Pricing of Greek CDS, 10Y Bond Yields Sense Risk (CDS 399bps, 10Y 6.85%)

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Interesting times folks.  Here is an update on Greece and Euro-land.  ZeroHedge has a detailed post showing a flow chart of potential scenarios (via Barclay's).  The recent move in the US Dollar Index above the 200dma could be related to all of this.  Remember institutions were building USD positions in Nov/Dec? Credit risk is reflected in Greek CDS as well as 10 Year Bond Yields.  CMA Datavision houses data on credit default swaps (insurance premium to protect against debt default) for a fee but provide most active wideners/tighteners, sovereign CDS and index fair values to the general public for free.  Greece 5 year CDS closed at 399.23 basis points on Friday, up from 175bps in November, 2009 (Chart).  Currently Dubai trades at 493.13bps and Venezuela at 1017.13 basis points!  It is a reminder of what happened in 2008 when Lehman, credit default swap sellers and counterparties all went bust.  Read the articles and watch the Davos video below.  From the first video, European Union Economic and Monetary Affairs Commissioner Joaquin Almunia said Greece will NOT DEFAULT, there will be a "fiscal adjustment for imbalances".  I also put up a chart of the Greek 10 Year Yield hitting 6.85% on Friday, up from 4.6% in November, 2009.  It will be interesting to see what happens with EUR/USD and Gold when news is eventually sold.

News Links
Greek Debt Swap Counterparty Risk May ‘Spook’ Market (Bloomberg)
A Greek [Default/Bailout]: Flowcharting The Dominoes (
Who’s selling Greek CDS? (FT Alphaville)
Germany’s Bruederle Rules Out Bailout for Greece (Bloomberg)
BNPP: Domestic And Foreign Banks Exposed To Greece (
Greece 5-Year CDS Reaches New Record Wide Of 397 BPs -CMA (1/28/10, WSJ)
Randolph (IHS Global Insight) Says Greece Won't Default on Debt Obligations, CDS (Bloomberg Video)
Billionaire Soros Says Confident Greece ‘Will Make It’ (Bloomberg)
The Greece Dilemma (Nouriel Roubini at
Joaquin Almunia: we don't need a Greek bail-out because the country won't default (Telegraph)
2nd UPDATE: Greek-German 10-Year Yield Spread Hits New Highs (1/27/10, WSJ)
Greek 10-Yr GGB Spread Over Bunds Hits 300 BPs; CDS Widens(1/20/10, WSJ)

Below are Bloomberg videos at Davos featuring EU and Greek leaders.

EU's Almunia Says 'No Plan B' to Plug Greek Deficit"

Greece Prime Minister: Papandreou Says Rumors Hurt Greece, Not Seeking Aid

Greece Finance Minister Papaconstantinou at Davos, "May Make Deeper Budget Cuts"

Greek 10 Year Bond Yield (from Bloomberg)

Geopolitical News Volatility: China, US, Taiwan Arms Deal, Internet, Europe, Iran, Venezuela (1/31/2010)

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Geo-political and corporate related tensions are building, I noticed this when browsing my news feed and twitter stream.  Here are recent news links of interest not in any particular order but in late January 2010.  Squash the beef, we don't want any geopolitical-black swans.  If you see updated news provide a link below.

U.S. companies involved in Taiwan arms sales (Reuters)
China's strident tone raises concerns among Western governments, analysts (Washington Post)
Clinton warns China to stay the course on Iran nuclear sanctions (LA Times)
China suspends U.S. military visits after Taiwan arms deal (CNN)
China threatens sanctions over arms sale to Taiwan (LA Times)
Video: US reacts to Chinese hostility over arms deal ITN NEWS (Youtube)
China condemns the United States over an arms deal with Taiwan (Reuters Video, CCTV)
China, Iran Prompt U.S. Air-Sea Battle Plan in Strategy Review (BusinessWeek)
How should Europe respond to China's strident rise? (
UK's Mandelson: Ludicrous To Compare UK's Situation To Greece (WSJ)
Protesting Firefighters Clash With Police in Spain (SKY Video)
ECFA to endanger Taiwan democracy and human right: warned Chinese democracy activists (TaiwanNews)
Colombia protest over Venezuela 'airspace violation' (BBC News)
Protests continue in Venezuela following 2 deaths (CNN)
Chavez Says Protests May Require ‘Radical’ Response (BusinessWeek)
Canada concerned over free speech rights in Venezuela (AFP)
WTF? Hugo Chavez Mouthpiece Says U.S. Hit Haiti With 'Earthquake Weapon' (FOX)
U.S. surrounds Iran with missile defenses (
Fears that US missiles move may be exploited by Iran's hardliners (
*'Iran will deliver telling blow to global powers on Feb. 11' (PressTV)
Iran Continues Focus on Outside Provocateurs, Now Blaming Germany (New York Times)
Iran accuses U.S. of seeking to use Internet against it (Washington Post/Reuters)
Iran Warns Against Protests During Islamic Republic Anniversary (BusinessWeek)
Israel "responsible" on Iran, Obama adviser says (Reuters)
Iran leader predicts destruction of Israel (AFP)
Critical Infrastructure under Siege from Cyber Attacks (PC World)
Critical infrastructure execs fear China, But they fear the US more (TheRegister)
China fires back at Hillary Clinton on internet restrictions (
China launches its own search engine 'Goojje' in midst of row with Google (Beforeitsnews)
Japan Protests To Russia After Boats Fired At (
Moscow police break up anti-Kremlin protest (
Report: Russia to sell Libya weapons in $1.8 billion deal (CNN)
Political Uncertainty Grips a Russian Republic (New York Times)
Bin Laden deplores climate change, Targets USD (Al Jazeera)
Bin Laden warns US of more attacks (Al Jazeera)
Israel: Hamas commander killed in Dubai was key arms smuggler (ChristianScienceMonitor)
*Palestinians get 1st private equity fund designed to boost economy (CanadianPress) -ETF available?
Leaders of Turkey and Israel Clash at Davos Panel (NewYorkTimes)
Israel-Turkey ties strain again over TV show (AFP)
Video:  Turkish PM storms off in Gaza row (BBC News)

VIX Update From Davos, Switzerland (Video)

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Dr. Phil Pearlman on reported live from Davos, Switzerland on Friday at the World Economic Forum featuring Adam Warner, author of and Options Volatility Trading (book). Also follow them on twitter @ppearlman, @agwarner for good info. Dr. Phil and Adam discussed the recent move in the $VIX (Volatility Index) and what it's implying about the underlying S&P 500 Index. Adam talks about the dynamics of implied volatility, the quick change in sentiment (VIX spiked 50% in a week (18-27), how the measure is still low relative to 2008 and if technical analysis is applicable.  Adam noted that it was the biggest weekly move in the VIX since 2008.  It is reflected in the chart below.  Keep in mind the VIX hit 90 in 2008 and we are at 24! So there would need to be 5 black swans in a row to retest those levels, imo.  Never know, anything can happen. They both gave market predictions as well.

