Saturday, March 2, 2013

SMBC Theater: now with Wendy McColm!!!

Wendy McColm is hilarious when someone funny writes her material. Like, not her.

Here she is on SMBC's "Susie and the Internet":

And she shows up later in a bit part in "BJ Bond":

For comparison, about the funniest thing she ever did on her own was the Starcraft 2 Beta Breakup Girl video:

SMBC Theater

Saturday Morning Breakfast Cereal isn't just a cartoon, it's also a bunch of video sketches that sometimes are funny in the same twisted way the cartoon is.

Gold, the renminbi, and the multi-currency reserve system

OMFIF and the WGC have published a 44-page report titled Gold, the renminbi, and the multi-currency reserve system.

You can download it here.

It's been added to the reading section as well.

John Kaiser on a Tuesday panel at PDAC

For those willing to go to PDAC on Tuesday and pay $70, there's a luncheon panel titled "Strategies to revive the juniors".

Kaiser will be speaking, as well as Sprott and Ned Goodman from Dundee.

Wonder if Kaiser's gonna publicly call Sprott out for being one of the scumbags responsible for the destruction of the juniors?

Some Saturday news

Calculated Risk - US light vehicle sales still were up in February. Data, bitches! It's there and it's mocking your theories. - GLD investors are dumping 10 tons Per DAY!!1!!!one! Hm... and yet gold finished this week at... $1576.80? That's pretty darn good, eh? I wonder who's buying all this extra gold? I wonder if they're ever going to sell that gold that they've bought? Maybe it gets socked away somewhere never to be seen again? I'm only saying....

Biiwiii - Euro downside target achieved. So with that, and the Yen trade done, does that mean the USD stops going up? Or is it now going to go up versus the Pound?

Speaking of which,

Gold looks boring in pounds and strong in Yen. The only currency it looks weak in is Euros right now. Just in case you forgot that there are other countries in the world.

Friday, March 1, 2013

Your PDAC bingo sheet

Someone in the comments posted a link to an old exploreco bingo sheet that was laughably out of date.

Here's your new one, updated for 2013.

Print it out and take it with you to PDAC!

Aw heck, more news why not.

A few more bits of news, because god knows it's so darn enlightening.

Calculated Risk - Feb ISM improves, consumer sentiment improves. Eppur si muove, eh?

Mineweb - Finland is ranked #1 for mining! They block Youtube here at work, so you'll have to find Monty Python's "Finland" song on your own. - Glencore delays Xstrata merger to address accusations of helping Iran build nuclear weapons. Um... Ivan Glasenberg just spent a whole hour telling everyone at the BMO conference about how fucking smart he is, and now this? Selling nuke-building material to Iran?

Mineweb - too early to ring gold's death knell. And please check out their other article, it's time to ring gold's death knell. They really should get together and co-ordinate their articles better.

Interesting point btw - the Indian jeweller interviewed thinks nothing's wrong, everything's fine, and Indians will be buying loads of gold again come April. So, no $1300 gold.

Also, here's the money shot:

Elsewhere in Asia, "[gold] demand from jewelers has recovered a little [with] prices below $1600," says Heraeus Metals general manager Dick Poon in Hong Kong, "though investors are either selling or sitting on the sidelines."


Yes, you did read that correctly.

Yes, yes there is.


There really is, yes.

No I didn't make it up.


Yes, there is a man with the name of Dick Poon.

Noontime noos

Beyond brics - Asian PMIs all suck. #1, now they're talking about the world economy collapsing, so I guess the S&P should go down now aight? And #2, I guess that's what happens when Japan diddles their currency.

FT Alphaville - currency moves contextualized. Because everyone's piddling their panties waiting for the next apocalypse; all this currency-war crap is really just noise right now, there's been no great pivot that I've seen yet.

IKN - the bottom in gold is in! Because Casey is now recommending their clients buy downside puts. Which I'm sure their clients would all do if their accounts were all set up to trade options. Of course, they could also just hedge with DUST or with HBD.TO or HGD.TO. Or they could just not own any shitty miners pumped by the Caseys.

The thirteen sins of the newsletter writers

Why write an article about the "sins of the newsletter writers"?

Firstly, I know (from my previous PDAC review posts) that they always read my blog - well, when I mention them by name at least - and I do, honestly, enjoy providing people with constructive criticism that they can use to improve themselves.

But also, I'll post this in the hope that fewer people get taken in by bullshit.

Ooh, but ain't I attacking my own huggy-buddies with this post too? Sure. Probably every newsletter writer is guilty of a few of these sins. But the guys who still talk to me are man enough to own up to their mistakes, and have even made it a point to address their past errors with the aim of improving their future performance.

Which is smart, cos the way things are going, they might be the only writers left standing by the end of this year. You'd hope.

