Full Market Update
Nov 27, 2005
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Welcome back to FMU
From Uncle Harry:
Dear family, Nov 27, 05
is a LOT going on at the moment, significant stuff. And many charts
at the close Friday suddenly threw up some possible signals. This page
& the ones that follow may give U & I a head start on some new
directions that determine asset gain or loss for the next 3-6months.
US T-bonds rally seems likely now, to 114, where it will no doubt be a sell or shortsale again. ····If INTEL breaks out over 27.50 it's not just a buy for itself but a possible buy for much of the tech sector, which would push Nasdaq to new highs, dragging DJI & S&P along. Intel needs 29.00 to confirm the 27.50 B/O-if it occurs. Note that the worldwide index has just broken to a new high. This will puzzle many who have been predicting a mkt decline shortly. But for the time being, let's just follow the money trails. That's safer than buying/selling on expectations.
Personally, I'm both long & short gold bullion, hope to cover shortside on next correction & ride the longs. But mainly I'm long lots of better acting gold shares. I sell golds when the profit is satisfactory & I want to bank them. Some of U may prefer to use profit-saving stops, but (as I said in Gold Charts R Us last Wednesday), by the time a stock falls to the stop level, U have obviously lost part of that profit, so personally I usually prefer to maximize profits. But if profit-stops suit U best, go with that. ····GCRU subs are reporting nice profits of late. Some who left the field while gold fell are back now as the scene has turned overall bullish & seems safe longterm. *** Among my longs are: Anglo American, Falconbridge, Freeport McMoran Copp, Gammon Lake, Gold Corp, Teck Cominco. But I only hold them 'til the profit is sufficient to sell (or fear of a setback), or sometimes via a close profit-stop order. The word "longterm" has been removed from the better dictionaries. ····I'm also long CCJ again, having taken profits earlier & bought back on dip. I think everyone should own this uranium stock (Cameco), & price today is satisfactory for rebuying.
IMO, the US Fed will do one more rate hike (25pts). Then a pause. ····The Fed & DC lever-pullers may not want the US$ much higher, for trade & trade deficit reasons. Watch the NZ & A$ & C$ for signs Washington is trying to slow or stop the US$ rise (however, in my new unrevealed "outrageous" theory, we may have a shock currency dichotomy coming up. ····SUGAR is the best bet commodity because it is a new source of fuel. Price is high, maybe overbought, but anything worth having gets that way now&then.
The US Fed is discontinuing disclosure of M3 data. This is disturbing news that is ruffling financial monitors. M3 was the best measure for liquidity. Will also stop certain other data, eg large size time deposits, will only release quarterly. They obviously don't want us to see what is going on. Whatever happened to transparency? The assumption here is that the politicians & bureaucrats know best what is good for the public & need not inform them. The truth is all too obvious. Look for money from Fed choppers to come. ·····Silver is going to be worth playing again anyday now. ····It's easy to get carried away by watching the gold price and fail to watch the relative strength of individual gold shares. These shares go in&out of favour. Some virtually disappear from sight. We have had to remove many from Gold Charts R Us over the past 3 years. Partly this is because gold ore is a shrinking resource for mines. Unless they make new discoveries, they have less gold left every day they mine it. And partly management varies (wildly), as in any biz. Also takeovers are constantly in play or rumoured. All of which affects a mine's price. So, to assume every gold mine company is more or less as good as any other is quite illogical.
This wordy but good article appeared on Bloomberg the other day & it has significance for both women & men. It will give courage to our female readers & give some tactic tips to the men. It seems men are (naturally) macho-in varying degrees & it shows in their trading. Men let their ego get in the way, which women apparently don't. Men can benefit from adopting some female habits in trading. U can just skim read it quickly to get the gist.
Step Aside -- Women Are Better Investors: Matthew Lynn
That's the claim of some who are starting funds for women. Nicola Horlick, 44, one of London's highest-profile fund managers, has just opened a division of her Bramdean Asset Management called Bramdiva to manage money for wealthy women. Horlick began the service with a punchy round of artillery fire in the battle of the sexes.
are better than men at running funds because they don't let their egos
get in the way, she said at the launch of the fund-management service.
"Nicola has always believed that women can do a better job of investment
than men can," said Neil Mainland, a spokesman for Horlick in London,
in an interview.
isn't the only person pushing those views. Merrill Lynch & Co. published
a survey this year that showed women were better at investing than men.
"Men tend to make what we call the `glamorous' mistakes, like riding winners down, holding on to losers, buying on a tip or putting too much money in a single investment,'' said Hannah Grove, chief marketing officer of Merrill Lynch Investment Managers, in a statement on the results.
mistakes may make for interesting cocktail-party conversation, but in
the greater scheme of things, it's the bigger, systemic failures like
ignoring their asset allocation that do the greatest damage to investors'
portfolios,'' she said.
``Overconfidence and overtrading lead to a much worse investment performance,'' said Tim Price, senior investment strategist at London-based Ansbacher & Co., in a telephone interview. "That is classic alpha-male, testosterone-fueled behaviour.''
For the guys, this is worrying to hear. The logical conclusion is that men should be cleared off the trading floors. Hedge funds should be installing day nurseries. Investment banks should be getting rid of all that black granite and redecorating their offices in some nice pastel shades. The men have been in charge of the money for long enough. It's time to give the women a chance.
may not be that simple. The markets are competitive & ruthless.
If women were better at investing than men, wouldn't more of them be
running the big funds?
For example, someone such as Warren Buffett, 75, the billionaire who runs Berkshire Hathaway Inc., would appear to embody many feminine values: He invests for the long term, he doesn't churn, and he buys what he knows. Except, he's a man.
Likewise, someone such as the high-profile London-based financier Robin Saunders, 43, seems to embody many male values: She makes big, high-risk plays and uses lots of leverage. Except, she's a woman.
Too much 'alpha-male' behavior is damaging for investors and companies. You shouldn't trade too much because the gains won't recoup the fees. You should research investments because just having hunches isn't good enough. And it is better to admit your mistakes earlier -- blind faith in your own judgment is a good way to get poor quickly.
But whether it's men or women who are trading on too much testosterone doesn't really matter. It's the values that count, not the sex of the person who embodies them. To contact the writer of this column: Matthew Lynn in London at firstname.lastname@example.org."
On that non-sexist note, I leave U to see the charts & comments to follow. Good luck, Uncle Harry
DJ World Index
DJ World Index closed Friday Nov 25 at 230.09, ie up 2.94 on the week.
DJ World Index weekly chart - basis line on close:
DJ World Index daily chart - basis line on close:
free online charts of DJWI available via: www.bigcharts.com
Dow Industrial vs. Dow Transportation
Transports: gave lead signal of strength via explosive rise above top boundary resistance of 12-month 3360-3832 trading zone; 4418 provisional upside target. Spinner & MACD in new positive cross above zero & placed to confirmed sustained strength. Chart bullish.
Basis Dow Theory, a decisive rise above 11,000 in industrials is required to confirm the upside breakout in transports & validate a new bull cue. If seen, recent trading range activity in both indexes may provide footing for a sustained & determined rally leg.
S&P500 Mar futures closed Friday Nov 25 at 1278.30 ie, up 20.20pts on the week.
The Commitment of Traders report shows S&P500 commercial hedgers reduced 375 longs, bringing total longs to 462,553, whilst shorts reduced 703 contracts, bringing total shorts to 467,543. Large speculators are holding 59,621 longs against 67,365 shorts. And, small traders are holding 129,783 longs against 117,049 shorts.
Consensus shows S&P 500 at 70%. Says: "S&P 500 futures
are moving sideways/higher in a test of short-term overhead resistance.
S&P500 (continuation Cx) weekly chart - line on close:
S&P 500 Mar futures daily chart - line on close:
FMU Traders Guidelines:
Per FMU Sept 25: gamblers exited Dec longs with loss :-(. Took profits at 1st target in Dec shorts & exited 2nd ½ via trailing profit stop :-).
