Sunday, December 27, 2009

Next U.S. President May have to Live up to George Washington's Aggressive Legacy of Corrective Actions; We Owe Allegiance to No Crown ..


I think President Obama's leadership is re-awakening the socioeconomic base of true free-market capitalists and doctrinal Judeo-Christians.
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The United States may be on the verge of one the most anomalous turning points in Constitutional history since the days of President George Washington.
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If this Obama Administration continues to pass 100% partisan and anti free-market legislation: Healthcare (60 - 39 straight-line vote), and pending Energy Cap and Trade, and Employee Free Choice Act (EFCA), then the odds of witnessing positive long-term change in 2013 increase greatly.
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Perhaps an American Renaissance will envelope our hearts and minds from border to border and sea to shining sea. Where core values of pursuing life and liberty are celebrated, and where fiscal conservative philosophies of lower taxes and smaller government re-emerge and re-ignite today's flickering American spirit.
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Will 2013 prove to be a fresh beginning of what worked very well for more than two centuries? Long live winners and losers, peaks and troughs, bubbles and busts, fear and greed, as well as socialists and capitalists; all necessary extremes so the burning torch of the American dream is passed to the next generation of children.
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What made the United States the model global free-market society - and what enables healthy market cycles - are fewer government strings, not more. Though this latest economic bust was more costly and emotionally painful than any in recent past, every generation goes through a time when the world is "coming to an end".
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The cyclical beauty of capitalism is rooted in the ability of risk takers to continually restore balance, not a bigger government imbalance of stricter rules and regulations like this Obama Administration is pushing. The brave pioneers divorced themselves from the European Crown centuries ago, and we must refuse to owe allegiance to any form of authoritive government.
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Continue to legislate risk-taking away from entrepreneurs through a burdensome/centralized government and our free-market will extinct. Our children's behavior could become fogged by an acceptance of laziness and that being average is great.
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Just like our greatest and most valiant founding father George Washington Amended the Constitution through 10 Amendments - Bill of Rights in 1791 - the next president may have to take decisive correction action so the core principles of smaller government and respect for life and liberty are unable to be changed. 
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I think today's donkey majority is blatantly and wrongly taking advantage of the cyclical economic trough we experienced after 9/11 and then accounting scandals at Enron and several other firms. The financial crisis that developed was the fault of many moving pieces, butt today's bottom left pending legislation of Cap and Trade and EFCA may have to be reversed through powerful Amendments to the Constitution as in 1791:    

http://www.senate.gov/civics/constitution_item/constitution.htm#amendments
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Here's hoping President Obama does a sudden 180. His insistence of hemorrhaging U.S. dollars chokes off a young man's or woman's entrepreneurial spirit, perhaps even enslaving it to mediocrity. Is this first black president's behavior not paradoxical in a post slavery America, I think so ..   
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President Obama thinking is fiscally and socially flawed and poses danger to our nation's future. President Barack Obama risks the fate of being forever googled alongside arguably the worst and least valiant President, Jimmy Carter. 
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Capitalist Pig Bob

The Good, the Bad, and the Ugly of Real Estate in Illinois; Aware of Similar Situations in Your State?



http://www.suntimes.com/news/1959389,mortgage-rates-refinance-122609.article
(this link misbehaves, please click a second time if it doesn't open after the first try)

Friday, December 25, 2009

The Obama Administration Poses a Clear Danger, not only for Crossing the Public-Private Sector Lines of Free-Markets, but now Forcing the 85%* of Faithful U.S. Citizens to Pay for Abortions, More Egregious ..


From the desk of our lead political correspondent: Capitalist Pig Bob:
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From this Christmas day forward, Obama's Healthcare bill should be referred to as "Obama Deathcare H.R. 3590." Abortions may soon be financed by public funds, just like your local police and fire department; utter nonsense. 
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Ironically, Deathcare is being signed, sealed, and delivered  around the most holy Christian day of Christmas. It's the birth of Jesus Christ that is being celebrated by billions around the world, as 60 loons in Washington, D.C. voted "I" to subsidizing death.
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The fact the president has not chosen a church in nearly 1 year of living in D.C. speaks volumes about his goals, but especially after being affiliated with Reverend Wright's hatred for many years.
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I think Obama hypocrisy poses a clear danger to the future of our children, seniors, and founding fathers' legacy.
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The United States was founded upon Judeo-Christian principles, and neither of the aforementioned doctrines support abortion. As a matter of fact, none of the 5 major religions finance abortions, not one.

Thus, this Administration has just sinned against approximately 83.9%-85%* of the faithful U.S. citizens ( A survey directed by Dr. Ariela Keysar for the City University of New York indicated that only 15% of U.S. citizens were non-believers in 2008, another showed 16.1%), as every doctrine teaches love and respect for human life.

This partisan Administration has not only crossed the public-private sector line with respect to autos, education, insurance, and autos, but now crossed the line of church and state with legislating public financing for abortions. Perhaps it won't stop at less than 9 months of age ..
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Is it possible an age or health limit is around the corner from being legislated to death? Sorry to any seniors or unhealthy people reading this, butt as a fiscally and socially conservative capitalist pig, I speak openly and honestly to warn you against this Administration of change. One must be able to tie money issues to moral values to understand the maniacal genius of this Administration.

If you're still not convinced, just visit your local hospital and ask to see the premature babies (preemies) fighting for their lives. Please remember that 1 in 8 people are born prematurely, so Obama's support of late-term abortion is completely against the moral grain of the Constitution as it extinguishes any chance of life, liberty, and the pursuit of happiness. Endorsing abortion through goverment subsidies is asinine and a direct spit in the face of every major organized religion.
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Now, please allow me to take this issue one step further: Obama is a person who voted to permit infanticide in the state of Illinios: http://article.nationalreview.com/?q=NzRhZTgzNmRlZWE0MTA1YTM4NWMxN2UxMjA5YjBkZTE=
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1) http://www.youtube.com/watch?v=f4B3O9uUc-4&feature=related
2) http://www.youtube.com/watch?v=3DlTgrMCxPg
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Here's hoping some humanity comes over this president of Deathcare H.R. 3590, or that a human with an ounce of respect for life and liberty defeats and then reverses these anti free-market and anti religious doctrine bills in 2012.
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Perhaps Newt Gingrich, Sarah Palin, Mike Huckabee, or even an aging but brilliant in many respects, Ron Paul, will be up to the task of kicking this donkey back to his Chicago community street ================================== problems.

Capitalist Pig Bob.

A Heartfelt Merry Christmas to All Subscribers, May the Reason for the Season be the Promise of Eternal Life through the Birth of Jesus Christ; Good Health and Wealth in the Coming New Year Wished ..


