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Comments on the overall strength of the markets

September 3, 2015

Chris is with us today to chat about his outlook on the conventional markets. We feel as though the selloff will not come extremely quickly but you never know…

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Discussion
54 Comments
    CFS
    Sep 03, 2015 03:54 AM

    How quickly things change though.

    Sep 03, 2015 03:57 AM

    Big Al looking at this chart I’d say the FOMC has been very successful propping up the markets since 2009 S&P 500 up 225% all while the likes of B.M. suggests the Dow will crash, US$ will crash and Hyperinflation will hit the USofA, now that’s funny!

    http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=7&mn=6&dy=0&id=p30799666686&a=423003480&listNum=1

      Sep 03, 2015 03:42 AM

      OJJ:
      You don’t need to make stuff up. Yes, the DOW is crashing, you may not have noticed. The Dollar is doomed when the bond market heads south but I have not supported hyperinflation. With $630 trillion in derivatives, extreme deflation is certainly an option.

      Since you stand for nothing at all, you are quite comfortable making stuff up.

        Sep 03, 2015 03:09 PM

        http://www.kereport.com/2013/08/08/morning-gold-commentary-bob-moriarty/

        Dow was at 14700 and you were certain of a crash! ….Dow rose 25% since Aug 2013 and you also called the low is in for gold, its been on a steady decline since Aug 2013….so I guess in cryptic manner a Dow crash to you is a healthy stealth bull market so sell gold

            Sep 03, 2015 03:02 PM

            OJJ:

            Thank you for proving my point. I did not say we were going to go into hyperinflation. I showed both sides of the coin. That’s something you always manage to avoid. So you can drop the hyperinflation bs.

            BM: That’s a really great question, but unfortunately I’m going to have to dodge it. You’ve got about $700 trillion in derivatives, and by everything that makes sense financially, we should have a credit market crash and total deflation. On the other hand, we’re printing to beat the band, and sooner or later that will cause hyperinflation.

            The only question is does the $700 trillion in derivatives blow up first, or does the hyperinflation take off? When the US longterm bonds are about 3%, it’s going to cost $800 billion a year in interest. That’s on a tax income of $1.6 trillion. We’re in Never Never Land, and it’s like asking are you worried about dying of cancer, or are you worried about dying of a heart attack. The answer should be I’m worried about dying. So it doesn’t make any difference how the financial system is destroyed, but it is going to be destroyed.

      GH
      Sep 03, 2015 03:57 PM

      OJJ, sincere question: what’s wrong with the notion that the longer the market is goosed with easy money the worse will be the eventual bear?

      I’m not talking about trading or timing. Just the basic principle. Do you disagree with that?

        Sep 03, 2015 03:08 PM

        GH we came within a 1/2 hour of the US financial system from closing if it wasn’t for the feds stepping into the inter dealer markets. That’s as bad has it gets imo, so Dow 26,000 in 2017 and loses 50% based on the eventual bear market collapse, hey great buying opportunity.

          GH
          Sep 03, 2015 03:14 PM

          Okay. Your reply sounds like you assume that one can just goose the markets to unheard-of extremes and, hey, no big deal–trade it baby!

          I have to agree with Bob M. They’ve thrown things so far out of whack that it will eventually lead to a disaster, as it has historically. An agile trader like yourself might do well in all this. I hope to do so. But I want to have plenty of well-chosen, non-paper assets when the disaster starts to break.

            Sep 03, 2015 03:25 PM

            GH I can say with all honesty I have no idea how this global central bank experiment will work, lets say my ego won’t allow me to do so vs so many gurus on the web today

            Do any of us know what gold and silver will do in such an event, no!

            What if the governments make it illegal to own gold, again?

            I have no idea if the Dow is going to 1000 or 30gs I will just invest long or short as the chart system I use suggests, who thought when the SnP was 666 it was going 200% higher, not me, did Bob M heck no!! it was going to crash for the past SEVEN YEARS!!

            Sep 03, 2015 03:44 PM

            +1 GH
            Stocks have have smoked both dollars and gold during the last four years but the time is coming (soon, in the scheme of things) when we’ll start to notice a divergence in which stocks will continue their rise against the dollar but plunge anew versus gold at the same time.
            The Dow would have to be triple, or 49,500 right now, just to match its 1999 high vs gold. Since gold is even better than shadowstats for measuring monetary debasement, this tells you just how much of people’s retirements have been transferred to a special few. Throw in the repeated selling low and buying high that most people do, and the picture is much worse.

