Friday, June 28, 2013

You learn who your friends are when you need to bury a corpse

IKN loves monitoring the Friday evening newswire for fun stories of junior miners doing badly.

This week, the Friday burial of a festering corpse was that of Barrick Gold's Pascua Lama, which apparently is never going to be a mine now - or at least it won't be one til 2016, which may as well be never considering how it's been progressing til now.

That's what I like to see! Major gold mine projects getting shot down, not just chickenshit tinycap ones.

Gold should bottom soon.Need a few more major projects to get kiboshed and then people will start looking around, wondering where all the gold's going to come from.

No, Simon Black is not Jeff Berwick

I was checking ZeroHedge this aft to see if they have anything to say about what you'd think would be an important story for them - the massive ongoing and pitiless short-squeeze in the PMs and miners.


But they do have a Simon Black story.

The Best Second Passport for Edward Snowden is....

So okay, I can see why y'all think Simon Black is Berwick, since Berwick is also big on the second passports thing.

However I don't recall Berwick pimping Brazilian passports - I thought he was more into Belize.

Also, while this article was certainly written by someone who believes the US government is a fascist dictatorship out to imprison political enemies, I think Berwick would have thrown in something about the police being a lawless gang of armed state-supported thugs and thieves. Black doesn't go this far.

So it may be that Black and Berwick know each other, and even maybe happily read each other's work; but I doubt they're the same person.

PS - my personal opinion is that, even better than a second passport under your name, you should have a second (in-the-system) identity. It costs money, but it would be a life-saver for anyone needing to flee the country. That and some easily anally-storable bullion.

PPS - oh and Otto Rock is Mickey Fulp.

More on this gold and silver thing

Maybe the idea is that there's so many guys that are over-extended short, on the miners and the PMs, that someone big wants to burn them all and make a quick killing?

That happens elsewhere on the commodity markets, no? And certainly a lot of people are short, and margin requirements have just been upped, and silver is up 5% and GDX up 7%.

So it should be possible to make people feel a lot of pain, and a Friday seems a good time to do it.

Interesting theory anyway.

A few more of these slaughter days and maybe the market dies off entirely, so that you can have a proper bottom?

Santa Barbara Resources signs JV agreement with Rio Alto Mining

Santa Barbara Signs Definitive Agreement with Rio Alto Mining for Sancos Property in Peru

For a $1M market cap (as of this second) you get up to $4.5M of free drilling by Rio Alto. It's the next Colorado Resources! Guaranteed 50-bagger! Buy buy buy!*

* - this is not investment advice or a solicitation to buy or sell securities. My Own Market Narrative is a comedy blog meant only to entertain, not to inform your investment decisions. The author of this blog is not a licensed securities dealer, has no concept whatever of how to manage money, and has possibly even served time for criminal offences and/or been made the subject of restraining orders. If you want someone to inform your investment decisions, phone some company like Sprott or Canaccord and ask them if they would like to anally rape your life savings to death. We seek safe barbers.

Interesting idea

Vancouver Venture - end of month junior pump. Well, they're picking a Friday to walk the prices up - that's a good time, no? There's nobody out there on the ask in a lot of these stocks, especially Friday afternoon, so it should be quite easy work, no? Quote:

Mr. and Mrs Resource Mutual Fund is going to get their Q2 statement in the mail next week and it is going to be ugly.

The funds have been hammering deals across the board knowing full well the redemption to follow. They needed to cash up.

As a measure to lessen the impact they bid up all those deals they have been hammering on the last trading day of the quarter.

Funny thing is that someone else who really insists that he's "connected" to the trader world told me last night that there was a whisper out there about an organized conspiracy afoot to drive gold up to $1250 by end of today.

Well, at 12:26 ET it's up to $1223.

The question is, why pump up gold today? Pumping shitty juniors is easy: buy 10000 shares of BCM via iceberg and you can move it up 20% as the unthinking robots pile in. So $15K in capital gets you the move you wanted on your end Q statement.

But moving gold up by 5% when it's already borked support and in free-fall? That takes real money, I'd assume - not TSX-V chump change.

And with all that? For some weird reason, Business Insider is running article after article today on how doomed gold is. And how doomed it's not.

It's as if the naive clowns at BI are being used as pawns in a titanic struggle over the gold price - like maybe Joey the Weasel is getting fed stories from the dude trying to tank gold, and Mamta Badkar is getting fed other stories by the dude who's trying to crucify the shorts.