Per HSL 650: traders bought Dec at 1250.20 or better.
Stocks in run-away upside mode & likely to stay strong as we head into the mid Dec-mid Jan period, which is habitually the most positive period of the year for stocks.
If out, buy Mar after a pullback that holds on or above 1240-1254 closing support band (gamblers buy at 1254); sell ½ at 1284, ½ at 1294.
Sell, or sell short (toehold) on 1-dc below 1224; stop: 1-dc over 1255. Cover ½ at 1192 & use trailing stop on rest. And/or sell short a rally that clearly stops below 1295-1300 resistance; stop: 2-dc over 1300. Cover ½ at 1254, ½ at 1240.
NOTE: Traders are advised to use mini S&P's to enter/exit trades incrementally. 1 mini Cx = $50/point, compared with $250 for full size Cx (5 minis = 1 full size).
Nasdaq (mini) Mar futures closed Friday Nov 25 at 1720.50 ie, up 21.50pts on the week.
Nasdaq Composite weekly breadth figures show new highs almost tripled new lows (305-105), advances crushed declines (2050-1190) & advancing volume outpaced declining volume by a healthy ration of 1.82 to 1.
Nasdaq Composite (continuation Cx) weekly chart - line on close:
HSLP-Nasdaq chart (HSLP = our in-house mkt predictor) line & bar:
Nasdaq (mini) Mar futures daily chart - line on close:
FMU Traders Guidelines:
Per FMU Sept 25: exited Dec shorts via trailing profit stop :-). Took profits on 1st ½ Dec longs :-); exit 2nd ½ at mkt (or apply tight trailing stop).
Per HSL 650: exited Dec shorts with loss L. Traders then bought Dec at 1632; take full profits at mkt (or apply tight trailing stop).
If out, buy Mar Cx after a pullback that clearly holds on or above 1660-1675 closing support. Sell ½ at 1712 (if buy low) & use trailing profits stops on rest.
Sell, or sell short (small size) on 2-dc below 1640; stop: 1-dc over 1675. Cover ½ at 1595, ½ at 1566.
Market Sentiment Indicators
AAII Index shows 57.3% bulls (up firmly from 53.6% of 2 weeks ago), 16.0% bears & 26.7% neutral.
Market Vane Bullish Consensus at 69%, up from 64% of 2 weeks ago & 63% of 3 weeks ago.
UBS Index of Investor Optimism (Overall Index) rose to 47 in Oct vs. 34 in Sept & 61 in Aug.
& Precious Metals Index +43.93%
10-Year T-Note Mar futures closed Friday Nov 25 at 109^03, ie up 0^16 on the week.
10-Year T-Note Mar futures daily chart - line on close:
FMU Traders Guidelines:
Per FMU 9/30: took profits at both targets in Dec shorts :-)
Active/shorterm traders buy Mar Cx on 1-dc (or decisive rise) over 109^12 for run at 110^25 profit/sell target.
Sell, or sell short on 1-dc below 108^09; stop: 1-dc over 109^00. Cover ½ at 106^00 & use trailing profit stop on remainder. And/or sell a rally that clearly stops below 111^00; stop: 1-dc over 111^08. Cover ½ at 109^05, ½ at 108^09.
CRB Futures Index
CRB futures price index closed Friday Nov 25 at 330.42, ie up 0.66pts on the week.
CRB futures price index daily chart (continuation Cx) - line on close:
NY gold Feb futures closed Wednesday Nov 23 (due to US Nov 24 holiday) at 496.40 ie, up 6.20 on the week.
gold ends off lows in pre-holiday trade, eyes $500/oz
"NEW YORK, Nov 23 (Reuters) - Gold futures in New York ended down but off session lows Wednesday as the market continued to show it resilience and held just below the psychological level of $500 an ounce, market sources said.
"COMEX gold futures opened lower as investors were seen pocketing profits ahead of the long holiday weekend, but speculative buying supported prices at the lows and the market continued to consolidate after hitting an 18-year high at $495.90 on Tuesday.
"NYMEX metals will be closed on Thursday and Friday for the U.S. Thanksgiving holiday.
"Benchmark December gold settled down 60 cents at $492.30 an ounce on the New York Mercantile Exchange's COMEX division, after dealing from 487.50 to $495.30. Its all-time high, based on the nearby futures contract, was $873, reached in January 1980.
"Final estimated COMEX gold volume reached 110,000 lots, with 10,319 switches.
"The trend is really strong, especially after a performance like today where it looked relatively weak in the morning and then we came right back up to settle above $490," said Scott Meyers, senior trading analyst at Pioneer Futures.
"Since the start of the year, COMEX gold has climbed 14 percent, or $59, on strong investor demand. Floor dealers said the market may have the ability to reach $500 an ounce next week as over the counter options expire on Monday, Nov. 28, with all settlements occurring on Nov. 30.
"We always track options expiration dates. Can you imagine what type of money upstairs is around $500? You don't think those guys are going to want the market to move toward that strike price," one COMEX trader said." End quote
Gold (continuation Cx) weekly chart - line on close:
Gold Charts R Us is our weekly online gold share trading service.
Gold Feb futures daily chart - line on close:
FMU Trader's gold Guidelines:
Per HSL650: whipsawed for loses in long & shorts :-(
Uptrend from July lows shorterm overstretched/uncertain; limit new longs to toehold positioning only. Gamblers buy Feb Cx if dips to 488.50 &/or 481.30; place preliminary stoploss 12-points below your entry/buy point (basis close). Take ½ profits at 509.60, ½ at 517.40 (or use tight trailing profits stop to follow upside).
Sustained break below 460 needed to overturn bullish stance.
Euro vs. US$
Euro Mar futures closed Friday Nov 25 at 1.1780 ie, down 0.0060 on the week.
Euro Mar futures weekly chart - basis line on close:
Euro Mar futures daily chart - basis line on close:
FMU Trader's Guidelines:
Per FMU 9/30: exited Dec longs with loss :-( Traders then sold short Dec on break below 1.2000.
Per HSL650: traders sold short Dec at 1.1830 (or better).
Head & shoulder tops are the most reliable of technical formations but can develop surprisingly sharp countertrend rallies if reversed to the upside (as recently seen in gold). The trend is clearly down but would become defective on any rise above Mar downtrend resistance. Stay flexible.
Sell short Mar Cx at mkt &/or after a bounce that clearly stops at or below 1.2010-1.2160 resistance band; cover ½ at 1.1440 & use trailing profit stops on rest.
Stop & reverse/buy on 1-dc (or significant intraday rise) above 1.2230; stop: 2-dc below 1.1960. Sell ½ at 1.2550, ½ at 1.2830.
NOTE: Traders are advised to use mini forex contracts to enter/exit trades incrementally. 1 mini Cx = $100/full point, compared with $1,000 for full size Cx (10 minis = 1 full size).
Yen vs. US$
Yen Mar futures closed Friday Nov 25 at .8468 ie, down .0039 on the week.
Yen Mar futures daily chart - line on close:
FMU Trader's Guidelines:
Per FMU 9/30: gamblers sold short Dec at .8915; take full profits at mkt, or apply squeaky tight trailing stops to lock in gains.
Per HSL650: traders sold short Dec at .8602.
Tuff call to enter new trades in such a lengthy & exceptionally oversold downtrend from Sept peak that has yet to develop any retracement action of significance. Prefer wait for a mini bounce before initiating new longs.
Sell short Mar after a bounce that clearly fails at or below .8767-.8844 intermediate resistance; cover ½ at .8410, ½ at .8230 or use trailing stops to follow downside.
Buy on 1-dc over .8840; stop: 1-dc below .8550. Sell ½ at .9140, ½ at .9290.
Crude oil Jan futures closed Friday Nov 25 at 58.71 ie, up 1.50 on the week.