And why not an article on the "sins of the newsletter readers"? Ah-ha, clever question! It's because such article would be very short: the only sin of a newsletter reader is not kicking the shit out of the fucking cunts that stole his money.

Anyway, here are the thirteen sins of the newsletter writers. Feel free to repost this wherever you want, as long as you provide a link back to this post and blow some smoke up my ass.

And if you're going up to PDAC this coming weekend, or Cambridge House in September, or to some other stupid junior mining conference, then feel free to bring up these points with your own favourite analysts! Those who dare to show their faces....

1. Living in fantasy-land.

Some of these assclowns have been prattling on about how silver's going to $100, or gold to $5000. They've been going on like this since 2009. If you were calling for $100 silver by 2012, and we're not there yet, might you perhaps learn from your mistakes and quit making childish projections that have already turned out to be wrong?

The fact is, silver and gold and stocks do what they do, and we're forced to invest based on what's going on in reality. The minute unicorns start pooping Smarties and rainbows, you can start investing based on your fantasy-land projections; until then, assume that reality is going to continue intruding on stock performance.

2. Not having the slightest clue how economics works.

Again, as above: if there's a coming hyperinflation, why do you think miners will be able to stay in business? Don't you think hyperinflation will also hit salaries, diesel, heavy equipment and power generation?

As well: what does anyone with an Econ 101 textbook say about the gold standard? Seriously, if there's some elite conspiracy of Lizard People ruling the world, why are they going to want to destroy all wealth that's not tied to the price of gold just so they can institute a gold-backed currency for you? And where is all the gold that's supposed to back this currency?

You might as well be saying "if the Earth gets hit by an asteroid fired at us by the evil aliens from the planet Nibiru, here are the stocks you want to own".

3. Sounding like a fucking drooling assclown.

Seriously, if your politics makes you sound like a hate-fueled nutcase, then you should maybe tone down your politics. Because you're making the whole junior mining scene look like a bunch of drooling gun-happy survivalist racist apocalyptic neo-Nazi Jesus-freaks.

How do you expect sensible people to want to have anything to do with your stock picks? The sensible people have the big money: don't you want them to join you in the market? Because they usually try to avoid associating with loonies; okay, maybe not the Koch brothers, but definitely most other intelligent rich people.

Stupid people can't float your market. Quit talking stupid to attract stupid people. It makes it look as if you're not trying to make money on stocks, you're just trying to sell subscriptions to the retards on that mailing list that you bought from a Republican Super-PAC.

4. Arrogant self-assuredness in the face of conflicting evidence.

This applies to the analysts who make rosy projections which fail to come to pass: if your stupid stock pick hasn't hit your target in the time allotted, why are you sticking with it? And if the US economy has performed radically differently from how you thought it would last year, why can't you admit that you were wrong and adjust your forward expectations? If silver's not at $200 yet, why not cut back your expectations?

Your job isn't to be right. Your job is to make me money. I don't give a shit about your big theory.

Speaking of which, all you fundamental analysts and technical analysts: if you're giving me an upside target for a stock, why not also calculate the maximum downside? And tell me that too? So I can determine whether it fits my risk-reward? And so that you can dump it when your maximum downside projection is proven wrong?

5. Clamming up on your model portfolio performance the minute it sucks.

Seriously, you were so fucking proud of your 60% return in 2010 when life was easy and any old sack of shit won you a double. Why all of a sudden did you clam up about your performance the minute the junior market turned to shit in 2011? Where are your performance numbers now, smartass?

If you're not owning up to your subscribers about how badly your performance has sucked in the past two years, then either you're a weak-necked wimp, or you're an outright liar. Which of those should I go to for investment advice?

Oh, and by the way - it might also serve you well to compare your model portfolio performance to the GDXJ, or even to SPY. Because if you're not beating both of those, you're wasting your readers' time and money.

6. Clamming up about other writers' criticism of your picks. 

If someone points out that there are problems with one of your picks, why not at least invite him to write a commentary for your newsletter? Or ask permission to reprint the email he sent you? And if you don't have what it takes to successfully defend your investment thesis from that sort of criticism, why not admit you might possibly be disastrously wrong - especially after your stock has already dived 50%?

Why is it wrong to let your readers know the reasons why other writers disagree with your thesis?

7. Not admitting your limitations to your readership. Or to yourself.

I admit I have no clue about mining and exploration. But if I've subscribed to your junior mining newsletter, I fucking well expect you to know it all. If you've been proven to not know the first fucking thing about how to build a mine, how to operate a mine, or what the odds are to find a deposit, why not admit that lack of knowledge to your readers and stick with what you're good at? Why keep making dismal mistakes that blow up your readers' portfolios?

Hell, if you don't know anything about mining, there's things you can do: you can read the Hard Rock Miner's Handbook, you can take a few day courses at PDAC. There are loads of educational books and video series on exploration and mining available for free on certain peer-to-peer file-sharing networks of a Swedish persuasion.

