the system is in need of revisions that to me are obvious, and this is concentrated in the belief we should have qualifications clearly identified – both in the ability to execute the responsibilities needed to serve the public, and also those that choose the leaders. In order to get employment at any level, skills are needed, why not qualify the ones we hire to run our government, and more importantly those that select and consider the expertise of those that are elected. Some of the most flawed , illiterate folks in our society make the choice for us – case in point…. Rangle is an admitted crook, and his constituency keeps re-electing him. Is there not something wrong with Rangle and more to the point the idiots that think he is "just fine"!

  11. Hi, Phil,
    Friday night, I had a question regarding your answer to Gel’s question on GLD.  I’d appreciate it if you can help.  Please see my comment (link below).  See also Gel’s comment immediately after mine.

  12. Hi, Gel,
    I understand that if we think that JPY will weaken, then we bid that USDJPY will go up.  But what about FXY and YCS?  Do we bid that FXY will go down and YCS will go up?
    I just want to understand the direction of each of these instruments.

  13. @gel1
    You make my point.
    When corruption is not only tolerated by the electorate--minority, no less, —but bragged about, ("He may be an S.O.B., but he’s our S.O.B!") there is no hope but for the majority that does not vote, knows the futility of it, to take to the streets. 
    Since the voters are also corrupt-- along with those neurotics they vote for--the system of a democratic republic cannot help but be rotten to the core.
    Tom Delay was recently convicted on many counts and the penalties for his transgressions amount to a life sentence in prison.  What do you want to bet that the next republican potus pardons him? IF he even serves any time at all.
    (great call on ASYS, btw)

  14. cwan
    Yes, go long the USD/JPY. The Yen will weaken per my scenario. The Dollar may also weaken, but the imputis is on the weakening Yen, vis a vis the dollar.
    FXY is the etf that is LONG the Yen, so I am holding puts long on this one. The YCS is the ultra short ( 2 X ) the Yen. The ultra is short so we would be long. The ultras are fun to trade but can be more challenging.
    Pstas, last week, linked an article last week that referred the short Yen as the "play of the decade" as cited by the author.  Could be, but many others of significant repore have said the same. I made a study of the charts, and I must conclude the charts are in agreement. The currency folks are "chart-a-holics" and trade accordingly. I’m more of a "meat and potatoes" fundamentalist and both methods of analysis are in sinq. This crazy currency, over the last year was "all star" performance king…. it gained even more than the "super star" Australian dollar, and it had all the fundamentals behind it ( commodity sales and interest rates ).I think most of the traders will be caught "off guard" on this shorting opportunity, as they think the BOJ or the MOF will intervene… but that will not be necessary. Since 2007, the Yen has beat the USD with an "ugly stick:", The unwinding of the "carry trades" will sink the Yen, and you and I will enter a carry trade of our own – carrying bucks ( profit ) to the bank.  I will try to look up the article Pstas linked, and re-activate it, or if Pstas is on-board, he might be able to do the same.

  15. Flip…. yup… you have it figured out – there is a lack of conscience that prevails !
    ASYS is doing well – thanks !.  I am buying more tomorrow, and working on a few more plays that should be likewise – "very nice "

  16. Gel- I agree with your political view.  Violence has been the solution of choice in most situations but I think that today it is ‘out of date’.  Besides our government is putting the military on alert for civil violence and have been conducting drills to counteract such actions that formerly led to our Freedom and Independence.  The home of the free and land of the brave.  Mere rhetoric today.
    One minor note:
    "Yes, go long the USD/JPY. The Yen will weaken per my scenario. The Dollar may also weaken, but the imputis is on the weakening Yen, vis a vis the dollar." 
    I assume that you were thinking [impetus] rather than [imputis] (Isn’t [imputis]  a yet to be  discovered disease of the nervous system that leads the general malaise and acceptance of the status quo?).

  17.  doubled
    Ah… I should to know better than to float my bad spelling past you… your expertise is in the diseases of the brain, and that is one of my shortcomings ! ( Ha ) I will remember "impEtes  forever, but google still does not like the spelling.!… At least I am making points with my political view!

  18. GEL, do you have a “short yen” rec for a new position. buy Jan 119 putsn FXY? I still have USO 2013 puts (that i sold). Looking for a sustained pop in oil this week.

  19.  Jo
    Trading the Yen short term is difficult, although I have the Dec 122 puts, and I am long the USD/JPY in the FX market. A January put position makes sense… but keep a close eye on it, as if the dam shows some weakness, this one will unravel quickly, and you could increase your position at that time, for an increased position….I’m waiting for a play from Phil, as he might possible have a bear spread in mind.

  20. Phil:
    When you get a chance can you help me adjust my TZA hedge. Currently have:  (7) Jan $22 calls buy @$3.25 (now $.75),
    (7) Jan $28 calls Sold @$1.55 (now $.33), (5) Jan $19 Puts sold @$1.61 (now $2.74). I am down $1.28 on the spread. First of all, I am questioning if I need this play as much as when I initiated  I don’t think the RUT will go parabolic nor do I think the short term will change greatly (upward channel because of FED actions). But I do like it if something drastic was to happen (what a hedge is supposed to be for). I thought about rolling down to (5) of the  April 17/22 spread and then rolling the puts to April 17′s. That move will cost me $400. Is there something better in your opinion?

