February Stock Talk !!

"I expect there will be some failures," he said. "I don't anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system."

The Fed announced again on March 9th, with no palatable explanation, that they will no longer publish M-3 as of March 23rd. While they claim that M-3 is useless, in the blurb on their website, the fact is banks are still reporting all the data on their Call Reports used to calculate M-3. The Fed has not eliminated the unique M-3 components from the Bank Call Reports.

Why don't they want to be transparent with the most important statistic, the very measure of why they were established by a minority of Congress during a late night session back in 1913? Because they cannot wait to pump money to high heaven like some sort of fiat tower of Babel.

M-3 was increased by $28.3 billion last week, a 14.2 percent annualized rate of growth. Over the past 2 weeks, M-3 was boosted an amazing $81.9 billion, for an annualized rate of growth of 20.7 percent! Over the past 8 weeks, M-3 is up 129.6 billion, an 8.2 percent rate of growth, and is up a whopping $249.7 billion over the past 12 weeks, a 10.7 percent annualized rate of growth, a $1.0 trillion annual expansion.

What is happening here? How does this reconcile with the Bernanke announcement that bank commercial real estate lending will be curtailed?

I do still own SKF.  I also am short via SRS (largest position), SMN, FXP, and LEH puts. 

However, I just closed out of 75% of my LEH puts for a realized 26% gain.  I'm keeping the rest for the chance of a big hit next week. 

Today's observation is an excellent one... and one we can't take credit for. It comes from our friend and supertrader Jeff Clark.

 Jeff cautioned traders on the danger of buying agricultural assets right now... specifically, the PowerShares DB Agriculture ETF (DBA).

We've mentioned the DBA several times as a direct, one-click way to participate in the soaring corn, soybean, and wheat markets. We trumpeted its introduction over a year ago, and it's been a huge winner for its entire existence.

He spoke today at the CLSA Japan Forum in Tokyo.

On the outlook for agricultural:

``If I told you how bullish I am about agriculture, you'd ask me to leave the room. Prices of agricultural commodities are going to explode. Inventories of food are the lowest they've been in over 40 years. The number of hectares devoted to wheat farming has been declining for over 30 years.''

``All of you should get all the sugar you can. The price of sugar is going to explode.''

``I'm bullish on cotton and have been for a while. A lot of people in the textile business are starting to convert from synthetics to natural fibers again because it's so much cheaper'' given the rise in prices for oil used to make synthetic fibers.

On prospects for the Japanese yen:

``I own the yen and it's another thing I'm buying these days. I'm convinced the carry-trade is going to reverse and when it does the yen is going to go through the roof.''