Hey, you can even quit playing junior miners entirely and just stick with something like playing ETFs using technical analysis. Exactly like all sorts of no-name bloggers do for free on the internet. But then you wouldn't be providing any value to your readership, would you?

8. Not knowing how to read a balance sheet.

I admit I have no clue how to read a balance sheet. But if I've subscribed to your newsletter, I fucking well expect you to know how. Don't hide behind that "due diligence, not investment advice, not a licensed financial advisor" crap: if you're suggesting stocks to me you'd better have the slightest clue how to read the financials. They'd better not be about to go bankrupt, or spring surprise dilutive financings on me.

And for the love of Christ, please understand that the legal disclaimer at the back of your newsletter isn't going to protect you from getting your fucking teeth kicked in by an angry ex-subscriber next time you show your face in public. Which, while illegal and unfriendly and not something I would condone, is still something that you'd have to expect to happen when you fuck over your readership so much.

No wonder so many of the old newsletter crowd aren't presenting at PDAC this year, eh? They're too chickenshit to show their faces. But they were all so butch and tough in 2010!

9. Getting suckered by frauds.

One big running joke this past year was how certain newsletter writers made themselves look stupid with Liberty Silver. These are guys who purport to know what they're doing. They got taken in.

Any newsletter writer who got duped by that scam, and who didn't get their people out the minute IKN broke the news, should fold up his tent and go back to working at Denny's. Instead of complaining to Google about posts, or deleting his own previous posts, or writing a passionate defense of the fraud on his shitty website.

10. Not calling "fraud" on the frauds.

Seriously, Bob Moriarty. You knew Liberty Silver was dodgy. You knew it when you went on the site visit. You knew the pump was on. Why did you wait til November to post about it, after IKN and I had already written repeatedly on the topic, and after the TSX and the US OTC halted it? Why do a couple rabid friendless bloggers have to stick our fucking necks out while the fatcats of the industry sit back and let people get hosed?

I know it's difficult to tread the line between legality and a civil prosecution, but Brent Cook and Quinton Hennigh seem to have done a pretty good job when they criticized a heavily-debated resource estimate a few months ago.

Why leave the policing to one rogue Peruvian blogger and a couple insane lunatics in Canada? Do you newsletter writers feel you owe nothing to the industry and readers that you've made so much money from? Do you have something better to invest in now that the Venture has been annihilated? Are you going to tell your readers that you'll be winding up your newsletter now that you've let the industry get destroyed by incompetent geos, lifestyle CEOs and outright frauds?

11. Front-running your readership.

This is aimed squarely at the professional houses. If you've already taken a big chunk of this stock in a PP, and you intend to dump it directly into the market when your 4-month holding period is up, then it is not enough for you to simply put a tiny-type "disclosures" section in your glowing writeup.

You should be required by law to tell your readership exactly how long you intend to hold the shares that you have. You should be required by law to tell your readership that you fully intend to puke your shares into the bid the minute they become free-trading. You should be required by law to admit to your readership that you're getting them into a stock which is going to get destroyed the minute you bail on them.

Your clients know where your offices are. They can look them up on Google Maps. They can show up at your fucking desk. Don't you think that it's dangerous for you to repeatedly hose retail? If you think you're safe, then please re-read points 1 thru 3 above to re-familiarize yourself with exactly what sort of people invest in junior miners. Half the people you suckered into buying a 90% loser stockpile guns and ammo and think they hear Jesus.

12. Letting management and financiers front-run your readers.

I've learned by now that if a big block of shares are coming free-trading, you need to get the fuck out of the stock and don't get back in til the front-runners have sold. As a newsletter writer, don't you think you should also be exploiting this? Shouldn't you be tracking the share structure changes in the stock that you recommend? After all, it'd help your readers make money, wouldn't it?

You're swimming with fucking sharks. Quit thinking that any of these junior mining bastards are your friends. All they want is to eat your readership. Start acting like you understand this.

13. Never dumping your losers.

Jesus fuck, there's no better way to blow out your readers' portfolios than to encourage them to stay in a stock that's already lost half its value. If I lose 50% on a position, I have to make a 100% profit to get that money back; if I lose 80%, I need to make back 500%.

You're not giving us any winners of enough size to make back what we lose on your losers. So quit blowing up your readers' portfolios. Why do you want readers to stick with losers? Why didn't you set a stop-loss point? Why didn't you keep us out of the market entirely til we could be sure it bottomed, and then get us in at cheaper prices? Isn't that what all the real investors do?

After all, if your original thesis was that this 50 cent stock is worth $1, and instead it goes to 10 cents, isn't your original thesis now proven wrong? Sure, the market might be wrong and you might be right; but why stick with a wrong market and watch all your money (and all your readers' money) disappear?


