Market Update: Still Ranging

So I would have liked to have seen a close under 1018'25 (which by measurements sake is the lower part of the range) instead we get a last 1/2 hour surge and close at 1018'50. Although not entirely clear, it tells me that we need one more attempt by buyers to get back to that magical 1025 area before sellers come in and do damage to the chart. This close means tomorrow is another wait and see kind of day. these ranges are proving to be tough to break free of.

Sellers would show that they were in control with a gap down tomorrow. Next downside target is 1006-1007 (the upper end of the previous ranging action)

Picture of the Day: Autumn

Market Update: Calling a Top

There have now been 3 new market highs since breaking out of the previous range (where 996-997 held the gravitational pull). None of which have been validated by more buying. Each new high as subsequently been rejected and that days close has been back in the range. This is a text book example of a top. Now I have said previously that it is going to take a lot of selling pressure to get out of this range and today didn't amount to enough as we tested the lower end of it once again. The market needs to gap down (or up) to get out of this range and the pattern that is emerging leads me to believe that it is going to be down.

This bearish prediction will be delayed further and partially damaged by a close above 1025 today.

But I can say with conviction that 1038'75 looks like the top

Rep. Frank eyes Fed audit, emergency lending curbs

We may be getting somewhere with Dr. Paul's bill to audit the fed. Hopefully Frank won't demand too many changes in the bill and it can get passed. Color me surprised!

From Yahoo News

WASHINGTON (Reuters) - Rep. Barney Frank, the chairman of the U.S. House of Representatives Financial Services Committee, said he plans legislation to restrict the Federal Reserve's emergency lending powers and subject the central bank to a "complete audit."

At a recent town hall meeting, Frank said the House would pass a bill to use an audit to crack open the central bank's books more widely, but in a way that will not encroach on the central bank's monetary policy independence.

In addition, he said the House would move to rein in the authority that allows the Fed to lend to a wide range of non-bank firms in "unusual and exigent circumstances."

A bill sponsored by Texas Republican Rep. Ron Paul that would allow the Government Accountability Office, a federal watchdog agency, to audit Fed interest-rate decisions has won the co-sponsorship of more than half of the House.

Fed Chairman Ben Bernanke has warned that the bill would compromise the U.S. central bank's policy-making independence and could undermine financial markets and the economy.

Frank said he has been working with Paul on compromise language. "He agrees that we don't want to have the audit appear as if it is influencing monetary policy because that would be inflationary,"
....
Frank said the audit and emergency lending provisions would be incorporated in broader legislation to revamp U.S. financial regulation that would likely pass the House in October. By seeking a compromise with Paul, Frank could strengthen the broader legislation's chance at passage.
....
The Obama administration has proposed giving the Fed responsibility for overseeing firms whose collapse could endanger the entire financial system. At the same time, it wants to strip the central bank of its consumer protection function, and invest that authority in a new agency.

Frank expressed unease at what he called the Fed's power to "lend money to anybody they want" in emergency circumstances. "We are going to curtail that lending power. We are going to put some restraints on it," he said.

Since the financial crisis struck two years, the Fed has used this emergency authority to prop up a number of non-bank financial firms with billions of dollars in loans, including insurer American International Group.

The Fed's actions have angered many lawmakers who are concerned the central bank has put taxpayer money at risk. Fed officials have defended their actions as necessary to prevent a deeper credit crisis and widespread damage to the economy.
.....
Frank said the House legislation would pave the way for an audit to look into what the central bank "buys and sells," but he said the data would be released after a period of several months to avoid impacting financial markets.

Bernanke is widely expected to win needed Senate backing for a new term as Fed chairman, but the central bank's aggressive efforts to stem the financial crisis have stirred controversy that is likely to color his re-nomination hearing.

Single Molecule Finally Pictured!

From the Daily Mail

It may look like a piece of honeycomb, but this lattice-shaped image is the first ever close-up view of a single molecule.

Scientists from IBM used an atomic force microscope (AFM) to reveal the chemical bonds within a molecule.

'This is the first time that all the atoms in a molecule have been imaged,' lead researcher Leo Gross said.
pentacene

The delicate inner structure of a pentacene molecule has been imaged with an atomic force microscope

The researchers focused on a single molecule of pentacene, which is commonly used in solar cells. The rectangular-shaped organic molecule is made up of 22 carbon atoms and 14 hydrogen atoms.

In the image above the hexagonal shapes of the five carbon rings are clear and even the positions of the hydrogen atoms around the carbon rings can be seen.

To give some perspective, the space between the carbon rings is only 0.14 nanometers across, which is roughly one million times smaller than the diameter of a grain of sand.

Read more: http://www.dailymail.co.uk/sciencetech/article-1209726/Single-molecule-million-times-smaller-grain-sand-pictured-time.html#ixzz0PccKWqQw

Today in History: How the "Colonel" Saved the Whales

It was 150 years ago today — on Friday, August 27, 1859 — that “Colonel” Edwin Drake struck oil 69.5 feet below the surface at his well near Titusville, Pennsylvania.

(The title of “colonel” was entirely honorific. Drake was a native of New York who grew up in Vermont and began his adult life in Connecticut. He had worked mainly as a railway clerk and conductor. He was a newcomer to Pennsylvania, and he was never commissioned in any military organization.)

Drake would not know of the strike until the next morning, Saturday, August 28, 1859, when workers, returning to the well after drilling late on the previous day, noticed that crude oil was bubbling to the surface and they reported it to the Colonel.

Although it was already known that petroleum oil (”rock oil”, as it was then called) would yield kerosene, it was not yet available in sufficient quantities and qualities to make its use commercially viable. People still depended in the mid-19th century on sperm whale oil for lighting homes, businesses, and streets, a product obtainable only by capturing and slaughtering whales.

The lowest historical prices of the least expensive type of whale oil was reached in the 1820s, when it was priced at $200 per barrel (in 2003 dollars). By 1855 whale oil was selling at more than $1,500 per barrel (in 2003 dollars). At 42 gallons per barrel, that works out to $35 per gallon (in 2003 dollars).

In short, whale oil was extremely expensive — and, of course, came at a catastrophic price to whales. By the late 1850s the worldwide sperm whale population was seriously dwindling and was coming close to extinction. Meanwhile, people in America and elsewhere throughout the world were approaching a crisis in lighting and energy supply.

Aware that previous attempts at drilling for oil had ended in failure, Drake had an idea that would made his discovery possible: He surrounded his drill with a pipe down to bedrock, thereby preventing water seepage from causing the drill hole to collapse. This enabled the drilling of holes sufficiently deep to permit oil to be tapped in large quantities. (Before Drake, only very small quantities of oil were recoverable, mainly through chance locations of oil percolating up to the surface.)

Drake’s initial production ranged from 10 to 35 barrels per day. He used the containers that were readily at hand on short notice — recycled whiskey barrels. In generating even that small amount of crude from a single well, Drake single-handedly doubled the world’s oil supply.

Drake’s achievement on this day in 1859 led directly and swiftly to the development of the petroleum oil industry, producing oil in sufficient quantities and grades — at amazingly low prices — to allow it to be used both for energy and for lubricants and in home, business, and industrial applications. This, in turn, led to rapid mechanization and industrialization, as well as to a revolution in the supply of energy to people’s residences, schools, places of business, and vehicles.

