Saturday, July 14, 2012

Well, they practice magical thinking over here too

Frog wedding breaks the drought

A FROG couple have been joined in holy Hindu matrimony by Indian villagers hoping the custom will bring rain. 

With five priests chanting scriptures, a frog groom named Punarvasu and his amphibian bride Pushala were married by villagers hoping to summon monsoon rains to their drought-stricken district.

Organiser Nandkumar Pawar says thousands of people gathered on Thursday in a massive tent in Patkhal village for the lavish wedding banquet.

He said on Saturday that the frogs were decorated with flowers and smeared with turmeric, a holy and auspicious ointment. A brass band played Bollywood film songs while the priests blessed the frogs.

The region in Maharashtra state is 400km southeast of Mumbai, India's financial capital.

Frog weddings are practiced in some parts of India and other areas of South Asia.

Well at least they didn't do something stupid.

Like trying to get bond yields down by driving the country into a deep fucking economic depression with 50% youth unemployment.

If only our idiot western economists practiced more frog weddings.

Joe Wiesenthal bitch-slaps the austerians with one chart

Joe Wiesenthal, enemy of anarcho-capitalists and Rethuglicans everywhere, just bitch-slapped the entire Austerian movement with one chart.

He notes that since the election of Hollande, the French yield has gone down.

Let me rephrase that for you.

Since the second-largest economy in Europe with a propensity for "swarthy Mediterranean fiscal profligacy" (and a balance sheet far too large to ever bail out) elected a socialist on a platform of rejecting Austerianism - and also gave his party a majority - French bond yields have gone down.

The obvious answer is that Austerianism is a buttfuck stupid ideology.

After all - Spain, with their pliable obedient president, has instituted Austerian measure after Austerian measure. And what has the result been? 10-year yield steady at 6-7%, constantly threatening to roll off the precipice.

Italy? I'm sure the world screamed "about fucking time, you idiots!" when they turfed out that scumbag Bunga-Bunga Berlusconi and replaced him with Monti, another pliable obedient president who's instituted Austerian measures at the behest of the Nazis in Germany and their client states Finland and the Netherlands. And what has the result been? 10-year yield steady at 5-6%, constantly threatening to roll off the precipice.

The bond market is saying they don't reward austerity. The bond market is saying they will reward growth-centered policy. Austerianism is by definition contractionary. But the plutocrats are wilfully blind to this.

When you have growth, ceteris paribus government expenditures go down and revenues go up, reducing the yearly contribution to gross national debt. Plus your GDP grows in size relative to the debt (as long as your deficit is less than your yearly GDP growth).

That is how you get out of a debt crisis. That is why the bond market has no worries about the US and is rewarding them with a 1.5% 10-year yield - because they expect, once the political bullshit is sorted out, the US will begin to grow at a rate greater than their debt. Because they've been really awesome with their economic growth in the past. (As an aside, I'll make anyone a bet that if the Rethuglicans win over 50% of the House this fall, US bond yields will spike. I.e., go up significantly.)

Oh, and by the way - the bond market does not reward a country that bails out its banks with taxpayer money in the form of sovereign debt issuance. Look at the recent action in Spanish yields, relative to newsflow, and you'll see that this is exactly what the market doesn't want. But the plutocrats are wilfully blind to this.

The bond market wants banks to get recapitalized by wiping out shareholders, converting debt into new equity, and then bailing-in the bondholders. If you do that in Spain, your yield will go down tremendously.

But of course this can't happen because (I betcha) it is precisely the thing that will bankrupt Deutschebank and the Germans. And the Germans are the ones who (everybody assumes) are calling the shots.

I bet the bond market is waiting for that "eureka!" moment when the Spanish, Italians, French and so on realize that the Germans (and their Austerian client states Finland and the Netherlands) are a minority, and that the EU was supposed to be built on a democratic consensus.

I.e., that the Germans can be out-voted.

Wake me when the market goes down

Here's an image that I've shamelessly stolen from Bespoke's weekly review:

(May as well take the time to plug their service too. If a reccie from me doesn't do it for you, note that Gary Tanashian also subscribed to them on my reccie, and he's a guy who's notorious for not wanting to clutter his mind with other people's analyses.)

Anyway, back to the above chart.

I'll tell you right now that everyone in the market sees this chart.

Everyone in the market also remembers last fall's crash.

Everyone in the market wants to be out before the S&P 500 tanks 200 points again this year.

Everyone in the market is casting about, trying to find something that will make the S&P 500 tank by 200 points again.