And why is silver going up too?

In any case, none of these dudes has broken their EMA yet, only gotten back some of their horrible losses from the past two days. So I'm not interested in playing.

Still, conspiracies.

New news for the noontime, noo noo noo noo noo noo noo

Here are the only articles you're supposed to be reading.

Bespoke - extreme volatility in Chicago PMI. Seems to me it's pretty worthless data if it gyrates around so much.

Bloomberg - Bernanke was clear, it's your fucking IQ that's cloudy. An article on how Bernanke was completely clear with the taper criteria, and the hedge funds are just coked-up idiots who don't pay attention when someone important is talking.

Off the Charts blog - the longer term debt-to-GDP picture. In easy-to-read chart form for all those clowns who get all their (purposefully fudged) US economics data from ZeroHedge. Basically, the US has no real long-term debt problem, though it'd help if the tax giveaways to corporations are allowed to expire (yeah as if). And hey, if you want to really fix things, kill off that fucking stupid FICA income ceiling for social security.

Bloomberg - US bond funds have record $60B in redemptions. It's mostly mutual funds, so this is retail bailing; good for them, they'll do better putting that cash into SPY and not paying a fucking fortune in fees for incompetent management. Besides, if this was the top for bonds, what better time to do your portfolio rebalancing to go overweight equities?

Michael Shaoul - Japan housing starts May 2013. Again, positive data.

Reuters - JGB10Y rises on robust economic data. Robust, eh? Sounds like a recovery in the world's second largest economy, eh?

FT opinion - China could be reforming its state businesses by stealth. I don't want to summarize - it's a very good article all around and you need to read it. Related:

Reuters - China plans to cut industrial capacity. What better way to do it than to cut off credit from the least productive businesses? I mean, if the issue is one of credit creation not resulting in GDP growth, the trick is to kill off the hungriest consumers of credit, no? And also related:

Reuters - China steel firm goes bust as slowdown, supply glut bite. Well, by going "bust" they mean the company quit paying its bills and the CEO tried to flee the country with $33 million in company money. I call dibs on his liver!

Xinhua - PBOC intends to go further. If you don't comprehend what's going on after this quote, you're a fucking moron:
"To squeeze the pimple of over-leverage, we need an overhaul of the current fiscal system," said a well-respected researcher at a think tank of the State Council, who requested anonymity in discussing the matter.
OK? Translation: you fucking banks are pimples, and our control of interbank liquidity be poppin' yo' bitch asses. Out comes the pus of over-leverage.

Reuters - Premier Li with scalpel in hand. More of that vivid Chinese imagery. It continues:
Investors getting stung by China's worst financial market rout in years should find solace in the fact that the government, in particular Premier Li Keqiang, is willing to play hardball to force through much-needed policy change[...]

"Clearly we are now in a different ball game," said Louis Kuijs, an economist with RBS in Hong Kong[...]
This reminds me of a funny word definition from The Meaning of Liff:
PELUTHO (n): A South American ball game. The balls are whacked against a brick wall with a stout wooden bat until the prisoner confesses.

Bloomberg - Gold Fields CEO says he needs $1500 gold to stay in business. Well y'aint getting it, so how's about you fire those 80 people in HR who spend all day surfing the net and dreaming up stupid office policies?

Bloomberg - gold traders split as rout resumes. I am happy, btw, that it took less than 24 hours for the raped and defiled corpse of Peter Schiff's credibility to get dumped at the side of the road this time.

Mineweb - OSC survey finds 40% of 43-101s "unacceptable". I don't doubt that one bit. And I betcha this probe was instigated because the bullshit got to the point where Brent Cook was getting interviewed about 43-101s in Northern Miner and felt no need to mince words.

My question is, who was the clueless, useless, incompetent fucking jackass at the OSC who was supposed to be responsible for the compliance of the 43-101s til now? We need names and we need to see those clowns fired. Because (as I've held) that utter fraud in exploration is responsible for the situation of the industry today.

Reporting standards are useless without compliance officers and enforcement. If the OSC just figured this out now, then everyone up to the top management needs to get their asses fired, preferably sued into oblivion, then arrested and put in jail, and some new people hired who have the slightest, most protean fucking clue about how to police a profession.