Weekly VIX Chart from August 2008 (Courtesy of

IYR Intraday Descending Triangle and Carnage, Technical Analysis | DVtv

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As you've noticed, with the boost in volatility lately I've been showing intra-day trading activity.  I use Screenr to record my computer screen.  Below I presented live intra-day trading activity of IYR (iShares Real Estate ETF) inside a bearish "descending triangle", where price makes lower highs after an initial spike and rides floor support towards the downtrend vertex point. Learn more about descending triangles at Chart School.  Obviously breakouts/breakdowns fail half the time so trades warrant a decent stop and/or hedge imo.  In this case downside momentum was dominating the market so I thought there was better risk/reward on the downside. It ended up taking out support.  I've seen this work (and fail) across many different time frames. It is just analyzing the supply/demand of stock (via traders) over time measured in price.  I was thinking that a long term example would be if the S&P tested the 2002/2009 lows again and broke down right at the 2007 downtrend.  Hopefully the downtrend demon from 2007 gets violated soon so we don't have to experience that.  If it does happen I'm sure it would be priced in gold not Dollars.  The high speed rail idea could boost jobs and economic activity... First is a live streaming video of IYR and then a snapshot of IYR at the close (chart from

IYR (chart courtesy of

How Low Does Tech Go, Potential Support for QQQQ, AAPL, GOOG, MSFT, QCOM

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I've been on a massive charting spree given the sell off and volatility. This post is dedicated to technical analysis on QQQQ (Nasdaq ETF) and its largest holdings, $AAPL (Apple), $GOOG (Google), $MSFT (Microsoft) and $QCOM (Qualcomm).  Charts are courtesy of

QQQQ:  I'd like it exhausted at $37.50 (June, 2009 support) but that's just me.

AAPL:  Apple is being mashed in an interesting triangle.  It is 15.66% of QQQQ.  If people continue to exit this stock, $180-ish looks like decent support from August, 2008 and $150 from June, 2009.  Watch Apple to guide the QQQQ.

Senate Reappoints Bernanke For New Term (77/23), Traders Sell SPY Into Close

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"Bernanke Clears Senate Hurdle for Confirmation as Fed Chief" (Bloomberg). $SPY was riding an uptrend channel in the last half hour of trading but broke below floor (109) and uptrend support and closed at 108.55 (-1.15%).  See video and snapshot of the close.  Streaming chart is from Any thoughts going forward?

(Chart courtesy of

Wall Street 2: Money Never Sleeps Trailer Video

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Here is the Wall Street 2: Money Never Sleeps trailer. Yes!

Hat tip Reformed Broker

Technical Analysis $SPY, $ITY, $IWM, $DIA Charts 1/28/2010, Obama State of Union Overnight Hope Trade Today

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So much for Obamas State of the Union overnight hope trade! Last night I showed you Screenr videos of traders bidding up the March S&P future during Obamas speech. They almost drove it to 50DMA resistance before the big plunge.  Watch out for the Bernanke vote as well.

Today it looks the risk trade couldn't hold and the downtrend will resume, we will see how the markets close.  Qualcomm's forecast, Greece bond sell off and US Dollar Index rise crushed the hope trade (Stocks, Greek Bonds, Commodities Fall; Dollar, Treasuries Rise -Bloomberg) Also a glitch went down at the NYSE (NYSE Says Error Delays Delivery of Price Quote Data -Bloomberg) and the Senate is voting for Bernanke's second term today (Final Bernanke vote may come Thursday, Reid says -MarketWatch). The Dow is down 149 points as of 12:32pm.  Here are 9 month charts of $SPY, $IYT, $IWM, $IYR, $DIA and $VIX with trend lines, 50 day moving average and support/resistance levels.

First of $SPY (S&P 500 ETF): After the multi-day plunge a squeeze was inevitable and the 50 day moving average resistance level looked like a target. On the 9 month chart it pierced through an uptrend channel (1) and is trading at 108.12, 3 points under the 50DMA 111.36 (2).  If the S&P stays weak $102.5 (3) and ultimately $95 (4) are support levels.  It's just a historical look at selling exhaustion which is now considered support. 

Next up $DIA (Dow):  Same type of deal, it broke through uptrend support and the 50dma however it is near a support level from October at $100.  That could easily get taken out but if there's a bounce it would be there in my opinion.  Minor support occurs at at 97.5 and 95 it looks like.  I'm thinking the 200DMA $93.20 is big support and if it breaks that $87.5 (June highs).  We'll see what happens.  There is always a chance it retests the downtrend demon again (long term downtrend).

S&P E-Mini Future Breaks Out During Obama State of Union (Live Chart Action During Speech)

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Below, watch the E-mini S&P 500 March Future break through ceiling resistance levels at various time frames. ESH10 is heading towards the 50 day moving average resistance level of 1,110. As I write it is trading at 1,103. It's interesting that the USDX (US Dollar Index) and $SSEC (China Shanghai Composite) pierced through their 200dmas on the upside and downside respectively (h/t Bespoke). Judgment day is near for the risk trade imo. I took a screen shot of an OptionsXpress Flexchart during Obama's State of the Union address (full speech video). Next time I'll play some Marilyn Manson for you loud in the background.

