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Extraordinary Volatility


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If this isn't the week Noland mentions "extraordinary volatility" in his opening paragraph.......

 

More big news hit the tape today. AMAT smoked for 5%. CRB hits a new high, thanks to a gigantic 6.5% move in the Natural Gas futures. Gold closes the week within a hairsbreadth of $400. Gold and silver juniors like WHT and CDE up another 8%.

 

But next week is Scam Week.

 

Unless we get an gap and crash Monday, a bounce is imminent.

 

When was the last time shorts were winners during Scam Week??

 

I can't remember.................

 

There is always some type of excuse to go long:

 

- End of Month Tape Painting

- End of Quarter Bonus Jamming

- Pre - FOMC Ramp Job

- Post - FOMC Resubstantiation and Confirmation

- T-Bone Auctioneering

- Scam Week

 

I guess that leaves about 5 trading days a month suitable for short selling.....

 

No time to write much today, so I?ll borrow some snippets from last night?s M2M rap session.

 

Here?s Cardiff?s take on the most important stock in the Speculative Sphere: AMAT

 

Here is some amazing info re: AMAT stock.

 

Since 1978, the stock has run up a 36% per year trendline (I said 39% earlier).

 

In 1995, AMAT earned 454 million and the stock's trendline was at $1.76

In 2003, AMAT will earn 200 million and the stock's trendline is today at $25 area.

 

If AMAT's earnings would have increased 36% per year since 1995, they would do $5.3 BILLION in 2003.

 

AMAT had a PE of around 6 in 1995. Today their PE is 212.

 

If AMAT sports a 25 PE in 10 years, and the stock price were to still go up 36%/year, AMAT would need to generate 44 Billion dollars in profits in the year 2013 to support a stock market price of $585/share or around $900 billion

 

Check out how large these companies will be in 10 years if the trend of the past few decades continues:

 

DELL has grown 60% annually for 14 years. In 10 years, a $10 trillion mkt. cap.

MXIM has grown 40% per year for 15 years. In 10 yrs, $500 billion.

QCOM at 38% for 12 years will be $960 billion

EBAY at 71% for 6 years will be $7.7 trillion

HD at 36% for 22 years will be a $1.8 trillion company in 10 years.

 

I guess valuation doesn?t matter. We?ll find out soon enough.

 

Buddha checks in?..

 

May the Force be With You Stoolies. Arch fiend Al Green continues to run the big lie. Why not? Entire executive branch is peopled with ad agency hacks,failed oil flim flammers and crude psychopaths. Lying is the essential tool of despotism. The 'big lie' as defined by Joe Goebels is to merely repeat the most outrageous untruths as often as possible until they become accepted as fact. The enormous contempt and disdain for the teeming masses is the calling card of these elites. The House of Cards remains. How much longer it stands no one can say. Dow 10,000 is a given. Should be a staged Orwellian event of unheard of magnitude in the media. There is no difference between the marketing of war and the marketing of equities in these dark times. All of it is staged, clownish and tasteless. Whats left for the sane is only humor and an occasional trade. May we all live with as much integrity as can be summoned. Bless you guys, buddhadropping

 

Other big news was the non-stop collapse in the U.S. Peso last night. Currency short sellers dare not press their positions, due to the imminent ?intervention? by the Bank of Japan. Overheard a conversation on the wires last night:

 

Ring, Ring........

 

Ring, Ring........

 

Ring, Ring........

 

Finally the BatPhone is answered

 

Alan Greenspan: "Get me Fukui, now!!"

 

Fukui: "Ah, sooo, Good morning, Mr. Greenspan"

 

Al: "Spare me the pleasantries!! Where are the buy orders?"

 

Fukui: "Buy orders for what, Mr. Greenspan?"

 

Al: "The U.S. Dollar, you stupid fool!!! Double Bottom must be defended now!!! ASAP!!"

 

Fukui: "So sorry, Mr. Greenspan, I'm late for my appointment at the Hostess Bar. Call tomorrow, and we can discuss."

 

Al: "No!!! I need the BOJ's cooperation now!!! I need support for the dollar IMMEDIATELY!!!"

 

Fukui: "So sorry, Mr. Greenspan, you must wait for BOJ committee. Meeting next week. We discuss then."

 

Al: "What?? No!! Support is needed NOW!!"