Goldbug alert

Level one alert to all goldbugs:

Something interesting happened at 10AM.

Go look at your little goldbug charts. Run run run.

Friday videos - Martha and the Muffins

Holy shit. You can find 1980 live performance recordings of forgotten Canadian pop bands on the internet. What's that about the impermanence of postmodern mass media again, Mister Fucking Smartypants Manuel Castells*?

* - I doubt Castells ever suggested the internet leads to social amnesia and annihilation of identity, but surely some smarmy po-mo did.

Thursday, June 27, 2013

A half hour of Buffy behind-the-scenes

Hey neat! Someone compiled a half hour of behind-the-scenes footage from Buffy the Vampire Slayer.



Hm... Monday morning bottom-tick. Almost as if it was nothing more than a knee-jerk puke.

Hm... Monday morning bottom-tick. Almost as if it was nothing more than a knee-jerk puke.

A few more newsbits

World still not ending, sorry.

Bespoke - Jobless claims inline. Doesn't look like an apocalyptic collapse.

Michael Shaoul - initial claims. He thinks it's positive given the seasonality.

Calculated Risk - Personal income increased 0.5% in May, spending 0.3%. May is old data, but still doesn't look like an apocalyptic collapse.

Michael Shaoul - May US pending home sales "the latest excellent set of data". Though possible weaker still-on-trend numbers in June could muddy the market waters over the summer.

Bespoke - crude oil and gas inventories rise more than expected. Bullish for the US economy, given the importance of the gasoline price.

JC Parets - if this is the gold bottom, it's totally random. I dunno what mechanism is supposed to make gold obey TA, other than whitey traders buying and selling by TA. Still, you wanted your JC Parets, here he is doubting the future of gold.

If that wasn't the bottom....

If we didn't see the bottom already in the SPY,

Why has advance-decline not gone below 1000 for three straight days?

And why did the $VIX drop below its EMA?

Morning news - and a libertopian paradise awaits!

A few newsbits this morning.

As for the S&P, Josh Brown says he doubts the sticking power of this bounce-back - he thinks it's just end-of-month window-dressing; considering the relative strength of MU and F, it's quite possible he's right.


Suggestion for my Irish brethren: you haven't been kicking enough heads in. You've gone astray from your Irish roots. I thought I'd never say this, but here you go: if you want to get more respect in the EZ in the future, you need to be more drunk and violent.

NY Times Dealbook - China market stress: pay attention to the politics. Bill Bishop with some important background for the China situation. Please read it if you care at all about China. As an aside, I'm pretty sure the Chinese leadership are all very good at chess.

Reformed Borker (Bork Bork Bork!) - re the gold miner crash. Quote:
So we had a gold miner mutual fund manager on CNBC Fast Money tonight, live in-studio. He seemed like a nice guy and he probably knows these companies really well. It doesn't matter.
I feel bad, there's really nothing that can be said. His job is to pick stocks from a sector where no one is able to sell an ounce of gold for a price higher than their acquisition cost.
But then again,

Mebane Faber - what happens when you buy assets down 80%? Of course, he's giving you average 3-year return, not a guaranteed return. So you have to ask yourself, what has a better possibility of returning >100% in three years - Greece, or gold miners? You can't just say "ooga-booga, the data says the average 3-year return is >100%, buy buy buy"; you have to actually think about the background of the sector and the data showing likelihood of improvement. Anything less is just feel-good bullshit.

And for all you goldbugs,

Fox19 Kansas - World's largest doomsday shelter opens in Kansas. Here's your future libertopian paradise:
An old cave, once used as a government storage unit, will soon be the world's largest doomsday shelter.
California company Vivos is renovating more than 2 million square feet of underground space.
The doomsday resort will have room for 5,000 people living in up to 1,500 recreational vehicles.
Customers will be able to buy a spot and pay $1,000 per foot for their vehicle.
A 25-foot-long RV would cost $25,000 plus a $1,500 charge per person to pay for a year's worth of provided food and toiletries.
[...]The complex will include indoor golfing, a bowling alley and swimming pool complete with other amenities.
Members will be able to visit whenever they like.
Compare that to the price of a condo in Jeff Berwick's South American libertopia project! This Galt's Gulch is easily fortifiable, there's enough food stored, Kansas has liberal freedom-loving gun laws, and heck, 5000 like-minded goldbug hard-money libertarians to hang out with! Who wouldn't want to go there? And what could possibly go wrong with 5000 armed survivalist libertopian goldbugs living in RVs underground?