That explains all the worry about China all of a sudden. (Tell me - did China suddenly become a corrupt plutocracy riddled with insolvent banks and full of fake government economic statistics this spring?)

That explains the continued worry about Greece (tell me - did Greece suddenly become a clusterfuck nation with a corrupt government and a population that doesn't pay any taxes this spring?) and the rest of Europe (tell me - did Europe suddenly become an entitlement society with large government deficits this spring?).

It even explains the worry about the drill-down re: Alcoa's earnings. (tell me - did Alcoa suddenly start to suck this spring?)

This is all explained by the psychological mumbo-jumbo known as "self-fulfilling prophecy". Follow the link and read up on it at Wikipedia. Oh, also look up "recency effect".

So, everyone in the market is trying to repeat 2011 this year. They want the market to go down. Maybe because they saw what happened last year, and figure if they get a repeat this year, they can do things differently and get on the right side of the collapse and make money shorting the market this time?

Difference is, the market is also a cybernetic feedback system, with multiple inputs. One important input is sentiment. But other important inputs are crap like velocity of money, consumer spending, earnings, and so on.

In a multiple input feedback system, if you push down hard at one input, you can depress the output a little bit - but if the other inputs are pushing up, your output won't go down by far. Basically, it'll partially ignore the input that doesn't agree with other inputs.

Then when you take away the downward push, the whole system can spring back up hard as it gets back to its normal equilibrium point.

What I'm trying to say is, the market wants the market to crash 200 points like last fall. Unfortunately, despite all the worry being spread thru the blogosphere, it's just not going down that well.

People are even comparing the present slowing upward trend of the spring with the nasty lower-high rounded top that presaged the enormous downward kablooie of 2007.

And yet the market's not going down. If sentiment sucks so bad, why isn't the market going down? Because something else is keeping it up.

And bloggers are stupid humans. Don't forget that. Ritholtz loves going on about investor psychology and how it stops you from making money - but why doesn't he write an article on how investor psychology also makes bloggers write bullshit?

ADDENDUM: I guess what I'm really saying is, blah blah everybody's on one side of the boat, blah blah herd mentality, blah blah crowded trades. Or something.

Tired from a morning of heavy posting. Need lunch, then will play 3 hours of Civ 4.

PUDENDUM: Holy crap. I forgot I also had to read the rest of this week's Bespoke report... so I went to page four, and... holy crap.

I'm not going to reprint that chart too cos I already stole one this week and I do have some morals. But wow. Economic sentiment indicators are reading better than they did a year ago, and yet market sentiment indicators are all lower. Strategist Recommended Equity Allocation is in fact at a five year low.

Strategist Recommended Equity Allocation is in fact at a five year low.

Strategist Recommended Equity Allocation is in fact at a five year low.

Strategist Recommended Equity Allocation is in fact at a five year low.

I want to make sure you read that:

Strategist Recommended Equity Allocation is in fact at a five year low.

That tells me right there that, indeed, the market is already positioning itself for a 2011 dump to S&P 1000, if not a 2007 dump to S&P 666.

Eppur non si muove!

And as of Wednesday Gary points out that bonds are heavily overbid.


See, that's why I like Bespoke and should read their weekly reports more. I read too much of the daily blogoblather, and get too wound up in the neurosis of the market masses, when I should be keeping the cold hard data of Bespoke in mind.

Friday, July 13, 2012

Stockchase - fantastic historical resource for you

I was thinking. Now that the junior gold sector is getting its bum whooped by the cruel mailed fist of fate, wouldn't it be nice to go back and see who recommended the really, really shitty stocks that have tanked 75-90%?

I mean, Brent Cook notes that for a year or two after 2008, any idiot with an acre of moose pasture could own a junior resource company and make a fortune; now we're seeing most of them, the companies who had nothing, disappear off the face of the earth.

Well, analogously to this: for a year or two after 2008, any fucktard with internet access could start a junior resource blog - or newsletter - and make a fortune. So shouldn't we also see most of those guys, the analysts who had nothing, also fall off the face of the earth never to be heard from again?

Are we about to see, that is, the Great Cull of Idiot Analysts?

With that in mind, I remembered that there's a fun little site called Stockchase. It is more-or-less an archive of stock reccies from days gone by. Not everyone is followed, not all stocks, not all analysts; hard to find any of the "professionals" from Canaccord, for example; and I don't know if it's just a volunteer-run site, and perhaps the volunteers have all up and quit now that they're making money of AAPL instead.