Obama State of the Union Speech Video 1/27/2010, Transcript

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Here is Barack Obama's 2010 State of the Union Address from 1/27/2010. I provided the full video and transcript. You can find everything at

Videos from iPad Keynote by Steve Jobs and Introduction Video

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iPad is set to be released in late March, 2010 for $499.  Here are videos from the keynote and iPad introduction.   Interesting piece of technology here.  The text below is from the iPad press release at
"iPad features 12 next-generation Multi-Touch applications. Every app works in both portrait and landscape, automatically animating between views as the user rotates iPad in any direction. The precise Multi-Touch interface makes surfing the web on iPad an entirely new experience, dramatically more interactive and intimate than on a computer. Reading and sending email is fun and easy on iPad’s large screen and almost full-size “soft” keyboard. Import photos from a Mac®, PC or digital camera, see them organized as albums, and enjoy and share them using iPad’s elegant slideshows. Watch movies, TV shows and YouTube, all in HD or flip through pages of an e-book you downloaded from Apple’s new iBookstore while listening to your music collection."
"Pricing & Availability

iPad will be available in late March worldwide for a suggested retail price of $499 (US) for the 16GB model, $599 (US) for the 32GB model, $699 (US) for the 64GB model. The Wi-Fi + 3G models of iPad will be available in April in the US and selected countries for a suggested retail price of $629 (US) for the 16GB model, $729 (US) for the 32GB model and $829 (US) for the 64GB model. iPad will be sold in the US through the Apple Store® (, Apple’s retail stores and select Apple Authorized Resellers. International pricing and worldwide availability will be announced at a later date. iBookstore will be available in the US at launch.

FOMC STATEMENT 1/27/2010: Inflation Subdued, 0-1/4% Fed Rate, $SPY Short Squeeze, Triangles and Parallelograms

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FYI, not a surprise about 0-1/4. Nice short squeeze.  Shout out to triangles and parallelograms.  Intra-day chart courtesy of

"Federal Reserve Press Release

Release Date: January 27, 2010
For immediate release

Information received since the Federal Open Market Committee met in December suggests that economic activity has continued to strengthen and that the deterioration in the labor market is abating. Household spending is expanding at a moderate rate but remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software appears to be picking up, but investment in structures is still contracting and employers remain reluctant to add to payrolls. Firms have brought inventory stocks into better alignment with sales. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability.

With substantial resource slack continuing to restrain cost pressures and with longer-term inflation expectations stable, inflation is likely to be subdued for some time.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. In order to promote a smooth transition in markets, the Committee is gradually slowing the pace of these purchases, and it anticipates that these transactions will be executed by the end of the first quarter. The Committee will continue to evaluate its purchases of securities in light of the evolving economic outlook and conditions in financial markets.

In light of improved functioning of financial markets, the Federal Reserve will be closing the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Primary Dealer Credit Facility, and the Term Securities Lending Facility on February 1, as previously announced. In addition, the temporary liquidity swap arrangements between the Federal Reserve and other central banks will expire on February 1. The Federal Reserve is in the process of winding down its Term Auction Facility: $50 billion in 28-day credit will be offered on February 8 and $25 billion in 28-day credit wil be offered at the final auction on March 8. The anticipated expiration dates for the Term Asset-Backed Securities Loan Facility remain set at June 30 for loans backed by new-issue commercial mortgage-backed securities and March 31 for loans backed by all other types of collateral. The Federal Reserve is prepared to modify these plans if necessary to support financial stability and economic growth.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting against the policy action was Thomas M. Hoenig, who believed that economic and financial conditions had changed sufficiently that the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted."

Video: Nouriel Roubini on Economy, Pre-State of Union (CitizenTube)

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From Newsweek on Youtube.

For a more in depth 2010 economic outlook by Nouriel Roubini see his speech in Hong Kong at the Asian Financial Forum.

A Ratio Put Spread Traded on SPY Today (120K/240K)

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Big volume in SPY put options are always interesting. I remember back in July, 2009, a total of 740,000 SPY puts traded in one day and was the largest trade ever conducted on the options market. According to articles and institutional traders it was an out of the money ratio put back-spread rolled from August to December.  If it was in fact a back-spread they bought cheap downside protection and sold the higher strike to fully hedge the purchase if SPY kept rising.  Which is exactly what happened.

Today I saw that SPY was on the most actives list on the ISE put/call widget on the sidebar.  Digging deeper, according to Crimson Mind, 120,000 March $100 puts and 240,000 March $85 puts traded with 283,000 and 379,000 open respectively.  They noted that puts were rolled from December to March in October, 2009.
"note that on Oct 20 one investor rolled Dec 95/82 ratio put spread (120K/240K) to March 100/85 ratio put spread (120K/240K) - Oct 20 - 120,000 March 10 puts traded at $3.21 and 240,000 March 85 puts traded at $1.01 (120k) and $1.02 (120k)" (CrimsonMind)

No idea about the ticks but here are some ideas. Chris McKhann of OptionMonster thought it was a protective ratio put spread but did mention it could have been "buying back" an existing back-spread given the open interest (video). Fred Ruffy at thought it was a new backspread (link). The S&P March e-mini future is down again tonight, -0.66%.

FXI Under 200DMA, China Has Mini Real Estate Bubble According to NAI

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FXI broke below an uptrend channel and most recently the 200 day moving average. I remember traders were playing with near term FXI puts last August and economist Andy Xie said China was overvalued. For the last 6 months FXI bounced around between $38-$45. FXI closed at $38.55 today so it is unchanged on a 6 month basis. Still it broke some barriers on decent volume and could be anticipating a slowdown in China. Recently China reported very strong productivity numbers (December HSBC China Manufacturing PMI Hit 56.1 vs. 44.8 in March (Chart)). However, with the Bank of China tightening bank reserve requirements and underlying market jitters about a possible rate hike and/or Yuan de-peg from the $US (Goldman's O'Neill Says China Yuan May Rise More Than 5%), volatility could continue as the flow of goods/capital adapt to the different environment, imho.

6-Month FXI (iShares FTSE/Xinhua China 25) -

FXI 1-Year Chart

FXI 3-Year Chart

2010 Detroit Auto Show, Year of Electric Car (Video on Electric Avenue)

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Video courtesy of ClearSkiesNews. See cars on Electric Avenue at the 2010 International Auto Show in Detroit. Also, they showed the first electric car built in 1922.