The whale oil business — not the whales — went extinct almost overnight, replaced by the petroleum industry.

Petroleum oil and its derivatives remain abundant and, in comparison both with historic prices and with the prices of all known alternatives, cheap to this day.

This is not to say that better and cheaper sources of energy may not yet be found and made practical. Such progress is, indeed, possible. After all, no one uses whale oil any more!

But on this anniversary it is worth noting, and celebrating, three important facts about Drake and his deeds:

1. An individual can make a huge difference in history. An entire industry and a civilizational revolution flowed from the ingenuity and enterprise of one man.

2. No government planner directed Drake; no government subsidy financed him. A thoughtful man observed rising prices and realized that there was a ready market for a better and cheaper product. He had an idea about where and how to look for that product. Backed by private capital that he used to acquire drilling rights, buy good equipment, and hire willing workers — all at private risk — Drake found that product.

3. No single human act has ever done more to preserve and perpetuate a major non-human species. Drake saved the whales!

Technically it was 2 days ago, but work with me here people!

Picture of the Day

Enjoy your Weekend everyone

Steeerike! Right down the middle. I don't know why he didn't swing at that one

1025 proves to have a huge magnetic attraction which in turn will require a HUGE push either to the upside or the downside. There are no outstanding objectives above so closing above 1035 (preferably 1038) will result in a move probably to 1054 on the way to 1100+. That said there are far more outstanding targets on the downside that still need to be tested all the way back to 880 and lower. When this range does break, I will be on the lookout for signs that the first break will be false (which is usually the case). However being that the market hates to repeat itself and the previous ranging around 995-997 had a breakout lower only to fail and make higher highs, I'm willing open to the theory of an over exuberant run to 1054 only to have it fail miserably and start the resumption of the bear market. Only time will tell.............

Pre Open Update

We often see similarities in chart patterns and the most important thing to understand about interpreting them is that the second time around the resolution is most likely going to be different.

If you look at the two trading ranges i have indicated by thick blue lines, they are defined not by their upper and lower limits but by the 995-997 level in the previous trading range and the 1025 level during this current one.

The key to these levels is that they offer a sort of gravitational pull and when they get established it requires a tremendous amount of either buying or selling pressure to break free of it. The farther it goes away from its normal orbit without breaking the more violent the snapback. This what is happening today at the pre-open shows what happens with a failed attempt to break free of the trading range. yesterdays test of the 1017 level didn't produce a break and as a result we are back in the upper range.

A close above 1035 would make me start to add into a small long position and a close above 1038 would make me long for a run up to at least 1054.

There really isn't a bearish perspective other than a rejection of this test of the upper end of the range.

Once Again Trying to Fan the Fires of Debate

So my first attempt at getting some healthy debate worked marginally well and therefore I am stepping it up a notch. From Breitbart's Big Hollywood. The rest of the article isn't worth your time but this nugget certainly is...

I saw a real fat girl once, slowly walking down the middle of an empty street in a “poor” neighborhood. She was eating from a bag of Cheetos. I was in my car at a stop light, watching her. I thought maybe no one told her that Cheetos make you fat, or maybe her life is so sad that that bag of Cheetos is the highlight of her day. Sometimes, Cheetos is the highlight of my day. I said a little prayer for her. Then, she dropped the empty bag in the middle of the street.

My empathy dissipated.

Statistics confirm the fact that most “poor” people have no fathers. My father told me that Cheetos makes you fat. He also built a gym in our backyard. We lived in a very “poor” neighborhood. Our house cost $10,000 when he bought it in the 50’s. The neighborhood then got worse. All of our neighbors’ houses began to look dirty and have five broken cars and beer cans in their front yards. Our house was always immaculate and our front yard always had freshly mown grass. My father took us to church 3 times a week. He read the Bible out loud to Grandma and Grandpa every Sunday night, at Grandma’s house, because Grandpa was an agnostic and wouldn’t go to church. My father taught me how to read when I was 5, so that when I started first grade I was the best reader. I skipped second grade. My father played the piano every night and taught us show tunes, and how to harmonize. My father taught us how to water ski. My father was a gymnastics coach, so he taught me a “flip flop” and I was the only cheerleader who could do that. My father protected us. He bought a bee bee gun that looked like a real gun, to scare burglars away. We were robbed four times. He said, “I could never kill anyone.” My father made us feel safe. He gave us confidence and a history and a future.

That Cheetos girl probably doesn’t have a father. And, no amount of government assistance, housing, food stamps, free college, or ObamaCare can give her that. She needs a father.

I wholeheartedly believe that there is much truth to what the author is saying that the problems existing in our society stem mostly from the lack of real authoritative role models in a child's upbringing. My posed question on this topic is who is to blame for what has happened to our lower class society and why is the Father figure missing?

Racketeering 101: Bailed Out Banks Threaten Systemic Collapse If Fed Discloses Information

Verbatim From Zero Hedge because i couldn't have said it better myself:
And so the guns come out blazing. The Clearing House Association, another name for all the banks that were bailed out over the past year with the generous contributions from all of you, dear taxpayers, are now threatening with another instance of complete systemic collapse if Bloomberg's lawsuit is allowed to proceed unchallenged, let alone if any of the "Audit The Fed" measures are actually implemented.

As a reminder, The Clearing House Association consists of ABN Amro, Bank Of America, The Bank Of New York, Deutsche Bank, HSBC, JP Morgan Chase, US Bank and Wells Fargo.

In a declaration filed in the Bloomberg Case (08-CV-9595, Southern District of New York), the banks demonstrate no shame in attempting to perpetuate the status quo with regard to the Federal Reserve and demand that the wool over the eyes of the general population remain firmly planted in perpetuity.

The Clearing House submits this declaration because the Court's Order threatens to impair the ability of our members to access emergency funds through the New York Fed's Discount Window without suffering the severe competitive harm that public disclosure of their identity will cause.

Our members have accessed the New York Fed's Discount Window with the understanding that the Fed will not publicly disclose information about their borrowing, especially their identity. Industry experience, including very recent and searing experience, has shown that negative rumors about a bank's financial condition - even completely unfounded rumors - have caused competitive harm, including bank runs and failures.
Surely transparency would facilitate rumor-mongering to an unprecedented degree. After all rumors spread much easier when everyone knows the true financial condition of banks.

And here, in plain written Times New Roman, you see what racketeering by a major bank consortium looks like:

If the names of our member banks who borrow emergency funds are publicly disclosed, the likelihood that a borrowing bank's customers, counterparties and other market participants will draw a negative inference is great. Public speculation that a financial institution is experiencing liquidity shortfalls - which would be a natural inference from having tapped emergency funds - has caused bank customers to withdraw deposits, counterparties to make collateral calls and lenders to accelerate loan repayment or refuse to make new loans. When an institution's customers flee and its credit dries up the institution may suffer severe capital and liquidity strains leaving it in a weakened competitive position.

Pardon me if I am a broken record here, but would rumors not spread much less if there was more transparency, if investors and other financial intermediaries were fully aware of the conditions of their counterparties, if banks did not have to cover their billions in reserve losses by pretending they are viable and essentially being constant wards of the state?