But you can still type in a stock's name and see who were some of the tards who recommended it. It even gives the date of recommendation, and what the price was then, and what the price is today.

Ain't that grand?

So let's take a look:

Baja Mining (Today's price $0.14): Lawrence Roulston's been pumping it from $1.66.

Canaco Resources (Today's price $0.35): Dennis DaSilva called it a buy at $1.11. Worse, James West called it a "strong buy" at $1.66.

And you can also go into more detail, and follow the anal yst through his history, looking at all his other picks.

This way, perhaps, if you can think of a few dozen juniors whose prices have utterly collapsed, you could perhaps take note of the bozos who've recommended them?

Be thankful for small mercies

Can SLV make it back up to the SMA(50) at $27.35? Or could it break out above the triangle line?

Can GDX make it back up to the EMA(8) at $43.15, or even up to the SMA(50) and Bollinger mean at around $44.50? Even that wouldn't make for a higher high in July.

Can UUP drop all the way to the SMA(50) at $22.63, or will it stop at the EMA(8) at $22.89?

As you can see from these three questions, I don't have a great amount of optimism right now... but I'm happy for small short-term profits. If things get beyond these limits, I'll be even happier cos it means the strong-USD weak-PMs setup is falling apart.

Friday Videos - High Places

Here's yet more by High Places, cos they're just amazing:

Thursday, July 12, 2012

Oh and by the way - China doooom

Oh, and I almost forgot: overnight, China will release a whole pile of economic data that will probably make everybody pee their pants and go running home to mommy.

Because we all so very much believe the Chinese economic data, don't we?

So despite the miners printing a white hammer candle today, we still might see a further big puke tomorrow.

India's monsoon revives, drought fears diminish

Hooray for India! Now please threaten to buy some huge fucking loads of gold and silver, you hoarding gents you!

India's monsoon revives, drought fears diminish

* Sharp increase in rainfall allays drought fears

* Monsoon covers entire country four days ahead of usual date

* Deficit from June 1-July 11 narrows to 22 percent (Adds details, quotes, background)

By Ratnajyoti Dutta

NEW DELHI, July 12 (Reuters) - India's monsoon rains were above average in the past week for the first time in the current season, the weather office said, as the downpours resumed after a worrying fortnight-long pause over the central part of the country.

The annual rains are crucial for farm output and economic growth as about 55 percent of the South Asian nation's arable land is rain-fed. The farm sector accounts for about 15 percent of a nearly $2-trillion economy, Asia's third-biggest.

Rains were 1 percent above average for the week ended July 11, a sharp improvement from 49 percent below average in the previous week - allaying fears of a drought, which would hit output of food crops in the major consumer and producer.

Rapid progress of monsoon rains over the grain bowl of northwest India helped cover the entire country four days ahead of the usual date of July 15 although weather officials have cautioned it could remain weak until next week.

"The monsoon scenario is not as bad as has been painted," Food Minister K.V. Thomas told Reuters.

Farm Minister Sharad Pawar had already said on Wednesday the rains had improved, speeding the sowing of major summer crops such as rice and cotton.

Rains had been 30 percent below average from June 1 to July 4 and now that deficit has narrowed to 22 percent below average.

Weather officials said the monsoon rains would be above average over the hilly regions of the north and northeast over the next three days, helping to fill reservoirs, but would decrease over northern states such as Punjab and Haryana in the grain bowl of India early next week.


The revival of rains over central India increased the pace of soybean planting, which is now almost 80 percent complete in Madhya Pradesh, the main producing state for the oilseed, an industry official said.

"Rains are needed even in the next week to complete the sowing operations," said Rajesh Agrawal, spokesman for the Soybean Processors' Association of India said.

Soybean is the main oilseed crop for India, the world's biggest importer of cooking oils and also a major supplier of soymeal to nations such as Iran, South Korea, Vietnam, Japan, and Thailand.

By July 6, soybean had been planted in 1.9 million hectares, more than the normal area, according to preliminary farm ministry data. A further update will be issued on Friday.

Thomas said the planting scenario for rice and cane was also "good." India also has huge stockpiles of rice after three years of bumper harvests. By July 1, government rice stocks were 30.7 million tonnes, much higher than the 9.8 million tonnes targeted for the quarter to end-September.

But concerns remain for cereals in some rain-fed areas of the western state of Maharashtra and southern Karnataka. Cereals had been planted on 2.19 million hectares by July 6 compared with normal acreage of 5.66 million hectares.