Sincerely, the entire Psychology of the Call team.
Subscribe for 2010 by sending an e-mail to: PsychologyoftheCall@gmail.com

Thursday, December 24, 2009

Freudian Slip of Harry Reid's Speaking Tongue? Capitalist Pig Bob sure Thinks So ..


"An exhausted Senate Majority Leader Harry Reid, D-Nev., initially cast a "no" vote by mistake, then quickly corrected himself as fellow senators burst out laughing".

full text and video: http://www.dvorak.org/blog/2009/12/24/harry-reid-votes-no-on-health-bill-for-half-a-second

Wednesday, December 23, 2009

10 Worst ETFs in '09; POTC Predicts Most of them Return 10%+ in '10, Yet would Not Buy any Short Bond ETFs til Q4 ..



Psychology of the Call blog is proud to have added Capitalist Pig Bob (CPB) to our team in '09. We will continue to focus efforts on bringing the most forward-looking investment ideas to our e-mail subscribers throughout 2010. If not yet a subscriber, please send us your e-mail for addition: Psychologyofthecall@gmail.com
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Happy Christmas and a Healthy '10; without Health, Money is merely a form of Pulp ~
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Now for a telling review of the worst '09 ETFs; remembering the worst sectors often times become best the following year: 
http://seekingalpha.com/article/179470-the-ten-worst-etfs-of-2009/

Friday, December 11, 2009

Donkeys Continue to Hemorrhage Dollars ...


WASHINGTON (Dow Jones)--Democrats in the U.S. House Of Representatives intend to seek an increase in the nation's debt limit of $1.8 trillion to $1.9 trillion to ensure the federal government's borrowing needs are met through 2010, the House Majority Leader said Friday.

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The current debt ceiling stands at $12.1 trillion and, according to Treasury estimates, is expected to be reached soon. The federal budget deficit in fiscal 2009 was $1.4 trillion and, through the first two months of this year, is on course to be even higher.
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According to figure made public by Majority Leader Steny Hoyer (D., Md.) Friday, the move would hike the government's ability to borrow to $13.9 trillion to $14 trillion.
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That figure is higher than an estimate earlier in the week by Senate Budget Committee Chairman Kent Conrad (D., N.D.). He said lawmakers would have to add "north of $1.5 trillion" to provide the administration with sufficient breathing room through next year.
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It is widely seen that the debt ceiling increase will be added to legislation setting forth the Pentagon's budget in fiscal 2010, which began on Oct. 1.
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At a press conference Friday, Hoyer said that House lawmakers would attach a measure requiring all new mandatory spending to be offset by tax cuts or new revenue raised elsewhere in the federal budget to the defense spending bill.
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"It is not an acceptable alternative for the U.S. to not pay its bills," he said.
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The so-called "pay-as-you-go," or PAYGO, rules were in place in the 1990s when the federal government was running a healthy budget surplus and House Democratic lawmakers are eager to reinstate them.
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The House approved stand-alone legislation enacting PAYGO rules earlier this year, but the Senate hasn't taken the measure yet. Senate lawmakers like Conrad favor PAYGO but object to a move by the House to exempt four large big-ticket spending items from the new austerity measure.
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House lawmakers hope the Senate will find it difficult to strip out the PAYGO rules from the must-pass defense spending bill. The defense bill is proving to be an all-purpose vehicle, with lawmakers expected to add other unfinished pieces of business to it that they either must or want to complete before the end of the year.
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This list includes a probable extension of federal jobless benefits, and a continuation of a program of federal subsidies for people who have lost their health care as a result of losing their jobs.
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Hoyer said that both extensions would be for six months, meaning that people who exhaust their benefits before June 30, 2010, would be eligible for more generous federal assistance.
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-By Corey Boles, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=0Y98lBT5s6ey%2FEGPJRqIfg%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
December 11, 2009 11:47 ET (16:47 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.- - 11 47 AM EST 12-11-09
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Thursday, December 10, 2009

Obama Must Alienate Robin Hood Types like George Soros, the Most Despicable Billionaire on the Planet in Capitalist Pig Bob's Opinion ...


COPENHAGEN (Dow Jones)--Financier George Soros, who's declared he will invest up to $1 billion in low-carbon energy technology, waded into the dispute Thursday over how to finance efforts by poor countries to combat climate change by proposing rich nations tap into special currency reserves issued by the International Monetary Fund.

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Soros used the forum of the United Nations climate summit here to suggest that rich nations finance climate subsidies for developing nations by tapping into some of the $283 billion in special drawing rights that the International Monetary Fund issued to respond to the global financial crisis earlier this year. More than $150 billion of those rights went to the 15 biggest developed economies, he said. Special drawing rights, or SDRs, are a form of composite currency issued by the IMF to its members.
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Soros is one of a cadre of global business and political figures in Copenhagen hoping to sway the bargaining among 190 nations over what should be done to cut global carbon dioxide emissions linked to a trend of rising temperatures, and who should pay the price. The conference is scheduled to end Dec. 18 with a gathering of world leaders.
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The U.N.'s chief climate negotiator said Thursday that "some progress" is being made toward deals world leaders can consider next week.
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"There is real seriousness now to negotiate, good progress is being made in a number of areas, especially in the area of technology," said Yvo de Boer, the executive secretary of the U.N. Framework Convention on Climate Change. Countries agreed that a new "executive body" should be set up and would be responsible "for accelerating action on technology development and transfer."
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The transfer of technology to developing countries to help them limit their greenhouse emissions is a delicate matter in the talks, because it opens up to issues such as intellectual property rights and patents. It also opens up a profit opportunity for companies and investors with solar panels, wind turbines, carbon scrubbers and other technology to sell.
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Soros announced about two months ago that he would invest up to $1 billion in "clean-energy technology." He also announced the formation of the Climate Policy Initiative to address global warming, and said he would fund it with $10 million a year over 10 years.
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Without action to put limits on consumption of fossil fuels, however, some clean energy bets may not pay out, because fuels such as coal and oil are cheap, still abundant, and don't require expensive new technology. Poor countries are calling on the U.S. and the European Union to subsidize investments in clean energy technology.
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"Rich countries could double available funding to combat climate change by donating recently issued special drawing rights to a new green fund," Soros said in a statement. "This fund would jump-start investment in low carbon energy sources, reforestation efforts, rain forest protection, land use reform, and adaptation programs."
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Developing countries, backed by some non-governmental organizations, expressed support for Soros' idea.
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"As we are sitting now, the IMF is sitting with more than $200 billion of SDRs that are not being used," said Lumumba Stanislaus Di-Aping, Sudan's ambassador to the United Nations and chairman of the Group of 77 and China, during a press conference Thursday. Issuing that money wouldn't create inflation, but just "effective demand," he said.
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European Union representatives were more cautious.
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"We have to be very careful in the way we use the special drawing rights. It is an instrument which can be used in very specific situations," said Artur Runge-Metzger, one of the E.U. lead negotiators, in a separate press conference. "There is no way we can just print money in order to make sure there is sufficient finance on the table."
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The International Monetary Fund couldn't immediately comment on Soros' proposal, an IMF spokesman said.
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-By Alessandro Torello, Dow Jones Newswires; +32 2 741 14 88; alessandro.torello@dowjones.com
(Devon Maylie in London contributed to this article.)
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=7ojXRiREuXMrjVVUORfG7w%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
December 10, 2009 14:42 ET (19:42 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.- - 02 42 PM EST 12-10-09
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Friday, December 4, 2009

Could Swap Dealers' Net Long Position Signal Fear of an Israeli Attack on Iran's Nuclear Facilities? CFTC Aim at Transparency Interesting Nonetheless ..