The Banks' racketeering has gone on for far too long.

And yet, it does not stop: the conclusion from the banks' letter:

In sum, our experience differs from the factual conclusions the Court appears to have reached about the nature of competition in the banking industry:

• The competitive harm to institutions that are publicized as needing emergency funding is not "speculative," but demonstrated by the recent multiple failures of financial institutions whenever information about their funding difficulty has been disclosed.


• The disclosure does not involve mere "embarassing publicity" but information that could result in the immediate demise of an institution.


• The disclosure would not merely "stigmatize "the institution or make it "look weak," but goes to its very viability.


• The disclosure of accessing emergency funding is not an "inherent risk" of market participation, but an extraordinary risk in extraordinary circumstances.


• Competitors can use the disclosure to advertise or publicize that they are financial stronger because they don't need emergency funding.

In a nutshell - the banks want their complete opacity cake and eat it too, or else, the racket goes, the transparency that will somehow promote massive rumor mongering will again destroy capitalism. In the meantime, the Ken Lewises of the world can continue touting how stable their businesses are based on optimistic future projections, while implicitly, they continue to survive merely thanks to the cash granted them by you, taxpayers.

AIG- Ex Squeeze me

Yet another reason why this is not a market for investors, but speculators......

With no significant news to speak of, AIG stock soared more than 29% to $48.89 midday Thursday in a move that appeared to be motivated by a wash of speculative trading and a possible short squeeze. Volume reached 73 million shares; daily average turnover is about 103 million.

The firm's stock price has exploded by more 250% since Aug. 4, a surge that has largely mystified market observers.

So AIG has a low of 6.60 mid July and today cross 50. So in 6 weeks with perfect timing you could have made 667% on AIG. AIG people not some random high beta internet stock. And people call this the end of the recession. Speculation like this is not the fuel for a market bottom or a new bull market, but a bear market rally. consider yourself warned.

Picture of the Day

Housing, there aint no cure....

Cure rates on mortgages are exactly what you think they are, people that are delinquent on their mortgage payments returning their payment status to current and therefore "curing" their delinquency. One would think that in a recovery these cure rates would be increasing.....
From Businesswire

NEW YORK--(BUSINESS WIRE)--While the number of U.S. prime RMBS loans rolling into a delinquency status has recently slowed, this improvement is being overwhelmed by the dramatic decrease in delinquency cure rates that has occurred since 2006, according to Fitch Ratings. An increasing number of borrowers who are 'underwater' on their mortgages appear to be driving this trend, as Fitch has also observed.

Delinquency cure rates refer to the percentage of delinquent loans returning to a current payment status each month. Cure rates have declined from an average of 45% during 2000-2006 to the currently level of 6.6%. It is important not only to observe total roll rates, but delinquency cure rates as well, according to Managing Director Roelof Slump.

'Recent stability of loans becoming delinquent do not take into account the drastic decrease in delinquency cure rates experienced in the prime sector since the peak of the housing market,' said Slump. 'While prime has shown the most precipitous decline, rates have dropped in other sectors as well.'

In addition to prime cure rates dropping to 6.6%, Alt-A cure rates have dropped to 4.3%, from an average of 30.2%, and subprime is down to 5.3% from an average of 19.4%. 'Whereas prime had previously been distinct for its relatively high level of delinquency recoveries, by this measure prime is no longer significantly outperforming other sectors,' said Slump.

I think that it is important for me to reiterate this statistic. Cure rates for prime mortgages have declined to 6.6% from 45%. Keep in mind that we have a lot of prime and Alt-A mortgages resetting in the next year or 2, and delinquent payers probably don't have the best chance of refinancing at a significantly better rate. Now think about what that means for the banks who are holding these loans........

Fed Official: Real Unemployment Rate is 16%

From Breitbart:

The real US unemployment rate is 16 percent if persons who have dropped out of the labor pool and those working less than they would like are counted, a Federal Reserve official said Wednesday.

"If one considers the people who would like a job but have stopped looking -- so-called discouraged workers -- and those who are working fewer hours than they want, the unemployment rate would move from the official 9.4 percent to 16 percent, said Atlanta Fed chief Dennis Lockhart.

He underscored that he was expressing his own views, which did "do not necessarily reflect those of my colleagues on the Federal Open Market Committee," the policy-setting body of the central bank.

Lockhart pointed out in a speech to a chamber of commerce in Chattanooga, Tennessee that those two categories of people are not taken into account in the Labor Department's monthly report on the unemployment rate. The official July jobless rate was 9.4 percent.

Close Update: A whole lotta nuttin.

So apparently what today indicates is that the market is going nowhere without gapping either up or down. It is going to take a pretty violent move to get things going and even so, moves that start from a standstill (which is what these past 5 or so trading days have been technically) are usually retraced at some point. So back to wait and see mode.

Idea: Long Heart Surgeons

New KFC "Double Down" Dumps the Bun

Sometimes a sandwich is so big, so tasty and so thick that those carb-loaded bookends we call buns just aren’t necessary.
That’s the premise behind Kentucky Fried Chicken’s latest calorie-laden creation: the Double Down Chicken Sandwich, two chicken fillets hugging cheeses, bacon and sauce, sans the bun.

KFC hasn’t released actual caloric counts, but has told media outlets such as the Huffington Post that it estimates the sandwich to weigh in at roughly 600 calories. The Vancouver Sun, however, estimates the Double Down at nearly double that number, with 1,228 calories.

KFC has made more than one headline this year with new products. Untold numbers of consumers flocked to the chain earlier this year hoping to get a free taste of KFC’s new grilled chicken. But Georgians shouldn’t rush to a nearby KFC for this bird, however, as it’s only being tested in parts of Nebraska and Rhode Island.

No word on whether the Double Down will be offered with two grilled fillets, instead.

Long awaited Market update

The yellow line I have drawn is the proverbial line in the sand. There are no outstanding requirements above the current price level of 1025 and there are a couple of outstanding requirements below. Most notably the 1018'50. For me to "buy" any rally to new highs having durable sponsorship I would expect that level and even down to 1015 to be tested before setting new highs. However this market has been ignoring most of what I like to see in a neat and tidy pattern so I will try and summarize best what the most likely outcomes will be:

If we close above this "line in the sand" then we are going back up to test the highs and any subsequent closes above 1035 will make me convinced we are in the beginnings of a new upleg to 1100+

If we close below the LITS (convincingly) then this means we are on our way to 1018'50 and then I will have to reassess depending on price action. But if 1015 breaks convincingly, let that be a great indicator that we might be starting a HUGE down leg back to at least 880 and maybe even 666

Ted Kennedy Dead at 77

Boston.com

Senator Edward M. Kennedy, who carried aloft the torch of a Massachusetts dynasty and a liberal ideology to the citadel of Senate power, but whose personal and political failings may have prevented him from realizing the ultimate prize of the presidency, died at his home in Hyannis Port last night after a battle with brain cancer. He was 77.

Chart it to Me!

Not really much to say here... You know what they say about pictures....

Global Recession Status

A very cool interactive map. Doesn't mean much, shows us where we have been. The important thing is where we are going......