 

Fukui: "No can do, Mr. Greenspan. Seems that we have too many T-Bone Treasuries on our plate now. Stomach too full. Maybe we should go to foreign exchange and offload some excess baggage."

 

Al: "Are you kidding?? Where else are you going to invest?? We are the investment of choice right now"

 

Fukui: "High ranking party officials are getting struck with Gold Fever. Unable to stop it. Something about rising prices and safety."

 

Al: "No!!! No gold purchases!!! It will cause a panic at the JPM Derivatives tower!!! Everything will come down!!?

 

Fukui: ?Not my problem. You have the problem. I am creditor. You are debtor.?

 

Al: ?Don?t push me!!! Otherwise, I?ll send nuclear bombs, if you don't cooperate!! If my GSE's melt down, Tokyo melts down the next morning!!"

 

Can't paint a better summary than this, offered by Machinehead:

 

Most towns don't allow you to burn leaves anymore. But today you could sure smell that autumnal scent of paper burning.

 

The CRB chugged ahead to 257.30 (+2.30). Dec. 2003 gold futures closed at another 7-year high, just short of $400. The HUI clocked another 7-year intraday high. Crude oil closed at $32.32 (+.42), just 23 cents short of a 52-week high. Natural gas flamed 5.9% higher. Kali house prices soared at a 20% annual rate, with several beach locations hitting an average price over $1 million (such as Malibu, up a modest 57% in 12 months).

 

Meanwhile the dollar index teeters at the edge of collapse, though it's only measured in relation to other (mostly European) paper currencies.

 

Al, Benny & Co. have been getting a free pass for years, pumping up an insane credit bubble, even as they cackle madly about "an unwelcome fall in inflation" and "low rates for the indefinite future." They just ignored the anal cysts who warned that asset bubbles are a form of inflation, just as surely as a rising cost of living is. They insultingly dismissed critics with the absurd claim that "bubbles are identifiable only in retrospect." (Try that as a criminal defense -- "I'm not responsible. Murder can be identified only in retrospect.")

 

Well, today Al's bluff was called. The PPI spewed 0.8% in a month, vs. 0.2% expected, and stocks took a whaling. The inflationary chickens have come home to roost, in the hallowed PPI/CPI numbers where they can't be ignored any longer. Als's ruined Dorian Gray face took a savage whack upside the head. Biff! Wap!

 

The icing on the cake is that this inflationary fecal dump occurs in the twilight of Al's career, when he was hoping to bow out in a blaze of glory, full of foil-wrapped chocolate boxes and colorful award sashes and tootling coronets.

 

Sir Al "Lounge Lizard" Green is identified at the pinnacle of his career as just another pedlar, hawking inflationary snake oil from the back of his rag wagon, like a modern-day William Jennings Bryan or something. "Time wounds all heels," as my late buddy Scott Cochran of Texarkana, Ark. used to say. Hasta la vista, Al.

 

An old five-and-dimer

Is all that I wanted to be

 

- Waylon Jennings, Honky Tonk Heroes album

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Well, the bullish hubris is deafening.

 

On top of CokeBoy's appearance on the Rush Limbaugh show, this is from Alan Farley at RM.com from 2 days ago

 

"Let me say it as undiscreetly as possible. Anyone who thinks this bull market is even close to being over is out of their minds. No need for arguments. Look at the gosh darn ticker tape. It says higher. That's all anyone needs to know. I really worry that the permabears will keep folks from making the big money they can make over the next year, because they're hiding under their matresses waiting for Armageddon. Here a hint: every permabear I know talks his or her position. Translated: no bearishness = no following, no newsletter subs, no hedgie investors"

 

 

 

My comment. Those damn permabears and their 300% CDE one-year gains.

LOL. What an idiot.

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Most towns don't allow you to burn leaves anymore. But today you could sure smell that autumnal scent of paper burning.

 

The CRB chugged ahead to 257.30 (+2.30). Dec. 2003 gold futures closed at another 7-year high, just short of $400. The HUI clocked another 7-year intraday high. Crude oil closed at $32.32 (+.42), just 23 cents short of a 52-week high. Natural gas flamed 5.9% higher. Kali house prices soared at a 20% annual rate, with several beach locations hitting an average price over $1 million (such as Malibu, up a modest 57% in 12 months).