Paul Kedrosky Talks About Riding Macro Trends on MissTrade TV (Video)

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Paul Kedrosky (research consultant at hedge fund Ten Asset Management, venture capitalist and blogger at Infectious Greed) talks about riding macro trends w/ Matt Davio on MissTrade TV. Interesting conversation. Find the full video here.

Bob Prechter on CNBC 1/26/2010, Signals Similar to Top of 2007

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He is seeing signals similar to the top of 2007 (extreme optimism, extreme valuation, low dividend yields, high P/E). He says wait for the ultimate buying opportunity.

I'm an affiliate of his firm, E-wave International, here is a free 2010 report.

DVtv 1/26/2010: IWM Broke 50DMA, SPY, DIA, SRS, VIX Into Close

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At a coffee shop I put up a live screenr of showing SPY, IWM, DIA, SRS, VIX trading activity, technicals on multiple time frames. There's a little coffee shop volatility in the background. $IWM (Russell 2000 Index ETF) took out the 50 day moving average today, following everybody else. Interesting day indeed folks. The 2007 downtrend demon injured a few ETFs. Where are the market paramedics? It also looks like someone is protecting a large portfolio of Spdrs ($SPY) which I'll write about later. Today goes well with the recent ride in $VIX. The last few weeks were a decent time to run with put protection. Ladies and gentleman I present to you DVtv Episode #2 on Screenr. Once I get 4G I can do a post on top of the bean.

Episode #1, 1/24/2010: Technical Analysis on SPY, DIA, IWM, SRS, IYT, DRYS, DXY, VIX

S&P E-Mini Future Down .6%, China Raised Bank Reserve Ratio By .5% (ES_F, IWM)

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This will be an interesting week for the markets.

Overnight the March S&P E-Mini future is down 0.6%. All major index ETFs (SPY, DIA, QQQQ, IYT) are under their 50 day moving average except for $IWM (Russell 2000).  So keep an eye on the Russell 2000 index imo.  IWM is right around October support after piercing it.

ESH10, 1 Year (E-Mini S&P March Future) Courtesy of Optionsxpress

$IWM (Russell 2000 iShares) Courtesy of

Economics Rap Videos: Hayek vs. Keynes and Economics 101

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After big banks failed in 2008 which froze up the free market and led to trillion Dollar Government bailouts (and fiscal debt crisis on the way), these videos are dedicated to Keynesian and Austrian economics.  I saw a rap battle between economists/theorists Hayek and Keynes floating around Twitter ("Fear the Boom and Bust" a Hayek vs. Keynes Rap Anthem") h/t @Dogwood.  I added two additional videos that you might find amusing.  Are there any raps about credit-default swaps on collateralized debt obligations of CDOs of asset backed securities?

Correction of 10-15%? Prechter Thinks It Will Be Deeper and Longer (Reuters)

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Lets hope Robert Prechter is wrong... He thinks "this wave structure is the LARGEST that we've lived through" (CNBC Interview, 11/23/2009). He sees "shelter in Treasury bills" and is going against some big xTARPies that are optimistic on 2010! Read the article.

Next bear market phase starting: Prechter

NEW YORK (Reuters) - The next leg of a bear market in stocks has probably started and gold and corporate bonds are likely to slide as the U.S. economy suffers long-term weakness, technical analyst Robert Prechter said on Monday.

Also, read free Elliot Wave International reports below. I'm an affiliate.

$VIX Had Wild Ride Last Week, VIX Cash Above Futures and VIX Volatility Sold off, Watch Action From The Options Pit

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I missed the action from the VIX pit last week. Luckily OptionMonster had it on demand. Here is a summary of the last 3 videos (click the links). On January 20, when $VIX was at 19, traders bought February 40 and 32.5 calls and on 1/21 when Obama came out with his bank plan traders bid up the 32.5 calls. On Friday 1/22 the $VIX closed at $27.31 and someone bought protection against a double in the $VIX, Feb 42.5 calls. VIX cash is now above all of the futures (Feb VIX future closed at 24.75, March 25.10, April 25.35, May 25.35, June 25.30, July 25.40, August 25.25 data at I provided a chart below of $VIX cash and implied volatility of the VIX itself. Look at the volatility spike in volatility anticipating volatility. I embedded the video from Friday.  Will VIX futures catch a bid here, bottom out and widen or will VIX cash stay relatively stable in the 20s?  The curve is flat compared to late November, interesting.

$VIX Index (Courtesy of

Implied Volatility of the $VIX (Courtesy of

Hectic Week For Markets, January Now In Red, What Caused Sell Off? SPX, DJIA

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Before I dig into charts, wtf caused the sell off? Here are a few ideas, comment more..
  • Bernanke’s Bid for a Second Term at the Fed Hits Resistance (New York Times)
  • China to step up efforts on overheating: analysts (AFP)
  • Emergency Unemployment Compensation, Claims Continuing to Grow (SeekingAlpha)
  • Homebuilders Index Slips Again In January, Confirming The Housing Double Dip (BusinessInsider)
  • Obama's Volcker Rule Outlaws Trading, Hedge Funds at Banks (Video/Text) (DV)
  • ECB Opinion on Greek Proposal Jolts Markets (WSJ)
  • UPDATE: Greece Sovereign CDS Spreads Widen To New Record High (WSJ)
  • China Targets Inflation as Economy Runs Hot (WSJ)
  • SPY, IWM, DIA Downtrend Demon™ Scares Traders, DIA Pierced 50 Day Moving Average (DV)

The S&P 500 and Dow are now in the red for January/2010 and stabbed through their 50 day moving averages. At the close The S&P  was down -2.09% and Dow -2.45% ytd.

S&P 500 LARGE CAP INDEX (YTD - January 22, 2010)


Charts courtesy of

Is S&P 500 Going Higher or Lower in 2010? Chart Analysis Video

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MarketClub has a free video analysis of the S&P 500 chart for 2010 titled "Where should YOU be in the S&P 500?".
"In today’s short video we take a fresh look at S&P 500 and what we think it is going to do in 2010.  We will also be looking at an important “Trade Triangle” that has just flashed an important signal for this index."