Picture of the Day

Seth Godin on the tribes we lead

Absolutely fascinating... please watch

Court Orders Federal Reserve to Disclose Emergency Loan Details

Very Excited about all the upcoming data that must be divulged... From Bloomberg

The Federal Reserve must for the first time identify the companies in its emergency lending programs after losing a Freedom of Information Act lawsuit.
...
The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under 11 programs, most put in place during the deepest financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle shareholders.
...
The judge said the central bank “improperly withheld agency records” ... She gave the Fed five days to turn over documents it told the reporters it located ...

The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan).

Well thats not how its supposed to happen!

I apologize for not updating my TA for quite some time now. I am in the process of switching charting software and i got caught up in all the new features. Anyhoo, just a quick note on today's morning action. Failed breakouts are not good for bullish chart patterns and unless we can close above the previous high of 1035 this damages any bullish sentiment tremendously. I will follow up after the close with some potential targets and what this means short term and long term.

Fun With Charts! The Road To Recovery?

Here is the market graph from Doug Short, Doug Short is matching up the market bottoms for four crashes (with an interim bottom for the Great Depression).

Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500.

Nat Hentoff: I am finally scared of a White House administration

Nat Hentoff, the prodigious Village Voice writer who retired after 50 years in 2008 was given the following blurb in the NYT;

Across his 83 years, his three dozen books and his countless newspaper columns and magazine articles, Mr. Hentoff has championed free speech and opposed censorship of any kind, whether by liberals or conservatives. Few have more assiduously and consistently defended the right of people to express their views, no matter how objectionable.

The thing is that, agree with him or not, Nat Hentoff offers no opinion that isn’t supported by facts, diligently gathered.

Mr. Hentoff may not hear as well as he once did, or stand quite as straight. But he will not fade to silence.

Mr Hentoff has not faded into silence yet his coverage on Obama's Health care reform has been ignored by mainstream media. Obviously you know why. From August 19th;

I was not intimidated during J. Edgar Hoover's FBI hunt for reporters like me who criticized him. I railed against the Bush-Cheney war on the Bill of Rights without blinking. But now I am finally scared of a White House administration. President Obama's desired health care reform intends that a federal board (similar to the British model) — as in the Center for Health Outcomes Research and Evaluation in a current Democratic bill — decides whether your quality of life, regardless of your political party, merits government-controlled funds to keep you alive. Watch for that life-decider in the final bill. It's already in the stimulus bill signed into law.


The members of that ultimate federal board will themselves not have examined or seen the patient in question. For another example of the growing, tumultuous resistance to "Dr. Obama," particularly among seniors, there is a July 29 Washington Times editorial citing a line from a report written by a key adviser to Obama on cost-efficient health care, prominent bioethicist Dr. Ezekiel Emanuel (brother of White House Chief of Staff Rahm Emanuel).


Emanuel writes about rationing health care for older Americans that "allocation (of medical care) by age is not invidious discrimination." (The Lancet, January 2009) He calls this form of rationing — which is fundamental to Obamacare goals — "the complete lives system." You see, at 65 or older, you've had more life years than a 25-year-old. As such, the latter can be more deserving of cost-efficient health care than older folks.


No matter what Congress does when it returns from its recess, rationing is a basic part of Obama's eventual master health care plan. Here is what Obama said in an April 28 New York Times interview (quoted in Washington Times July 9 editorial) in which he describes a government end-of-life services guide for the citizenry as we get to a certain age, or are in a certain grave condition. Our government will undertake, he says, a "very difficult democratic conversation" about how "the chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total health care" costs.
This end-of-life consultation has been stripped from the Senate Finance Committee bill because of democracy-in-action town-hall outcries but remains in three House bills.


A specific end-of-life proposal is in draft Section 1233 of H.R. 3200, a House Democratic health care bill that is echoed in two others that also call for versions of "advance care planning consultation" every five years — or sooner if the patient is diagnosed with a progressive or terminal illness.


As the Washington Post's Charles Lane penetratingly explains (Undue influence," Aug. 8): the government would pay doctors to discuss with Medicare patients explanations of "living wills and durable powers of attorney … and (provide) a list of national and state-specific resources to assist consumers and their families" on making advance-care planning (read end-of-life) decisions.


Significantly, Lane adds that, "The doctor 'shall' (that's an order) explain that Medicare pays for hospice care (hint, hint)."


But the Obama administration claims these fateful consultations are "purely voluntary." In response, Lane — who learned a lot about reading between the lines while the Washington Post's Supreme Court reporter — advises us:


"To me, 'purely voluntary' means 'not unless the patient requests one.'"


But Obamas' doctors will initiate these chats. "Patients," notes Lane, "may refuse without penalty, but many will bow to white-coated authority."


And who will these doctors be? What criteria will such Obama advisers as Dr. Ezekiel Emanuel set for conductors of end-of-life services?


I was alerted to Lanes' crucial cautionary advice — for those of use who may be influenced to attend the Obamacare twilight consultations — by Wesley J. Smith, a continually invaluable reporter and analyst of, as he calls his most recent book, the "Culture of Death: The Assault on Medical Ethics in America" (Encounter Books).


As more Americans became increasingly troubled by this and other fearful elements of Dr. Obama's cost-efficient health care regimen, Smith adds this vital advice, no matter what legislation Obama finally signs into law:


"Remember that legislation itself is only half the problem with Obamacare. Whatever bill passes, hundreds of bureaucrats in the federal agencies will have years to promulgate scores of regulations to govern the details of the law.


"This is where the real mischief could be done because most regulatory actions are effectuated beneath the public radar. It is thus essential, as just one example, that any end-of-life counseling provision in the final bill be specified to be purely voluntary … and that the counseling be required by law to be neutral as to outcome. Otherwise, even if the legislation doesn't push in a specific direction — for instance, THE GOVERNMENT REFUSING TREATMENT — the regulations could." (Emphasis added.)


Who'll let us know what's really being decided about our lives — and what is set into law? To begin with, Charles Lane, Wesley Smith and others whom I'll cite and add to as this chilling climax of the Obama presidency comes closer.


Condemning the furor at town-hall meetings around the country as "un-American," Harry Reid and Nancy Pelosi are blind to truly participatory democracy — as many individual Americans believe they are fighting, quite literally, for their lives.


I wonder whether Obama would be so willing to promote such health care initiatives if, say, it were 60 years from now, when his children will — as some of the current bills seem to imply — have lived their fill of life years, and the health care resources will then be going to the younger Americans?

A Georgia County Shares a Tale of One Man’s Life and Death

A truly heartwarming story,

A Georgia County Shares a Tale of One Man’s Life and Death

Published: August 22, 2009

His pallbearers were the six boys who built his plain pine coffin in their high school shop class. They built it right in the middle of the classroom. When they finished, one of the boys crawled inside it while the others toted him around the school to make sure it worked.

Now Sammy Green lay inside the coffin, wearing the overalls he requested, while the boys marched him to his mountainside grave. Two preachers played guitars and crooned the kind of bluegrass gospel Mr. Green loved. “I’m a weary traveler,” one song began, “traveling through this land.”

