Price of cooking gas went up by 50 rupees (US$1.25) per 14 kilogram (30.8 pound) cylinder.

Some 300 million of India's population of around 1.1 billion live on less then a dollar a day and millions of others living on the state-set minimum daily wage of about 66 rupees (about US$1.6) cannot afford cooking gas at all.

Also not reported/lightly reported in the US are protests in England, Spain and France (to name a few) - fisherman, truck drivers, et al. Again folks as you now - if it doesn't happen in the United States it pretty much does not matter to the US press (short of a tsunami or historic earthquake - and then we can get back to Brad and Angelina news). But the ingredient that greases the skids of the world economy is causing major havoc worldwide. Just imagine the plight of said fishermen who is paying double the cost for petrol, and getting just a small uptick in fish prices to offset that. What happens? They eventually go out of business, and stop fishing. What happens next? Shortages in that product. ("thankfully" we still have big corporate fish farmers to offset it to some degree) But just apply that example to... everything. Almost everything must be transported. If oil does indeed get to $150+ and stays there we are pointing ourselves to global recession (except in the US where of course our government will show positive GDP) :) But the rest of the world, too bad for you...

• Belgium: Fishermen from France and Italy demonstrated against soaring fuel prices on Wednesday. French fishermen say they will go broke unless they can buy diesel at half the market rate.
• Britain: Hundreds of truck drivers blocked London roads on May 28, causing chaos. Almost a week later fishermen's groups massed in the capital to demand urgent government aid to ease rising fuel costs.
• Bulgaria: More than 150 truck drivers and dozens of bus drivers converged in a convoy on the capital Sofia on May 28, saying high fuel prices meant they were operating at a loss.
• Chile: Thousands of Chilean drivers parked their trucks along national highways last week to protest soaring fuel prices and diesel taxes in a tacit rejection of the Government's US$1 billion cash subsidy on consumer fuel prices. They lifted the strike on Friday.
• Italy: Commercial fishermen went on strike on May 30, closing down the industry on both coasts.
• France: Lorries and taxis blocked a major motorway in Paris and called for low-cost diesel. Fishermen, truckers and farmers have staged numerous protests over the past month to pressure the Government into helping them after oil costs doubled in a year.
• Spain: Almost the entire Spanish fleet, Europe's biggest, stayed in port on May 30, calling for the Government action to lower fuel prices.

And so we go in the US markets, relatively oblivious to what is happening in the rest of the world, trusting and holding dear the information that the government provides us while ignoring all the anecdotal stories that pile up (to the roof) of people struggling to deal with the rising cost of life, combating it with 3.5% wage gains. All will be will... in the 2nd half. If oil dares to put on another $10 spurt Monday or Tuesday, I can only imagine the spinmeisters giving us the Goldilocks economy spin.... "hey we STILL see growth in the GDP figures, why is everyone up in arms".

For the fund, we remain in high cash position - let me reiterate now since we have a lot of new readers of late - I'm not a hedge fund that will be going 70% short even if I think the market is in trouble. I am comparing myself to the mutual fund industry which is long biased in nature - I will be long biased in nature. But in turbulent times I will have a meaningful short exposure, and heavy cash exposure. We will still suffer along with the rest, but hopefully less than the rest (over time). Again I don't see much different in the news flow today, that has been in the past few weeks/months - so we never know when the market is in "ignore the news" mode versus "fear the news" mode, so timing these things is nearly impossible. But technically we are in precarious position, so I'll mostly just be sitting and monitoring until some of our favorite names begin to break down and then we'll begin to layer in. My goal, if this sell off does continue (no guarantee it does, remember everything is fine starting in 3 weeks as the 2nd half recovery begins), is to have some cash waiting there at that moment we all hit when the market does the type of dip where we want to toss our (long) cookies. Usually purchases done at or near that point, while the most painful to execute and follow through on, yield the best gains over time. Unfortunately (or fortunately) most of the names I want to purchase have yet to see any meaningful selloff... so until we see price weakness we won't begin layering into the long side in a heavy manner.



As far as a technical game plan, I will assume the medium term is now down, after our 7 weeks of happiness from the "Bear Stearns" bottom in mid March. Using the S&P 500, we are at 1360 - the 50 day moving average (exponential) is at 1375. Any bounce to that level I'll be adding some short exposure I let go on the Friday selloff. Could we bounce off this 1360 level (no man's land) and go straight up? It would not follow any textbook but frankly "anything" is possible is our new and exciting managed markets where things seem to go the Invisible Hand's way more often than not. But I'm still playing by the old fashioned handbook that worked 20 years previous to the Invisible Hand's prominent display of pre-market buying (I think futures have turned positive to flat between 8:30 AM and 9:30 AM almost every session but 4-5 since the Bear Market bottom) and last 30 minutes buying (3 times last week we had miraculous buying to keep us over the 50 day moving average, twice on quite negative down days). So we just never know, and hazarding a guess is even more difficult with a cornered Invisible Hand :) If normal patterns were allowed to play out we'd look first for that mid April low in 1320s and then off we go to revisit March lows.