            GH
            Sep 04, 2015 04:13 AM

            OJJ, Like you, I don’t know how it will work out. I just expect extreme events. If there aren’t, great, I can keep making a living. If there are, I’d like to be insured.

            Will gold and silver serve as insurance? In some plausible scenarios, yes. Would I want to rely strictly on bullion in my physical possession? No. A more diversified insurance approach would be preferable. Lucky folks like you, who have the resources to effectively diversify.

            R.e. paper assets: What if there are market holidays where they revalue your assets? What if your broker pulls an MF Global? Etc. You get my drift.

          Sep 03, 2015 03:34 PM

          OJJ:

          You simply don’t get it. The system we have doesn’t work. We need the financial system to collapse. Whatever we end up with at the end is better than what we have now.

          But since you don’t understand the difference between hyperinflation and deflation, I’m sorta wasting my words.

          Trade away. I’m thrilled to see you think you are smarter than this market.

    Sep 03, 2015 03:57 AM

    CHRIS TEMPLE just owned Cory LOL

    CFS
    Sep 03, 2015 03:58 AM

    Beige book reports how things were, not how things are, and certainly not how things will be.

    Leading economic indicators are pretty flat right now.

    jon
    Sep 03, 2015 03:07 AM

    For you who believe the Fed/Gov’t/PPT is in these markets, why not just announce it as China, Japan, Russia, etc. have done? They would get 100x more bang for their buck, so why keep it secret? Why print $4t and ANNOUNCE every monthly purchase of bonds, but keep it quiet about stocks, gold, etc. And finally, the stock market means little to the public on a large scale, whereas as prices at the the pump matters more than anything, so why not use all that firepower to keep crude under $50 than to keep the spoos up every day?

      Sep 03, 2015 03:13 AM

      jon your wasting your time 99% of those here have never been at the professional level within the markets so they hang on the boogie man story and wear tin foil hats. There is always big players in every market that have pushed values to the extreme mostly because than can, only to set up their next position, short/long its a game played since JC was a carpenter!

        jon
        Sep 03, 2015 03:25 AM

        originall jj, you are right, waste of time here. good luck. adios.

      Sep 03, 2015 03:23 AM

      Hi there jon. I don’t know what to make of all this. But I am really interested in what You have to say.

      1.) So then when and why do You think will markets crash next time?

      2.) Here I got a citation from a recent article by James West:

      “”””Authoritative articles on the ‘Plunge Protection Team’ as it was coined for a headline in the Washington Post in 1997, suggest that the group deploys funds from the Exchange Stabilization Fund, a (2006 figure) $38 billion secret account of the Treasury department to buy large volumes of stocks and stock futures to influence technical indicators and thus ease selling pressure during times of abnormally huge market sell-offs.

      The only hard evidence that such is the case is the consistently repeated pattern during market swoons of 400 points or more on the Dow in a single day, or when the 50 day moving average moves below the moving 200 day average – known as the ‘Death Cross’ among technical traders – of miraculous reversals against all logic. “”””

      What do You think? Does it make You think at all?

      Best Regards and Good Luck with Your trading.

    jon
    Sep 03, 2015 03:17 AM

    LOL, dam where is MY roll of tin foil!
    You are correct JJ, I just feel bad for the drivel that GATA, Sinclair, et.al. put out over and over again and these newbie trader/investors just have no idea what is really going on.

    CFS
    Sep 03, 2015 03:19 AM

    Commonsense from Chris! A high stockmarket gives the appearance of a healthy economy, not reality.

    How can the US have a good economy, when it has one of the highest corporate tax rates in the world?

    The US may have the best inventors, the best computer jocks, and the most innovation of new technology in the world, but they are battling against an uphill struggle of government drag of high taxation and excessive welfare, deficit spending, etc.
    The Government may be giving out hand-outs to banks, to create inflation, give the appearance of a managed situation, by postponing the consequences of their economics for a time, but eventually this process will have totally distorted a viable system. Capital will disappear or be in short supply; interest rates, currently totally distorted low, will rocket if the Fed ever stops pumping. The system is digging a hole that will collapse. The real question is when. It can muddle through longer than most folks think, but it cannot muddled through until things naturally “get better”. It can muddle through only until there will be a total systemic collapse. Then in retrospect, we will look back and wonder how the Fed and other Central Banks could have expected anything else.