The Commitment of Traders report shows crude oil commercial hedgers added 13,375 longs, bringing total longs to 543,858, whilst shorts added 8119 contracts, bringing total shorts to 473,204. Large speculators are holding 115,494 longs against 117,662 shorts. And, small traders are holding 155,678 longs against 190,543 shorts.
Consensus shows crude oil futures at 60%. Says: "Crude Oil
futures are moving sideways/higher to test short-term overhead
Crude oil Jan futures daily chart - line on close:
FMU Trader's Guidelines:
Per FMU 9/30: took profits at both targets in Dec shorts :-)
Gamblers sell short Jan after bounce that clearly stops below 59.60 neckline resistance of June-Nov H&S top; cover all at 53.40.
Buy Jan on 1-dc over 60.40; stop: 2-dc below 57.00. Buy more on rise above 64.00. Take ½ profits at 67.30, ½ at 69.80.
New Stock Recommendations
Note: the energy sector is showing timid signs of a revival that hint an important reversal may be at hand (need crude oil above 64.00 to substantiate). Thus we are looking to tentatively reposition in energy stocks. Start by buying toehold positions in 1 or 2 energy stocks only & increase exposure only if /when trades move in your favor. If the reversal fizzles out, be ready to cut losses & move back to sidelines.
Cardero Resources (TSXV: CDU - iron-oxide, copper & gold) (also trades AMEX: CDY) high volume rise above 20-month bullish ascending triangle. Gamblers buy if dips to 4.46 &/or 4.20; stop: 1-dc below 3.50. Speculative.
Laramide Resources (TSXV: LAM - uranium) high volume rise above bullish symmetrical triangle from Sept peak. Gamblers buy toehold at mkt &/or buy if dips to 6.56 &/or 6.05; stop: 1-dc below 4.80.
Pan American Silver Corp (Nasdaq: PAAS - gold/silver) upside breakout from bullish symmetrical triangle from Apr 2004 peak (best seen on weekly chart). Buy bit at mkt &/or buy if dips to 17.80; stop: 1-dc below 15.40.
Southwestern Energy (NYSE: SWN - oil/gas expl-prod) buy on upside breakout from 5-week reverse head & shoulder base, ie: buy at 38.80-stop; stop: 1-dc below 32.90.
Spdr Energy Sector (AMEX: XLE - index tracking) rose above bullish symmetrical triangle from Sept peak. Buy foothold at mkt &/or buy if dips to 49.40; stop: 44.70. Buy again on sustained rise over 52.00 & 55.00.
W-H Energy Svcs (NYSE: WHQ - oil/gas-field svcs) expanding potential reverse head & shoulder base below pivotal 34.00 resistance. Buy at 34.90-stop; stop: 1-dc below 29.90.
1)Traders are strongly advised to limit total equity exposure in their portfolios to percentages outlined in the HSL Investment Box.
2)Traders must adapt recommendations to shorterm mkt direction. If strength/weakness kicks in before pullbacks to buy/sell levels are reached, enter small foothold positions at mkt. Likewise if general mkt direction moves against open positions, exit at mkt rather than waiting for stoploss levels to be hit. Your interpretation & modification based on conditions of our recommendations often makes the difference betwn profits or losses.
Stop & Sell Recommendations
partial profits on:
Note: HSL recom's are followed by a wide selection of investors, ranging from novice traders to professional fund managers. And, many Hslm's have requested we give partial profit taking signals (at intermediate resistance levels) to allow incremental exit from medium to large share positions. Thus, recom's to take partial profits can be given up to 3 times before a position is finally exited.
Welcome to the editorial section of FMU
we really care about children?
"I cringe with disgust when I hear politicians say, "We're doing it for the children." What's worse is so many Americans mindlessly fall hook, line and sinker for the hype. Judging by our actions, Americans could not care less for future generations, and future generations will curse us for it. Let's look at it.
"According to several respected authorities, including the Concord Coalition (co-chaired by former Sens. Warren Rudman and Robert Kerrey), the Congressional Budget Office, U.S. Treasury Secretary John Snow, and the Social Security Administration, the estimated present value of the unfunded liability of Social Security and Medicare ranges between $61 trillion and $75 trillion dollars.
"Williams," you ask, "what's this present value business?" Simply put, between $61 trillion and $75 trillion dollars is the money that would have to be put aside right now, at current interest rates, in order to meet future obligations of Social Security and Medicare. To put an astronomical sum like $61 trillion or $75 trillion in a bit of perspective: The value of our entire national output of goods and services (GDP) in 2004 was only $12 trillion.
"Congress can't put aside $75 trillion as reserves against future liabilities of Social Security and Medicare. Therefore, according to the Dallas, Texas-based National Center for Policy Analysis (NCPA), the annual rate of Social Security unfunded liabilities is growing at a $667 billion clip and Medicare's at $4 trillion.
"What does all this mean? It means little in pocketbook terms to today's Americans who are 65 years or older. They will collect their Social Security checks and their promised Medicare benefits, but not so for future generations. Here's that future according to House Ways and Means Committee testimony, given by Dr. John Goodman, president of the NCPA (May 2005). "In 2020, combined Social Security and Medicare deficits will equal almost 29 percent of federal income taxes. At that point the federal government will have to stop doing almost a third of what it does today. By 2030, about the midpoint of the baby boomer retirement years, federal guarantees to Social Security and Medicare will require one in every two income tax dollars. By 2050, they will require three in every four." And by 2070, Social Security and Medicare will consume all federal revenues.
"There are some "optimists" who seek to minimize the pending disaster that will be caused by these and other federal unfunded liabilities. They argue that the federal government can always meet its obligations through its power to tax. According to some estimates, by 2030, Social Security and Medicare obligations alone will require a 50 percent increase in payroll taxes. If tax increases are off the table, 2030 will see a 30 percent reduction in promised Social Security benefits and stringent rationing of health care services promised by Medicare. There's another "solution." Even though Congress can't increase our life-expectancy, they can raise the age of Social Security and Medicare eligibility. Were Congress to make 80 as the age for Social Security and Medicare eligibility, they'd solve the problem because most of us would be dead.
"Let's look at the raw politics of the Social Security/Medicare situation. Few, if any, of our 535 congressmen will be around in 2030 and later when the real crunch comes, but they are subject to today's, not tomorrow's, political pressures. Similarly, few of today's Americans 65 years of age and older will be around. Other than mouthing a concern for future generations, both have little economic incentive to be concerned about what happens in 2030. After all, what do they have at stake?
"In 2030, will young people in the labor force be willing to see themselves taxed at Social Security rates of 20, 30 and 40 percent to take care of some old people? I don't think that will politically fly, and they might begin to get ideas about euthanasia. In addition to economic strife, Social Security and Medicare are laying the groundwork for intergenerational conflict. Unfortunately, the politics of today don't give us room to prevent these twin disasters." End quote.
***Chinese billionaires on the rise. As one empire crumbles another rises from the ashes.
"China's economy has been expanding rapidly, boosting the personal wealth of the country's leading entrepreneurs. Businessman Larry Rong Zhijian remains China's richest man, with an estimated fortune of $1.64bn (£929m). The son of former Chinese vice premier Rong Yiren is chairman of Hong Kong-based investment firm China International Trust and Investment Corporation.
"The combined wealth of China's 100 richest people now exceeds $41bn, the survey found, compared with $29bn a year ago." End quote.
***Dangers of a runaway mortgage market. The warning signs are everywhere. And conservative financial institutions -- insurers and pension funds -- are set dead in the path of the runaway train.
By Jim Jubak, Nov 18, 2005
"The annualized rate of increase in the price of a new home fell to 1.9% in September from a peak of 16% at the beginning of 2004. You don't have to work too hard to figure out why the housing market is slowing down. The supply of home buyers isn't infinite, and every time housing prices go up, the supply of buyers shrinks a bit. But mortgage rates for a 30-year fixed loan hit 5.2% in June 2003, expanding the pool of potential buyers who, at such a low rate, could afford to buy houses even at inflated prices.