NEW YORK (Dow Jones)--Managed money reduced its long crude-oil position on the ICE Futures Europe Exchange in the week ended Dec. 1, according to data released Friday by the Commodity Futures Trading Commission.

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Money managers, including hedge funds, held a net long crude-oil position of 12,752, down from 14,837 the week before. Traders in the category added 1,892 long positions and 3,977 short positions.
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The net long position is the difference between the number of long positions, or bets that prices will rise, and short positions, or bets that prices will fall.
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Producers, merchants, processors and users held a net short crude-oil position of 53,282, down from 59,713 the week before.
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Until recently, money managers were grouped with "other reportables" into a single "noncommercial" category. The CFTC has also split the "commercial" column into two, with one set of data covering swap dealers, and another detailing producers, merchants, processors and users. Regulators said they introduced the new reports to increase transparency in commodity markets.
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Swap dealers, often large financial institutions, conduct bilateral over-the-counter transactions, using exchanges to reduce their exposure to changes in commodity prices.
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Swap dealers raised their net long position to 58,677 from 57,004 a week ago.
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Other reportables held a net short position of 19,030, up from 13,366 the week before.
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Open interest in crude-oil futures rose 17,170 to 493,332.
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Week Ended Change From Dec. 1 Previous Week
Open Interest 493,332 +17,170
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Long
Producer/Users 113,018 + 9,166
Swap Dealers 94,406 - 621
Money Managers 33,341 + 1,892
Other reportables 4,429 - 2,687
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Short
Producer/Users 166,300 + 2,735
Swap Dealers 35,729 - 2,294
Money Managers 20,589 + 3,977
Other reportables 23,459 + 2,977
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-By Brian Baskin, Dow Jones Newswires; 212-416-2453; brian.baskin@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=QeXZ3mqtebqJ2o6mFIzo6w%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
December 04, 2009 16:06 ET (21:06 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.- - 04 06 PM EST 12-04-09
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Is the Worst Over for Pacific Ethanol, Inc (PEIX)? POTC Believes the Higher Crude Climbs, Gov't Subsidies Become Godsend for Shareholders ..


WASHINGTON (Dow Jones)--Nineteen biofuel refinery projects have been selected to receive as much as $564 million in funding under the recovery program, the U.S. energy and agriculture secretaries said Friday.

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The funding will help finance the construction and operation of pilot demonstration and commercial scale facilities, the Departments of Energy and Agriculture said in a statement.
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The recipients include Sapphire Energy, Algenol Biofuels, Archer Daniels Midland, Clearfuels Technology and Solazyme.
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"Advanced biofuels are critical to building a cleaner, more sustainable transportation system in the U.S.," said Energy Secretary Steven Chu.
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Agriculture Secretary Tom Vilsack said the development of renewable energy "is a critical component of our efforts to rebuild and revitalize rural America."
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Congress and the administration of President Barack Obama are subsidizing the growth of next-generation biofuels to diversify the economy away from conventional crude products as part of a plan to cut oil imports and decrease greenhouse-gas emissions.
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By Ian Talley, Dow Jones Newswires; (202) 862 9285; ian.talley@dowjones.com;
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=QeXZ3mqtebqJ2o6mFIzo6w%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
December 04, 2009 11:02 ET (16:02 GMT)
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Copyright (c) 2009 Dow Jones & Company, Inc.- - 11 02 AM EST 12-04-09

Pre-Christmas Cheer Evident in this Employment Report, Albeit things are Improving from Depths of the Banking Abyss ..


http://www.bloomberg.com/apps/news?pid=20601087&sid=a1zUV7FpCC0k&pos=1/

Thursday, December 3, 2009

Japan's Preliminary Stimulus Announcement Should Heal the Dollar/Yen Relationship; Could the Euros be Next to Stimulate? Bullish Signs Continue to Emerge for U.S. Equity Investors ...


TOKYO (Dow Jones)--Japan's fresh economic stimulus package for the current fiscal year will likely have an effect worth around Y24.3 trillion, Kyodo News reported Friday, citing government sources.

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Prime Minister Yukio Hatoyama's Cabinet, which is crafting stimulus measures for the first time since its formation in September, will attempt to agree on specifics later in the day.
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But one of the parties in the ruling coalition, the People's New Party, is asking that the package be even bigger to help shore up the sagging economy.
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Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=NsViVaG0MhuownGg9OaPgQ%3D%3D. You can use this link on the day this article is published and the following day.
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(END) Dow Jones Newswires
December 03, 2009 22:25 ET (03:25 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.- - 10 25 PM EST 12-03-09
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The Wisest Free-Market Words Uttered from President Obama to Date, Capitalist Pig Bob is Shell Shocked ...


*DJ Obama: True Recovery Will Only Come From The Private Sector

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(MORE TO FOLLOW) Dow Jones Newswires
December 03, 2009 14:00 ET (19:00 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.- - 02 00 PM EST 12-03-09
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White House Clown Spokesman, Gibbs, Plays Up Tomorrow's National Unemployment Rate, a Bullish Sign ..


WASHINGTON (Dow Jones)--White House spokesman Robert Gibbs Thursday said at least one economic report suggests that Friday's unemployment report could show a higher unemployment rate.

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"Obviously, we've seen the one payroll estimate--the ADP estimate came out yesterday, and it seemed to suggest that it might tick upward," Gibbs said in response to a question about tomorrow's unemployment data.
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Still, he added: "I don't know how to predict these things" and noted that he doesn't know exactly what Friday's report will bring.
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According to a national employment report published Wednesday by payroll company Automatic Data Processing Inc. (ADP) and consultancy Macroeconomic Advisers, the pace of layoffs eased further in November. The report showed that private-sector jobs in the U.S. fell 169,000 last month.
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Gibbs, speaking ahead of a key jobs summit Thursday, said the Obama administration is eager to hear the private sector's ideas on job creation even as it actively examines ways to use leftover Troubled Asset Relief Funds to aid the ailing labor market.
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"We've obviously lost millions and millions of jobs since the beginning of this recession," Gibbs told reporters. "I would point out some good news on jobless claims. Weekly jobless claims are at their lowest point in a year, which is certainly hopeful," he said. "But we want to hear from and investigate ideas that the private sector has for creating an environment that is conducive to hiring.
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"Government is not going to create jobs that will make up for the dip that we have," he said.
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-By Maya Jackson Randall, Dow Jones Newswires; 202-862-9256; maya.jackson-randall@dowjones.com
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Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=NsViVaG0MhuownGg9OaPgQ%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
December 03, 2009 10:43 ET (15:43 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.- - 10 43 AM EST 12-03-09
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Monday, November 30, 2009

Fed's Greenlee Offers the Ugly Commercial Real Estate Stats and Muted Prospects for Growth ...