If you remember the videos from late December on the S&P and Dow they mentioned the long term downtrend and fibonacci retracements.  We sold off violently last week right at downtrend resistance.  Adam Hewison provides an update on the S&P using his trade triangle signals.  I am an affiliate partner of MarketClub for full disclosure.  The link above is to a free vid.

January 2010 Updates From Bob Janjuah (RBS Analyst) and Follow Up

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Courtesy of
1) Deep Thoughts From Bob Janjuah - January 2010
2) Deep, Grammatically-Incorrect Follow Up From Bob (Janjuah).

Technical Analysis on SPY, DIA, IWM, SRS, IYT, DRYS, DXY, VIX via Screenr

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I'm testing out Screenr on my blog. It's a video of the screen while I look at charts on  I'll review the last two weeks in detail next as trading activity, catalysts and technicals converged. Going forward I might use Screenr to record live intra-day trading setups instead of using static charts.  Below I clicked through charts of SPY, DIA, IWM, IYT, DRYS, SRS, DXY ($USD) and VIX with trends, volume and moving averages.  Obama talks about the Volcker Rule (bank plan) in the background for your listening pleasure.

Last Conan O'brien Tonight Show Episode, Last Words to Fans (Videos)

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Here is Conan's last show featuring Will Ferrell, Tom Hanks and Steve Carell. I embedded his first episode from June 1, 2009 when Will Ferrell was on. He said he can't host another show for 7 months. If you don't know what happened here is the Chinese version.  In the first video he gives his last words to fans and NBC, the second is the Free Bird performance with Will Ferrell and the last video is the full episode (might cut out after a few weeks). Where is he going next, Fox? The last episodes were amazing.

Illinois Insolvency, Chicago Commercial Real Estate Outlook, Warehouse Vacancies Hit 12.1%

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Here is a fiscal and CRE outlook for Illinois and Chicago.  Illinois is on the brink of bankruptcy with "$5.1 Billion of unpaid bills" -Illinois Comptroller Dan Hynes .  Will they send a pension fund to bankruptcy court?   A Crain's Chicago interview brought that up, Illinois enters a state of insolvency (Crain's Chicago VIDEO).  The Illinois 2009 CAFR (annual financial report) should be out soon, all I see is 2008.  In other news, California might issue IOU's again next year.  Cali issued IOUs in July of 2009.  How long can municipalities operate without raising taxes?  It's either that or municipal mergers, issue MORE debt for expenses (Illinois Leads $9.8 Billion Muni Sales Planned for Early 2010, *Illinois Pays Pension Bond Premium as Budget Fix Eludes State), entity bankruptcy or cop a Fed bailout (inflation tax).  How the hell does this end?

Also there's mucho industrial space out there.  The vacancy rate hit 12.15% in Q4 2009 at 159 Million Square Feet, "highest it's been in 20 years" (Warehouse Vacancies 1/20/2010 (Crain's Chicago VIDEO).  Crain's Chicago also had a 2010 commercial real estate outlook video with analysis from Copley Advisors.  The office vacancy rate hit 16.2% in Q4 2009 and Copley thinks it will hit 20% (from last downturn).

Previous municipal posts form 2009:
California Issues IOUs, California GO Bond Bets
Moody's Downgrades Detroit $781M GO Debt Further Into Junk
Oakland, California Denies Bankruptcy Rumors, General Fund Drying Up
Jefferson County Volatility, Interest Rate Swaps to National Guard

SPY, IWM, DIA Downtrend Demon Scares Traders, DIA Pierced 50 Day Moving Average

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An update from my previous post: $TRAN, $INDU, $RUT, $SPX Fighting Downtrend Demon From 2007 (IYT, SPY, DIA, IWM, Nasdaq an Outlier) on January 13. It appears that the Downtrend Demon™ scared away some traders recently with the sell off. A variety of catalysts could have been responsible (Obama financial reform, unemployment claims, China tightening, sell earnings? etc.) but it was really the demon imo.  Check out the weekly charts.   SPY, IWM and DIA could not get over the 200 week moving average (in red) and the downtrend from the 2007 market highs.  Also, here we go again with a moving average team work exercise for the index ETFs.  DIA breached its 50 day moving average and a near term uptrend channel as you can see on the chart.  So will SPY (S&P 500) and IWM (Russell small caps) jump off the bridge after DIA, or will they end up saving it from the abyss.  Volume was high but it was also high in October.  I added support levels.  Read more for all charts if on main page.

Nouriel Roubini Speech at Asian Financial Forum, 1/21/2010 (Video)

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Nouriel Roubini (NYU Professor, economist) gave a speech at the Asian Financial Forum (AFF) in Hong Kong on January 21, 2010.  It's a great speech/lecture and you can learn real time macroeconomics for free.  He thinks we see a market correction in the second half of the year. Here are more points he made:
  • Market correction in second half of year
  • Pessimistic, sub-par recovery with below trend growth, U-shape recovery
  • Damned if you do, damned if you don't (de-stimulus risks deflation, more stimulus risks inflation)
  • Good news: light at end of tunnel, gives credit to policy makers for backstopping freefall
  • Labor market remains very weak, unemployment in US 10%, creation of jobs < labor force
  • Private sector debt ratios have stabilized at a high level, barley starting to fall
  • Private losses being socialized by public sector in major way
  • More savings will weigh on consumption, major component of GDP
  • In a typical V-shaped recovery capex spending is very strong, now 1/3 of capacity not utilized
  • Glut of capacity, housing, commercial real estate, financial system/credit markets still damaged
  • Still credit contraction in system, when it's time to re-lever economy financing will be limited
  • Affect of fiscal policy becomes drag on economic growth in US, Europe, Japan in 2nd half
  • If oversaving countries don't pick up overspenders slack it will affect overcapacity around world
  • EMERGING MARKETS (China, Asia) will see a V-shaped recovery, growth rate 5-8%
  • Emerging markets did not have leveraged household sector that ruined US, Europe
  • China cannot be "main locomotive" for growth.......
  • Emerging markets were net exporters w/ cheap currencies, they no longer have US buying...
  • Switched from net exports to public demand (fiscal stimulus, infrastructure), must switch to private consumption, will take years
  • More deflationary pressures in advanced economies (slack in goods, pricing, labor markets)
  • Base money doubled but not inflationary due to the collapse in velocity, hoarding by banks..
  • Inflation could come back in 2012 (expected inflation, commodity chasing, weakened US Dollar,  growth...)
  • Recovery since March is a shift to more risky assets from T-bills, wall of liquidity chasing assets, momentum, dollar funded carry trade...