"But mortgage rates have been on the rise lately, climbing to 6.5% on average, the highest level in more than two years, according to HSH Associates. And rates are expected to keep climbing into 2006.
"Mortgage lenders have fought back against rising prices and rising mortgage rates with all kinds of mortgage products designed to make it possible for more buyers to take on more debt and still, hopefully, meet their monthly payments.
"One of the riskiest mortgage types, the option adjustable-rate mortgage, was among the fastest-growing type of mortgage in the first half of 2005. Option-adjustable-rate mortgages give the borrower the option of making payments that pay interest and principal, that pay just interest, or that pay less than the interest due each month. That last option actually increases the amount the borrower owes on the mortgage.
"And, most recently, the mortgage industry has promoted low- or no-documentation mortgages for buyers who might not qualify for a mortgage if they had to reveal information such as the size of their income or the level of outstanding debt. Low- and no-documentation mortgages made up 46% of all non-Fannie Mae and Freddie Mac mortgages in the first eight months of 2005, according to LoanPerformance, a mortgage industry risk analysis company. In 2000, such loans made up 28% of that market.
"A ladder of risk All the risky mortgage schemes aren't a problem as long as home prices keep climbing and as long as interest rates are steady or falling. If prices are climbing, the buyer and the lender can always sell the house in question for more than enough to pay the balance on the loan, even if the balance of the loan has been climbing. If interest rates are steady or falling, the low initial interest rate of an adjustable mortgage stays low, and so do those monthly payments.
"But that's all changed recently. Home prices have started to level off and some industry experts predict that prices will fall in 2006. The National Association of Realtors is still predicting a 6% increase in median home prices in 2006 after a 12% increase in 2005. But Realtors in some of the markets that have been hottest during the boom are looking for prices to decline by 5% or so next year.
"Interest rates on the 10-year Treasury note, the benchmark for many adjustable mortgages, have climbed to 4.6% from 4% in June 2005. Higher energy prices make any increase in monthly mortgage payments even more of a strain on the family budget.
"All this creates a ladder of risk that begins with the individual home buyer/mortgage holder on the lowest rung and climbs toward the top rungs of the global income markets. The risk for the individual homeowner, of course, is default on that mortgage because higher interest rates lead to higher mortgage payments. Add enough individual mortgage defaults, and the mortgage banks that made the riskiest mortgages start to feel the pain. In October, 18% of the mortgages made by Countrywide Financial, the country's largest mortgage lender, were option-adjustable-rate mortgages. Interest-only mortgages made up 19% of all mortgages for the month. Adjustable-rate mortgages of all sorts made up almost 50% of mortgages in October." End quote.
***Free Speech and Dietary Supplements
from friend & Congressman Ron Paul
"Mr. Speaker, I rise to introduce the Health Freedom Protection Act. This bill restores the First Amendment rights of consumers to receive truthful information regarding the benefits of foods and dietary supplements by codifying the First Amendment standards used by federal courts to strike down the Food and Drug Administration (FDA) efforts to censor truthful health claims. The Health Freedom Protection Act also stops the Federal Trade Commissions (FTC) from censoring truthful health care claims.
"The American people have made it clear they do not want the federal government to interfere with their access to dietary supplements, yet the FDA and the FTC continue to engage in heavy-handed attempts to restrict such access. The FDA continues to frustrate consumers' efforts to learn how they can improve their health even after Congress, responding to a record number of constituents' comments, passed the Dietary Supplement and Health and Education Act of 1994 (DSHEA). FDA bureaucrats are so determined to frustrate consumer access to truthful information that they are even evading their duty to comply with four federal court decisions vindicating consumers' First Amendment rights to discover the health benefits of foods and dietary supplements.
"FDA bureaucrats have even refused to abide by the DSHEA section allowing the public to have access to scientific articles and publications regarding the role of nutrients in protecting against diseases by claiming that every article concerning this topic is evidence of intent to sell a drug.
"Because of the FDA's censorship of truthful health claims, millions of Americans may suffer with diseases and other health care problems they may have avoided by using dietary supplements. For example, the FDA prohibited consumers from learning how folic acid reduces the risk of neural tube defects for four years after the Centers for Disease Control and Prevention recommended every woman of childbearing age take folic acid supplements to reduce neural tube defects. This FDA action contributed to an estimated 10,000 cases of preventable neutral tube defects!
"The FDA also continues to prohibit consumers from learning about the scientific evidence that glucosamine and chondroitin sulfate are effective in the treatment of osteoarthritis; that omega-3 fatty acids may reduce the risk of sudden death heart attack; and that calcium may reduce the risk of bone fractures.
"The Health Freedom Protection Act will force the FDA to at last comply with the commands of Congress, the First Amendment, and the American people by codifying the First Amendment standards adopted by the federal courts. Specifically, the Health Freedom Protection Act stops the FDA from censoring truthful claims about the curative, mitigative, or preventative effects of dietary supplements, and adopts the federal court's suggested use of disclaimers as an alternative to censorship. The Health Freedom Protection Act also stops the FDA from prohibiting the distribution of scientific articles and publications regarding the role of nutrients in protecting against disease.
"This legislation also addresses the FTC's violations of the First Amendment. Under traditional First Amendment jurisprudence, the federal government bears the burden of proving an advertising statement false before censoring that statement. However, the FTC has reversed the standard in the case of dietary supplements by requiring supplement manufactures to satisfy an unobtainable standard of proof that their statement is true. The FTC's standards are blocking innovation in the marketplace.
"The Health Freedom Protection Act requires the government bear the burden of proving that speech could be censored. This is how it should be in a free, dynamic society. The bill also requires that the FTC warn parties that their advertising is false and give them a chance to correct their mistakes.
"Mr. Speaker, if we are serious about putting people in charge of their health care, then shouldn't we stop federal bureaucrats from preventing Americans from learning about simple ways to improve their health. I therefore call on my colleagues to stand up for good health care and the First Amendment by cosponsoring the Health Freedom Protection Act." End quote.
[Uncle Harry urges US readers to request their Congressmen to support this act.]
***Is the Modern Banking System Entirely Dependent on Cheap Oil?
"Yes. The global financial system is entirely dependent on a constantly increasing supply of oil and natural gas. The relationship between the supply of oil and natural gas and the workings of the global financial system is arguably the key issue to understanding and dealing with Peak Oil, far more important than alternative sources of energy, energy conservation, or the development of new technologies.
Dr. Colin Campbell presents an understandable model of this complex (and often difficult to explain) relationship:
"It is becoming evident that the financial and investment community begins to accept the reality of Peak Oil, which ends the first half of the age of oil. They accept that banks created capital during this epoch by lending more than they had on deposit, being confident that tomorrow's expansion, fuelled by cheap oil-based energy, was adequate collateral for today's debt. The decline of oil, the principal driver of economic growth, undermines the validity of that collateral which in turn erodes the valuation of most entities quoted on Stock Exchanges. The investment community however faces a dilemma. It desires to protect its own fortunes and those of its privileged clients while at the same time is reluctant to take action that might itself trigger the meltdown. It is a closely knit community so that it is hard for one to move without the others becoming aware of his actions.
"The scene is set for the Second Great Depression, but the conservatism and outdated mindset of institutional investors, together with the momentum of the massive flows of institutional money they are required to place, may help to diminish the sense of panic that a vision of reality might impose. On the other hand, the very momentum of the flow may cause a greater deluge when the foundations of the dam finally crumble. It is a situation without precedent.
Commentator Robert Wise explains the connection between energy and the economic activity as follows:
"It's not physics, but it's true: money equals energy. Real, liquid wealth represents usable energy. It can be exchanged for fuel, for work, or for something built by the work of humans or fuel-powered machines. Real cost reflects the energy cost of doing something; real value reflects the energy expended to build something.
"Nearly all the work done in the world economy -- all the manufacturing, construction, and transportation -- is done with energy derived from fuel. The actual work done by human muscle power is miniscule by comparison. And, the lion's share of that fuel comes from oil and natural gas, the primary sources of the world's wealth.