WASHINGTON (Dow Jones)-- Federal banking examiners continue to see sharp deterioration in the credit performance of commercial real estate loans held by U.S. banks, the Federal Reserve's associate director of banking and supervision said Monday.

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In a speech before the House Financial Services Subcommittee on Oversight and Investigations, the Federal Reserve's Jon Greenlee noted that about 9% of commercial real estate loans in bank portfolios were considered delinquent at the end of the second quarter.
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Banks at the end of that quarter held approximately $3.5 trillion in outstanding debt related to commercial real estate loans, he said.
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Banks struggles with commercial real estate loans, however, are only part of the challenge facing the financial sector going forward.
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"Corporate bond spreads are high by historical standards as expected losses and risk premiums remain elevated," Greenlee, who was speaking in Michigan, said.
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He expects credit conditions will remain tight for small businesses even as demand is muted because of sluggish growth prospects.
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-By Meena Thiruvengadam, Dow Jones Newswires; 202-862-6629; meena.thiruvengadam@dowjones.com
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Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=PO5BRXyuTDweTVto76I9eA%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
November 30, 2009 11:00 ET (16:00 GMT)
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Copyright (c) 2009 Dow Jones & Company, Inc.- - 11 00 AM EST 11-30-09

Saturday, November 28, 2009

With Only 23 Trading Days in '09, S&P is a Whopping 21% Higher Since We Posted this Question; POTC Now Urges Great Caution Through End of Year, as a 10%+ Pullback is Overdue:

In 1 year, 12/31/'09, S&P will be: (Votes Tallied from 12/25/'08 - 02/14/'09):

35 - Much lower*
23 - Slightly higher*
19 - Much the same*
17 - Much higher*
9 - Slightly lower*
*S&P Closed At 903 on 12/31/'08
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The Greenback's New Channel of Pain vs the Yen; Only Questions Now are Duration of this Ugly Scenario and Whose Currency is Next to Become Unhinged ...


http://www.kshitij.com/graphgallery/jpycandle.shtml#candle/

Dubai's Reaching Out to Neighbor Abu Dhabi Highlights the Seriousness of its Self Inflicted Commercial Real Estate Wound; Pressure Should Mount from Conservative Islamists Against a Dubai Bailout as Devout Islam Forbids Paying or Receiving any Interest Income; Socioeconomic Conundrum Unfolding, caution ...


Associated Press (AP):
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Yet Abu Dhabi's largesse may be reaching some limits. On the same day that Dubai announced its debt
payment "standstill," two Abu Dhabi-controlled banks bought $5 billion in Dubai bonds for a stopgap cash infusion, but went no further.
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"I guess Abu Dhabi is saying there will be no blank check for Dubai," said Jane Kinninmont, a London-based specialist on Gulf economies at the Economist Intelligence Unit.
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What Abu Dhabi could get for their money, however, is greater long-term influence over Dubai's development policies. That would essentially mean giving the wealthy and more conservative rulers in the UAE's capital the task of trying to rein in Dubai after years of living beyond its means.
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Dubai crash landed about a year ago as the global economic downturn ended a sizzling property boom, which saw prices skyrocket and investors lining up for new projects. The state-backed Dubai World led the charge with a catalog brimming with ever-bigger ideas and the bold motto: "The sun never sets on Dubai World."
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Some were completed before the bubble burst, such as the Palm Jumeirah island that included a Hollywood A-list opening of the Atlantis resort in November 2008. But dozens of major projects, including entire mini-cities in the desert, have been shelved.
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Abu Dhabi has moved ahead with more caution — comfortable in the fact it has vast oil wealth that Dubai does not enjoy.
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Its rulers have concentrated on what they see as attempts to gain global stature as hub for culture and innovation: funding an alternative energy research center and building satellite museums for the Louvre and Guggenheim. The Abu Dhabi sovereign wealth fund is constantly on the hunt for new investments, including U.S. companies such as Citigroup Inc.
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Abu Dhabi's strategists are expected to dig deeper into Dubai World's books before deciding their next move, analysts say.
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Dubai officials said plans to restructure Dubai World will not include its profitable ports management division, DP World, which has a presence in nearly 50 facilities around the world. The main retooling will be to Dubai World's battered real estate units, led by Nakheel.
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A report from Goldman Sachs said the lenders HSBC Holdings PLC and Standard Chartered PLC could have the most exposure to Dubai debt, but the potential credit losses appeared relatively small. The deeper risks could directly hit Emirates' banks and investment firms.
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Christopher Davidson, an expert in Emirate affairs at Britain's Durham University, wondered if Abu Dhabi wanted to become too deeply involved in lifting Dubai from its fiscal wreckage.
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"There is no point throwing good money into Dubai's black holes," Davidson said. "These are mistakes of Sheik Mohammed and he needs to deal with them."
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Monday, November 23, 2009

SEC's Khuzami Shifts Focus to Options and Futures Cheats ...


The Securities and Exchange Commission will broaden the focus of its insider trading cases beyond the traditional equities sector into other instruments, such as derivatives, the agency's enforcement director said Monday, Bloomberg News reported on its Web site. Robert Khuzami, speaking at a New York legal conference, cautioned that the "days of insider-trading scrutiny being focused almost solely on the equity markets are now gone." He declined to say whether the SEC has any current insider trading investigations involving derivatives. Khuzami joined the agency in March.

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Full story at: www.bloomberg.com/apps/news?pid=20601087&sid=aNPUak7MMqgY&pos=3
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-Dow Jones Newswires; 212-416-2900
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=zwt0mZzjDDJIeNODwDY8mQ%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
November 23, 2009 12:39 ET (17:39 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.- - 12 39 PM EST 11-23-09
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Saturday, November 21, 2009

Donkeys' Partisan Health Care Stanglehold is Being Held Up by a Single Senator from Arkansas; Cheers to Blanche Lincoln, so far ...


WASHINGTON (Dow Jones)--Sen. Mary Landrieu, (D., La.), announced Saturday that she would vote to advance a $848 billion health-care overhaul measure, bringing Democrats one step closer to unanimity on an initial procedural vote on the bill slated for tonight.