Cookie and Kaiser (and everyone with nothing new to add who have recently been repeating them verbatim in interviews at BNN or The Gold Report) can talk all they want about how the financiers or the trading bots or the Accredited Investor rules or the sad reality of mining economics have kneecapped and smothered the junior scene.

The fact is, there are a lot more people to blame. 

Kaiser keeps comparing this market to the post-BreX market, and I think that's where he's making an interesting point. You couldn't trust any exploreco after BreX demonstrated how easily the system could get fucked over; so, Kaiser notes, the market went through three years of dismal hell, maybe til the BreX-inspired NI-43-101 system gave investors a reason to have confidence in the market again.

If the junior scene today needs another intervention from the government to restore faith, after all the damage that's been done, then I'm sorry but all you newsletter writers are going to be out of business. Because the first thing the government should do is slam anyone who's been offering stock picks - disclaimer or no. You'll be fined and banned for spouting off your bullshit without a CFA, a FINRA registration and a Series 86.

Frankly, that would be a fantastic thing, and if it's not the law already then certainly it should be - it'd shut up an awful lot of assclowns.

But in the meantime, a few decent stocks will continue to suffer.

Clean up your fucking act, the lot of you.

Some morning news

JC Parets - the first 2 months of 2013. Defensives are now outperforming, which he considers a warning sign. However....

Bespoke - bullish sentiment plummets. Also,

Ritholtz - Risk on risk off index.

Now here's the thing. Maybe defensives have been outperforming because bullish sentiment has dropped? In which case the RIRO index would automatically turn down (look at its constituents).

Now given the above, why is the S&P still flirting with new all-time highs?

We'll have to see if the sequester is enough to puke the market into a 8%-10% correction; but without any corresponding weakness in US economic indicators (as followed by Bonddad and Calculated Risk), we'll be able to ignore any market weakness.

It'd be nice though if there were a dump in US economic sentiment, and that forced gold back up. That would definitely be nice, no?

Mineweb - carrion and reincarnation: the theme for PDAC 2013. Kip Keen wins +1 internets for comparing explorecos to maggot-filled piles of rotten caribou meat, and anyone still touching them to a desperate starving loon who likes eating maggots. Seriously Kipper, take a bow. - Rick Rule says this gold bear market will yield tasty maggots. Supposedly, he considers this a time to buy, if you believe him.

Demonocracy - visualising all the silver in existence. Not as sexy as the real thing.

Mineweb - patience with gold wearing thin among investors. It's pretty interesting to me that the gold-backed ETFs have seen 100 tons of outflows this month, yet the price is still where it is. And speaking of which:

Isn't it interesting that gold only ever goes up and down when London or New York are open? I mean, you never see these big moves coming during China and India time. Which is funny, cos China and India make up 50% of world physical gold demand. Looks like this dive is driven by paper, not bullion.

If you're going to PDAC this weekend....

Here's a little game to play at PDAC.

Go to where all the "companies" have their booths set up.

Pick a "company" at random.

On your smartphone, look up its 2-year chart on

Then ask the booth guy "so, it says here that your 'stock' is down 95%/80%/99.7% over the past 2 years. Why do you even bother staying in business? It's obvious you suck."

Wait for reply, break out into uproarious laughter the minute he uses the words "hope", "challenging", or "we think".

Repeat at the next booth.

Seriously, let's have 100 guys doing this on Sunday. You won't be missing anything at the "newsletter writers' presentations" except a bunch of stock recommendations that have already plummeted 80%.

Friday videos - for the upcoming PDAC

PDAC is coming up, and at PDAC you find geologists, and every geologist likes a rock.

 The only thing a geologist likes better than a rock? Two rock.

So here's some April Wine with the official song of geologists: "I Like Two Rock".

Trivia: when I was a kid I had the exact same table hockey game that they have at the studio.

Thursday, February 28, 2013

Funny how the "get me out at any price" spikes are predictive

So someone puked Lachlan Star into nonexistent bids last week.

You might have called it a stupid move, back then.


As it turns out, that spikedown has been surpassed by today's vomitage.

I just find it interesting that these desperation pukes end up looking smart a few weeks later sometimes.

Maybe the idea is that the initial puker puked into thin bids, and thin bids are indicative of a stock that has absolutely no buying interest? In that case, if the case for buying that stock remains weak afterwards, the price has no choice to return back to that puke-bottom.

Lesson being, don't buy stocks that nobody else wants to buy?

Or maybe, more generally, if a stock is going down, say since $1.60, assume it will continue to go down.

What still looks good?

Got wood? Yabut seriously though this chart still looks good, doesn't it? Previous high was around $50 at April 2011; if US housing has improved since then, so should this, no?

Cotton looks strong, and is apparently a widowmaker market: for example, in 2010-2011 it earned people a triple. Good to go again, you think?