"In October 2005, the normally conservative London Times acknowledged that the world's wealth may soon evaporate as we enter a technological and economic "Dark Age." In an article entitled "Waiting for the Lights to Go Out" Times reporter Bryan Appleyard wrote the following:
"Oil is running out; the climate is changing at a potentially catastrophic rate; wars over scarce resources are brewing; finally, most shocking of all, we don't seem to be having enough ideas about how to fix any of these things.
"Almost daily, new evidence is emerging that progress can no longer be taken for granted, that a new Dark Age is lying in wait for ourselves and our children.
". . . growth may be coming to an end. Since our entire financial order - interest rates, pension funds, insurance, stock markets - is predicated on growth, the social and economic consequences may be cataclysmic.
"If you want to understand just how cataclysmic these consequences might be, consider the current crisis in the UK as a "preview of coming attractions." On October 23, 2005 the London Telegraph reported:
Government has admitted that companies across Britain might be forced
to close this winter because of fuel shortages. "The balance between
supply and demand for energy is uncomfortably tight. I think if we have
a colder -than-usual winter given the supply shortages, certain
"The Met Office says there is a 67 per cent likelihood of prolonged cold this year after almost a decade of mild winters. That, coupled with high fuel prices, raises the fear that industry will not be able to cope.
"The consequences of such relatively small shortfalls between supply and demand have prompted the UK government to look into draconian energy conservation measures that would be enforced via house-to-house searches by a force of "energy-police."
"This is happening despite the fact we are probably at least a few years away from peaking. You have to ask yourself, "what's going to happen when the 'real problems' start showing up?" End quote.
***Bush has borrowed more than previous 42 presidents combined!
- "President Bush and the current administration have
Dog Coalition, which describes itself as a group "focused on
to the Treasury Department, from 1776-2000, the first 224
American political leadership has ever willfully and deliberately
***What's Happened to M3?
David Chapman (www.DavidChapman.com)
"On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.
"Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).
"As a former money market/foreign exchange dealer I grew up in the business on M3. I recall back in the late 1970's when we would sit around on Thursday's awaiting the Federal Reserve's weekly release of the Money Supply numbers. The market would centre on M3. The Bond market and the Eurodollar market would soar or plummet depending on how much M3 grew on the week. Volatility was the name of the game and one could make or lose thousands or more of dollars if you correctly (or incorrectly) surmised the weekly money numbers. As the years went by the weekly money numbers lost some of their aura as they began to target bands of growth or focused elsewhere rather than on the monetary numbers. Still it was never forgotten and dutifully I would go and check the weekly releases to find out how much money supply grew. Old habits die hard.
"So what is M3? To understand what M3 is one needs to know what M1 and M2 are as well.
- Money supply that includes all coins, currency held by the public,
"M2 - Money supply that includes M1, plus savings and small time deposits of depository institutions, overnight repos at commercial banks, and retail mutual fund money market accounts.
- Money supply that includes M2, plus large time deposits, repos of
"Note: These are the US definitions of M1, M2 and M3. The Bank of Canada's definitions of M1, M2, and M3 may vary.
M1 and M2 are measurements of money that are held for the most part
by the general public M3 adds the huge institutional funds to the equation.
These funds are generally the most liquid funds. It does not capture
all of the institutional funds but it does capture an important part
of it sufficient enough to measure the growth of money in the financial
system. It is M3 that has experienced the most explosive growth in the
past decade. Since the end of 1995 M1 has increased a paltry 18.8% while
M2 is up 89.5%. But M3 is up 130%. GDP by comparison is up roughly 67%
in the same period so M3 growth is almost double GDP growth. Consumer
debt has grown about 123% in the same period or about equivalent to
M3 growth. Business debt is up 97%. It has taken an incredible amount
of debt and money to obtain GDP growth
"I have never paid a whole lot of attention to M2 and even less attention to M1. In the broader scheme of things they were just not as important as M3. Only M3 told us what was really going on with monetary growth and the big money is in the institutions. If the stock market started to jump sharply even though neither the economic situation nor the economic outlook shifted substantially one could look over at the monetary numbers and depending on how they grew get a good idea why the market was rising (or falling if M3 growth was exceptionally sluggish).
"One certainly didn't rush to look at M1. Noting that M1 grew a paltry .7% in the latest 13 weeks was not significant. While M2 up 5.2% told us a bit more we had to go to M3 and find it up 10.1% in the latest 13 weeks. There is serious money and all that money goes somewhere. The stock market has soared recently. The last time M3 was actually negative was in the early 1990's and if one recalls it was the last time we had a serious recession. Since 1995 M3 growth has soared and this corresponds with the period when the Federal Reserve under Alan Greenspan decided to effectively print their way out of the recessionary early nineties.
"M3 is very important. Indeed of the Fed's monetary numbers only M3 was of major importance and in other G7 countries we also focus on M3 including our own Bank of Canada. No word that they intend to follow. So why are they dropping M3? Well we have seen nothing to tell us why we only know they are doing it. Oh it's not that the numbers will completely disappear. For those that wish to take the time they can pore through the Flow of Funds accounts (released quarterly as Z.1 release and the H.8 bulletin released weekly for commercial banks) and piece together the former M3. Painstaking, but that is not the way it is supposed to be. European Central Bankers put great stead in M3 so why has the Fed after all these years decided to cease publication?
"Some of the reasons we have seen floated around are as follows:
has shown that only failing economies e.g. Soviet Union keep
end of publishing of M3 in March 2006 coincides with the start
is a measure of inflation in the economy. A somewhat unproven
are about to enter a period of hyperinflation and by eliminating
on the theme above a period of hyperinflation would occur as
conclusion is that the Federal Reserve will be hiding a
"One writer (Recently announced reporting changes at the Fed - Captain Hook <http://www.safehaven.com/showarticle.cfm?id=4134> , November 18, 2005 on SafeHaven) compared this move by the Fed to Nixon's closing of the "gold window" in August 1971. It might be although the ceasing of the publication of a widely watched monetary number does not quite compare to a default which is effectively what the US did when they closed the "gold window". But given the importance of M3 to market watchers we do have to wonder at what the Fed wants to hide. As Captain Hook notes "we just got another "big signal" from US monetary authorities that the rules of the game are about to be changed fundamentally, once again."
"And the results might be the same. Indeed an examination of gold shows that that gold made a low November 4 near $456. By the time of this announcement Gold had climbed back to $470. Then 3 days later gold leaped and it has been on a tear ever since. This has come despite the recent rise in the US$. Indeed gold prices have been rising now for several weeks despite the strong performance of the US$. While it is possible that the US$ has a target zone of 95 based off what appears as a head and shoulders bottom it is not slowing down the recent jump in gold prices.
"Putting aside demand/supply conditions that favour gold right now the recent sharp jump in gold prices can only be explained in light of a realization that a monetary disaster is in the making. Gold is or has been breaking out in a number of currencies recently as well. Gold is the ultimate currency and when it is going up against all currencies it is telling us that something big is going to happen." End quote.
***Derivatives dealing hits record levels. The time bomb ticks .
Jennifer Hughes in New York
"The use of privately-traded derivatives reached a record in the first half of this year with the notional amount of outstanding trades worth $270,000bn, the Bank for International Settlements said on Thursday.
"Dealing in credit derivatives jumped particularly sharply but there was also strong growth in equity and commodity instruments.
"The notional amount represents the value of the underlying assets on which the derivatives are based. Based on market value, which reflects the actual cost of replacing the contracts, the market grew by 16 per cent to $11,000bn.
"While many derivatives such as futures are traded on exchanges where activity levels are closely monitored, the more nebulous over-the-counter or OTC world of instruments that are traded directly between counterparties has proved trickier to measure.