"It is true that the rains are late in some areas where farmers have been advised to sow short-duration, high-yielding seed varieties," Thomas said.

Rains were also weak in cane-growing areas of Maharashtra and Karnataka in the past week, while cane-growing areas of the northern state of Uttar Pradesh received above average rains.

"Cane crop is mainly grown in irrigated areas and it can withstand any temporary lull in the monsoon," said A.K. Singh, deputy director-general of the state-run Indian Council of Agricultural Research.

But any long dry spell could affect the sugar yield of the cane crop, as happened in 2009 when India had to import from international markets, pushing prices to 30-year highs.

India's weather office is sticking to its forecast for an average monsoon this year, even factoring in the effect of an El Nino weather pattern.

El Nino causes a warming of ocean surface temperatures in the eastern and central Pacific that can trigger droughts or heavy rain in Asia.

L.S. Rathore, chief of the India Meteorological Department, said on Wednesday the weather pattern was unlikely to develop before mid-August, or after farmers had finished planting most of their summer crop. (Additional reporting by Rajendra Jadhav; Editing by Jo Winterbottom and Alison Birrane)

Silver option pain charts

Here's some charts from

I'm trying to figure out why the heck silver just went up today.

Minas Conga news

I expect within 5 minutes of my posting this, Otto will come along and tell me the news reports are completely wrong, these correspondents don't know what they're talking about, etc....


2ND UPDATE: Peru Priests Hold Talks In Minas Conga Mining Dispute

--Peru priests held talks in Minas Conga mining dispute

--No agreement was reached at meeting, more expected to be held

--Priests call meeting "positive"

By Robert Kozak

(Updates throughout and adds comments)

LIMA--Talks led by two well-known Catholic priests with community leaders in the Cajamarca region of northern Peru ended Monday with no agreement on the outstanding issues surrounding the Minas Conga copper and gold project.

Participants in the meeting said they didn't rule out more taking place soon and the priests leading the talks called the meeting "positive."

The talks were called to restore peace following violent protests against the Minas Conga project. Parts of the Cajamarca region remain in a state of emergency, declared by Peru President Ollanta Humala last week following protests in which five people died and more were injured.

Priests Miguel Cabrejos and Gaston Garatea met with antimining activists, including the regional president of Cajamarca, Gregorio Santos, who is one of the main leaders of the protests.

At a press conference Mr. Santos called the meeting "productive."

Opponents of the Minas Conga copper and gold mine project have marched for weeks, pressuring the government to kill the project. President Humala has supported the approximately $5 billion project run by Minera Yanacocha, majority-owned by Newmont Mining Corp. (NEM).

Police in Cajamarca last week briefly detained antimining activist Marco Arana, a former priest, who now leads a left- leaning political party known as Earth and Liberty. Mr. Arana said Monday that more protests are expected to take place later this week in Cajamarca.

Antimining protesters attacked and destroyed government buildings last week.

Opponents want the government to cancel Minas Conga, saying it will hurt water supplies. The company plans to build reservoirs in order to ensure more water is available.

The government and Minera Yanacocha called a temporary halt to work late last year following protests but have since said the project will proceed.

Bank of America Merrill Lynch Global Research said in a report Monday that the government appears to be stepping back from its hard-line stance against protesters, and appears willing to make further concessions.

"We believe that an outcome in which the government decides to withdraw permission for Conga in the face of its inability to control protests is possible and would not be well received by markets," it added.

Eurasia Group said Monday in a report that "The Ollanta Humala administration remains strongly committed to advancing Minas Conga at all costs. It is not only the country's largest FDI project, but the government views this as a test case that could shape other social conflicts affecting mining investment."

Peru is one of the world's largest producers of gold, copper, zinc, silver and other minerals.

Production at Minas Conga is slated to have an average annual output of 580,000 to 680,000 ounces of gold and 155 million to 235 million pounds of copper during its first five years.

Minas Conga is 51.35%-owned by Newmont Mining, while Compania de Minas Buenaventura SA (BVN, BUENAVC1.VL) has a 43.65% stake. International Finance Corp. holds the rest.

Write to Robert Kozak at



Peru Unions, Activists to Protest Minas Conga Project

--Activists, union plan protests

--Protests to go ahead despite mediation attempts

--Economists say canceling project would harm investment climate in Peru


By Ryan Dube and Robert Kozak
LIMA--Activists in northern Peru plan to continue with protests against the Minas Conga copper and gold project this week, despite ongoing mediation attempts aimed at restoring calm in the Cajamarca area.

