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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (63792)	6/15/2006 11:18:40 AM
From: yard_man	Read Replies (1) \| Respond to of 110194

happy options ex rally ... chicken choking?? are you going to start maligning my hobbies again ... can't get no respect.

To: orkrious who wrote (63792)	6/15/2006 11:44:16 AM
From: ild	Read Replies (1) \| Respond to of 110194

Global CFO Survey: Economic Optimism Drops as Risks Multiply for Corporate Sector dukenews.duke.edu The study's main findings are: -- Only 24 percent of CFOs are more optimistic about the U.S. economy, in contrast with 42 percent last quarter; -- 49 percent are more optimistic about their own companies, however, suggesting the pressures facing the economy have yet to affect most firms directly; -- Rising wages, falling consumer demand, and increased fuel costs top CFOs’ lists of concerns; -- CFOs say their bottom lines will suffer if core inflation rises to 3.5 percent, the Federal Funds rate goes above 5.5 percent, or if the price of oil surpasses $75 a barrel; -- Companies will increase capital spending 7.5 percent over the next 12 months, an increase from last quarter, when CFOs predicted a rise of 6.5 percent; -- Earnings are expected to increase 10.4 percent over the coming 12 months; -- Corporate cash balances will grow another 2.1 percent. OPTIMISM ABOUT U.S. ECONOMY PLUMMETS Business optimism about the U.S. economy declined sharply, with only 24 percent of U.S. CFOs more optimistic than they were last quarter; 46 percent are less optimistic. At the same time, CFOs’ optimism about their own firms remained fairly steady, with 49 percent growing more optimistic and 28 percent becoming more pessimistic. “CFOs are telling us that we are moving closer to the danger zone for the U.S. economy, but that their firms can ride it out for now,” said John Graham, a finance professor at Duke’s Fuqua School of Business and director of the survey. “There are several risk factors that are near the tipping point, and if any of them worsens, it would heighten the risk of a corporate slowdown.” CFOS WORRIED ABOUT WAGES, INFLATION, CONSUMER DEMAND Corporations are worried about inflation and wages. U.S. companies expect to increase their prices by 3.1 percent over the next 12 months. This would put the U.S. economy dangerously close to 3.5 percent inflation, the level at which a majority of CFOs say their bottom lines would begin to suffer. Trouble may arrive even sooner as a result of oil prices; CFOs say prices above $75 per barrel will harm profits. CFOs are similarly worried about the Federal Funds rate. “CFOs don’t want any more Fed hikes,” said Campbell R. Harvey, founding director of the survey and a finance professor at Duke. “The CFOs have drawn a line in the sand. Rates above 5.5 percent will be damaging and rates above 6 percent would cause substantial damage to their bottom lines. The Fed does not have much wiggle room left.” CFOs cited rising labor costs as their No. 1 concern for the first time in the history of the survey. The second highest-rated risk facing the corporate sector is waning consumer demand, followed closely by rising fuel costs, increasing interest rates, a shortage of skilled labor and high health care costs. Asian corporate concerns are similar, but with more emphasis on consumer demand and fuel. European CFOs list high wages and salaries at the top of their concerns, followed by waning consumer demand. “The risk posed by rising health care costs has not gone away, but companies now have bigger worries,” said Don Durfee, research editor at CFO magazine. “Rising wages and salaries are a problem because CFOs tell us that they can only pass along about 40 percent of increases in employment costs. Similarly, on average only about half of rising commodity prices show up in the final prices of the products that their companies sell. The companies have to eat the rest.”

To: orkrious who wrote (63792)	6/16/2006 8:48:43 PM
From: russwinter	Respond to of 110194

Some more defensive as opposed to swing for the fences put spreads strategies that might work here, with the premiums higher. The further out priced puts have higher implied volatilities than the closer strikes. Yesterday with SPY at 126.00 I bought the July 127 puts, and wrote the July 124 for 1.10 debit. 125.90 would be breakeven, max return 1.90. Did the same today on BSC July 135/125 puts at 3.70 debit, with the stock trading round 132. Be a little careful how far out you go on option duration, because the vegas thinkorswim.com have been expanding on the market swoons, and it shows up mostly in the lower strike prices.