"The semi-annual report from the BIS reported a striking 60 per cent jump in the amount of credit default swaps (CDS) outstanding to $10,200bn. The instruments are a form of insurance against a company's default.
market for them barely existed five years ago but has exploded in the
last couple of years as banks and investors such as hedge funds have
used the instruments to lay off their risk to particular credit events."
Stephen Roach (in Beijing)
"Back in Asia for the second time in a month, I have heard two recurring (and related) themes -- amazement at the ever-resilient American consumer and astonishment over the dollar's strength. This fixation only reinforces my conviction that an externally focused Asian economy remains very much a levered play on US demand. Consequently, it would be a big deal out here in Asia should the terms of engagement with the United States change - through either a shift in demand or a swing in relative prices (i.e., currencies). In my view, that's precisely the risk that looms in 2006.
fluctuations have long been one of Asia's biggest wildcards. That is
very much the case again in 2005 -- largely due to the surprising
continuation of this counter-trend rally by the dollar could pose a
"China could make or break the all-important Asian export story. While much was made of Beijing's abandonment of the decade-old dollar peg on July 21, China has been reluctant to cut its currency loose. After an initial 2% adjustment vis-à-vis the dollar, the RMB has traded in a very tight range against the US currency in subsequent months. That means as the dollar has gone up, so, too, has the Chinese currency. On a broad trade-weighted basis, the RMB is up about 10% in real terms from levels prevailing at year-end 2004.
far, that hasn't made much of a dent in China's export trajectory.
"In recent years, China's increasingly powerful export machine has turned the Chinese economy into an engine of pan-Asian trade. China draws heavily on imports from its neighbors to provide inputs into Asia's increasingly China-centric export platform. A dollar-led strengthening of the RMB actually boosts China's purchasing power of such foreign made components. Chinese import growth was still running at a 23% annualized clip through October 2005 -- especially good news for its Asian suppliers such as Taiwan, Korea, and Japan.
"In the end, however, China's export prowess is balanced on the head of a pin -- a pin made in America. Fully 35% of all Chinese exports go to the United States. Should US domestic demand falter -- hardly idle conjecture for an over-extended American consumer that looks exceedingly vulnerable to the twin pressures of an energy shock and a possible bursting of the housing bubble -- China would quickly be in trouble.
"Everywhere I go in Asia, I hear the tale of the tough American consumer who has once again triumphed over adversity -- this time, making it through the energy shock of 2005 without even flinching. The latest estimates of 4Q05 real consumption growth by our US team -- an anemic 1.5% increase versus a 10-year trend of closer to 3.75% -- certainly draw that perception into question. In addition, mounting US-China trade frictions pose a different set of risks to the biggest piece of the Chinese export business. Whatever the reason -- a capitulation of the American consumer or Washington-led trade bashing -- there is good reason for concern on the Chinese export prognosis.
Asian trading partners can hardly afford to take those concerns
"While the US dollar has continued to strengthen in recent weeks, Asia should not count on a continuation of this trend. America is suffering from its largest current-account deficit in history -- presently running at 6.4% of US GDP and, reflecting a further shortfall of domestic US saving, probably headed into the 7.5% range by year-end 2006. Nor has the world ever had to fund such a large external shortfall -- running at nearly an $800 billion annual rate in the first half of 2005. History and established economic theory point to a resumption of the dollar's decline as a logical response to this extraordinary imbalance. A weaker dollar would change America's relative price alignment with the rest of the world -- making imports more expensive and US exports more competitive. It would probably also add to US interest rate pressures, as America's foreign creditors seek compensation for taking inordinate currency risk. The combination of a weaker dollar and higher US interest rates should finally allow the United States to turn the corner on its massive current-account imbalance.
"A renewed decline in the dollar underscores another risk that Japan could face -- a reversal of the recent depreciation of the yen. A decoupling of the yen from other Asian currencies in 2005 has provided an important prop to the nascent recovery of the Japanese economy. Yet if Japan's recovery is for real, then there is no overriding reason why its currency should continue to sag. That's especially the case given Japan's outsize current-account surplus -- an external imbalance that is normally associated with a strengthening currency. With all eyes focused on the Chinese currency issue, Japan has slipped under the currency radar screen. The day will come -- sooner rather than later, in my view -- when the yen will strengthen again. That will undoubtedly prove vexing to Japanese exporters. And with Japan's internal private consumption growth unlikely to exceed 2% by year-end 2006, according to our Japan team, the possible combination of a stronger yen and a slowing of Chinese demand could be especially problematic for a still fragile recovery of the Japanese economy.
"Asia is the most currency-sensitive segment of the global economy. That was a painful lesson from the Asian financial crisis of 1997-98 and is still very much the case today. And it's especially the case for the region's two export powerhouses -- China and Japan. If the US dollar strengthens further and Asia's dollar-linked currencies continue to follow suit, the region's export-led growth dynamic could be in trouble. If the dollar resumes its decline, as I suspect it will, those pressures would be tempered. China, however, could be an important exception. If its currency stays tightly linked to a weaker dollar, an increasingly competitive RMB may well be the breaking point for Washington's protectionist-prone politicians. That slippery slope should be avoided at all costs.
is relatively carefree these days -- riding the waves of US-centric
***Britons going bust: total soars by 46% in a year. Experts blame easy credit and 'want now' consumers · Government accused of allowing £1trillion debts. A taste of things to come.
The Guardian November 5, 2005
"The number of people filing for insolvency in Britain rose by almost 50% to new record levels over the past year as consumers struggled to cope with the debts amassed in recent years, according to government figures released yesterday. The Citizens Advice Bureau said it was coping with more than a million cases of serious indebtedness after a decade in which consumers have taken advantage of cheap credit to finance a prolonged spending spree.
"Opposition parties last night accused the government of allowing Britons to build up more than £1 trillion of debt following the announcement by the Department of Trade and Industry that personal insolvencies were up by 11.6% in the third quarter of 2005 and 46% higher than in the same period a year ago.
"A total of 17,500 filed for insolvency in the third quarter of the year, the highest since records began in 1960. Of the total, 12,000 people actually went bankrupt; a rise of 31% on a year earlier while 5,500 entered an individual voluntary agreement (IVA) with creditors in an attempt to restructure debts to give them a chance of paying them off. That figure represented a jump of 95% from last year.
"Last week the Bank of England said Britain's total debt level had risen to £1.1 trillion, the equivalent of the country's entire economic output in a year and triple the size of the government's debt.
Levene, of the Citizens Advice service, said the organisation's bureaux
were now dealing with 1.1m cases of serious debt problems every year,
equivalent to about one in every 45 adults. The bankruptcy figures represented
only the tip of the iceberg of debt problems."
***5 Reasons the Dollar is Headed for Hard Times
1) "Deficits Do Matter- Never in the history of the world has one country owed so much to other countries without experiencing a currency crisis.
"With that in mind, here are the latest deficit numbers posted on the U.S. ledger: Trade Deficit for September... $66.1 billion. Yes, that's billion with a "B" as Ronald Reagan used to say. At this rate, the trade deficit will exceed $700 billion for 2005, topping 2004's record $617.6 billion deficit by some 13%. Meanwhile, the budget deficit for October rang in at $47.2 billion.
"The markets, economists and dollar bulls keep telling us this is a new paradigm... the globalization of economies, and that old-time fundamentals toward deficits no longer matter. To which I reply, isn't this the same bad fruit they sold us back in 2000 when they told us it was a "new economy" and that stocks "could" continue to trade at 300 times over earnings? I say yes, it is...
"One day, in the not too distant future, investors and traders alike will wake up to the reality that their dream of a new paradigm for deficits was just that... a dream. At that point, we'll see a return to fundamentals, which strongly point to a weakening U.S. dollar.
2) "An administration that wants a weaker dollar - We've all heard government officials, including U.S. Treasury Secretary John Snow and President Bush, claim that a "strong dollar is in the best interests of the U.S." The problem is that they turn around and tell the Chinese they want them to adapt a flexible currency, knowing all the time that most observers believe that the Chinese renminbi is undervalued by somewhere between 25% to 40% vs. the dollar.