Roubini Speech at AFF ( video link)

More speeches by Roubini can be found here.

Obama's Volcker Rule Outlaws Trading, Hedge Funds at Banks (Video/Text)

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Obama, with insight from Paul Volcker, announced today that he's outlawing proprietary trading and in-house hedge/private equity funds at banks.  They would be allowed to trade on behalf of clients only.  How does this affect Goldman Sachs?   10% of their revenues come from proprietary trading and they said it's hard to distinguish from client trading and "proprietary risk".  Also, Goldman Sachs CFO: Pure 'Walled Off' Proprietary Business At Firm Not Very Big. Well, it was fun for the ex-TARP banks while it lasted.

Goldman Will Benefit From Obama’s Proposal, Bove Says (BusinessWeek)
Goldman Sachs Calls Idea of Dropping Bank Status ‘Unrealistic’ (BusinessWeek)
The Beginning Of The End For Wall Street's Various Prop Trading Desks (ZeroHedge)
The Volcker Rule & AIG: It’s Not About Prop Trading (ZeroHedge)

The market didn't buy the news, nor the unemployment insurance data. $SPY (S&P 500 ETF) ended down 1.92% at 111.70, testing the 50 day moving average. I'll do more technicals on next post.  Below is Obama's press release and announcement video.

SPY Intraday (

"For Immediate Release
January 21, 2010
Remarks by the President on Financial Reform
Diplomatic Reception Room

11:34 A.M. EST

THE PRESIDENT: Good morning, everybody. I just had a very productive meeting with two members of my Economic Recovery Advisory Board: Paul Volcker, who's the former chair of the Federal Reserve Board; and Bill Donaldson, previously the head of the SEC. And I deeply appreciate the counsel of these two leaders and the board that they've offered as we have dealt with a broad array of very difficult economic challenges.

Over the past two years, more than seven million Americans have lost their jobs in the deepest recession our country has known in generations. Rarely does a day go by that I don't hear from folks who are hurting. And every day, we are working to put our economy back on track and put America back to work. But even as we dig our way out of this deep hole, it's important that we not lose sight of what led us into this mess in the first place.

This economic crisis began as a financial crisis, when banks and financial institutions took huge, reckless risks in pursuit of quick profits and massive bonuses. When the dust settled, and this binge of irresponsibility was over, several of the world's oldest and largest financial institutions had collapsed, or were on the verge of doing so. Markets plummeted, credit dried up, and jobs were vanishing by the hundreds of thousands each month. We were on the precipice of a second Great Depression.

To avoid this calamity, the American people -- who were already struggling in their own right -- were forced to rescue financial firms facing crises largely of their own creation. And that rescue, undertaken by the previous administration, was deeply offensive but it was a necessary thing to do, and it succeeded in stabilizing the financial system and helping to avert that depression.

Since that time, over the past year, my administration has recovered most of what the federal government provided to banks. And last week, I proposed a fee to be paid by the largest financial firms in order to recover every last dime. But that's not all we have to do. We have to enact common-sense reforms that will protect American taxpayers -– and the American economy -– from future crises as well.

For while the financial system is far stronger today than it was one year ago, it's still operating under the same rules that led to its near collapse. These are rules that allowed firms to act contrary to the interests of customers; to conceal their exposure to debt through complex financial dealings; to benefit from taxpayer-insured deposits while making speculative investments; and to take on risks so vast that they posed threats to the entire system.

That's why we are seeking reforms to protect consumers; we intend to close loopholes that allowed big financial firms to trade risky financial products like credit defaults swaps and other derivatives without oversight; to identify system-wide risks that could cause a meltdown; to strengthen capital and liquidity requirements to make the system more stable; and to ensure that the failure of any large firm does not take the entire economy down with it. Never again will the American taxpayer be held hostage by a bank that is "too big to fail."

Now, limits on the risks major financial firms can take are central to the reforms that I've proposed. They are central to the legislation that has passed the House under the leadership of Chairman Barney Frank, and that we're working to pass in the Senate under the leadership of Chairman Chris Dodd. As part of these efforts, today I'm proposing two additional reforms that I believe will strengthen the financial system while preventing future crises.

First, we should no longer allow banks to stray too far from their central mission of serving their customers. In recent years, too many financial firms have put taxpayer money at risk by operating hedge funds and private equity funds and making riskier investments to reap a quick reward. And these firms have taken these risks while benefiting from special financial privileges that are reserved only for banks.

Our government provides deposit insurance and other safeguards and guarantees to firms that operate banks. We do so because a stable and reliable banking system promotes sustained growth, and because we learned how dangerous the failure of that system can be during the Great Depression.

But these privileges were not created to bestow banks operating hedge funds or private equity funds with an unfair advantage. When banks benefit from the safety net that taxpayers provide –- which includes lower-cost capital –- it is not appropriate for them to turn around and use that cheap money to trade for profit. And that is especially true when this kind of trading often puts banks in direct conflict with their customers' interests.

The fact is, these kinds of trading operations can create enormous and costly risks, endangering the entire bank if things go wrong. We simply cannot accept a system in which hedge funds or private equity firms inside banks can place huge, risky bets that are subsidized by taxpayers and that could pose a conflict of interest. And we cannot accept a system in which shareholders make money on these operations if the bank wins but taxpayers foot the bill if the bank loses.

It's for these reasons that I'm proposing a simple and common-sense reform, which we're calling the "Volcker Rule" -- after this tall guy behind me. Banks will no longer be allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers. If financial firms want to trade for profit, that's something they're free to do. Indeed, doing so –- responsibly –- is a good thing for the markets and the economy. But these firms should not be allowed to run these hedge funds and private equities funds while running a bank backed by the American people.