UPDATE: in fact, look what they've accomplished already:

Wednesday, June 26, 2013

A gold chart

IKN posted this gold chart:

Strong confluence of support at $700-$1000, eh?

You think it'll hold?

Platinum and palladium


Only two places in the world mine platinum and palladium.

One has seen their entire workforce go on strike and the mining companies respond by shutting down mines.

The other is threatening to stockpile the Pt-group metals cos with South Africa out of the picture they now control world supply.

That, at least, was the idea behind being long platinum and palladium.

Oh, also the world is buying more cars than ever before, and cars literally eat platinum and palladium and poop it out their tailpipes as a fine dust.


In that case, why has Palladium done pretty much nothing for 3 years?

And why has platinum just borked its multi-year support?

Dear analysts: please explain.

Are these metals like gold and silver, or something?

Evening news

A few more news items.

Calculated Risk - GDP revised down to 1.8%. Takeaways: gee, I guess the sequester did have an effect after all. And what have the high-frequency indicators been saying so far about Q2? Also: 1.8% means no taper this year. So I guess the Bernanke dip in the SPY is now over. About time, too - earnings season starts in just a week, and earnings have a real effect on S&P valuation, unlike vague policy announcements.

New Deal Democrat - No, real wages are not falling. The futile battle against neocon disinfo continues.

Economist's View - Krugman on Karicature Keynesianism. Here's Mark Thoma's comment on Krugman:
Let me follow-up on the point about predictions. A relatively well known economist who recently started a blog said he has a formula for getting things right -- just take the opposite side of Krugman on any issue ("to take the correct stand on any issue I need only learn Krugman's, and take the opposite"). What's remarkable about his statement is that Krugman got it basically right. Not in every instance or every detail, but far, far more than most.
So what we have is someone who is supposed to be a credible voice implicitly telling readers to believe those who were wrong over those who were right (or at least be dismissive of someone who is telling them things they need to know). Why? Because his team disses Krugman. That's what they do. He was probably trying to impress the people in this group, get a little chuckle for his witty (?) remark by playing the bash Krugman game. He and others are supposed to be these data based, scientist types -- that's how they portray themselves -- but the truth is that many of them are anything but.
Again, the futile battle against neocon disinfo continues.

And by the way - neocons don't ever have to be right about the economy. That's not their purpose. Their purpose is to get you peasants back into church and the kleptocrats back into absolute power.

Right-wingers say a lot of very stupid things because they're in a constant battle to make their buttholes get noticed by Jamie Dimon's cock.

Bonddad - Chinese markets now at critical support. From the department of No Shit Sherlock.

FT beyond brics - China savers perversely flock into WMPs. This part I found interesting:
Since the crunch began in early June, many savers have received messages from banks and their so-called wealth managers, urging them to buy new WMPs, which are similar to time deposits but are subject to fewer official controls and pay higher interest rates.

Dan Bin, chairman of Shenzhen Ebay investment company, said on his Sino Weibo microblog that he received a message from Minsheng Bank, a leading bank, offering a new product generating annualised returns of 9.9 per cent on June. 26. The minimum deposit is a high Rmb3m.
Um... you see what they did there? Banks are urging people to buy WMPs. At end of Q. With $250B in WMPs maturing at the end of the month, and the liquidity pipe welded shut.

So ask yourself: what does it suggest when banks are urging people to buy WMPs at end of Q with $250B maturing in the next few days and oh by the way the lending market has shut down?

Michael Shaoul on Bloomberg

Michael Shaoul was interviewed on Bloomberg TV. Here's the link.


- Despite what the doomer wackaloons who get all their news from Max Keiser and ZeroHedge tell you, the US corporate sector is doing fairly well and "can stand a yield of 3% on the 10-year, or 4% on the 30-year."
- He notes the UST market was priced for a period of mediocre economic growth, and the US is better than that now.
- He thinks we could probably see a substantial new all-time high some time in 2013.
- He thinks the Chinese have essentially declared war on central banking, he expects them to win, it's by far the most important thing happening right now, and negative effects will show up in the Chinese economy within 3-6 months.
- He thinks the Chinese bond market could fall apart later this year.