Indonesia is about to break out to an all-time high. What happens when it breaks $34.73?

EEM short

For the record, I decided to buy some downside protection by shorting EEM, via HJD.TO.

Here's my thesis based on that cluster of candles from the past 6 days:

1. EEM went below its short-term EMA, then has come back up to try and retake it. Breaking above that EMA is a sign I'm wrong, and I get out.

2. When you look thru the various EM ETFs, FXI is already in a downtrend, INP looks horrible, BRF is trying to stay above its SMA(50) having lost its short EMA, GAF is breaking down, and so on. So it looks like the most sensible direction for EMs is down.

We'll see. Only a small position, for downside protection. Could get out if things change.

SPY to RSP ratio

Here's an interesting one. SPY is the market-cap-weighted S&P500 ETF, and RSP is the equal-weighted.

RSP should outperform when there is market breadth in a positive direction, yeah?

It does kinda seem like the RSI is giving a signal on this chart.

Not much else, though.

Anyway, it was an idea.

Wednesday, February 27, 2013

Let's drill down in the emerging markets

Here's EEM, which is the big fund the big boys play with and which is grossly overexposed to the BRICs:

Is it rolling over? Is it doooooom? That volume of the last week does still look supportive.

I'm personally interested in buying Mexico or the Andean ETF:

Well, they seem to be rolling over too. Maybe the heavy exposure to metals is a bad idea. Maybe I should stay away?

Then I looked at a couple east Asian growth economies:

Thailand might be toppy, or it might not; Indonesia looks positively ravishing.

That's interesting to me: as far as I know, Thailand and Indonesia don't make money on metals, they make it in manufacturing.

So is the proper thing to look for manufacturing-heavy emerging markets? Again, is the metals play dead?

So is it a GDXJ bear flag, or not?

So is this a bear flag we're seeing?

The problem I have is twofold.

First, we know the miners were puked last week on desperation selling. The volume shows it, and the scuttlebutt seems to confirm it.

Second, not all the charts are conforming to the thesis.

For example, here's Silvercrest:

That's a mighty big bear flag, if it exists! What SVLC seems to hint is there was a massive puke on volume to $2.10, which has now been bought back. SVLC is back into its lightly downward sloping channel of 2013. A hold of $2.40 and the short EMA is positive here.

And here's Oceana Gold:

Again, it's kinda hard to draw a bear flag on OGC. In fact, it's also threatening to go positive on its short-term EMA.

So I'd explain the GDXJ chart as a massive oversell, which is now being digested. People bought back the easy stocks like OGC and SVL, and now the market is digesting. A bunch of dumb money was puked out by big doomer funds seeing redemptions, and now the market has to figure out what it wants to do next.

Just my own opinion.

On Sandstorm and Mongolia

Sandstorm Gold is one of the companies that took a massive dive last week on news that the Mongolian government is screwing over Entree Gold.

I'm not particularly worried. From my knowledge of how Nolan Watson operates (via the Sandstorm Metals and Energy resurrection last year), SSL's money has not vanished down a black hole. Their contracts are wicked nasty: essentially, you're putting your whole company up as collateral.

Nolan Watson always wins.

What I'm wondering is if maybe this dive is a result of their August financing - did it have a 6-month hold? Where can I find this info?

Morning news

Feeling awful clever about my new big position in BTO (10M volume so far today), as well as my AEM warrants.

Here's some news.

JC Parets - is this the beginning of a bear market? Quote:

Was Monday’s new 52-week high in the Dow Jones Industrial Average the high for the year? Are we in the beginning stages of a bear market? I’m asking this because I simply can’t think of a single person who does think that. And I talk to a lot of people. From a contrarian perspective, this is some scary stuff.

My response? Yeah, I'm pretty sure everyone's seen the fucking longterm triple-top chart, JC. They just aren't talking about it because it's stupid.

Reformed Borker (Bork Bork Bork!) - 361 weekly briefing. A lot of data, including this significant chart from Bespoke:

That's the effect of Bonddad's "gasoline choke collar" on the US stock market. So perhaps we do see a ~10% pullback? Then again, each time the pullbacks have gotten smaller; maybe that's just an effect of a strengthening economy. Anyway, he also notes JNK is still strong and $UST2Y is flatlined, so no need to worry about the crash indicators; meanwhile trucking and arch billings are still strong.

Price Action Lab - naive speculators were hit hard. Good interpretation of the big outside candles we saw this week: the market was in a tight range, so the robots came in and took out both the top and bottom stops! That makes the big red candles less scary, to me.

FT Alphaville - a powerful convexity in $VIX futures. Interesting point about the $VIX surge we saw: if I understand Kaminska correctly, it wasn't caused by any real fear, but rather by a shortage of volatility available to buy for settlement of shorts. In which case, $VIX no longer provides a reliable signal for the market, and therefore (when you include the robot stop raids in the post above) going short S&P right now might be the naif trade.