Only about a dozen people attended Mr. Green’s funeral on Thursday afternoon in these fog-wrapped mountains, tucked into the northeast corner of the state. None were relatives — they are all dead — and most hardly knew Mr. Green, if they knew him at all. The boys who built the coffin never met him. Yet it was the people of the county who made the funeral possible.

For years, the story of Mr. Green, a never-married 76-year-old itinerant millworker who could not read or write, and his impending burial had spread through the mountains of Rabun County and beyond, becoming the kind of tale these people have long been famous for telling.

It began two years ago when a couple of students and a teacher from Rabun County High School showed up to interview him for Foxfire magazine, a renowned student-run publication devoted to Appalachian culture.

Since its founding here in 1966, Foxfire has sent students out to interview aging relatives, vanishing craftsmen and all manner of homegrown characters. Subjects run the gamut: beekeeping, moonshining, witches.

The magazine’s articles have been anthologized into a popular series of books. With about nine million in print, they have been adapted into a Broadway play and TV movie.

Mr. Green spoke into the students’ tape recorder for hours about his hardscrabble life. He was born in nearby Murphy, N.C., one of six children. His father pulled him out of the second grade to grind corn at a watermill. He hunted squirrels for food, smoked “baccer” (tobacco) and walked six miles to church, where he was baptized in a river on a 35-degree morning.

He worked for a while at a steel mill outside Atlanta, but returned to North Carolina to cut pulp wood and, as he told his visitors, “snake logs.” He paid for his own parents’ burials, once walking 16 miles for a headstone (he never had a driver’s license).

Finally too old to work and practically homeless, he met a family of traveling gospel singers at church and they took him in. One daughter eventually moved with her family to Rabun County and brought Mr. Green along.

After he finished his life story, Mr. Green asked the students to turn off the recorder. He looked troubled. Suffering from a deteriorating lung disease, he said he did not have enough money to be buried. He worried that if he died a pauper, the county would cremate him, an act that he believed would sentence him to eternal damnation. All he wanted, he said, was a pine box and a hole to put it in.

In the driveway as they left, one of the students, Casi Best, turned to the teacher and said, “Can’t we do something?”

“I could tell it was burden for him,” said Ms. Best, now a freshman at Piedmont College, in Demorest, Ga.

So Ms. Best and some other students started a “Bury Sammy” campaign. The school’s industrial arts teacher got the six volunteers from his ninth-grade class to build a coffin, pulling a design off the Internet. A bluegrass barbecue was held at a Wal-Mart parking lot. Mr. Green showed up briefly, trailed by an oxygen tank, marveling at the coffin on display.

“He said, ‘I don’t know if I’ll fit in there,’ ” recalled Joyce Green (no relation), the faculty adviser for Foxfire. “I knew he would. My son had already measured him.”

A granite company donated a headstone. A county cemetery offered up a plot. A funeral home director cut his rate to cost. People dropped change into gallon jugs placed inside gas stations, banks, beauty parlors. The $3,100 needed to bury Mr. Green was soon raised.

“He said, ‘That’s one thing I don’t have to worry about,’ ” remembered Sherri Eads Gragg, the woman who had taken him in.

Go here for the rest of the story.

Roubini: The risk of a double-dip recession is rising

From the Financial Times;

That effort worked and the free-fall of economic activity eased. There are three open questions now on the outlook. When will the global recession be over? What will be the shape of the economic recovery? Are there risks of a relapse?

On the first question it looks like the global economy will bottom out in the second half of 2009. In many advanced economies (the US, UK, Spain, Italy and other eurozone members) and some emerging market economies (mostly in Europe) the recession will not be formally over before the end of the year, as green shoots are still mixed with weeds. In some other advanced economies (Australia, Germany, France and Japan) and most emerging markets (China, India, Brazil and other parts of Asia and Latin America) the recovery has already started.

On the second issue the debate is between those – most of the economic consensus – who expect a V-shaped recovery with a rapid return to growth and those – like myself – who believe it will be U-shaped, anaemic and below trend for at least a couple of years, after a couple of quarters of rapid growth driven by the restocking of inventories and a recovery of production from near Depression levels.

He then goes on to discuss the reasons for a U shaped recovery and not a V shaped one.

1) Employment is still falling sharply in the US and elsewhere – in advanced economies, unemployment will be above 10 per cent by 2010.

2) True deleveraging has not begun yet because the losses of financial institutions have been socialised and put on government balance sheets. This limits the ability of banks to lend, households to spend and companies to invest.

3) consumers need to cut spending and save much more, yet debt-burdened consumers face a wealth shock from falling home prices and stock markets and shrinking incomes and employment.

4) Most of the shadow banking system has disappeared, and traditional banks are saddled with trillions of dollars in expected losses on loans and securities while still being seriously undercapitalised

5) weak profitability – owing to high debts and default risks, low growth and persistent deflationary pressures on corporate margins – will constrain companies’ willingness to produce, hire workers and invest.

Finally oil, energy and food prices are now rising faster than economic fundamentals warrant, and could be driven higher by excessive liquidity chasing assets and by speculative demand.

A Classic E-mail from a Friend

So my wife and I are getting our bathroom floor re-tiled this week, so
we've both been home to make sure the guys do it properly. We got stir
crazy yesterday and ended up playing Monopoly, which I hadn't played
in forever. In flipping through the rule book to remind myself how
shit worked, I came across this incredible gem:

"The Bank 'never goes broke.' If the Bank runs out of money, the
Banker may issue as much as needed by writing on any ordinary paper."

Yeah, that sounds about right. I'm hereby blaming Parker Brothers and
Rich Uncle Pennybags for the financial meltdown of 2008, for having
created the overriding (unsustainable) banking mentality for a
generation of financiers and government lenders. In fact, I'm suing
them. For gross negligence and depraved indifference.

Picture of the Day

White House to Lower 2009 Deficit Estimate to $1.58 Trillion

Hooray!!! Oh wait a minute....
Bloomberg:

The White House’s biannual budget review set for release next week will show the projected shortfall lessened primarily because the administration scrapped contingency plans to provide hundreds of billions of dollars in additional aid to the financial industry, said the official.

The reduced deficit is also attributable to fewer bank failures than the administration anticipated, which meant spending by the Federal Deposit Insurance Corp. will be $78 billion less than forecast, said the official, who requested anonymity because the figures haven’t been publicly released.

So once again lets celebrate because things are "less bad" than they thought! Lets forget that the 76 bank failures this year is the 2nd higest number in history aside from the S&L crisis. Oh and let us not forget that these budgets, like all government figures, get revised in later quarters to much worse numbers.

The return of "The Man"

So the comment section has been pretty sparse since I started this blog and yesterday I came across this very interesting article called The Left's Favorite Enemy Conjured Up Again by Keith Riler. It offers up a very lively discussion topic regarding the resurgence of "The Man"....

My lefty friends stare at me blankly when I ask why that outdated, goofy guy known as "The Man" is still at the core of their social doctrine. They insist theirs is a political orientation that is sophisticated and intellectual, appreciative of the nuances of modern capitalistic society and the actual individual human beings involved therein. Then we get this:

Chris Matthews, on Tuesday's "Hardball," invited on California Senator Barbara Boxer to dismiss the increasing number of town hall protestors opposed to Obama's liberal agenda as the "angry, and "noisy," "well-dressed middle-class people in pinks and limes...Brooks Brothers Brigade."