The project's opponents plan to hold a 48-hour series of strikes and protests from Wednesday, especially in provinces of the region that aren't under a state of emergency imposed by the administration of President Ollanta Humala last week.

The government suspended civil liberties in three provinces of Cajamarca following the deaths of several protesters.

Two high-profile Catholic priests held mediation talks this week with community leaders opposed to the project, including with the president of the Cajamarca regional government, Gregorio Santos.

The priests are attempting to facilitate an agreement between the protesters, who say they are concerned about potential environmental damage, and the Humala administration, which supports development of the nearly $5 billion project.

Political analysts say many opponents to the project have political motives, and oppose the government's market-friendly economic policies. Economists say cancelling the project would harm the investment climate in Peru.

Opponents are demanding an end to any work on the project site and also want the government to end the state of emergency.

"The general sentiment is that if before there were reasons to call for Conga to be canceled, now, after the people were killed, the general sentiment is that Conga definitively has to be stopped. The deaths have provoked an even greater rejection of the project," said former priest Marco Arana, who was briefly detained by police last week. Mr. Arana now leads a left-leaning political party.

The main union federation in Peru, the CGTP, plans to hold a national strike on Thursday, in part in solidarity with the demands made by the activists.

Opponents say the mine will hurt water supplies, although Newmont Mining Corp. (>> Newmont Mining Corp), which holds a 51.35% stake in the project, plans to build reservoirs in order to ensure more water is available. The government approved the company's environmental impact study, or EIA, in 2010.

"We fully support the dialogue process underway and believe that discussion--not confrontation and violence--is the most responsible and productive way to resolve issues," Newmont said in a statement Wednesday. "Following the international experts' review of Conga's EIA, we are taking a slower approach to developing the Conga project, with an initial focus on building water reservoirs."

Following a meeting with President Humala Tuesday, Monsignor Miguel Cabrejos, one of the priests facilitating negotiations, said the government plans to name representatives to a group that will look to advance talks with opponents of Minas Conga.

Peru is one of the world's largest producers of gold, copper, zinc, silver and other minerals.

Production at Minas Conga is slated to have an average annual output of 580,000 to 680,000 ounces of gold and 155 million to 235 million pounds of copper during its first five years.

Besides Newmont's stake in the project, Compania de Minas Buenaventura SA (BVN, BUENAVC1.VL) has a 43.65% stake. The World Bank's International Finance Corp. holds the rest.

-Write Ryan Dube at or Robert Kozak at


And here's the point of view of the communist subversives:


Peru's Repression of Mining Protesters Condemned

WASHINGTON, DC, July 11, 2012 (ENS) - The Peruvian government must immediately halt violent repression of mining protesters, more than 80 environmental and human rights organizations demanded today in a statement that will be delivered to Peruvian embassies and consulates across the United States and Canada.

Protests against Peru's biggest mining project have been brutally put down in June and July in incidents that have left five people dead, including a 17-year-old boy, and dozens of others injured.

The protesters oppose the $4.8 billion Conga gold and copper mining project in the northern Andean province of Cajamarca, out of fear that their water supplies will be contaminated.

Mining company Minera Yanacocha last week began preparations for the construction of water reservoirs at the Conga project. Newmont Mining Co., a Denver, Colorado-based company that is the world's second largest gold mining firm, is the project's majority owner. Peruvian mining company Buenaventura is the minority owner.

The protesters object to mining company plans to drain three pristine mountain lakes and replace them with the reservoirs, and generate massive quantities of toxic mine waste.

Protests intensified in the last week of June after Newmont announced that the company would move forward with the Conga mine, despite growing community opposition.

The Peruvian government declared a State of Emergency in the region on July 3, suspending the right of assembly and causing fears of additional violence that proved to be justified.

On July 4, the day after the State of Emergency was imposed, Marco Arana, a former Catholic priest and a coordinator of opposition to the Conga mine, was pulled by police from a public bench during a silent vigil in the provincial capital of Cajamarca. He was beaten while in custody, suffering internal bleeding, a broken jaw, and other head injuries before his release July 5.

In their statement, the organizations express grave concerns about "the alarming escalation in the repression of free speech, police brutalities, and human rights violations related to extractive industry projects in Peru."

The signatories called on the Peruvian government to immediately put an end to these abuses, and to seek peaceful and dialogue-based resolution to conflicts related to the Conga mine and other mining and energy projects in Peru.