WSJ China Realtime (no paywall) - China's property market. The suggestion is that a property tax should be a very simple way to moderate housing in China. And by the way, as Bill Bishop notes, there's been a property crash in Harbin - but Harbin is Harbin and not important to the rest of the country. So he won't be surprised if the media gets all over the story to spread a doom message, but he considers it unimportant to the broader China story. - iron ore at $70 this year? China has grossly overbuilt base metal capacity, as we've also recently seen with aluminium; so conclusion #1, the "EM growth therefore commodity inflation" play is wrong, and conclusion #2, it's nice to see that they have been unable to similarly build out gold production.

Forbes - Almost Gold CEO says Turkey wants to build a mining industry. Interview with John McCluskey, younger and less-famous brother of OMD's Andy McCluskey. Gold mining is an easy way to fix Turkey's current account deficit. If this is good news for Pilot Gold, someone should tell its chart. Also, McCluskey notes:

McCluskey, who has been Alamos CEO for 10 years, described current conditions as “really tough” in the industry, with gold prices themselves in a corrective phase. However, he also described this as a good time for acquisitions. Alamos has made an offer to acquire Aurizon Mines Ltd.
“I think the market is going to clamor for these kinds of things to happen,” McCluskey said. “There is just too many companies. There are 78 companies that produce under 200,000 ounces of gold. And most of those produce less than 100,000 ounces of gold. And there is only 24 companies producing more than 400,000 ounces of gold.”
He envisions a change.
 “Those 78 companies (under 200,000 ounces) just can’t get enough investor attention to justify their existence,” he said. “So we’ve got to consolidate some of these companies and create more companies that produce over 400,000 an ounce.”
Larger companies would mean less volatility in output for individual producers and thus less volatility in share prices, he continued.
“I’m the first to say, ‘no growth for the sake of growth,’” McCluskey said. “But I think there (are) really solid reasons for mergers.”

That would be nice. Then again, it does make the assumption that a shitty 200ktoz/y miner is automatically worth more when merged with another 200ktoz/y miner. I don't think your shareholders are going to fall for that one.

Financial Post - wage gaps destroy employee morale, productivity. With a link to - go on, you know you want to!

Tuesday, February 26, 2013

Regarding the grammatical operator "on"

I'm quickly learning the language of news articles.

For example, today I just realized that the grammatical operator "on" implies no logical correspondence whatsoever between objects.

To wit:

Bloomberg - cocoa falls most in two weeks on Europe debt woes.

Cocoa futures fell the most in two weeks on concern that persistent debt woes will erode demand in Europe, the world’s biggest chocolate consumer. Sugar and orange juice also slid, while coffee and cotton advanced.

So, um, therefore... Europe is also a significant consumer of sugar and FCOJ, but not coffee and cotton?

Noonday noos

BI - OMG Italy teh dooooomz. Technically, the voter rejection of austerity is bullish as fuck for Europe: once the kleptocratic oligarchs are kicked out through the application of democracy, Europe can go back to stimulus. But for now everyone has to piss their panties.

Bespoke - charts of the bloodbath! Lotta big red candles, except on the $VIX which got a big green one. Lotta piss-stained pantywaist sissies if you ask me. But I guess this should mean gold gets that fear bid that it's supposedly been missing, no?

BI - but consumer confidence surged!! Market can't decide to shit or get off the pot, no? - Italy election result should spark gold demand. Because if it's one thing the Chinese and Indians fear, it's Berlusconi back in power. Or not.

Krugman - This is the way the euro ends: not with the banks but with bunga-bunga. Funny guy, agrees with me a lot.

Bonddad - quick note on Italy. He thinks it's a game changer. I say yeah, for maybe 2 days. As Josh Brown would say, do you really expect the rich plutocrats of Europe to let a little democracy get in the way of their precious stability?

FT Alphaville - another dollar bull market coming? This article suggests that a USD bull would kill EMs. I don't understand how that could happen; I'd expect a USD bear to be what'll kill EMs, not a bull. But whatever. We're not there yet anyway.

Bloomberg - gold bets cut by most since '07 as sugar bears grow. Mmm... sugar bears. I'm not inspired by the sugar chart just yet; it is at 2-year support, but 3-year support is over 30% lower. I'll stick with my coffee long for now: this article says coffee stockpiles are at their highest since March 2010, which was the start of a 100% bull move in coffee. As for silver, long bets have been cut by the most since silver was at its previous low. And GLD outflows? They have gone on for the longest since 1Q2011 which was right before gold shot from $1350 to $1900. You see what I'm doing here?