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Landrieu, who is considered a centrist Democrat, made her announcement in a speech on the Senate floor. While she said the bill contained "amazing and cutting-edge reforms" to reduce health-care costs, she cautioned that she had not decided whether to support passing the bill in a final Senate vote.
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"I've decided that there are enough significant reforms and safeguards in this bill to move forward, but much more work needs to be done," Landrieu said.
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The vote on the procedural motion, which if approved would allow the Senate to formally begin debate on the measure after it returns from a Thanksgiving recess, is set for 8 p.m. EST Saturday.
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Landrieu's announcement follows a similar announcement by Sen. Ben Nelson, (D., Neb.), another centrist, on Friday. Democrats are still waiting on Sen. Blanche Lincoln, (D., Ark.), who faces a tough re-election battle in 2010, to announce how she will vote on the measure.
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In all, 60 senators--58 Democrats and 2 independents--caucus with Senate Democrats. Senate Majority Leader Harry Reid (D., Nev.), must secure all of their votes in order to prevent a filibuster on the motion to proceed to the bill.
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Reid has worked assiduously to gain the support of Nelson, Landrieu and Lincoln to begin debate on the bill. Aides have pointed to a provision in the bill that would steer an estimated $200 million to $250 million in Medicaid funds for Louisiana in fiscal 2011 as an overture to Landrieu.
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-By Patrick Yoest, Dow Jones Newswires; 202-862-3554; patrick.yoest@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=Xe%2Fsjdo6uTceR2BNpA5ArA%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
November 21, 2009 12:58 ET (17:58 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.- - 12 58 PM EST 11-21-09
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Thursday, November 12, 2009

Geithner's Testimony Next Thursday at 10ET Regarding Regulations Bodes Bearishness Ahead of Friday's Option Expiration...


WASHINGTON (Dow Jones)--U.S. Treasury Secretary Tim Geithner is to testify next week about the efforts to overhaul the financial regulatory landscape at a hearing of the joint economic committee of Congress.

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According to a statement released by the committee, Geithner will testify about whether any loopholes in regulation led to last year's financial collapse, and how proposed regulatory changes will promote job growth and economic stability.
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The hearing is scheduled for Nov. 19 at 10 a.m. EST.
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-By Corey Boles, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=%2Bj4Gq6PYcnUJEFI5CLuhaQ%3D%3D. You can use this link on the day this article is published and the following day.
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(END) Dow Jones Newswires
November 12, 2009 14:52 ET (19:52 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.- - 02 52 PM EST 11-12-09
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Tuesday, November 10, 2009

Donkey Regime Espouses Clear Fiscal and Social Danger for Long-Term Capitalism


Next economic market moving data comes this Thursday at 8:30ET, Initial Claims for Unemployment week ending 11/7: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/claims.htm/
Last posted 512K, now the estimates are from 510K - 525K.
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POTC has blogged about the government smoothing effect before and we remind again: the tremendous gov't spending will create many public jobs, whether in education, health and human services, transportation, energy, or labor/infrastucture, more gov't jobs are definitely coming: http://www.stimuluswatch.org/project/by_state/
Yet the long-term impact this un-American governmnet spending paradigm will have on the all important private sector is reason to be very concerned...
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The Obama Administration is not completely stupid; dangerous to capitalism a resounding yes, but completely ignorant in their anti free-market agenda, no. The Administration realizes a controlled drip of stimulus money will be necessary to have a better chance at stabilizing the financial markets and hence increasing their chances of winning the midterm November 2010 elections.

Even the slightest passage of bills with the word "public" attached, i.e. public health care option, could envelope our free-market system after the midterm elections. Give them an inch and they'll want a mile, caution. Hopefully more Americans are paying attention to what is standing before us.
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Inside this highly impressive 8 month technical bounce, it is difficult to short the S&P, yet there are many V-shaped stocks that could come tumbling on account of uncertain and dislocated fundamentals looking-out 6 months - 1 year (ISRG is one example).
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Yet we feel this 8 month liquidity rush into stocks could continue as this Administration is only in the infancy stages of a $787B stimulus - spend. Trading has never felt so plastic and difficult to time.
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POTC predicts weekly claims continue their trajectory down due to the government smoothing effect. As that 500K mark is broken on November 26th, a Santa Clause rally could take a firm grip through year-end, forcing shorts to cover and underperforming money managers to buy at bloated prices.
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An S&P spike may well occur through year end and shock bears and bulls alike. POTC would consider S&P 1,300 the ultimate Obama spending spike and unsustainable technical level, presenting the best shorting opportunity since 2000.
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Monday, November 2, 2009

The Obama Administration's Fiscal Policies Have Revealed a Golden Cross... (CNBC's Larry Kudlow Gets It)


Gold will be in a bull market as long as the Obama Administration pushes for and legislates anti free-market fiscal and social policies. The Gold/S&P Cross has occurred and POTC believes it is due to the looming socioeconomic ramifications of a big government. One troy ounce of gold now costs more than one share of S&P 500 index.
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POTC warned of this day several weeks ago, please verify the blog archive on October 6th and 7th. Our team feels vindicated as equities sold off and lost most of their October gains on the same exact day the "Golden Cross" occurred. Yet many CNBC talking heads continue to blow their bull horns as if pending anti free-market legislation did not matter.
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Shame on Jim Cramer and everyone who is turning a blind eye to the increased regulations and controls on the horizon. The insistence of the Obama Administration that government is the solution to all our problems is troubling and only developing, as the donkey majority is behaving very aggressively in favor of a centralized government model.
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Every private sector is at great risk of having to change their business models as a result of higher taxes and government fees. Whether Public Health Care, Energy Cap and Trade, Autos, Banking, Insurance, or Employee Free Choice Act/Card Check (EFCA), POTC agrees with Larry Kudlow's blunt admittance on Thursday, Oct 22nd: "I Cannot be a Long-Run Bull on the Stock Market".
http://psychologyofthecall.blogspot.com/
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Friday, October 30, 2009

Timothy Geithner Tricked on Halloween by Chairman Barney Frank as Fed Governor Bernanke Watches...



WASHINGTON (Dow Jones)--The top U.S. House Democrat crafting legislation to overhaul regulation of the financial services industry now supports having large financial firms pre-pay the costs to cover a large firm collapsing, a spokesman said.