And,

The White House is now taking a hard line against the Tea-Party organized disruptions of Democrats' town hall meetings, the Washington Times reports, with press secretary Robert Gibbs referring to it this morning as "the Brook Brothers Brigade"....

He's back! And he's white, old, in khakis and a blue oxford ... The Man!!

The divisive intent of "well dressed middle class people" intentionally stokes class envy, at best, and is bigoted and hateful, at its worst. These citizens, like all people, deserve both dignity and respect.

He then goes on to discuss how easy it is to slip into using the word they with abandon.

Our President has been using "they" and "them" quite a bit. He said the following in reference to citizens clamoring to be heard at town hall meetings:

But I don't want the folks that created the mess -- I don't want the folks who created the mess to do a lot of talking. I want them just to get out of the way so we can clean up the mess. ... I don't mind cleaning up after them, but don't do a lot of talking.

Them who? They who? What folks? What special interests? Did anyone voting last November believe the winner of the election would represent only those who voted for him? Did anyone believe that a vote cast might neuter that voter's future ability to participate in democracy? Did anyone voting for McCain expect such intolerance from Obama, or anyone voting for Obama expect such intolerance from McCain?

The word "they" has a really creepy way of simplifying, stereotyping, dismissing and aggregating so as to diminish the dignity of individuals, as in the following uses: "They are always trying to keep us down." "They are subversive." "They need to get out of the way." Our civil rights heroes are very cognizant of the misuses of "they".

The article makes some points that I had not thought of and think may have some merit.

Discuss.....

Homeowner Misperception Index

Zillow.com has this neat survey showing the sentiment and (IMO) delusion of homeowners regarding the prices of their homes and how they are the most optimistic they have been in over a year. It is really fascinating. On to the charts.

Along with growing misperception is a growing optimism that home values will not continue their declines in the coming six months. For three quarters in a row, homeowners have effectively called a bottom, with the majority thinking their home’s value will not decline any further. This quarter, the number of “optimists” was our largest yet:

• 34% think their home’s value will increase
• 47% think their home’s value will stay the same
• 19% of homeowners think their home’s value will decrease

The most optimistic bunch are homeowners in the South and Northeast, where fewer markets experienced a “bubble,” and where home value declines haven’t been as precipitous as many major cities in the West.

Giant Clawed Dinosaur Unearthed in Utah

MSNBC REPORTING

U.S. Debt as a Percentage of GDP Means No Growth for 50 Years

From UK site Market Oracle comes a great little piece on US GDP growth being funded entirely by debt and how the last 50 years of our growth has come from an 11.5 Trillion dollar increase in borrowing.

Apparently, a bazooka wasn’t enough. Last summer, that is what then Secy. of the Treasury Henry Paulson asked for when he made his case for sweeping financial powers. Instead, Congress gave him a nuke, and apparently that wasn’t enough either. Making the jump from completely absurd to the absolutely ridiculous, Timothy Geithner became the latest in a long line of Treasury Chiefs to run to Congress to ask for an increase in the nation’s debt ceiling.

The fact that he is asking for the increase should not be a surprise to anyone given the massive deficits already racked up over the past 18 months. What would be laughable if it weren’t so serious, however, were the comments made in his request letter to Congress.

"It is critically important that Congress act before the limit is reached so that citizens and investors here and around the world can remain confident that the United States will always meet its obligations,"

How exactly does digging your hole even deeper inspire confidence? How does borrowing nearly 50 cents of every dollar you spend inspire confidence? How can anyone with two bits of common sense to rub together take this as anything less than an overt devaluation of the Dollar?

The aricle then goes one to show the a table of GDP and total debt outstanding. It includes the governments estimates over the next 5 years as well where they assume a resumption of 5% GDP growth. The article then questions this unrealistic assumption by showing that the money supply (the discontinued M3) has continued to grow at a 5% clip. THIS IS THE RATE OF INFLATION! I understand that the govt uses CPI because they can can massage and manipulate the data to show whatever they want. The fact is Bernanke discontinued M3 so he could do just that, inflate M3 and not report it.

Finally he concludes that if one were to discount the GDP growth from the past 50 years by the 5% average that M3 grew you would get 0 growth from anything other than the increase in debt. So keep this in mind when the congress raises our debt ceiling again.

Pre Market Update; Red Rover, Red Rover....

Well the back and forth game between buyers and sellers in this consolidation range looks to have come to an end with what is looking like a 20+ point drop during the globex session last night and into this morning. The longstanding level of 983 was tested and appears to be a spot where buyers are defending price. When levels are defended it acts as confirmation that my assessment and calculations of the patterns are indeed valid.

Going back to Thursday's close and Friday's price action, My comment that it 1016 was going to be tested was not a statement of fact. It had already been tested in the overnight session (a test by proxy*) what remained was just a test of that level during the cash session (9:30-4:15). Friday's afternoon rally again came too late and didn't do enough damage to the chart to give buyers any control.

The result of this last 1/2 hour of action on Friday acted as a slingshot for sellers and propelled price action through the much tested 990-991 straight down to the 983 level. Given how much buyers protected 990-991 my assumption is that 983 is not going to be as sticky. Next Stop 965.

Sellers start losing control of this attempt to break lower by not defending 998. Any close above 998 and this can be deemed yet another probe of the 991 area and would indicate that when 1007 breaks, it is to start a new market rally.



* testing by proxy means that the price action got close enough to the high to be considered a test of the actual high without actually touching it

Market Update: The More Things Change....

So apparently the pre-opens high of 1015.25 wasn't enough of a test of the 1016 high for buyers (or sellers for that matter) and today's price action now leads me to believe we need to have a test of the high before any real trending can begin. This has been a very strange couple of weeks as the ranging has not been as predictable as I might have liked. But this rally has had no pullbacks so its not surprising that the consolidation is just as neat and tidy.


So the next step is for a restst of the high at 1016 and these retests usually exceed the high by a calculable margin (in this case 1019.50 give or take) So I'm still not counting a bearish resolution out, but if we can get a close above the prior high of 1016 tomorrow. I think it is fair to say we are off to the races and a new rally leg will begin.

Sellers can show their might by allowing a test of the prior high, and then closing back under todays close of 1013.75, although I woould prefer a close back under 1011. That would indicate sellers are staunch opponents of a new rally leg and may still be around to start their own sort of "rally"...

Pre-Open Update: Dishing out the R rated Violence

Well last night and today were interesting. I promised you guys violence and it is looking pretty violent. In essence last nights session retested the rally's high (my TA says this high of 1015.25 was close enough to count as a retest) When the abysmal retail sales numbers came out the market went back to its favorite range of 1007-1005 and now we are back to where we were at the 3-3:30 window from yesterday. We should see some more volatile price action this morning and probably through the afternoon as the summer winds down Fridays become more and more sparsely traded, Thursdays become the time for trending.

Yesterdays close was at 1002 so filling the gap down would provide some support maybe, but the 1005 level is the big one and if that fails this morning we are heading to 1000/1001 and then down to another favorite range of this pattern, the 990-995 level.