I strongly disagree with his comment about the bullseye being on housing; based on what I've read, I doubt the Chinese people are all of a sudden going to stop moving out of tin-roofed shacks. As long as there is wealth in China it's going to continue to be plowed into housing, simply because the older housing stock is fucking miserable. And Chinese buy real estate.

Listening to him made me wonder, by the way, that if a pile of American money is going to be fleeing bond funds and ETFs, where is that money going to go? Cash?

Or the stock market?

I guess the stupid money will go into cash, no?

A goldbug's paradise

I was dicking around with Google Maps, and found that they've started covering Thailand for Street View.

I decided "neat, wonder what Phuket looks like", so I checked it out.

This is the first street I landed on:

Two gold shops there, plus one just behind me and to the right.

There you go, goldbugs - your new libertarian hard-money paradise.

(Just don't step on a coin or you'll go to jail for insulting the King.)

Many newses

More later, here's your starters:

BI - Q1 GDP release.

Ritholtz - state of the economy dashboard. A refreshing bit of hard data counter to the doomers' wailing and gnashing of teeth.

Michael Shaoul - consumer confidence index. Quote: 
Although at extremes we regard Consumer Sentiment to be a contrary indicator, the breakout of opinion regarding the present condition of an economy is normally a pretty good real-time indicator that not only are conditions getting better but also that this is now generally being recognized to be the case. The latter is important since it is this change in opinion that tends to drive retail allocations, as the bond market has discovered to its cost in recent weeks.
Here, I'll quote Shaoul some more:
From our perspective the sudden steepening of the US yield curve is more a rational response to a clear firming of US economic conditions than anything else. The fact that this transition to higher medium and longer term rates will inevitably cause some distress amongst investors does not disguise the fact that it is basically a response to good economic news, and as such is likely to be followed by a period in which it is generally beneficial to own risk assets that are sensitive to the US domestic economy.

Krugman - Florida versus Spain. A simple explanation for why Florida's managed to bounce back from a collapse, while Spain hasn't from the same kind of collapse.

FT beyond brics - EM capital flows after the party. Quote:
The shock this time shouldn’t be as bad because the Fed has given plenty of notice of its intentions and Japan has recently started increasing its supply of liquidity.
People keep forgetting about all that "money-printing" that's on the way in Japan. Probably because there are no black presidents and Jewish central bankers to hate in Japan.

Mineweb - India's central bank moves to deter rural gold buying. Ouch. What the fuck do they want people in the countryside to do? Own a stack of worthless rupees? There are no banks in the countryside! WTF? OMG.

Bloomberg - Jim O'Neill on a 10-step program for India. As he notes, the BJP are clowns, but they also understand free markets and money a bit more than the clowns in the Congress Party.

FT beyond brics - PBoC: China's Bank of Dad. I think once Chirpers from the FT start making fun of the situation, it's pretty much no longer worth worrying about. Here's how it starts:
Bank: Hey, can I borrow $10?
PBoC: Wait, I gave you $10 yesterday.
Bank: Yeah, but I spent it on a magazine and a can of coke.
PBoC: But it was supposed to be for pencils and notebooks.
Bank: I was thirsty, and bored. Please, I haven’t got any money left.
PBoC: What happened to that $50 I gave you last month?
Bank: I bought my mates a round of drinks. It’s fine, they’ll pay me back.
PBoC: And the cheque you got for your birthday?
Bank: I bought a bottle of wine for some of the guys, Chateaux Margot. What goes around comes around and all that.
PBoC: And your savings?
Bank: Bought handbags for my girlfriend. She’ll get me a great present next time.
PBoC: Have you tried asking one of your four older brothers? They seem flush.
Bank: Yeah, but they expect me to pay it back at some point.
PBoC: Wait, didn’t you get a huge pile of cash from your uncle in Hong Kong a few years ago. What happened to that?
Bank: Um. Not sure. I think I lent it to a guy, but I can’t remember who.
PBoC: Well ask for it back!
Bank: No point, he probably doesn’t have it. I think he spent it on a model railway or something.

FT beyond brics - what looms after China's credit boom. More background, including about how housing isn't a problem, and other soothing noises.