BI - BofA says everyone hates gold so much it's due for a bullish turn. Sentiment now at lowest levels since Nov 2008, when there were actually things to worry about. Gee, it's not as if you hadn't read that here already several days ago, eh? Thanks so fucking much for your fantastic fucking research, Bank of America. Glad to see you're putting that trillion dollars of US taxpayer money to good use. - The Vampire Squid drops their targets for gold. I don't like conspiracy theories, but you see this and you've got to think GS is trying to milk their muppets again.

BI - UBS wades in on gold too. Oh, just fuck off the lot of you. You were pissing your pants a week ago. - Glasenberg of Glencore criticizes the miners at a BMO conference. Sorry dude, but Pierre Lassonde and Clive Johnson are both more intelligent, less evil, and more entertaining than you. Quit riding their coat-tails and get back to fucking over Xstrata shareholders, it's what you're good at.

Mineweb - Argonaut sees gold production increasing. Wow, I didn't even know about that Magino thing. Too bad Otto says Argonaut sucks.

Bloomberg - John Thomas Financial draws scrutiny. Cough cough Liberty Silver cough cough.

Monday, February 25, 2013

evening news

Bonddad - a closer look at the leading economic indicators. Not great, but still indicating growth. Stick that in your pipe, mister OMG ITS A LIQUIDITY CRISIS WE'RE ALL DOOOOOMED.

Beyond Brics - various people have differing opinions about the weak China flash PMI. How about let's leave it for a month? I doubt that a country of 1.3 billion people can turn its economy on a dime. - various people have differing opinions about gold. Yeah, sorry, I'm doing a poor job of giving a fucking shit what Gene Arensberg and Ole Hansen think. What are they anyway, the lead singer of Kiss and a center for the Vancouver Canucks?

Mineweb - some guy on the internet has an opinion about gold. Again, meh.

Beyond Brics - India offers banking licenses to hopefully serve the rural poor. Except they aren't luring companies with the promise of profit, so it won't accomplish anything. Besides, if you're some peasant in Bhilai Nagar, who are you going to trust: Tata Motors Bank, or (ahem) a handful of shiny yellow metal? - gold nanorods offer new way of getting energy from the sun. Gold: is there anything it can't do?

Vancouver Venture - keeping the lights on. That's hilarious - a company refinancing at one cent. It's only worth $552K to begin with, and the last time its price was over 4 cents was 2008. Why can't Darcy Krell and Doreen Boitard just shave and sterilize this bunny and get on with their lives? And that brings up an interesting point: out of all the Kaiserdoom companies on the Venture, how many of them sucked last year too?

A quick headrush of news

At work, busy, here's the news:

Reformed Borker (Bork Bork Bork!) - five signs the rally is on hold. Most scarily, defensives are leading and correlation is picking up.

Ritholtz - rug to be pulled out from the short bonds trade? Very clever thinking about what's the right direction to take your position.

FT Alphaville - The Chine PMI circus. Basically, nobody knows.

Reformed Borker (Bork Bork Bork!) - the stat I hate the most right now. The answer? Hedge funds most bullish on stocks since 2007. I always love when people say "Most X since Y", cos then I can pull up a chart. His post is also interesting because he notes GLD is at its lowest position level amongst hedge funds in four years.

BI - fund managers are shorting gold like crazy. Sounds like time for a faceripper, eh?

Oh, by the way - I bought a small position in JO, because apparently coffee is also at a very high short level.

JC Parets - gold from the top down. A chartie who doesn't care much about gold on how the charts look. I forwarded this to Jojo, and he replied something like "he should also take sentiment into account". - Marius Kloppers on how much he sucked. But he makes an mportant point on commodities:

"I think that we had China's demand hit a constrained supply system. And we saw prices escalate tremendously as the world couldn't respond," said Kloppers.
"I think over the next five years . . . we are going to see very strong demand from China, but we are going to move from growth rates in demand of 15%-20% demand to 2%-4% per year. That means suppliers will be able to respond to demand. And therefore you have to be low cost and you have to take into account that price is not going to help you there."

This is important, because it seems to support my suspicion that what's important is not absolute China demand increases, but how much that demand increase can race out beyond the ability of the miners to expand production. I doubt we'll get another 2010, basically.

Mineweb - Oceana Gold halts concentrate shipping over tax kerfuffle. Isn't BTO also Phillipines-exposed? I don't remember. Could that be a reason they're down too?

Mickey Fulp - a quick guide to finding free booze at PDAC. Well, not really... he just tells you it's there. Really useful, Mickey, thanks. However, his writeup does explain why he always looks hung over at his Sunday afternoon talks.

Sunday, February 24, 2013

The PDAC technical sessions

I can't really justify paying $800 for a delegate badge, but there certainly are a lot of interesting presentations at the PDAC technical sessions.

Here's a few I'd be interesting in going to, with links to the abstracts.