"Actions speak louder than words if the Administration truly wanted a "strong dollar" they would leave China and their currency alone.
3) "Global imbalances need correcting- At the present time, the U.S. requires the trade surpluses of 10 countries to finance her deficit, which is equal to 70% of the world's surplus capital. Put another way, the U.S. contributes 70% of the world's deficits. This is an unbalanced system that needs rebalancing, which most likely would come in the form of a dollar correction.
"The 10 countries with the largest surpluses that finance the U.S. deficit are: Germany, Japan, Russia, China, Saudi Arabia, Norway, Switzerland, Canada, Singapore, and the Netherlands.
"The disparity between the world's current account surpluses and deficits continues to widen, likely to hit a record of nearly 5% of world GDP in 2006. America's massive external deficit of 6.4% of GDP in the first half of 2005 seems set to go from bad to worse over the next year, as the U.S. savings shortfall is put to a test by energy-related pressures on households and Katrina-related pressures on the federal government.
4) "A Return of The Asian Tigers- Even with the dollar's correction in 2005, it remains 30% lower than it was in February 2002 when compared against an identical basket of currencies. The majority of the dollar's weakness came versus the European and South Pacific currencies of Australia and New Zealand. The Asian currencies, by contrast, have not participated in dollar weakness yet.
"Where do the majority of the IOU's that the U.S. issues daily end up being held? In Asia... which is why we haven't seen any correction in the current account deficit in the past 3 years of dollar weakness. The deficits are being financed by the Asians, and their currencies haven't gained vs. the dollar.
"It's about time, eh? Well, yes! And I'll tell you why... All of the Asian countries have economic growth going on at the same time. China's long awaited slowdown has never materialized, nor will it in the foreseeable future. Japan has finally put her decade-plus ordeal with deflation in the rear view mirror. Japanese corporations are beginning to make capital investments, and Japanese consumers finally have a yen to spend their yen!
"Foreign investment into the Asian stock markets continues to be strong, as witnessed by year-to-date returns such as Japan's NIKKEI +22.87% and South Korea +40.37%.
"The next big surprise for the U.S. dollar will come from Asia. You heard about it here first.
5) "Commodities will continue to rally- Inflation in the U.S. is running much higher than the government wants to tell us each month. This rise in inflation has given commodity prices another round of wind in their sails.
"Over the past 200 years, commodities have had five secular bull markets between the following periods:
boom - 1823-1838 (15 years)
"The shortest bull market lasted 15 years while the biggest commodity boom went on for a monstrous 40 years! The current bull market is only 4-5 years old. So, if history holds true, the commodity bull market has a long way to go!
"This time around, we have the added fuel being provided by China and their 9%+ year-over-year growth in GDP manna from heaven for commodities, and for countries that produce those commodities.
"We are early into an era of tangibles and late in the day for dollars created out of thin air by the helicopter load." End quote.
Chuck Butler oversees the trading desk and operations for over 12,000 individual and corporate clients, both in the United States and abroad, who look to EverBank (www.everbank.com) for FDIC-insured World Currency Deposit Accounts, and Single Currency and Index CDs .
***Trading tactics from friend & top-notch futures trader Chic Goslin:
"If in a position to put on at least two contracts whenever U make a trade, U will find trading significantly easier, and more profitable since this makes it possible to take partial profits on trades once they start to exceed 100% of margin levels. Have situations like this at moment in short positions in Euro and Yen and long positions in Copper. When U take partial profits in this manner U are treating your trading as a business, and if going to be long-term profitable trader, I feel U have to do this. Problem is that to be in position to always put on at least two contracts when do trade need to have at least 20K to trade with, and preferably 25K or more. If do not have this level of capital in trading account then have to limit most, or all, trades to just one contract. If this the case then feel need to take profits whenever they reach or exceed 100% of margin since when account "small" best to focus on taking profits rather than maximizing profits. Should only permit yourself luxury of trying to maximize profits, by sticking with trends and patterns until they actually change but at same time risking giving back decent profits, on the "extra" contracts, i.e., after have already taken good profits on part of original position." End quote.
of capital to invest spurs world-wide risk taking
By Greg Ip and Mark Whitehouse, The Wall Street Journal
"There's an unprecedented wave of capital flowing around the world, with all of its owners anxiously searching for a better return. World pension, insurance and mutual funds have $46 trillion at their disposal, up almost a third from 2000. In the same period global central-bank reserves have doubled to $4 trillion, and other gauges of available capital have risen as well.
"Meanwhile, world central banks have kept short-term interest rates low, even after the Federal Reserve's latest quarter-point boost. That means investors who put their cash in safe money-market paper can net only a modest margin above inflation.
"The result is that global investors are diving into a wide range of riskier assets: emerging countries' stocks and bonds; real estate and real-estate-backed debt; commodity funds; fine art; private-equity funds, which buy stakes in nonpublic companies; and the investment contracts called derivatives, including a kind structured to permit the sophisticated to take huge bond risks.
"For good measure, many investors use today's low interest rates to borrow money to amplify their bets. This "leverage," in effect, thus enlarges the already overflowing pool of investment capital. As these markets draw more investors, whose buying pushes up their price, prospects rise that a reversal could cause widespread pain.
"Where does this global flood of cash come from? Ben Bernanke, the economist just nominated to head the Fed, last March identified what he called a "global savings glut," which he said helps explain the relatively low level of long-term inflation-adjusted interest rates in the world.
"That there should be such a glut when U.S. consumers save none of their current income and their federal government borrows heavily might seem paradoxical. But plenty of others do save and accumulate cash to invest, including U.S. corporations. Companies' profits are near record levels, yet their expansion plans are muted, partly a hangover from the expansion excesses of the late-1990s stock-market bubble. So they have lots of money seeking a home.
"Abroad, meanwhile, many families' saving habits are the mirror image of Americans' free-spending ways. European and Japanese workers save far bigger shares of their incomes, and Chinese households a stunning 25 percent. In all, China is expected to have about $116 billion to invest abroad this year, much of which goes into U.S. bonds.
"Meanwhile, the steep price rises on oil and many raw materials in the past three years have fattened the purses of commodity-producing countries. Exports by Russia, a big oil producer, are likely to exceed imports by $102 billion this year, the International Monetary Fund estimates. About 60 percent of the Russian central bank's $163 billion in foreign reserves are invested in assets denominated in U.S. dollars.
"People talk about a wall of money everywhere," says Peter Fisher, a former Federal Reserve and Treasury official who's now a managing director at BlackRock, a New York investment company. "Bankers talk about too much money chasing deals. Private-equity funds talk of money chasing them. And buyers of corporate and asset-backed debt seem to come at the bond market from all directions."
"Policy makers increasingly see worrisome consequences of this global cash surplus. As the price of an asset rises, the income it throws off -- a stock's dividend, a bond's coupon, a building's rent -- automatically declines as a percentage of the asset's value. This means investors are demanding less compensation than usual for taking on the risk inherent in owning the assets. In the lingo of economics, the "risk premium" is low today.
"There are some sound reasons why it should be low. World economic growth has been unusually stable and predictable for several years. The U.S. economy grew at a 3.8 percent annual rate in the third quarter, the eighth straight quarter at about that pace -- the least volatile two-year stretch of growth on record. U.S. inflation did hit a 14-year high in September, but it remains low when energy prices are excluded. And the financial system hasn't seen the threat of a serious blowup since the 1998 Russian default and collapse of the Long Term Capital Management hedge fund, or private investment pool.
"But the concern is that, historically, very low risk premiums often presage a broad market decline that pushes down stock prices and pushes up what everyone must pay to borrow, hurting economic growth. "History has not dealt kindly with the aftermath of protracted periods of low risk premiums," Fed Chairman Alan Greenspan noted in August.
"As investors pile into riskier assets and their prices rise, they generate impressive returns for those who own them and attract still more investors. Cautious money managers who play it safe and stay on the sidelines run the risk of showing embarrassing low returns, and losing clients. Most choose to stay in the game.