Avondale - Chinese banks don't look that bad. Then again, this clown takes it as read that Ernst, PWC and Deloitte aren't utterly lying all to hell with their audits. When we know precisely the opposite. Krisiloff, if you trust auditors, then not only must you have been living under a rock in the US the past 5 years, you also haven't been reading the news about the audit crisis for Chinese US-listed companies. I'm not doubting your conclusions, but I am calling attention to the childlike rosy-cheeked naivete of your trust in the data. One example: how much were these banks hiding off-balance-sheet?

Mineweb - GLD shrivels as prices fall. Hm... 970 tons in GLD. 4000 tons world annual consumption. I'd be happier if GLD was down to 400 tons, but at least it's not as much overhang now.

Mineweb - silver ETF holdings sink the most in 12 months. And now, I guess, the carnage moves to silver? If you're a mining analyst and you're reading this, wanna maybe write an article on the all-in costs profile for the silver mining industry? I think it might be scary reading, if there are a lot of companies like Fortuna Silver mining silver at negative cash cost due to byproduct credits.

Tuesday, June 25, 2013

Today's miner barf of the day

Huldra Silver:

Now with $7M market cap. Is it a buy yet?

A few more news stories

Ritholtz - Morgan Housel is a permanent optimist. Here's a chart:

Feel free to shove that in the doomers' faces whenever they start quoting Prechter.

Bonddad - 1% rise in interest rates is necessary but not sufficient for recession. And they'll be going back down now anyway, because too many people were on the wrong side of the boat.

Calculated Risk - a few comments on house prices and new home sales. Quote:

Now that we have five months of data for 2013, one way to look at the growth rate is to use the "not seasonally adjusted" (NSA) year-to-date data. According to the Census Bureau, there were 202 thousand new homes sold in 2013 through May, up about 29% from the 156 thousand sold during the same period in 2012. That is a very solid increase in sales, and this was the highest sales for these months since 2008.

Note: For 2013, estimates are sales will increase to around 450 to 460 thousand, or an increase of around 22% to 25% on an annual basis from the 369 thousand in 2012.

Although there has been a large increase in the sales rate, sales are just above the lows for previous recessions. This suggests significant upside over the next few years. Based on estimates of household formation and demographics, I expect sales to increase to 750 to 800 thousand over the next several years - substantially higher than the current sales rate.
You can either get your data from Bill McBride, or you can get it from some guy who links to Max Keiser, ZeroHedge and Jim Kunstler. Who are you going to trust more?

Reformed Borker (Bork Bork Bork!) - so who bought the dip? Interesting point:
* While all three segments - private client, hedge fund and institutional - posted a combined a net sale of stocks last week, the one sector that all three groups actually added to was Technology. It was a record week for flows into tech stocks, the first over $1 billion week since 2008. BofA has previously determined that tech is actually the best performing sector during periods of rising interest rates so this makes sense. Chart below:
tech flows
And he also slags the hedge fund cokeheads.

Michael Shaoul - Japan small business confidence index.

FT beyond brics - China makes some friendly noises.
The central bank is committed to squeezing banks to curb over-rapid credit growth, which is seeing loans expanding this year at 22-23 per cent. While the ratio of credit to GDP at around 200 per cent compares well with the indebted developed world, what scares regulators – and, among others, the International Monetary Fund – is the fast growth rate. The figure for 2008 was only 120 per cent.

See, that's the problem they're trying to fight. Quit freaking out, this is a good thing.

IKN - the vampire squid on copper. Email him to get your free report from Goldman's Ballsacks!

More on Rye Patch Gold

Let's look for some people who plugged Rye Patch Gold, eh?

The Gold Report tends not to delete interviews that later carry uncomfortable truths. They have five reccies on record for RPM, and three specifically mentioned the little Coeur play:

Brien Lundin, Gold Newsletter (Jefferson Financial) (6/1/13) "Rye Patch Gold Corp. has reported some interesting surface sampling results from ongoing work on the Lincoln Hill and Independence Hill zones. . .the Looney mine's mineralization was traced for 300m along strike and yielded a sample of quartz vein material that graded 22.87 g/t gold and 9.7 g/t silver. . .the potential for the court to award the company either the LH Claims outright or give it some substantial settlement for returning those claims to the Coeur d'Alene fold make Rye Patch a company to watch. . .the decision could result in a cash influx that would exceed the company's current market capitalization."
Ouch! Turns out their market cap has been cut by almost half since this interview. Good call, Brien Lundin!