In addition, as part of our efforts to protect against future crises, I'm also proposing that we prevent the further consolidation of our financial system. There has long been a deposit cap in place to guard against too much risk being concentrated in a single bank. The same principle should apply to wider forms of funding employed by large financial institutions in today's economy. The American people will not be served by a financial system that comprises just a few massive firms. That's not good for consumers; it's not good for the economy. And through this policy, that is an outcome we will avoid.

My message to members of Congress of both parties is that we have to get this done. And my message to leaders of the financial industry is to work with us, and not against us, on needed reforms. I welcome constructive input from folks in the financial sector. But what we've seen so far, in recent weeks, is an army of industry lobbyists from Wall Street descending on Capitol Hill to try and block basic and common-sense rules of the road that would protect our economy and the American people.

So if these folks want a fight, it's a fight I'm ready to have. And my resolve is only strengthened when I see a return to old practices at some of the very firms fighting reform; and when I see soaring profits and obscene bonuses at some of the very firms claiming that they can't lend more to small business, they can't keep credit card rates low, they can't pay a fee to refund taxpayers for the bailout without passing on the cost to shareholders or customers -- that's the claims they're making. It's exactly this kind of irresponsibility that makes clear reform is necessary.

We've come through a terrible crisis. The American people have paid a very high price. We simply cannot return to business as usual. That's why we're going to ensure that Wall Street pays back the American people for the bailout. That's why we're going to rein in the excess and abuse that nearly brought down our financial system. That's why we're going to pass these reforms into law.

Thank you very much, everybody.

11:42 A.M. EST" (Remarks by the President on Financial Reform,

New York Times To Charge Fee To Read Additional Articles in 2011 ($NYT)

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The New York Times is pulling the trigger on a metered system in 2011 where they will charge a fee to read additional articles.  The Times to Charge for Frequent Access to Its Web Site (New York Times):

"Beginning in January 2011, unlimited access to will require a paper subscription or payment of a flat fee."

PBS Newshour had Bill Mitchell (Poyner Institute) and Bill Grueskin (Former Managing Editor at Wall Street Journal) on giving their views on this risk. I found the PBS Newshour video through Google search and it is quality news, imo. Subsidized!

As a news junkie and constant link pimp to financial articles found on Google News, even if they are summaries on WSJ, I will not link to something I can't read at least a paragraph on. I will just find a similar story somewhere else that offers it for free. If a story is THAT good and recommended on Twitter, I'd more likely pay a fee. But a trend is a trend.... Go to Business Insider to see how freemium news is destroying the pay and advertising models for online publishers.

Keep an eye on $NYT and options.

New York Times will charge for news on website (Reuters, Video)
New York Times Users React To Metered Pay Model Decision: 'Good Luck!'(BusinessInsider)
Conde Nast, New York Times, News Corp. In Talks With Apple About Tablet Content (BusinessInsider)
New York Times: Honest work means honest pay (MediaFile: Reuters UK)
Dialing in a Plan: The Times Installs a Meter on Its Future (MediaDecoder: NewYorkTimes)
New York Times to charge for access to news website (TorontoStar)
New York Times to charge for Web access in 2011 (AP)
How The New York Times Should Charge For Content (

Research Edge 2010 Outlook: Long US Dollar, XLK, XLV, Short GLD, Treasuries and China, Likes Brazil and Germany

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I found an interesting Forbes video featuring Keith McCullough of Research Edge giving his 2010 outlook. He believes the "Fed will raise rates earlier than expected".

2010 Macro bet:  The $USD chases higher interest rates and gold ($GLD) moves lower.  He's buying the US Dollar, shorting short term and intermediate term Treasuries and said he'd be long technology ($XLK) and healthcare ($XLV) to shield against inflation.  He's bullish on Germany and Brazil (high beta exposure) but bearish on China.  Here is the video below from Forbes.

I'm going to chart out $USD, GLD, XLK and XLV on a Google Doc presentation. Any thoughts gold bugs?

Chinese News Reenacts the NBC Conan, Leno, Zucker Debacle

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Hahahahaha... NMANews out of Taiwan does a great reenactment of the NBC, Conan and Leno debacle.

NMA 2010.01.19 動新聞 美國深夜脫口秀大風吹

Hat tip Shiny Objects Blog.

Delinquency Data/January 2010, QABA Community Bank ETF Above July Highs!

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They keep going and going and going and traders continue to buy the news.  Is delinquency capitulation right around the corner?  Here's a CMBS, RMBS and credit card debt news link fest.  $QABA (First Trust NASDAQ ABA Community Bank Index Fund) is just above its highs from August, 2009 (chart) and $KRE is testing $25 resistance, while 140 banks failed in 2009 and 4 so far in 2010.
  • CMBS Delinquencies Continue To Rise (Another Financial Portal)
  • Moody's: CMBS Delinquencies Rise To 4.9%; 8%-9% Seen This Year (WSJ)
  • Fitch: U.S. CMBS Delinquencies up 42bps; Peak Not Until 2012 (Fitch Release)
  • CMBS Delinquencies May Double by 2012, Says Fitch (HousingWire)
  • DC, NYC Loans Driving CMBS Defaults (GlobeSt)
  • Fitch: U.S. CREL CDO Delinquencies Up Slightly to 12.3%; 25% Possible by YE (Fitch Release)
  • Shopping Center Receiverships and Foreclosures Usher In New Year (CoStar)
  • Cincinnati’s real estate problems threaten recovery (BusinessCourier)
  • Lodging Stocks In 2010 (Investopedia)
  • Foreign Investors Revive Optimism in US Real Estate (HousingWire/AFIRE Survey)
  • CMBS downgrades hit Asia-Pacific performance (StructuredCreditInvestor/paywall)
  • Multifamily Predicted to Hit Bottom by Year End (HousingFinance)
  • CMBS delinquencies pass 6 pct for first time (Reuters)
  • Lender Processing Services’ December 2009 Mortgage Monitor Report Reveals One in Every 7.5 Properties Behind on Payments or in Foreclosure, 5.01 Percent of Loans Rolled to More Delinquent Status vs. 1.52 Percent That Improved (Lender Processing Services)
  • More than 13% of Mortgages Delinquent or Foreclosed in November: LPS (HousingWire)
  • Credit-Card Trends Mixed, Capital One/Discover/BAC/AMEX/JPM (WSJ)
  • AmEx 30-Day Managed Delinquencies: 3.7% In Dec Vs 3.9% In Nov (WSJ)
  • Fannie’s Serious Delinquencies Nears 5% in November (HousingWire)
  • S&P Revises Method For Estimating Losses On RMBS From 2005-07 (WSJ)
  • Moody's Puts $572.7 Bln In Alt-A RMBS On Watch For Downgrade (WSJ)
  • New RMBS Seeing Some Success Abroad (HousingWire)
  • Prime Jumbo RMBS Delinquencies Swell to 9.2%: Fitch (HousingWire)
  • Invesco Raises Nearly $149m to Buy RMBS, CMBS (HousingWire)
  • Amherst Projects ‘Awful’ Option ARM Performance (HousingWire)