Signatories include Amazon Watch, Earthworks, Earthjustice, Friends of the Earth, MiningWatch Canada, Oxfam America, Rainforest Action Network and the United Steelworkers.

The Peruvian Forensic Anthropology Team, EPAF, also issued a statement condemning the violence. The group, based in Lima, said the recent deaths in Cajamarca demonstrate the "widespread moral crisis" that exists in the Armed Forces and the National Police and is manifested in the excessive use of force, abuse of authority-verbal and physical-and concealment on the part of superiors, such acts, reminiscent of "the worst years of the political violence."

In its July 9 statement, EPAF members demanded that the government "recognizes the mistakes and rectify them before they generate a hopeless situation."

The police have repeatedly denied having committed any kind of abuse against detainees.

Today, Peruvian President Ollanta Humala called on the Catholic Church to mediate the conflict over the Conga project. Regional president Gregorio Santos, who has opposed the Conga mine, accepted the proposal.

The Conga project involves surface mining of a large copper porphyry deposit also containing gold located 24 kilometers northeast of the Yanacocha Gold Mine, also a joint venture between Newmont and Buenaventura.

On June 22, Newmont issued a statement pledging to "take a slower development approach focused on building water reservoirs before the construction of mining facilities."

"The reservoirs will supply water to downstream users who currently only have water flowing during the rainy season," the company said.

Following this announcement, President Humala expressed his strong support for the stalled Conga project. But Humala, a former military officer who values the mine for the jobs and tax revenues it will create, has said nothing about the violence this week, while his cabinet ministers suspended freedom of assembly and opposition lawmakers demanded that police restrain their attacks.

Following a three year, public process on the Conga project's Environmental Impact Assessment and reviews by 12 Peruvian government agencies, the EIA was approved by the Mines and Energy Ministry in October 2010.

Amidst protests from anti-mining activists in late 2011, Newmont suspended construction on the project.

Humala appointed a three-member panel to review the EIA, which confirmed in its April report that the mining plan "meets all the technical requirements for its approval" under Peruvian and international standards.

But the panel said, "Alternatives should be evaluated for the relocation of the mine tailings to try to avoid covering the Azul and Chica lakes."

The proposed destruction of the lakes is "motivating the rejection by society," the panel warned in its report.

The panel recommended that Newmont:

  • evaluate the possibility of relocating the Perol pit waste dump to try to avoid impacting Azul and Chica lakes. If it is not technically and economically feasible to do so, implement an appropriate hydrological and environmental compensation plan.  
  • consider encapsulating the rejects of the acid water treatment plant in a secure deposit, and improve water availability through regulation of reservoirs.
  • consider the possibility of using acid water treatment and refinement techniques through passive methods such as wetlands with reeds planting.
  • study the suitability to expand the reservoirs' capacity to optimize the management of the water emanating from the project area.
  • optimize the preservation conditions of organic soils coming from waste on the storage deposits planned and adequately preserve humic materials from the dismantling of the Perol bog for later use.
  • Newmont has agreed to "progressively implement" these recommendations, but has not yet agreed to keep the Azul and Chica lakes intact.

"Once completed, the reservoirs will increase the water storage capacity proposed in Conga's original development plan, significantly increase the current capacity of the lakes in question and provide year-round availability of water to downstream users, something they don't currently have as a result of the dry season," the company says on its website.

Carlos Santa Cruz, Newmont's senior vice president for South American operations, said on June 22, "The construction of water reservoirs will contribute to strengthening our relationship with Cajamarca, while demonstrating that modern and responsible mining can protect the environment and improve quality of life within the area of influence of the Project through economic and infrastructure development."

"Progressing the Conga project will require fostering a suitable social environment, while improving the development cost structure to ensure that the project is economically viable," said Santa Cruz. "Accordingly, construction on the project will continue only if it can be done in a safe, socially and environmentally responsible manner with risk-adjusted returns that justify future investment."


"We share President Humala's appeal for dialogue," the Newmont executive said.

But instead of open dialogue, there is further evidence of Peruvian government censorship of mining critics. Earlier this month, a group of Peruvian filmmakers denounced government censorship of films that told of issues related to mining conflicts.

"We criticize the members of the Government to provide for these purposes, dabbling in censorship practices or policies, making decisions that violate human rights and threaten basic rules of democracy," they said in a statement.

The document states that the Ministry of Agriculture invited a group of filmmakers and documentarians to show their work on the series "Water: a heritage that circulated from hand to hand." However, six films were not shown because they had "images, sounds or texts on environmental pollution generated by mining or oil companies," the filmmakers said. The six films had all received national and international awards.