Monday March 4, 9AM: Risk and Reward in Mining Exploration and Development

Monday March 4, 9AM: Capex and low grades

Tuesday March 5, 9AM: Financing in a volatile market

I guess I could treat it like an educational thing, no? Spend $800 and learn a hell of a lot more than I'd ever get out of newsletter subscriptions and reading Stockhouse.

Pricewater Housepoopers 2013 gold price report

Here's a link to the 2013 Global Gold Price report, a nice little colour booklet put out by Pricewater Housepoopers.

It's also put up on the "Library" page that you can access at right, along with a copy of the Hard Rock Miners Handbook which you can read for fun and entertainment.

Richard Bullock presentation at PDAC

Richard Bullock from Missouri U is doing what looks like a great presentation in a PDAC technical session on Monday. I'd almost pay $800 just to see him.

Here's the entirety of his abstract:

Mine feasibility studies still need correction

Richard Bullock, Missouri University of Science and Technology, Longview, USA

The original paper, (Bullock, 2011)* on the need to improve the accuracy of the mining industries feasibility studies reported on 261 projects which had an average overrun of 26 per cent and outlined twenty reasons for the causes of the problems. It documented various examples of how bad the overruns have been in the past. It then gave a classic example which the author had firsthand knowledge of a large project documenting why the overruns occurred. The paper then described what the author believes is the root cause of these problems; that there is insufficient good engineering hours applied to each level of feasibility study. That paper made a plea to the United States mining industry to set some feasibility study standards which in two years have been totally ignored.

This current presentation is an update on the same subject, reiterating the problems and what this author feels is the solution. The situation of the accuracy of feasibility studies, particularly of very large projects seem to have gotten much worse. Four examples are sited using information from the public literature to illustrate the problems (average of 332 per cent overrun). Based on these, the author will express his perception of some problems normally not discussed such as: that mining companies have become much more reliant on individuals rather than reliable systems of feasibility studies and cost estimating; that they accept a reworked feasibility study because it now meets a hurdle rate, even though it is wrong; they can always blame construction inflation for the blowout overrun. And to get one of the “reputable” EPCM contractors, they must accept cost reimbursable contracts, whose billing probably goes far beyond those who are actually on the project and who also probably have subsidiary companies from which they can buy supplies and rent construction equipment. Companies are encouraged to consider using Reference Based Forecasting, while it will not necessarily reduce cost, will lead to more accurate cost estimates.

Again the paper tries to show that for mining companies to improve the accuracy of each level of feasibility studies leading to developing an operation which will generate the return on the investment projected by the feasibility evaluation and improve our image to the investment community.

*Accuracy of Feasibility Study Evaluation Would Improve Accountability, April, 2011, Mining Engineering, SME, pp 78-85.

They keep dragging me in! Part 2: the also-rans

I dunno, maybe I can go see Tolhurst Roulston at PDAC next Sunday.

That Ralph Aldis works with Frank Holmes at US Global Investors - should I be scared? He likes Agnico, which is nice cos I just bought their warrants; he also follows George Topping, who as far as I remember is someone who IKN likes. He also picked the royalty companies. Maybe I'll go see him.

Paul Burton used to work at GFMS, and even worked in mining. In fact, he graduated from the Cambone School of Mines! Maybe he's worth a gander.

If I see them two, that gives me a 12:50-2:05 lunch break after Cookie. This means I miss Mickey Fulp, but I can't remember the last time I've heard him speak about anything other than his favourite stock picks, and I can get that from his website.

I might stick around for Roulston, depending on how I feel. Maybe I then stay for Adrian Day, maybe not - I don't know if he's going to be saying anything new. I'll avoid McCoach and Rule, they seem to be twats.

Still not sure I'm going, but if I am, that seems like enough work for me.

I admit Keith Schaefer might be interesting, but I might go to that thing on Saturday with him and Coffin and Roulston. Then again, just looking at that list of companies presenting on Saturday, this is how they've fared in the past year:

Not particularly stunning, guys.

They keep dragging me in!

I still haven't signed up for PDAC, but I'm nevertheless looking at the speaker list trying to figure out if there is anyone worth seeing beyond Kaiser and Cookie.

I don't think I've ever paid attention to Lawrence Tolhurst Roulston before. Here are some videos of him:

Y'know, on the one hand he seems an unbelievably reasonable person, which is hard to find in this scene of nutbars and fruitcakes.

But on the other hand, and I might be mistaken, it seems whenever he speaks here he's doing little more than addressing what's hot in the media at that time.

Precious Metal House website under construction?

I was thinking about buying yet more bullion for the coming apocalypse, don'tcha know.

So I go to Precious Metals House, thinking I'd check out what their markups are over spot. They tend to be within maybe 2% on 1toz, though higher on half-ounce and smaller gold denominations - so if things are different now that'd be interesting to me.

And guess what?

Website under maintenance.

I wonder if they do this when they feel the gold price is too low for them to want to sell anything?