$QABA (First Trust NASDAQ ABA Community Bank Index Fund) (Courtesy of

Jim Jubak: Nervous About UK Crisis, China Bubble, Likes Emerging Markets (EEM, EMB), What About US Dollar Carry Trade?

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Interesting articles are out by Jim Jubak who writes for MSN Money. He's nervous about a potential UK financial crisis and ratings downgrade. If there's a debt and currency crisis in the UK it could affect the US. He also believes China is in a bubble.

1) The coming economic crisis in China (MSN Money - 1/14/2009)

2) A new world: Where to put your money now (Emerging Markets, EEM, EMB) (MSN Money - 1/11/2010)

3) Anarchy in the UK (and US, too)? (MSN Money - 1/7/2010)

3.5) The UK could drag the US down (MSN Money Video - 1/13/2010)

I wonder what Jim thinks about Roubini's recent view that a sharp reversal in the US Dollar carry trade could affect emerging market asset prices, even though he thinks it could be 6-12 months out from December, 2009 (post w/video).

Elliott Wave 2010 Report Notes Important Wave Formation, Retracements

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First off, full disclosure, I'm an affiliate of Elliott Wave International and visit their site often for their thoughts on the market. They use the Elliot wave principle (wave patterns on charts) to aid with market timing. They are out with a free 13 page annual report on how to position for 2010.
Free 13-page Report: Robert Prechter's firm Elliott Wave International has just released its annual "Most Important Report of 2010." Inside, Prechter delivers hard facts, eye-opening charts and straightforward commentary to help you take advantage of the opportunities – and avoid the dangerous pitfalls – that you will face in 2010. You'll get analysis and forecasts you can act on, and you'll learn what the government's unprecedented involvement in the financial markets will mean for your portfolio in 2010 and beyond. Learn more and download your free report now..
Prechter sees this as a bear market rally and notes that the market retraced the same amount (around 53%) as the 1929 stock market crash so far. He's definitely fading the consensus view that we continue higher with a minor correction along the way. As is said, history doesn't always repeat but it sometimes rhymes. If he's right, "motive" wave C could be right around the corner.

Below is a headline feed from their site:

Chavez Fights 25% Inflation: Devalues Bolivar, Threatens Speculators, Raises Minimum Wage and If You Get Caught Raising Prices, Ownership Transfers To Employees ($VEB/USD)

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By devaluing the Bolivar by 50%, Chavez is trying to discourage imports, boost domestic production and aid oil revenue. He's using a dual exchange rate system to control the movement of capital by using 2.6($VEB/USD) for essential goods and 4.3 ($VEB/USD) for non-essential imports (Bloomberg). Venezuela is currently dealing with a recession, 25% inflation and power outages due to energy rationing. To prevent price increases Chavez said the National Guard would step in to control speculation.. and if business owners got caught raising prices, he'd transfer ownership to the employees! (AFP). Sounds like a chapter in Commanding Heights. Lets hope they don't end up like this ($ZWD). In other news, Chavez raises the minimum wage by 25%.

Venezuelan Bolivar Sinks as Central Bank Skips Dollar Auction (BusinessWeek)
Embattled Chavez lifts minimum wage (UKPA)
Chavez Deems Whale Sperm, Pickles ‘Essential’ Items (Bloomberg)
Some Prices Rise In Venezuela Despite Chavez Seizure Threats (WSJ)
Venezuela military shutters store amid devaluation panic (AFP)
Chavez suspends power cuts in Caracas (AFP)
Venezuelan consumers fear inflation, dump cash after Chávez devalues bolivar (WashPost)
Chavez Devalues Bolivar 50%, First Time Since 2005 (Bloomberg)
US critics of China seize on Venezuela devaluation (Reuters)

7.0 Earthquake Hits Haiti, Video Footage, News, Donate Through Google

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Videos below show horrific destruction from the 7.0-magnitude earthquake that hit Haiti on January 12. Some videos contain graphic footage. They need help, Make a donation through Google Crisis Response (

US takes control of Haiti airport to speed aid (Reuters)
Haiti death toll could reach 200,000 (
Haiti: MSF Treats 2,000 Patients; Working to Expand Surgical Capacity (doctorswithoutborders)
Looters roam streets of Port-au-Prince; death toll mounts (MSNBC)
France proposes strategies for building Haiti's future after earthquake (Washington Post)
UN: Time Running Out for Quake Victims in Haiti (VOANews)
Government IT Scrambles To Help Haiti (InformationWeek)
U.S. texting raises $11 million for Haiti (Reuters)
Major hospitals in Haiti paralyzed for lack of staff, medicines (
4000 prisoners loose as Haiti earthquake quake topples jail (Australian)

Jon Stewart: Banks Are Made of Balsa Wood Held Together By Baby Tears

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LOL h/t zero hedge.

The Daily Show With Jon Stewart
Mon - Thurs 11p / 10c
Clusterf#@k to the Poor House - Wall Street Bonuses

Daily Show
Full Episodes

Political Humor
Health Care Crisis

Also watch Jon Stewart vs. Jim Cramer (uncensored) here on March 15, 2008. They talk about hidden risk.