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A spokesman for Rep. Barney Frank said the Massachusetts Democrat, who chairs the House Financial Services Committee, would seek to amend a broader system-risk bill to create the pre-paid fund. Frank, appearing on Bloomberg Television, said the initial fear that the existence of the fund could encourage risky behavior was unfounded.
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"It turns out that doesn't have any impact because everybody thinks it's going to be there anyway," Frank said, according to Bloomberg.
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The reversal comes the day after a number of Democrats on the Financial Services panel questioned the idea of collecting fees from the banking industry after the fact for a major failure. Rep. Luis Gutierrez, D-Ill., said the industry should pay to have a fund in place.
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"Most of us don't die and then buy a life insurance policy," Gutierrez quipped at a hearing.
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That position was echoed by Sheila Bair, chairman of the Federal Deposit Insurance Corp. She said collecting the fees after the collapse of a systemically important firm would punish the firms that did not fail.
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"It allows all large firms to pay risk-based assessments into the [fund], not just the survivors after any resolution, and it avoids the pro-cyclical nature of requiring repayment after a systemic crisis," Bair said.
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Frank's reversal of opinion on the matter puts him at odds with Treasury Secretary Timothy Geithner, who on Thursday said having a pre-existing fund would create a moral hazard. It would send the message to creditors and market participants that they are insured against losses, he said.
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"We don't want to create that expectation, that's why we think it's better to do it after the fact," Geithner said, adding that "We want the ability to let them fail without the taxpayer being exposed to losses."
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Frank and the Treasury Department earlier this week introduced a draft proposal to regulate and wind down the largest financial firms, for the first time giving regulators the ability to take an overarching view of financial markets.
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-By Michael R. Crittenden, Dow Jones Newswires; 202-862-9273; michael.crittenden@dowjones.com
(MORE TO FOLLOW) Dow Jones Newswires
October 30, 2009 14:25 ET (18:25 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.- - 02 25 PM EDT 10-30-09
http://psychologyofthecall.blogspot.com/
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Tuesday, October 27, 2009

The Energy Transfer from Real to Intrinsic Wealth is Coming; Are You Protected?


Another quality piece submitted to us by Simon Jester:

What is wealth? In my opinion, the creation and destruction of wealth requires the transfer of energy. The energy it takes to make something, grow something, mine something, and eventually destroy something is what creates transient value. Since wealth is influenced by energy, wealth is subjected to the same laws of the universe as any other force.  One cannot make wealth out of nothing, so it's also true when a force/asset class erodes (mountain range or real estate) or completely destroyed (dinosaurs or Lehman Brothers), some new force or financial asset class attempts to balance out that erosion or destruction. 
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The financial markets have an energy transfer effect like in nature. Whether in a communist barter economy like Cuba, or a U.S. free-market economy, the creation and destruction of financial wealth exist since human nature is driven by greed: ( http://www.youtube.com/watch?v=RWsx1X8PV_A/ ). Thus, respecting and recognizing the cyclical nature of markets, and then practicing the swapping phenomenon from one asset class to another from time to time, is of critical importance to conservative portfolios/investors..
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The U.S. economy is still bleeding wealth, and unfortunately the greatest wealth loss is occurring in the largest asset class,  real estate.  Like crop blight to a farmer, or a tunnel collapse to a miner, it is a temporary setback that causes uncertainty, discourages recovery, but also creates opportunity.
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I am not a short term player in the market,  I have a conservative long-term investment philosophy tailored to my retirement goals. It is my opinion the commodities market will offer the best chance to build or retain wealth in the coming years: ( http://www.forbes.com/forbes/2009/0525/094-investment-guide-09-best-inflation-hedges.html/ ).
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The reason why physical commodities like gold are a good place to swap some of your vanilla mutual fund money during uncertain times is because it represents concrete efforts of energy; the sum of the efforts of millions years of nature and eventual production costs. The price of commodities, through modern times, have definite bottoms. Physical Gold has never filed for bankruptcy. The spot/market price of gold has never fallen below its production cost in times of global economic strife (1931, 1981, and 2009). In terms of real wealth, the price swings as currency weakens or inflates, but the value of your investment always carries that intrinsic raw physical element, even before extraction. Gold is a force of nature that doesn't erode and bankrupt like a paper asset. Thus the physical nature of commodities are a smart swap in times of great political and economic uncertainty, like today.
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Last April, Charles Biderman gave this interview: ( http://money.cnn.com/2009/04/21/news/economy/fortune-recovery-index.fortune/index.htm?postversion=2009042411/ )
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Biderman was asked:
"In your view, what would be the single best sign that we've hit bottom"?
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"That foreclosures dry up. That'll be a sign that household wealth has stabilized. Things aren't going to hit bottom until the real estate market bottoms, and we work through all the problem homes, and people can afford the homes they're in. Then we can grow from there".
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Wise investors should pay close attention to Biderman. This is why the current quarterly increase in home foreclosures bears careful watching. This means that the 17% increase in the second quarter ( http://www.washingtonpost.com/wp-dyn/content/article/2009/09/30/AR2009093001696.html/ ) and the 23% increase in foreclosures in the third quarter reported here: ( http://www.bloomberg.com/apps/news?pid=20601103&sid=aFofq9_za8Is/ ) is good reason to predict another economic downturn in real wealth the immediate future.
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This wealth bleed continues despite unnatural government programs to halt the natural free-market economic cycle. It is my opinion the interference of the Federal Government will actually prolong the descent of real wealth and exacerbate inflation and prices of commodities like gold and oil; unfortunately most investors are too conservative to swap their equity funds into commodity funds, this has me concerned. As unproductive public dollars begotten from thin air are spent in hopes of ending the slide, it becomes a matter of dangerous socioeconomic entropy for the masses of unsophisticated investors:  ( http://www.washingtonpost.com/wp-dyn/content/article/2008/11/11/AR2008111101178.html/ ).
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The Mortgage-Backed Security (MBS) market, and Collateralized Debt Obligation (CDO) market price and demand erosion locked up credit markts. Fannie and Freddie were paradoxically created by the  government, and now the recent thaw has also been created by goverment officials, not free-market entrepreneurs. The more home loans go into foreclosure the more “toxic” MBS's and CDO's become and the more toxic the federal reserve's balance sheet becomes. We have already been through a couple of rounds of CDO auctions: ( http://www.bloomberg.com/apps/news?pid=20601087&sid=a5KbYLsaKQhU/ ) If this trend continues, the glut of foreclosed homes will continue to be the deepest gash that bleeds real wealth from U.S. consumers overweight in real estate.
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If the government ended the spending frenzy today, real free-market wealth creation and destruction would be allowed to coogulate the bleeding. What does this have to do with investing? Well it means younger investors would have a green light of go back into higher risk strategies like equities, hoping to catch the economy on a normal bounce. I am worried that senior citizens holding their money in the stock market, or adding more in this latest bounce, will be hurt most as they sellout at the lowest point either in 2010 or 2011. The government cannot continue to print dollars and expect the free-markets to be fooled. Inflation in the next few years will degrade the bulk of savings. I recommend investors consider swapping into inflation protected assets like iShares Barclays TIPS Bond (TIP), or a larger chunk into a commodity ETF like the PowerShares DB Commodity Index (DBC). 
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I am obviously very concerned with inflation in late 2010. Official numbers for inflation are weighted 30% to the cost of homes ( http://infoproc.blogspot.com/2005/02/housing-and-inflation.html ). As home prices fall, it will keep “official” inflation low and fool many. Please remember home prices have little to do with the value of the dollar in the international market, nor do home prices have any correlation to the value of gold or oil on the world stage.
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Here's proof wise investors are worried about inflation: ( http://www.ft.com/cms/s/0/a28ac2fc-bda7-11de-9f6a-00144feab49a.html/ ). The system is being injected with public capital as lending rates remain at Zero Japan: ( http://www.bankrate.com/rates/interest-rates/prime-rate.aspx/ ).
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When an economy troughs/bottoms, it historically marks the top of gold prices. Thus, I would not buy real estate as long as gold remains at elevated levels. I do not see gold breaking down for quite some time, perhaps an entire decade. Understanding the mechanics of swapping asset classes is critical to the forward-thinking conservative investor like myself.