  21.  Just watched the interview with Ben Bernanke on 60 Minutes. In one part of the interview he said that the Fed is not printing any new money and that the total amount of money in circulation is not growing. He didn’t provide an explanation on where the money does come from. 
    Can anyone share his understanding of this?

  22. @yshenhar
    That’s known as clinton-speak.  Depends on the definition of ‘Printing any NEW  money’.
    The FED doesn’t actually print anything. 
    TheBenBernank walks into his office at 10 a.m., sits down at his super dooper laptop, gets on line and taps into theJPMorgue computer, goes to their balance sheet, enters the cash account and  changes it by 10 billions of dollars by simply putting another zero at the end of the billions they already have. One zero. that’s all there is to it. Takes about 5 seconds.
    He does this to the other primaries like Citibank, Merrill Lynch, BofA, theGoldmanSucks, and a few others.  He’s finished adding about a trillion dollars in about ten minutes. 
    And he hasn’t printed a thing. The money doesn’t circulate, so he’s not lying about that.  It just stays in the JPMorgue cash account or moves to the Treasury bond asset account where it earns 2-3 % interest.  It’s better than being an alchemist, not nearly as messy or dangerous, and you can pay yourself,  if your Lord Blankfiend, any amount of bonus money you want.
    TheBenBernank understands this very well. And now, I hope, so do you. Because every word of it is true.

  23.  yshenhar
    Ben is being honest… The Fed does not "print" money, but through their POMO activities it essentially "creates" new money We must remember, the Chairman of Fed speaks a language that most do not understand, and it is ambiguous on purpose, so as to leave doubt about the meaning of the words. A kid with his hand in the cookie jar, when he is caught, can say things that are very creative, but lies are lies when the intent to deceive is present.

  24. The Bernacke
    Yes, and of course the journalist(s) (60 minutes) took him to task to thoroughly explain himself…… or to really zero in on the issue of "printing of money"………. same ole bull*hit…. more propaganda….

  25. acobra65 – I enjoyed your comments from earlier today.  Thanks
    Gel – I enjoyed yours as well. You’re right, violence is not the answer. Besides, how do you take on the most formidible military and law enfocement the world has ever known, paid for by U.S. taxpayers?  Good luck with that musket folks…..

  26. Very interesting index- tracks truckers diesel fuel purchases through Ceridian’s card payment program- very "real time" measure of trucking activity.
    Also, good site on railcar loading/shipping activity:

  27. Good morning!  
    Dolllar not staying down so far (back to 80) so this will be an interesting morning if they can’t hold it. 
    Nonetheless, oil is still $88.85, gold $1,413, copper $3.98 (watch that $4 mark) and nat gas $4.40!   Wouldn’t it suck to be poor and have these things be a significant portion of your discretionary income?  
    Let’s do our best to get richer so we can avoid worrying about that this year.  We’re just 10 days from options expiration and by Wednesday, we shouldn’t be holding any Dec puts or calls that are not specifically momentum plays because those last 10 days eat up the remaining premiums very fast and a move against you is not likely to be recovered from.  That means it’s literally either Ireland busts or we do on those short-term bearish plays so let’s stay on our toes for news from Europe.  
    The people I talk to in Ireland say there is no way they will vote for the aid but, then again, the people I talk to in America thought there was no way the Republicans would be voted back into office so, obviously, I need to meet new people!  It’s amazing how NOT covered this event is on this side of the Atlantic.  58% of the Irish people say the Government should default on all or part of the debt.  

    According to a Sunday Independent/Quantum Research poll today, 61 per cent majority believe the EU-IMF deal is not a good one for the country; that 71 per cent believe the Dail should be given an opportunity to vote on it and that 54 per cent do not believe the next Government should be bound by it.

    I wish that made this an easy bet but no one gives a damn what the people think.  What they seem to be selling to the Irish people though, is that they will agree to this bailout but then they can renegotiate it after the elections next year – sound’s kind of like the way they push an ARM loan on people, doesn’t it?
    Lots of fun political points but I’m not here to debate them.  Please keep political comments out of the new posts – if you feel the urge, you can come back to this one but I’m more worried about the markets now than the idiocy on both sides of the aisle in government.  
    Please re-post any MARKET questions under the new post and I’ll try to get caught up today.

  28. Woops, spoke too soon, they knocked the dollar down 0.30 already!  7am on the nose they started dumping it, turning the EU green as FSTE trading thins out for lunch. 

    Just buy the F’ing dips remains the strategy of the day! 

  29. Morgan Stanley raises NFLX target to $265.  Ignores rising network access costs.  This seems predictable but any change of heart on NFLX puts?

  30. One hedgie is betting big on decline of yen.  His theory is that Japanese are liquidating non-yen investments to live on.  This has increased the demand for yen lately.  Eventually, this will run it’s course and the dollar competion on the carry will also weaken yen.  Timing is everything.