 

Meanwhile the dollar index teeters at the edge of collapse, though it's only measured in relation to other (mostly European) paper currencies.

 

Al, Benny & Co. have been getting a free pass for years, pumping up an insane credit bubble, even as they cackle madly about "an unwelcome fall in inflation" and "low rates for the indefinite future." They just ignored the anal cysts who warned that asset bubbles are a form of inflation, just as surely as a rising cost of living is. They insultingly dismissed critics with the absurd claim that "bubbles are identifiable only in retrospect." (Try that as a criminal defense -- "I'm not responsible. Murder can be identified only in retrospect.")

 

Well, today Al's bluff was called. The PPI spewed 0.8% in a month, vs. 0.2% expected, and stocks took a whaling. The inflationary chickens have come home to roost, in the hallowed PPI/CPI numbers where they can't be ignored any longer. Als's ruined Dorian Gray face took a savage whack upside the head. Biff! Wap!

 

The icing on the cake is that this inflationary fecal dump occurs in the twilight of Al's career, when he was hoping to bow out in a blaze of glory, full of foil-wrapped chocolate boxes and colorful award sashes and tootling coronets.

 

Sir Al "Lounge Lizard" Green is identified at the pinnacle of his career as just another pedlar, hawking inflationary snake oil from the back of his rag wagon, like a modern-day William Jennings Bryan or something. "Time wounds all heels," as my late buddy Scott Cochran of Texarkana, Ark. used to say. Hasta la vista, Al.

 

An old five-and-dimer

Is all that I wanted to be

 

- Waylon Jennings, Honky Tonk Heroes album

You da man

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DELL has grown 60% annually for 14 years. In 10 years, a $10 trillion mkt. cap.

MXIM has grown 40% per year for 15 years. In 10 yrs, $500 billion.

QCOM at 38% for 12 years will be $960 billion

EBAY at 71% for 6 years will be $7.7 trillion

HD at 36% for 22 years will be a $1.8 trillion company in 10 years.

 

Yeah, but with rampant inflation, a good suit will cost a 65 million, dinner and a movie with the wife 12 million.

Loaf of bread 565,000

 

Seems like your numbers are right in line :D

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Most towns don't allow you to burn leaves anymore. But today you could sure smell that autumnal scent of paper burning.

 

The CRB chugged ahead to 257.30 (+2.30). Dec. 2003 gold futures closed at another 7-year high, just short of $400. The HUI clocked another 7-year intraday high. Crude oil closed at $32.32 (+.42), just 23 cents short of a 52-week high. Natural gas flamed 5.9% higher. Kali house prices soared at a 20% annual rate, with several beach locations hitting an average price over $1 million (such as Malibu, up a modest 57% in 12 months).

 

Meanwhile the dollar index teeters at the edge of collapse, though it's only measured in relation to other (mostly European) paper currencies.

 

Al, Benny & Co. have been getting a free pass for years, pumping up an insane credit bubble, even as they cackle madly about "an unwelcome fall in inflation" and "low rates for the indefinite future." They just ignored the anal cysts who warned that asset bubbles are a form of inflation, just as surely as a rising cost of living is. They insultingly dismissed critics with the absurd claim that "bubbles are identifiable only in retrospect." (Try that as a criminal defense -- "I'm not responsible. Murder can be identified only in retrospect.")

 

Well, today Al's bluff was called. The PPI spewed 0.8% in a month, vs. 0.2% expected, and stocks took a whaling. The inflationary chickens have come home to roost, in the hallowed PPI/CPI numbers where they can't be ignored any longer. Als's ruined Dorian Gray face took a savage whack upside the head. Biff! Wap!

 

The icing on the cake is that this inflationary fecal dump occurs in the twilight of Al's career, when he was hoping to bow out in a blaze of glory, full of foil-wrapped chocolate boxes and colorful award sashes and tootling coronets.

 

Sir Al "Lounge Lizard" Green is identified at the pinnacle of his career as just another pedlar, hawking inflationary snake oil from the back of his rag wagon, like a modern-day William Jennings Bryan or something. "Time wounds all heels," as my late buddy Scott Cochran of Texarkana, Ark. used to say. Hasta la vista, Al.

 

An old five-and-dimer

Is all that I wanted to be

 

- Waylon Jennings, Honky Tonk Heroes album

 

MH,

 

iwhere's the inflation in the bond market?

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