Any selling pressure that closes under 992 (even better would be a close under 990) would signal to me that this rally and subsequent consolidation has run its course.

Jobless Claims + Retail Sales = Fail

I am not going to do a pre market update until the dust settles from these worse than expected reports. I said we were going to get violent and that's what we're getting. Overnight spiked up to 1015.25 only to drop back to down to the 1007 level after the reports. If you remember the 1005-1006 level has been very relevant over the last week or 2 so It will be interesting to see the resolution from here.



Remember the consumer is 73% of the economy. These retail numbers are terrible considering they include the beginning of the cash for clunkers program

Antibacterial Soap: Health Hazard?

From WebMD

May 29, 2008 -- Millions of Americans use antibacterial soaps and household cleaners every day, believing that their germ-killing ability will keep them and their families healthier.

But could these same chemicals that fight germs also be hazardous to your health?
That's a question being studied by a group of researchers at the University of California, Davis. In three separate studies, the researchers showed that the chemicals -- triclosan and triclocarban -- have potential to affect sex hormones and interfere with the nervous system.

They also may become suspects in the search for causes of autism.
.....
While Chang and the other researchers involved in the studies admit that it's too early to know whether the chemicals pose a serious health risk, it's already been shown that the cleaners might not work any better than regular soap and water -- and may contribute to the rise of resistant bacteria. So, they ask, why take the risk?

The chemicals causing these problems are petrolium byproducts called triclosan and triclocarban:

Chang, who coordinates the university's studies on triclosan and triclocarban as part of the Superfund Basic Research Program, supported by the National Institute of Environmental Health, says the U.C. Davis research doesn't contradict findings that triclosan and triclocarban are safe for most people.

But it does show that "there may be sensitive periods in development when these compounds could have a very subtle detrimental effect." Translation: If the compounds cause harm, they are most likely to do so during pregnancy, early childhood, and adolescence.

Chang argues that antibacterial soaps don't do enough good to risk this potential harm.

In 2005, an FDA advisory panel concluded that antibacterial soaps, as used by the general public, don't prevent illness any better than ordinary soap, and they may contribute to the rise of resistant bacteria.

In one study, recently accepted for publication in the journal Environmental Health Perspectives and made available online, Isaac Pessah, PhD, director of the U.C. Davis Children's Center for Environmental Health, looked at how triclosan may affect the brain.

There is a lot more in the article. I Highly recommend reading it. Also Make sure to watch the CBC documentary the Disappearing Male. It covers much of what is in this article. Link to my old post on it

Elizabeth Warren "We Have a Real Problem Coming"

Elizabeth Warren talks about the banks and how all those toxic assets are still somewhere

Visit msnbc.com for Breaking News, World News, and News about the Economy

Market Update: #&*#$ or get off the pot

Today was an interesting day. Like i said in the pre-market update this morning. The lack of conviction on sellers to push prices lower resulted in a spring like effect and we were up more than 20+ points at one point during the day.

Once again we have a move that transpires during the last 1/2 hour of trading and it is something that I hesitant to give an real importance to. This dip back down to the 1002 area is another one of those moments just like yesterday only now that we've tested the upper end of the range to a degree, the market is now in a #$@#$ or get off the pot point in time.

Tomorrow morning will be violent in one direction or the other. If we are able to gap under 1000 or 998 tomorrow it will probably be on the way through 995 down to 983 which should not provide much support. If that fails in any way we should be on our way to printing new highs above 1016.

Nothing in my TA indicates range bound price action.

Social Security: The Biggest Bailout Yet

Simply great article from Fortune:

In Washington these days, the only topics of discussion seem to be how many trillions to throw at health care and the recession, and whom on Wall Street to pillory next. But watch out. Lurking just below the surface is a bailout candidate that may soon emerge like the great white shark in Jaws: Social Security.

Perhaps as early as this year, Social Security, at $680 billion the nation's biggest social program, will be transformed from an operation that's helped finance the rest of the government for 25 years into a cash drain that will need money from the Treasury. In other words, a bailout.
....
Unlike the pigs feeding at Uncle Sam's trough, the people who qualify for Social Security old-age benefits -- the ones who'll benefit from the bailout -- have played by the rules and paid Social Security taxes for decades. It would be immoral to tell them, "Sorry, we have to trim your cost-of-living adjustment because we can't afford it," while expecting them to continue footing the bill for bailing out imprudent people and institutions.

Why am I talking about Social Security when health care is sucking up virtually all the oxygen in Our Nation's Capital? Because Social Security is a really big deal, providing a majority of the income for more than half the people 65 and up, and also supporting millions of disabled people and survivors of deceased workers; because the collapse of stock prices and home values makes Social Security retirement benefits far more important even to upscale baby boomers than they were during the stock market and home-price highs of a few years ago; and because the problems aren't that hard to solve if we look at Social Security realistically instead of treating it as a sacred, untouchable program (liberals) or a demonic plot to make people dependent on government (conservatives).

I would like to take a moment to rant a a little bit about the fact that the Ponzi scheme nature that is our current Social Security plan was engineered in 1983 by none other than Alan Greenspan, who is the biggest failure in the history of economic policy makers.

The Forbes Article continues:

The cash that Social Security has collected from my wife and me and our employers isn't sitting at Social Security. It's gone. Some went to pay benefits, some to fund the rest of the government. Since 1983, when it suffered a cash crisis, Social Security has been collecting more in taxes each year than it has paid out in benefits. It has used the excess to buy the Treasury securities that go into the trust fund, reducing the Treasury's need to raise money from investors.

So bascially the government spent it. In the 1980's when we were running a deficit, it wasn't as bad as it should have been because the government was siphoning off social security payments to pay other bills. Its the same as paying for everyone's dinner with a credit card, collecting the money and then spending the money thinking you'll just have another dinner next month and collect the money to pay for your previous dinner. It has to end eventually.

The Author makes the point that Social Security is merely monetary child's play compared to Medicare:

when it comes to problems, Medicare makes Social Security look like a walk in the park, even though at about $510 billion this year, it's far smaller. Not only are Medicare's financial woes much larger than Social Security's, but they're also much more complicated. . . . Medicare is more convoluted, because the healthcare system is much more complex than Social Security. Which, when you think about it, involves only money.

Please click the link and read the article. It is very sobering.

Social Security may not make it onto the agenda until next year. But it's going to show up sooner or later, and probably sooner, because the numbers are so bad that something's got to be done.

Opinion: Obama's Heathcare Horror

A very compelling opinion piece about the Democrats bungling of national health care.

From Salon.com's Opinion page:

Aug. 12, 2009 | Buyer's remorse? Not me. At the North American summit in Guadalajara this week, President Obama resumed the role he is best at -- representing the U.S. with dignity and authority abroad. This is why I, for one, voted for Obama and continue to support him. The damage done to U.S. prestige by the feckless, buffoonish George W. Bush will take years to repair. Obama has barely begun the crucial mission that he was elected to do.