Chen Lin, What Is Chen Buying? What Is Chen Selling? (4/16/13) "I talked to Rye Patch Gold Corp's CEO Bill Howard. . .he told me that the Nevada Supreme Court didn't have to listen to the company's case, but the justices picked it. That's very encouraging. . .if the Nevada Supreme Court deals Coeur d'Alene Mines Corp. with a big defeat, it will likely settle. . .I was told that if Coeur d'Alene takes over Rye Patch at a big premium, that would be acceptable. I like the answer. Rye Patch's market cap is only around $50–60M and Coeur d'Alene can pay a very high premium on that."
Hey Chen - have you now learned never to listen to the bullshit story that any CEO feeds you? How does your bunghole feel now?

Jay Taylor, Gold, Energy & Tech Stocks (4/12/13) "With some good news from the Nevada Supreme Court starting on May 13, when Rye Patch Gold Corp. challenges the legitimacy of the 'Special Master' as it applies to the Rye Patch v. Coeur d’Alene dispute, [the company's] shares could rise considerably from that alone. In addition, with a considerable gold and silver resource from the three properties next door to the Rochester Mine and assuming a positive PEA, value underlying Rye Patch's shares is most likely substantially higher than the market is currently suggesting."

Hey Jay! Still think that's true? Did their shares rise considerably? Or have you been proven wrong? Got any money left?

Now, I have no clue who Gecko Research is, but they also screwed the pooch on this one:

Rye Patch has a low Mcap with assets in a safe jurisdiction with almost 4 Moz AuEq (gold and silver), in proximity to Coeur d'Alene's Rochester Mine. We will not put a target price on the company's "fair value" but we have talked to our North American contacts for guidance. If in fact CDE bid for RPM, we think a bid would be in the neighborhood of one dollar which if that comes true, would make RPM an easy double from today's price.

It's even better now! It's a potential five-bagger now! ...except this is after the deal was announced.

Other people who had a very positive attitude about RPM in the past include Roger Wiegand & Al Korelin, Louis James, and Sean Brodrick. Can find any details right now, especially can't find any embarrassingly recent quotes asserting a guaranteed double on a Coeur buyout. Feel free to post them in the links though, if you know where to look for them.

Man! That is one hell of a lot of anal ysts who got that call disastrously wrong, no?

Did anyone call the Rye Patch play right? Anyone at all?*

* - Okay, one analyst pointed out that CDE didn't need the property for their mine plan any time soon, and so had the luxury of allowing RPM to wither on the vine for ten years - thus it wasn't a play worth getting involved with. But he's refusing to toot his own horn, so I guess we'll just have to leave his identity a mystery.

A bit of morning news

Not much reason to waste your time with reiteration of the same old crap I've been feeding you for the past few days, so it'll be short today.

BI - Jim O'Neill says there's no Chinese credit crunch. Oh, and he's smarter than you and most of the other people out there.

FT beyond brics - EM selloff: where are the bottom-fish? Hey, who was it who asked these guys to bid up the corrupt, politically unstable, economically vulnerable EMs up to such stupidly high PE values? Cos that was the smart thing to do just a few years ago, no?

Reuters - BRICs organizing to limit effect of US stimulus withdrawal. Now this is interesting! Dilma is trying to figure out how to ensure her country isn't destroyed by the big money outflow that cometh. Do the EMs have what it takes to limit the damage and counteract the threat of an end to the EM secular bull? Very interesting!

Yahoo Finance - "Megatons to Magawatts" program 95% complete. This was supposed to be the big boot on the throat of the uranium price. I'd really like to hear Mickey Fulp's take on where uranium supply goes from here - especially with the new program announced in this article. Mickey always sends a strongly-worded email (via Otto Rock*) whenever I misquote him, so I know he's watching me; hopefully he writes an article on his website about the end of the M2M programme.

* Mickey Fulp isn't Otto Rock, you say? - China + copper = DOOOOOM. I'm not worried. Not about EM metals demand, anyway. Supply side scares me a bit though.

BI - let's look back at the stupid gold price targets of yesteryear. Naming and shaming. Bodies found suffocated inside the clowncar include Bob Janjuah, Michael Pento, and (of course) Frank Holmes. Names to put on your "ignore list" for the future.

Mineweb - Chinese gold production up 10%. How much more can China increase gold production? Hm? And what about when they move into Afghanistan and start mining gold there? And then what if the Russians move into Iran and start mining gold there? Do you think there's no prospective deposits in Russia- and China-aligned central Asia?