      Sep 03, 2015 03:44 AM

      CFS: A high stockmarket can indicate nothing more than a lot of inflation ala Japan and Zimbabwe

        Sep 03, 2015 03:24 PM

        So Bob I guess its a better approach to suggest a continued call of a market crash in the Nikkei while the yen devaluation takes it from 8500 to 21,000 in the last 2 1/2 years, I’d rather make insane gains so that when THE bottom is in gold I can buy more oz, nothing more than good trading, no?

          Sep 03, 2015 03:04 PM

          OJJ:

          You have as much chance of seeing a bottom in gold as you have of finding a partner on Ashley Madison.

            Sep 03, 2015 03:03 PM

            At least I can still get it up Bob, can you even remember back that far?

            Since I sold my physical gold when the key $1525 level broke and silver $26 I have never called a bottom in gold, silver or the miners, you have for years!!!!

            Just like the spring of 2014 after gold popped $40, the low is in and gold with the miners are going a lot higher, charts can’t tell you that but I am, really gold continued to fall and the HUI lost 50%!!!

            Your ego is so big you suggest your the expert bottom caller of which those that follow charts will never do, remember this audio Booby?

            http://www.kereport.com/2014/06/19/bob-moriarty-gold/

            Sep 03, 2015 03:59 PM

            OJJ:

            We have had a lot of bottoms for gold that provided great trading opportunities for those who saw them. June 2014 was one and if you got it, you did well.

            But you think you are smart enough to pick the minute and hour and I can assure you with great confidence that you will be lucky if you get the century right.

            Sep 03, 2015 03:09 PM

            That is the difference between you self proclaimed guru’s and we pro traders, we never look for the bottom or top that’s what you egotistic morons do, we trade what the market gives us and could careless about calling tops or bottoms.

            The more you speak Bob the more you belittle your worth as a voice YOU know it all, WAFWOT

        CFS
        Sep 03, 2015 03:40 PM

        Or the high stockmarket, representing the value of companies is higher because of the inflation. Certainly true for the Wiemar Republic.

          Sep 03, 2015 03:03 PM

          Often a high stock market is a giant warning sign. The bigger the bull, the bigger the bear.

          No doubt I will be mocked for having an opinion but the world’s economy is so out of whack that it will take the worst financial collapse in history to manage a reset.

          The Euro is utterly insane, countries can print an unlimited amount of bonds but can’t print an unlimited amount of currency. But there is no difference between bonds and currency except the number of zeros on the paper.

          It takes 50 pages of regulations to know how much water you can put through a toilet design.

          QE is an interesting theory that you can print wealth. I’m dying to see how that works out.

          At the end of the day and the system, you better have something in your hands that does not represent someone else’s obligations else you have nothing at all.

          Saying that a high stock market is a measure of health of an economy is flawed to the core.

            CFS
            Sep 03, 2015 03:18 PM

            There you go again, Bob.

            What I said was:
            Or the high stockmarket, representing the value of companies is higher because of the inflation. Certainly true for the Wiemar Republic.

            When I talk about an economy I try to stick in the word “appearance”, indicating NOT an exact measure.
            I agree with you the system is very messed up.

            Politicians are corrupt
            Regulators are incompetent or ideologically repressive or devoid of sommonsense.
            And I’m sure you are aware of my opinions about leadership.

    Sep 03, 2015 03:22 AM

    Hello there.

    All this talk is getting me confused. It is my experience that in this global marketplace more or less everything goes down when the big indices go down for real. Gary is talking about the seven-year-cycle-low, Avi yesterday said that he expects the big indices to go lower after a minor push to the old highs.
    As I understand it there are so many big players investing with borrowed money that they will have to sell also some good assets, stocks etc. to cover the losses the would make on borrowed money.

    Wouldn’t this also take down or suppress oil and oil stocks even if the CRB low is in right here and right here and now?

    My experience is that just everything goes down. 😀

      Sep 03, 2015 03:07 PM

      Nic:

      At last a solitary voice of sanity.