Having said that, I must confess my dismay bordering on horror at the amateurism of the White House apparatus for domestic policy. When will heads start to roll? I was glad to see the White House counsel booted, as well as Michelle Obama's chief of staff, and hope it's a harbinger of things to come. Except for that wily fox, David Axelrod, who could charm gold threads out of moonbeams, Obama seems to be surrounded by juvenile tinhorns, bumbling mediocrities and crass bully boys.
....
There is plenty of blame to go around. Obama's aggressive endorsement of a healthcare plan that does not even exist yet, except in five competing, fluctuating drafts, makes Washington seem like Cloud Cuckoo Land. The president is promoting the most colossal, brazen bait-and-switch operation since the Bush administration snookered the country into invading Iraq with apocalyptic visions of mushroom clouds over American cities.
....
I just don't get it. Why the insane rush to pass a bill, any bill, in three weeks? And why such an abject failure by the Obama administration to present the issues to the public in a rational, detailed, informational way? The U.S. is gigantic; many of our states are bigger than whole European nations. The bureaucracy required to institute and manage a nationalized health system here would be Byzantine beyond belief and would vampirically absorb whatever savings Obama thinks could be made. And the transition period would be a nightmare of red tape and mammoth screw-ups, which we can ill afford with a faltering economy.

As with the massive boondoggle of the stimulus package, which Obama foolishly let Congress turn into a pork rut, too much has been attempted all at once; focused, targeted initiatives would, instead, have won wide public support. How is it possible that Democrats, through their own clumsiness and arrogance, have sabotaged healthcare reform yet again? Blaming obstructionist Republicans is nonsensical because Democrats control all three branches of government. It isn't conservative rumors or lies that are stopping healthcare legislation; it's the justifiable alarm of an electorate that has been cut out of the loop and is watching its representatives construct a tangled labyrinth for others but not for themselves. No, the airheads of Congress will keep their own plush healthcare plan -- it's the rest of us guinea pigs who will be thrown to the wolves.
....
And what do Democrats stand for, if they are so ready to defame concerned citizens as the "mob" -- a word betraying a Marie Antoinette delusion of superiority to ordinary mortals. I thought my party was populist, attentive to the needs and wishes of those outside the power structure. And as a product of the 1960s, I thought the Democratic party was passionately committed to freedom of thought and speech.

But somehow liberals have drifted into a strange servility toward big government, which they revere as a godlike foster father-mother who can dispense all bounty and magically heal all ills. The ethical collapse of the left was nowhere more evident than in the near total silence of liberal media and Web sites at the Obama administration's outrageous solicitation to private citizens to report unacceptable "casual conversations" to the White House. If Republicans had done this, there would have been an angry explosion by Democrats from coast to coast. I was stunned at the failure of liberals to see the blatant totalitarianism in this incident, which the president should have immediately denounced. His failure to do so implicates him in it.

The whole piece is quite good. I'd recommend reading it.

Pre-Market Update

Ultimately I don't trust moves that occur during the last 1/2 hour of the day. That window is used for position squaring and tends to be very unreliable for price action dictating anything predictable. So yesterday I said 995/994 was a major price point for signaling the end of this rally that originated at 865ish. Yesterdays close did close under the 995/994 level, however the price action that occurred from 3-3:30 was more telling than the price action from 3:30-4:15. We ranged in the 995/994 area for almost 2 hours in the afternoon before the position squaring window took prices lower. This signals to me a lack of conviction on sellers to push prices lower.

What they need to do today is prove they have conviction and the only way of doing that is to sell with conviction. Any hesitation will be exploited by buyers because 995/994 is the maximum stretching point for buyers before breaking. If sellers are willing to stretch them to their breaking point and not break, there will be a snap back and we'll see the upper end of this trading range tested (1016) and most likely broken.

Overnight sellers tried to gap down lower and show some selling conviction, but were stopped at the 986 area which shows that buyers are still willing to fight back and do so optimistically. By doing so this confirms a previous pattern and I can say that I need to see 983 tested and broken soon (including a close under that level) for me to finally call this rally finished. The first thing I am looking for is a close under 990 to signal a test of 983.

Comstock Partners: V shaped move in stocks doesn't mean V shaped recovery

A very nice piece in Comstock Partners Market commentary where they suggest the market is out on a limb:

The stock market rally has now reached a point where it is forecasting a V-shaped recovery that is not likely to happen.
The recent catalyst for all of this optimism is a bullish interpretation of current economic activity, some apparent stabilization in the housing market and various companies beating earnings estimates. Also not to be overlooked is the perceived strength of the Chinese economy that is affecting global growth and the upward move in some basic commodities. We think that all of these points are being exaggerated while the fear of missing the train leaving the station is resulting in a speculative surge that is likely to leave the majority disappointed.
...
As for the housing market, although we've seen some signs of stabilization at extremely low levels, the picture is nowhere near as bright as the screaming headlines in some major newspapers. New home sales for June were actually down when seasonally adjusted. Moreover the number of new homes sold in June was the worst since June 1982. You'd never know that from reading the newspapers or watching financial TV. Furthermore, income and employment, the main drivers of housing demand, are still too weak to support a meaningfull housing recovery. When we add in falling prices, excess inventories, more foreclosures and another surge of resets ahead, the housing picture is not too pretty.

Another factor that is being hyped is the bullishness over 2nd quarter earnings reports. Sure, earnings are beating expectations, but that's because they were deliberately set so low in the first place. While earnings are beating the most recent estimates they are actually still below the forecasts made in February.

They are a great resource for weekly readings. I would recommend checking them out.

Just A Little Market Update

So we have now filled the gap from last Friday's open @995 (Aug 8) which has essentially stretched this rally about as far as it possibly can go before breaking down (994 has some significance). So a close under this 995-994 area would be the "put a fork in 'er" type event and would signal at least a test of 980-978.50 area but most likely call to an end of this rally signaling a test of its origin at 865 with a stop on the way at 952.50.

Keep in mind I am neutral until this level is broken, but I my conviction for a break lower extending down 100+ points has increased.

A Surprise to No One: Paulson was still in bed with Goldman

courtesy of NYT

Before he became President George W. Bush’s Treasury secretary in 2006, Henry M. Paulson Jr. agreed to hold himself to a higher ethical standard than his predecessors. He not only sold all his holdings in Goldman Sachs, the investment bank he had run, but also specifically said that he would avoid any substantive interaction with Goldman executives for his entire term unless he first obtained an ethics waiver from the government.

But today, seven months after Mr. Paulson left office, questions are still being asked about his part in decisions last fall to prop up the teetering financial system with tens of billions of taxpayer dollars, including aid that directly benefited his former firm. Testifying on Capitol Hill last month, he was grilled about his relationship with Goldman.
...
Mr. Paulson did not say when he received a waiver, but copies of two waivers he received — from the White House counsel’s office and the Treasury Department — show they were issued on the afternoon of Sept. 17, 2008
...
During the week of the A.I.G. bailout alone, Mr. Paulson and Mr. Blankfein spoke two dozen times, the calendars show, far more frequently than Mr. Paulson did with other Wall Street executives.

On Sept. 17, the day Mr. Paulson secured his waivers, he and Mr. Blankfein spoke five times. Two of the calls occurred before Mr. Paulson’s waivers were granted.

It is just amazing that this amount of backdoor dealing occurs and goes unpunished. I'm frightened to see how much will occur if we do pass this healthcare bill