The crude oil and natural gas markets will continue to be volatile and weigh on consumers' discretionary spending decisions in months ahead. Right now oil is in a vicious upswing, and I would be very concerned if the move continues through $100/barrel with no improvement in employment or home prices: ( http://www.oil-price.net/ ).
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As I wrote in my last installment for this blog, I predict “hovering” action for the U.S. equity market/S&P over the next several months, as the $787B stimulus and $2.3T budget has negative consequences long-term, yet short-term it's difficult to fight against such a tsunami of liquidity. You can still make money in the equity market by taking advantage of the bounded ups and downs, always remembering there are two sides to the market: long and short. Yet I chose to transfer 25% of my portfolio into inflation protected assets mentioned above.
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My personal circumstances do not allow for day trading and watching CNBC's experts. I wrote this piece for an audience that respects long-term conservative investment strategies that even anti free-market  Administration's offer. The transient nature of financial instuments is fascinating, and the energy transfer mechanism of greed should influence forward-thinking investors to swap asset classes based on supply and demand principles first.
Simon Jester.

Monday, October 26, 2009

Caution to Majority Leader's Hook to "Opt Out"; CPB Disagrees with ANY mention of the Word "Public" Alongside Health Care..


WASHINGTON (Dow Jones)--U.S. Senate Majority Leader Harry Reid, (D, Nev.), said Monday that health-care legislation that comes before the Senate will have a government-run health insurance option which states can choose not to carry.

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Reid told reporters that, under the legislation, states would have until 2014 to choose to "opt out" of the public plan. The move casts doubt over whether Reid will be able to attract any Republican support for the bill and whether it will have 60 votes needed to avoid a filibuster.
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Reid cast aside questions of whether he will have 60 votes for the bill's passage, but suggested that he would have support among Democrats for a procedural motion allowing the Senate to proceed to the bill.
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"I believe we clearly will have the support of [the Democratic caucus] to move to the bill and start legislating," Reid said.
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Reid has led talks on health-care legislation between he, Senate Finance Chairman Max Baucus, (D, Mont.), Senate Banking Chairman Christopher Dodd, (D, Ct.), and White House officials. While there are 60 Democrats in the Senate, Reid has faced the challenge of crafting a compromise on the bill that can attract support from both liberals and moderates within his party.
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Sen. Olympia Snowe, (R, Maine), who is considered a key swing vote on the bill, has signaled that she would not support a public option with a state "opt-out" provision, though she supported a health-care bill approved by the Senate Finance Committee. The Finance Committee bill didn't include a public health insurance option, but rather would a network of health-care "co-operatives."
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In a statement, Snowe said she "deeply disappointed" that Reid would include a public health insurance plan in the bill. Snowe has argued for a public plan "trigger" that would spur the creation of public plans on a state-by-state basis only if private insurers did not provide affordable coverage to a large enough proportion of a given state's population.
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"I still believe that a fallback, safety net plan, to be triggered and available immediately in states where insurance companies fail to offer plans that meet the standards of affordability, could have been the road toward achieving a broader bipartisan consensus in the Senate," Snowe said in a statement.
Reid said that he hopes Snowe "will come back."
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"I'm very disappointed that this one issue, the public option, has been something that's frightened her," Reid said.
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In a statement, White House spokesman Robert Gibbs said President Barack Obama is "pleased" that the bill will include a public option.
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"Thanks to their efforts, we're closer than we've ever been to solving this decades-old problem," Gibbs said. "And while much work remains, the President is pleased

.. at the progress that Congress has made."
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Senate Minority Leader Mitch McConnell, (R, Ky.), in a statement Monday, criticized the yet-unseen bill, saying that the "core of the proposal is a bill that the American public clearly does not like, and doesn't support."
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Liberal lawmakers and groups cheered Reid's announcement. Sen. Jay Rockefeller, (D, WV.), who has argued forcefully in favor of a public plan, in a statement said he is "gratified to see the public option debate is alive and well in the Senate."
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Gerald McEntee, who heads the American Federation of State, County and Municipal Employees (AFSCME), said the bill is "by no means perfect," but a "significant improvement over the proposal crafted in the Senate Finance Committee.
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Health insurers have fought against a public plan and, in recent weeks, ramped up their criticism of leading health-care proposals before Congress. Karen Ignagni, president and chief executive of the America's Health Insurance Plans (AHIP) trade group, said in a statement Monday that the public plan debate is "a roadblock to reform."
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"A new government-run plan would underpay doctors and hospitals rather than driving real reforms that bring down costs and improve quality," Ignagni said. "The American people want health care reform that will reduce costs and this plan doesn't do that." Leading insurers in AHIP include Aetna Inc. (AET), Humana Inc. (HUM), Cigna Corp. (CI) and UnitedHealth Group Inc. (UNH).
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-By Patrick Yoest, Dow Jones Newswires; 202-862-3554; patrick.yoest@dowjones.com
(Henry J. Pulizzi contributed to this story)
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Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=1fjqP1dofWMKlIc%2BH7NDiQ%3D%3D. You can use this link on the day this article is published and the following day.
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(END) Dow Jones Newswires
October 26, 2009 16:45 ET (20:45 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.- - 04 45 PM EDT 10-26-09
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Thursday, October 22, 2009

Monday, October 19, 2009

CPB asks: Haven't We Witnessed these Altruistic Gov't Housing Initiatives Before? hmmm...


DJ Obama Administration Announces New Initiative For Housing
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WASHINGTON (Dow Jones)--The Obama administration on Monday announced a new initiative for state and local housing finance agencies.
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The initiative will help support low mortgage rates and expand resources for low and middle-income borrowers to buy or rent homes.
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-By Jeff Bater, Dow Jones Newswires; 202 862 9249; jeff.bater@dowjones.com
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Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=Ys6beN01yAdASZJc0To2fg%3D%3D. You can use this link on the day this article is published and the following day.
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(END) Dow Jones Newswires
October 19, 2009 12:46 ET (16:46 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.- - 12 46 PM EDT 10-19-09

Thursday, October 15, 2009

Our Capitalist Pig Bob on Google, AAPL, and RIMM via His Facebook Soapbox...