"Investors' quest for higher returns can present a dangerous quandary, says Jim Sarni, who invests for pension funds and insurance companies at a firm called Payden & Rygel in Los Angeles. "It makes you continue to invest in higher-yield instruments despite the fact that spreads are narrow" -- that is, their return above safe instruments is small. "So it becomes this vicious cycle," Mr. Sarni says. "It is a global game of chicken." End quote.
*** Big Brother is protecting us. Vitamins will soon be illegal!
World Without Cancer author G. Edward Griffin exposes how corrupt politics prevent real cancer cures from reaching the public
By Alexis Black, Nov 3, 2005
"Thirty-one years ago, a man wrote a book exposing the politics involved in cancer therapy. It painted a picture of a world in which an effective control for cancer existed but was outlawed because it couldn't line the pockets of the powerful pharmaceutical industry. In 31 years, little has changed.
"G. Edward Griffin's 1974 book World Without Cancer is as poignant today as the day it was written, and in some circles, just as controversial. That's because Griffin tells the story of a powerful substance that, despite its potential to aid in the fight against cancer, few cancer sufferers will ever know about, and that their doctors certainly will not offer them. That substance is vitamin B-17, also called Laetrile, and it is a naturally-occurring substance that has been banned for use in the control of cancer in the United States.
was first introduced to the subject of vitamin therapy for cancer control
while on a fishing trip with San Francisco physician John Richardson,
he said in a telephone interview. Dr. Richardson told Griffin he had
seen great success in treating his cancer patients with vitamin B-17,
but he faced opposition from local medical authorities who, when they
caught wind of what he was doing, balked at the fact he was using a
treatment that was not FDA-approved. In an effort to protect his right
to administer a therapy he had seen work on so many patients, Dr. Richardson
turned to Griffin for help in advancing his cause, and thus was the
beginning of World Without Cancer.
"According to Griffin, the 1953 California Report continues to be the basis of most scientific or legal opposition to vitamin B-17 today. The report, written by Dr. Henry Garland and Dr. E. M. McDonald of the California Medical Association's Cancer Advisory Commission, claims there is no proof Laetrile is an effective control for cancer. (It should be noted that these two particular doctors were at the time also insisting there was no link between smoking and lung cancer.)
Griffin writes in World Without Cancer that Garland and McDonald actually
falsified information from Laetrile experiments cited in the California
Report. In fact, 10 years after the report was published, original documents
surfaced that proved information had been falsified. Although the report
was subsequently updated, additional problems - such as insufficient
vitamin dosages used in the experiments - persisted, and the conclusions
of the original California Report remained embedded in the literature
and minds of many.
"When you dig into the facts, and you read the reports by the people themselves inside those institutions, you find out they found in their testing that Laetrile was highly effective, but they received directives from the top to suppress that information," Griffin said.
"So why would the "powers-that-be" work so hard to suppress information that could benefit thousands of people dying of cancer? "They do that because they're trying to make a buck, and something that is found in nature, like Laetrile, cannot be patented," says Griffin. But the story doesn't stop there.
The Hitler / Pharma connection
"World Without Cancer is divided into two parts, and in the second half of the book, Griffin goes on to reveal some disturbing information about an international drug cartel that came into being in the years before World War II that he says played a significant role in shaping the field of medicine in this country. This powerful cartel was created, Griffin argues, when I.G. Farben, a German-based chemical company and financial backer of Adolf Hitler, joined together with Standard Oil of New Jersey, founded by American business tycoon John D. Rockefeller, in an agreement not to compete. The partnership was largely concealed, since neither company wanted their countries to know about the relationship in the event of an inevitable second world war. In a lecture, Griffin once referred to the Farben-Rockefeller merger as "the largest and most powerful cartel the world has ever known, even though most people have never heard about it."
"And so the extremely influential Rockefeller came to be interlocked with the drug industry, and under the guise of philanthropy, began donating large sums of money to America's faltering medical schools. Of course, the catch was that such schools were told the money had to be used for drug research, which would create a great profit for Rockefeller interests. In their time of need, medical schools readily complied. "When they accepted the money, they had to follow the dollar, and they designed their curricula so it favors pharmacy (and) pharmaceutical drugs," says Griffin.
"This effectively gave birth to the conventional medical care system we know today, which is based almost entirely on prescription drugs and knows little to nothing about basic nutrition. "The medical schools of the United States now teach the students everything there is to know about their product, which is drugs," Griffin says, "And so [doctors] come out as highly trained drug salesmen, and they don't even know it!"
Even doctors are kept in the dark about B-17
"It's no wonder then that natural treatments like vitamin B-17 remain banned or widely unknown in the United States; there is a long line of profit and power ensuring they stay that way. That's why doctors will not offer cancer patients vitamin therapy with vitamin B-17, and why most doctors, if asked about Laetrile, will say it has been proven ineffective. However, Griffin doesn't blame the doctors for conventional modern medicine's focus on drugs, noting, "They're kind of victims of this whole system as much as the rest of us, and they and their families die of cancer just like everyone else. So it's clear that they're not holding back a control for cancer that they know works. If they knew about it, they would use it, just like Dr. Richardson. It's just that they're pretty well sheltered from that information, and they rely very strongly on the prestigious sources at the top."
"Since Griffin's book hit shelves in 1974, awareness of natural health has increased, but little has changed in terms of the availability of Laetrile in the United States. It remains illegal for doctors to prescribe or sell Laetrile as a control for cancer. According to Griffin, however, some clinics continue to quietly use the substance, often only after the patient has obtained it. Many other patients travel to Mexico for treatment.
worries that vitamin B-17 is not the only natural treatment for serious
disease being suppressed because of political and financial reasons.
"I'm convinced, and this is just my opinion now; I can't back this
up with facts, but on the basis of what I've seen, I think this whole
AIDS field is just a rubber stamp of the cancer field," Griffin
states. He adds, "I am sure that you'll find this thing all over
the medical field because they follow the buck. They have to have something
that's patented to do that, and patented medicines are usually toxic."
The politics of cancer therapy
"On the first page of his book, Griffin openly acknowledges that what he writes is not approved by the Food and Drug Administration, American Medical Association or the American Cancer Society and says that they in fact would call it "fraud and quackery." That is because, as Griffin has often said, the politics of cancer therapy are far more complicated than the science of cancer therapy.
core problem, according to Griffin, cannot be solved until we get the
politics out of a lot of other areas as well. In the meantime, it is
up to each individual consumer to take responsibility for his or her
own health and wellbeing. "I think it's important for people to
understand that government, in most cases, is not the solution; it's
the problem," Griffin warns. "As long as people think that
the government is supposed to take care of them and protect them and
that they can trust their politicians - as long as they think that,
they're in deep trouble. And, in fact, we are all in deep trouble because
of that kind of thinking." End quote.
***Medical Examinations :-)
Compiled by Dr. Richie Klein
A man comes into the ER and yells, "My wife's going to have her
Submitted by Dr. Mark MacDonald, San Antonio, TX
At the beginning of my shift I placed a stethoscope on an elderly
Submitted by Dr. Richard Byrnes, Seattle, WA
One day I had to be the bearer of bad news when I told a wife That
Submitted by Dr. Susan Steinberg, Manitoba, Canada
During a patient's two week follow-up appointment with his
Submitted by Dr. Rebecca St. Clair, Norfolk, VA
While acquainting myself with a new elderly patient, I asked, "How
Submitted by Dr. Steven Swanson, Corvallis, OR
I was caring for a woman and asked, "So how's your breakfast this
Submitted by Dr. Leonard Kransdorf, Detroit, MI
A nurse was on duty in the Emergency Room, when a young woman with purple
hair styled into a punk rocker Mohawk, sporting a variety of
Submitted by RN no name
As a new, young MD doing his residency in OB, I was quite
This Dr. wouldn't submit his name.
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