To: orkrious who wrote (63792)	6/19/2006 2:46:01 PM
From: ild	Respond to of 110194

Date: Mon Jun 19 2006 12:07 trotsky (@Fed) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved ``There's a clear link between what the data says and what they're going to do next.'' and that pretty much sums up why the bureaucrats can not possibly 'get it right'. the data ( such as they are - one must not forget that the government's economic data are only very loosely connected with reality ) describe the past, whereas the FOMC's actions influence the future. so they are using what has already happened to determine what they should do 'next' - which will only have an effect on what WILL happen. since they are inordinately inept as fortune-tellers ( just recall the great many totally wrong forecasts by Uncle Alan ) , they should accept that no amount of data can possibly point them in the right direction. instead, money and its price should be left entirely to the free market. Date: Mon Jun 19 2006 11:44 trotsky (PoP-eye, 10:02) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved mopping up 20 trillion Yen in liquidity is the exact opposite of inflationary, that much is certain. as to how it's done, the same way all CB's operate, by tightening reserve requirements and selling bills and bonds to the banking system for the cash. no landfills needed, as it's all in the form of electronic digits anyway. there's a good chance the markets will force the BoJ to reverse course - by way of more declines. at least that is what happened last time they attempted to tighten in the course of '00. in '01 they abandoned the tightening campaign and went back to ZIRP and quantitative easing.

To: orkrious who wrote (63792)	6/19/2006 4:04:46 PM
From: ild	Respond to of 110194

Reduced Gold Calls Position Golden Star also announced today that it has reduced its gold call option position by buying back some of its calls in the market. The Company's call option position is now 2,000 ounces of gold per month at a strike price of $525 per ounce through March 2007. This action is in keeping with statements by the company to reduce its hedge position opportunistically and to be known again as an unhedged producer.

To: orkrious who wrote (63792)	6/20/2006 12:00:32 PM
From: ild	Respond to of 110194

Date: Tue Jun 20 2006 10:32 trotsky (frustrated@ the Fed) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved yes, they are known for overdoing it, but imo they have ALREADY overdone it. it's just not yet obvious to them. Date: Tue Jun 20 2006 10:13 trotsky (lead/lag) ID#248269: gold sector lead time vs. actual rate decreases by the Fed is approximately 3-6 months. Date: Tue Jun 20 2006 10:08 trotsky (frustrated@FF futures) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved please note that that might not mean much. the FF futures often tend to be wrong close to turning points, and also when there is an extended 'no change' period. imo the better predictor is the yield curve itself. having inverted twice in succession, and nearly certain to be strongly inverted after the June hike, it supports the idea that we're in last lap territory. Date: Tue Jun 20 2006 09:51 trotsky (@the Rand) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved the Rand is now severly oversold ( it's down the 9th week in a row! ) , but at the same time, it has broken an important short as well as long term support level. since the break is only marginal at this stage ( on a monthly chart one could even argue it's not a valid break just yet ) , this support level may yet hold. if it doesn't, and a further decline in the Rand does NOT lead to a lower USD PoG ( similar to e.g. late 2000- mid 2002 ) , the South African gold miners will rake in a lot of money and their shares should re-adjust to reflect it. in fact, considering the current Rand PoG, these stocks are at bargain basement prices here.

To: orkrious who wrote (63792)	6/20/2006 1:54:43 PM
From: ild	Respond to of 110194

Date: Tue Jun 20 2006 13:00 trotsky (mozel, 11:53) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "written guarantee"? you must be joking. nothing a 'presidential signing statement' couldn't fix in a nanosecond. don't forget, 'we're at war' and that means anything goes. still think we need a government? your pro government argument ( no other way to protect the weak ) suffers from a major flaw, namely the fact that the institution as such has an inherent tendency for transformation, in only one direction: for the worse. it doesn't matter that in the best case it starts out as a consensual agreement between those governed and those doing the governing - the end result is ALWAYS tyranny. it sometimes takes a few 100 years to get from here to there ( see Roman Empire, old Greeks, or the modern-day democracies ) , but in the end you always get there. Date: Tue Jun 20 2006 12:43 trotsky (frustrated, 10:43) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved it certainly isn't overvalued against e.g. the Euro. the euro-zone printing presses have run at a much faster pace over the past two years than those of the Fed. it's also hard to make a case that emerging markets currencies represent value here vs. the dollar. of course it's a good bet that once the Fed lowers rates again, dollar selling will resume ( most foreign CB's have still a long way to go to properly rebalance their forex baskets ) . Date: Tue Jun 20 2006 12:38 trotsky (frustrated, 10:41) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved not just pension funds. imo major source of demand for treasuries waiting in the wings is the US banking system, with its current enormous exposure to the housing credit bubble ( 63% of all bank assets are now mortgage related ) . when times get tough, the banks will lend to the most creditworthy borrower and play the yield curve ( which will be a lot steeper ) .