Said the filmmakers, "We criticize the representatives of mining and oil companies that use their power and influence to pressure citizens, media and governments to prevent circulate information about the real impacts of extractive businesses."



Monsoon watch

Monsoon rains above average for first week this season

Rains Lash North India

Monsoon Rains Have Covered the Country and Still They Complain

El Nino Unlikely to Affect Indian Monsoon

A bank dying in China causes a hurricane on the NYSE

Apparently some bank in Zhejiang or somewhere might be going bankrupt. I think I came across this on Business Insider this morning.

I started to hear a strange clunking sound in the markets, a few days ago, starting with that big downmove in GDX. At the time, none of the bloggers I follow were able to explain exactly why.

A bank dying in China might explain it. The market seems to be quite tetchy about banks going under. Recency effect.

So, I guess we'll see that retest of the GDX and GDXJ lows. Hey, maybe even lower lows? Maybe even a pop in the $VIX? Pops in USTs and so on? You'd think so.

But you shouldn't see a big change in Europe, and that's going to be my test. If the market's scared about a China doooom, it should be China and commods that take the faceplant.

Oh and by the way: good initial jobless claims or something in the US today. Whatever, nobody cares anymore.

Wednesday, July 11, 2012

That sucking sound is the GDX, sucking

RSI is below 30, but GDX is hugging the lower Bollinger so I guess RSI could collapse even more.

GDX is also negatively diverging to the PMs.

Does it go all the way to $39? Does it even go lower than $39? Why would it do either?

And why does it look like it wants to do this within the next couple days?

All I know is, I cashed up a lot yesterday. I've written down some targets and might buy back some stocks if they get hit: FVI $3.25, LYD $2.04, DPM $5.86, AR $7.09, SVL $1.55, BTO $2.93.

But I find it disconcerting that they're already close to their targets. Maybe I should wait even longer. Then again, if they drop below these numbers, they're obviously still pretty darn broken, you think?

Also, I dunno if I want to buy any of these if silver breaks that supposed imminent support level of $26. I mean, sure everyone sees the $26, and on a day like today wth Fed disappointment it should break the $26; but it's not doing that yet. Why not? Shouldn't silver have broken down today, if the Fed minutes were disappointing?

Anyway, at least my BCM and NCU positions are still showing big profits.

Monday, July 9, 2012

Alcoa kicks it off tonight

Tonight Alcoa will report hideous, terrible, horrible earnings.

What do you think the odds are that this will make the gold and silver miners dive tomorrow? Y'know, despite gold and silver not being aluminium.

Political union in the EZ - a thought

Was just reading Sarkar, where he was opining on EZ political union and the fact France will fight it....

I wonder if anyone actually realizes the problem with political union?

Political union will not mean that the swarthy Mediterraneans give up their sovereignty to Germany.

Political union will mean that Germany, and their neo-corporatist client states Finland and Holland, will become a minority, entirely beholden to the interests of Portugal, Spain, France, Italy, Greece (if they're still around), and so on.

People in economics are still fantasizing about the neo-fascist ideal of a German Fourth Reich ruling all of Europe. The reality of a single European political state is going to be a lot different. Deutschebank, for example, will lose its preferred status as the one bank who is able to dictate the terms of its counterparties' bailouts: such as Deutschebank's command that Santander must be bailed out by the Spanish taxpayer. (You can't wipe out the equity and convert its debt to new equity because the overly-leveraged Deutschebank will immediately become insolvent and collapse, turning all of Germany into a smoking ruin next to Potsdam).

In fact, the rest of Europe will, quite rightly, be able to command Germany to run large deficits in order to drive stimulus in the periphery.

And any German who whines about this had better realize they've already got it a lot better than they would have if they were still on the Mark. The Euro gives them a devalued currency, open markets within Europe, and (as Yes Minister put it) an opportunity to make up for genocide and petition to rejoin the human race.

I'll put this into language a thick-skulled pig-headed German will understand:

You pissed your own bed, now you've gotta sleep in it. We're not changing the fucking sheets for you.

$bpspx versus $spx

The problem with history is there's far too many choices of stuff to rhyme with:

It looks like every June/July is the same.

But are we replaying July 2010 now? Or are we replaying the so much scarier (apparently) July 2011?

Actually, it doesn't matter, does it. Cos in both cases the goddamn S&P 500 went higher afterwards.