I think Google (GOOG) is the one stock you could buy on any pullback and just hold. NO need to listen to Jim Cramer or any other cable head. Butt remaining Capitalist Pig Bob's Facebook friend is a must...
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GOOG, in my porky opinion (impo). is better than AAPL, and safer than GS. GOOG is basically a legal monopoly.
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How many friends noticed GOOG's market share is exactly AAPL's at $170B, and they have $22B in cash after this Q, AAPL $24B.
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I say a wise trade would be long GOOG and short AAPL, any takers? AAPL is a great company no doubt, but this capitalist pig prefers RIMM over AAPL if he had to pan fry one.
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Yet no dividendless company trumps General  Google as a buy and hold impo.
 
Yours Truly,
Capitalist Pig Bob.

Tuesday, October 13, 2009

A Different Perspective; Unlimited Capital...


We're happy to publish another subscriber contribution, this time from George Swanson. You can find more of his work here and here

Capitalist Pig Bob and I met through Facebook. It was purely coincidental we became friends through this media, for I know nothing regarding capitalism, politics, and so forth. My ignorance to these topics may prove to be a valuable asset to those who follow my publishing’s. On the other hand, there is one thing I do know, and this may be the main reason Bob and I became acquainted. That issue is the financial markets.



I base all trades, investments or otherwise, upon mathematical principles required to have basic regulation within the markets. It all began with the simple precept that barring no limitations on capital, you can profit off each and every trade transaction utilizing a compounding position to roll down your cost average. Over time, this simple principle has proven to have some very complex mathematical structures, yet they are adhered to under every circumstance of the market cycle.

The trade technique removes the very principle under which this site (POTC) was constructed, hence, I tip my hat to Bob for keeping an open-mindedness which so many individuals lack.
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The technique removes the psychology which effects and influences every traders decision making capabilities. These influences typically occur when those decisions most impact the outcome of the trade. Psychology is born of the human psyche, it is more difficult to remove this element from trading habits than it is to attempt finding cognitive reasoning to explain what, where, why, or how something has occurred. The mind is always looking for a logical explanation to reason why something has occurred. The logical reason is there, but beyond the scope of what many can readily identify, hence the continuous attempt to create organization out of perceived chaos.

The psychology of trading, or those individuals involved in its practice, is not the topic of this writing however. So, I do not want to go any further in that topic. Once the mathematical rules which apply to the markets are identified, it makes for terrible writing. It is quite bland, boring, and just does not prove to be very interesting to monitor day by day. These rules are required for basic market regulation, for regulation is required to insure liquidity. Liquidity is required to sustain volatility, and volatility is required to increase professional profitability. Volatility, and the promise of profitability to market newcomers, is required to bring fresh money into the market. It is a cycle which most never escape, almost akin to a hamster in a ball. The onlookers know the hamster will never get to touch the object of desire, and the hamster probably does not even realize it is contained within a ball.

I asked Bob for a topic he would like me to write about. His suggestions were “Your best pairs trade idea with Jan 2010 strike.. or Where you see the S&P ending up by Dec 31, 2009.. or How do you think Obama's presidency will or will not affect the markets..”.


I will touch on each topic, and keep each very brief. I will start by addressing where the S&P will end up by Dec. 31, 2009. This question, or any variance of such question, is one of the most popular root causes to a traders account depletion. It is typically referred to as “speculation”. Speculation is an educated, or assumed so, guess. A guess is hope. Hope relies on luck. Relying on hope and luck makes for one broke trader. Even “controlling” risk:reward ratios, or whatever cognitive reasoning (see above) you use to counter this statement, the variables leveraged against you are insurmountable. Yes, some do walk away with fortunes, but see if they do this consistently.
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Professional money is made consistently, it does not rely on speculative conditions. Speculating where XXX will be on such and such a date is gambling. Gambling is only truly gambling when you are oblivious to the true variables which effect the outcome of a scenario. Does a professional gambler actually gamble? No, he does not. He will increase or decrease leverage, increase or decrease exposure, given the percentage calculation outcome of probability. This is similar to the market, if you counted all cards, the last card is always known. That last card is rule adherence, it must be abided by. So, back to the question, where and when. When is the most misleading variable to many an analyst, especially technical analysts. Ask any analyst what time frames he uses to analyze a security. It is pretty amazing, you always get a different answer. The markets trade in one time frame, that is current. This may sound pretty off the wall, but this piece of information is crucial. When one analyzes time on a chart, they note it on a horizontal axis. The markets are not bound horizontally, they are bound vertically. Once a traded issue exceeds an absolute price momentum change it becomes bound to that point. That point plays a roll in the compensation required to keep the issue regulated. Regardless of the time it takes to compensate, it will compensate. This is the primary reason why professional money is made utilizing stock, not options. Options can be used to hedge, or insure a position, but they are not the primary trading vehicle for wealth accumulation. The professional options market is made on the bid/ask spread and premium sales. Theta is time decay, you do not want to expose your capital to time decay when time is not an issue or objective of the market you are trading. So this is what I can tell you of the S&P for the remainder of the year, or beyond. The SPX is obligated to shave 15% off its posted high (since March), the higher the S&P goes, the larger this percentage will become. I do not guarantee this happens by year end, but I guarantee it will happen. How you play that information is on you, for how I play it would scare the crap out of most traders. Any drop beyond 15% is purely speculative and will not be participated in by the likes of me.

Next question, “How about something about your best pairs idea with Jan 2010 strike..”. First off, the only way I would commit to a Jan 2010 strike would be by playing extremely deepin the money” options. This would be where you are buying pure intrinsic value only. When Jan 2010 rolls around, if you need to calendar roll the position out, you can do so at almost no cost. With that being said, I can guarantee (yup I said it!) a profitable return IF (always that damn “if”) rules are followed! The pair trade would be long DIA, short QQQQ. The trade needs to be delta balanced (when referenced to a third issue (beta weighted)), deep “in the money”, and averaged in if the spread widens. The trade requires exiting when up to 15% of capital is utilized in the trade.


Last question, “Why and how you believe Obama's presidency will or will not affect the broad market..”. Frankly, I could really care less. Markets react to any and all input collectively. When they need to compensate, they will find a reason to do so. There will always be an “after the fact” reason to why something happened. Obama will be the equivalent to Goldman Sachs, or Google, or AAPL, or war, or any other mentionable reason one could use to explain the markets behavior. All in all, it is just one more source of smoke, or one additional mirror to the larger picture of being able to play this game with unlimited capital.

With that, I bid you a great day.

If you would like to view more of my writings, you can visit www.channellines.com and http://thetradingtruth.blogspot.com