      Yes, everything goes down in a crash for exactly the reason you say, the big guys dump the baby with the bathwater. If you understand the concept of buying cheap and selling dear, there will be the greatest transfer of wealth in world history.

      The selling will be overdone. The pendulum will swing way lower than fair value but not for long. As of now, the CRB in constant dollars is lower than it has been in 59 years. Meaning that you could buy any member of the CRB and odds would be that you would have made a profit in the last 59 years. But they probably will go even lower and if you can ignore the constant noise of PPT-PPT, you can buy really really cheap.

        Sep 03, 2015 03:30 PM

        And speaking of the big guys…….what would you do if you had an extra 20 billion sitting around in overpriced equities and were looking for a better place to invest it?…but then after looking there was pretty much nothing because EVERYTHING is overpriced already.

        Well that’s the story you are about to read. I picked this one up from ZH a few minutes ago and it started the wheels spinning. Ah!!! I thought, so that’s how we will eventually get the 30 year to fall to zero!

        And they said this was a bond bubble. Ha!

        Hopefully nothing that crazy ever happens of course. But this is a really interesting story about how the second largest pension fund in the US is about to rotate 10% of its portfolio into Treasuries because some stocks now look too risky.

        So they decided on UST’s because well…there is not much else out there deep enough to absorb that much money without seriously disturbing the underlying asset value. I mean, its not like they can dump it all in penny stocks!

        You have got to read this Bob. Just to get an idea of what may await us in the future as pension funds across the globe seek an outlet from frothy markets. You just KNOW pensioners are about to get royally screwed every which way to Sunday the way this show is moving.

        Gee…I wonder if any of that cash will land in the commodity markets. Orr maybe in gold. This story is going to be like Viagra for the precious metals crowd. Of course some of that money is going into beaten down resource stocks. Read on!

        Second Largest US Pension Fund To Sell 12% Of Stocks Holdings In Advance Of “Another Downturn” — ZeroHedge
        http://www.zerohedge.com/news/2015-09-02/second-largest-us-pension-fund-sell-12-stocks-holdings-advance-another-downturn

          Sep 03, 2015 03:45 PM

          On second thought, maybe the above story is really a glimpse into the future and how pensioners will eventually end up owning ALL of the Treasuries that are being sold off by the Chinese and other countries.

          Makes perfect sense really when we consider that the US national debt is roughly equal to all the pension funds in America (17 trillion each or something like that). And is this not what happened in Japan with the public in effect being on the hook for virtually all of their own debt via the pension systems ownership of JGB’s?

          They say that for every buyer there is a seller. And now we know who the buyers will be as foreign countries unload all those T’s at what they think is the market top. So is this the start of the financial reckoning?

          Sep 03, 2015 03:05 PM

          A Listener:

          What you say is correct but what everyone seems to be missing is the increasing lack of liquidity. Everyone assumes you can dump $500 billion into treasuries and all will be fine. But with $630 trillion in derivatives, the risk is not market risk. Everyone assumes the market works and you can guess right about puts or call or Tbonds and you will be just fine.

          But $630 trillion in derivatives says that the real risk isn’t market risk, it’s counterparty risk. You can guess right and get a failed delivery and then you are screwed.

          We have too much funny money floating around chasing phantom return and it will work right up until the minute it doesn’t work.

          I woke up 10 days ago to a 2% drop in the dollar in a day. No market can take those kinds of swings. Money is being destroyed by the minute and people are still mumbling about some mythical PPT.

            Sep 04, 2015 04:11 AM

            What I wonder is what would happen if too many of these giant pension funds decided to move, not ten percent of their funds, but 30 or 40 instead. And does this not just show that there is no easy places for capital at those levels? Those guys talk about reallocating a percentage of their mammoth funds over a period of many months and possibly a year. It’s akin to changing the direction of a Supertanker in a narrow sea channel. But the direction they are heading is no better than what they are escaping from. Even some (one?) members of the Fed have said bonds are in a bubble. If all assets are inflated then where the hell do they put these retiree funds to work? Of course the other interesting question relates to just how low yields might drop on long term debt instruments if there was such a flood of capital moving there in a short period of time. Maybe Rick Ackerman will be right that owning TLT now is going to be one of the best trades over the next few years as bond prices soar on the news that monster-size pension funds are snapping up whatever comes to the market. And its not like this problem they are having is isolated just to US pension funds. That article also mentioned Norway’s sovereign fund, Japanese pension plans and others as being in the exact same predicament and needing an outlet for under performing capital trapped in over-priced equity markets. So this suggests there are going to be giant waves of capital soon to start sloshing into government paper and driving down yield….which defeats the purpose of owning them if you are last to the party.