How's that for "more strident views than most"?

Noah Smith is a genius and he'll get lots of fame soon

FT Alphaville has a great article today:

Noah Smith is a moron and he’ll get cancer soon, etc

The point being that this blogger dude wrote an article about how ZeroHedge is stupid and gay. Gay in the sense of sweaty men gay.

You can go read it here:

How Zero Hedge makes your money vanish

Especially good is the kvetching back and forth in the voluminous comments section.

All I'd like to point out is that, as I've said before, it's funny how the ZeroHedge crowd fails to understand that Fight Club is a book about an ineffectual castrated suit-wearing worker bee who gets lost in a homoetrotic fantasy of survivalism and testosterone. To wit, they're ironically ignorant of the irony.

The bullish case and the bearish case

Here's two articles, one presenting the bullish case and one presenting the bearish case:

Tiho Brkan is seeing a major warning sign in divergences between the SPY and credit. In fact, he can draw a chart that shows this divergence is always the warning sign before a major crash.

On the other hand, The Reformed Borker (Bork Bork Bork!) gives you ten reasons to like stocks for the second half; basically, he says the narrative is so pessimistic right now, and stocks so utterly hated, that we can't really be about to crash because there's nobody left to sell.

Who's right? I want to always remind myself that analysis of narrative takes primacy over charts (thus the title of the blog, in all seriousness); after all, everyone sees the charts, so maybe the charts are already priced into the charts? The question isn't whether the charts are portending doom; the question is whether the doom portended is already priced into the charts. Get it?

(If you don't like the circularity of it, tough. The market is a cybernetic system, with feedbacks. Deal with it.)

So I'll go with Josh Brown on this one. The narrative outweighs the charts, because the narrative is the engine that pushes the chart lines forward.

At the same time, since Q2 was very stressful, I'm expecting the imminent earnings season to be dismal. Perhaps forward guidance will also be dismal. So maybe we suck for the next month, and then when forward guidance turns out to have been too low, we get a big run-up from August thru the US election season.

Which would sort of match up to historical performance during election years.

Meanwhile, what about gold? Business Insider had an article on the dismal monsoon season, so now I guess we can say that's already priced in. Someone (Peter Brandt maybe?) was saying gold's and silver's descending triangle charts are warning signs of a price collapse; I retort that it's funny the support lines haven't been broken through. Also, the gold and silver charts look beautiful when you factor out USD strength. Go chart gold and silver in euros, renminbi, yen, pounds and so on, and tell me if you think they look bad!

Meanwhile junior miners already suck™. They led the whole downward spiral already.

Sunday, July 8, 2012

Fun stuff for Sunday 2

Just came across Newsbiscuit, and it's quite a bit funnier than the Onion.

Here's a bunch of articles for you:

Scientists hail first sighting of elusive bankers’ morals

It starts out with:

Jubilant scientists at CERN have confirmed the first known sighting of the infinitesimally small ‘collective conscience of the bankers’, after a hunt lasting many years.

And then there's this article:

Barclays CEO rescues six kittens from a bin, takes them to kids’ cancer ward

‘It’s what anyone would do,’ said Barclays CEO Bob Diamond after leaping in front of a rubbish truck to save six kittens discarded in a bin. ‘It was lucky I was out there sorting my recycling as one second later those cute, lovable kittens would have been tipped into the truck. Muffy, Tiddles, Princess, Fluffy, Ginger, and Chloe would have been purring no longer.’

And then:

Britain’s banks downgraded to ‘bastards’

Britain’s banks are under fire once again, after rating agency Moody’s downgraded them to ‘a shower of bastards’. While investors at HSBC are still regarded by many observers as ‘pondlife’, several other major financial institutions fear they could lose their cherished status of ‘immoral grabbing shitbags’.

But also:

Notorious criminal boss elects ‘not to accept bonus this year’

‘I now accept that some of our methods were borderline legal at best,’ said the unnamed chief executive of the extortion, money-lending and debt enforcement racket operating out of a front company in the City of London. ‘People sometimes complain that our industry isn’t regulated effectively, but there is a clear and established code among criminals about how we break the law. We’re not bankers, you know.’

Good to see bankers are now recognized as scum of the earth and the justifiable target of ill humour.

At least in England.

In the US, comedians still give them fucking blowjobs.

fun stuff for Sunday 1

Fun video for you to watch: O Fortuna misheard lyrics

Gives you great gems like:

This octopus
Let's give him boots
Send him to North Korea