            Hmmm….I wonder when the action will start?

    jon
    Sep 03, 2015 03:22 AM

    Cory, if you think Fed is propping up the markets why would you say that “have a little fire power left?” The have a printing press and are accountable to no one, so they have an UNLIMITED amount of fire power. If you think that they are in the markets holding it up, the will have the resources to hold it up as long as necessary.

      Sep 03, 2015 03:14 PM

      This whole thing about the Fed propping up the markets with cash and their printing press is so preposterous it ain’t funny anymore. US equity markets were worth roughly 20 trillion in 2015 which is a pretty sizable amount no matter how you measure it.

      All the QE’s were what…..4 trillion grand total?

      But even then that flood of money was used to buy up assets like Treasuries, Mortgage Backed Securities and what have you, not to be used as an ATM cash account to support stock valuations.

      So how much money does the Fed or its agent banks have at the ready to buy the dips and keep everything levitated? Probably next to zero relative to the total size of the market but lets play along just for fun….

      For arguments sake lets say its three hundred billion of walking around cash. That’s maybe a percent and a half of the whole market on a good day. Does anyone here really believe that would make a rat-sh*ts difference at the margin during a real panic sell-off?

      I really doubt it. And anyway they can only spend it once if the market keeps on falling before the account gets wiped out. Meanwhile, the folks who think a printing press is behind all the interventions in stock prices don’t seem to know anything about how the Fed even functions.

      They just kind of assume that at the flick of a computer terminal a few trillion can be conjured up out of thin air, thrown at any old US equity market decline to save the day and NOBODY would ever notice that it had been done nor would anyone EVER come forward and whistle-blow they were part of it!

      Stupidest thing I have ever heard in my life.
      ——————————————————–

      Getting back in a good mood….here is a very cool graphic of the worlds stock markets by country showing their relative size to one another. Oh look….China and Russia are not so big after all.

      Graphic — Countries Scaled to the Size of their Stock Markets.
      http://www.businessinsider.com/map-countries-scaled-to-equity-market-capitalization-2015-8

    Sep 03, 2015 03:01 PM

    I’m still short the S&P.

    CFS
    Sep 03, 2015 03:32 PM

    Me too, Jason. (and I believe PPT does manipulate at chaos times)

    A_Listener, when ignorance is bliss, be happy in wonderland.

    http://hwcdn.libsyn.com/p/1/3/a/13a4382021e8ddca/JBS_2015_09_02BBB.mp3?c_id=9740133&expiration=1441311531&hwt=19a94254fc974e5b036db7df08b57055
    Interesting comments on world economy and China at about 8 or 9 minutes in

      Sep 03, 2015 03:12 PM

      You have given far too much weight to the “Fed has your back” narrative and it could cost you in the end. How about the market is pretty much doing what it always does best. Which is keep most everyone confused and looking for answers in the strangest of places.

      We are talking a David and Goliath story here. A pea-shooter versus a torrential rainstorm. Not even the Fed has the power to stop a real market crash. You have got to get real, man. And since that’s the case you might ask yourself why is it we are getting just a modest correction and why that is happening.

        GH
        Sep 03, 2015 03:11 PM

        It doesn’t seem to me that the mechanism is just the Fed printing money and going long, but rather the easy money environment they have created. Virtually free money for the big players.

        How else to explain a market at all time highs in the midst of a lackluster (at best) economy?

        I freely admit I don’t have all the nitty gritty details of how it all works clear. As so many have pointed out, we can either trade the markets we’ve got or we can sit it out. Pondering these matters won’t help one’s short-term trading.

        But it certainly might help one navigate things over the longer term. These are extremely dangerous financial times we live in, that can be summed up in three words: massive debt overload.

      Sep 03, 2015 03:06 PM

      CFS:

      Good advice to A Listener about being happy in wonderland when ignorance is bliss. Of all the people here, you would know best.

        CFS
        Sep 03, 2015 03:29 PM

        None so blind as those that choose not to see, Bob.

        In case You missed it, I announce I was shorting the conventional market a couple of days ago.
        Even though I believe in PPT at times of Chaos, like Greenspan has said.

        And I gave the reason for being short was that over the next 6 weeks I expect the market to go lower.
        I have continuously said I expect the PPT only to smooth things into a bear market, trying to avoid a complete collapse.
        I don’t know if it can avoid a systemic collapse, but I expect it to try until it fails.

          Sep 03, 2015 03:36 PM

          CFS, you know why there cannot be a stock market crash at this time? For a hint go up higher on this thread and read about how the biggest pension funds in the US (and the world for that matter) are currently trapped in equities that they cannot escape because there just is not anything else large enough for them to escape into and still earn a buck. Here is the article in case you missed it.

          http://www.zerohedge.com/news/2015-09-02/second-largest-us-pension-fund-sell-12-stocks-holdings-advance-another-downturn

            CFS
            Sep 03, 2015 03:44 PM

            At least time will tell who is analyzing correctly.

          Sep 03, 2015 03:59 PM

          CFS:

          Trading this market is the act of a mad man. There are times the very smartest thing you can do is sit on your hands on the sidelines. This is one.

          You are going to get whipsawed.

    Sep 03, 2015 03:53 PM
      Sep 03, 2015 03:14 PM

      `making up what I just said,
      but it makes sense to me`.

      sounds like most people in the `community`

      just make shite up
      – it`s all good fun in the end
      said the bugger

      GH
      Sep 03, 2015 03:18 PM

      Nice! Exactly.

      CFS
      Sep 03, 2015 03:40 PM

      A very bright person is Rick! He always seems to nail it.

      I doubt if Bush and Obama are devotees of Goddess Kali, but I think the appropriate the description is Thug.

    Sep 03, 2015 03:26 PM

    Wasn`t paying attention and missed a nice retest of last week`s low for RGLD.
    Now I suppose gold will bounce $50 tomorrow.

    O well, a proper double bottom should take a couple months anyway.

    http://stockcharts.com/h-sc/ui?s=RGLD&p=D&yr=0&mn=3&dy=0&id=p94650366632

    bj
    Sep 03, 2015 03:30 PM

    The one things most responsible for a recovery our economy is the fall of gasoline prices. It was also the catalyst for the original crash: Just as all those liar loans with teaser rates started to reset, oil went through roof and ‘everyone’s’ disposable income went into the tank instead of absorbing the rate increases on their mortgages. One thing led to another, and before you knew all those mortgage backed securities sold to local, state, foreign government pension funds became worthless. But I digress. Point is, lower gas prices allow consumers to start to pay off credit card debt and begin to stabilize the household budget. My guess is that if oil stays low enough long enough we may actually see a true economic rebound in a year or two.

    But as for now, all the back and forth sniping above set aside, the DOW saw its 50dma cross to over it 200dma to the downside. That’s a big one, and since the FEd only cares about its crony Wall Street banks since the repeal of Glass Steagall (thus allowing the brokerage houses to become “banks”), I seriously doubt (and have always maintained) that it will be QE to infinity…as the Fed never intended anything giving the enormous debt hanging over the “markets” and US Treasury.

    Sep 05, 2015 05:21 AM

    Bob M your a goof ball. I spent a couple years studing and can call it beter then uou life time of market knowledge.
    You have been call for the Dow crash for years. 3 years ago you said the banks would colapse. The easiest call you every made you said. Ive got a 50 of you dumb ass calls invouding your hold bull market call last winter. LOL
    Maybe you should talk to Hoye. Gold is in a bear market and dont expect to make any money off it. But you are making a shit load off adds. Your a con in in many peoples book I know. Go away your info in near usless. Actualy usless. If you had said to sell gold and anything related to it 2011 we would respect that. You said your not a guru so why do you poke your head up like you are? Originall jj should have a site not you. Lol
    Gold is so cyclical its not even funny. It went up in the boom and then crashed with everything else. Then everything else with a yeild took off. What did you say 8 years ago?? Gold stocks will be the next Google. Your exact words. You should pull up the HUI to Google. It didnt quite pan out eh? I can guess much better than you.