This is something to keep in mind for the long-term gold trend: does gold mining become state-subsidized, like REEs in the last decade? Cos after all, China and Russia have already indicated they want huge gold stockpiles; why not subsidize gold production so you can stock up faster?

And what happens to the price of a commodity when part of its production is state-subsidized?

Am I worried about nothing, here? Are all those smart guys like Brent Cook and Adrian Day and Rick Rule going to get punished with decades of state-subsidized artifically-low gold prices, or am I completely wrong? I'd like to assume that those three guys (an economic geologist, an LSE grad, and a goldbug guru) would be reading the sitrep properly and I'm the guy who's pulling stuff out of his arse.

But you never know.

PS Adrian Day's running a discount promo for new subscribers - something like $490/yr? Considering he's an LSE grad, and therefore probably understands economics, while your average $490 newsletter is run by some clown whose economics education stopped at "ooga booga gold is good", it seems like a good deal.

Plus you get to cancel after 60 days if you're not impressed. And he's not giving me any free stuff for plugging him (though it would be appreciated), and the extent of my involvement with him is having seen his presentations a few times in Toronto, and having argued with him once about the Chinese demographic hump.

Google has the answer for all the goldbugs who are out catching falling knives

This is hilarious.

Google's context-sensitive ads score a funny on the entire goldbug crowd today.

Rye Patch Gold - how do ya like them apples?

Someone who cares more than I do should go back and track down all those rosy predictions for Rye Patch. Cos after all, those guys who made the "buy RPM" predictions are "analysts", right? We should put this down on their permanent record for future reference, no?

IKN has the news: Rye Patch Gold and Coeur d'Alene come to an "agreement".

Let's check out the resultant happy pop in RPM's chart:

Um.. what was that target price, again?

Maybe it looks better if we turn the chart upside down?

Monday, June 24, 2013

My reading list

Market Internals and Data

Ignore everything and follow only the data. The data is the data, the chart is the chart; the market can be wrong for a long period of time, but eventually it has to conform to the data.

New Deal Democrat at Bonddad Blog - his weekly summary of US economic indicators is second-to-none. He seriously is ten times better than the ECRI.

Calculated Risk - just the hard data, no politics. Once you figure out what's important to follow, he helps you follow it all week.

Bespoke Investment Group - just the hard data, no politics. Their perspective is especially vital when emotion is running high. I cancelled my subscription to their premium service, but their free service still gives you decent enough info about what the market's up to right now.

FT Alphaville - A free blog from Financial Times. They pay attention to the world, not just the US; and to bonds and currency, not just stocks. I personally found it very difficult to read them originally, but over a year I've found it easier to follow what they're on about. The commentary is true City wonkage, and gives you a window into what the professionals are thinking about weeks before it gets into the lamestream media like Business Insider.

Emerging Markets

There's probably more EM news out there, but frankly the below is more than enough for me.

FT Beyond Brics - 20-30 articles a day on the EMs. Feel free to skip the countries you don't care about. But it'll keep your mind open to the possibility that other countries exist, and they are either good or bad.

Sinocism - more China news than you would ever want to read about. Seriously. You don't need to read all this unless you want to know all there is to know about China. A huge news report out by 10PM every night about that morning's China news.

Commie economists

It's finally being proven that the left-wing commie pinko economists have been right all along, and so now right-wing economics has devolved into a bunch of talking-head Fox News clowns blathering on about what they read off the back of an Ayn Rand novel. So here's a list of left-wing commie pinko economists for you to follow, in the hope that you can inoculate yourself against right-wing woo:

Paul Krugman - the king of flamewars, he never backs down from an argument.

Brad Delong - mostly news links, very little other content.

Mark Thoma - not so much a commie, but still a proper economist.

Evan Soltas - only an economics student, still a good blog. Gives lots and lots of links to journal articles, which is nice.

Antonio Fatas - hides his communist sympathies well, but he's probably on the side of the angels.

Chris Dillow - mostly British lefty issues.

Simon Wren-Lewis - also mostly British issues. Mostly talks about "mediamacro", which as far as I can tell is the neofascist mass-media's distorted, Rand-influenced idea of macroeconomics.

More news

Evening news:

Bespoke - UST10Y most extended in 50 years. This is really starting to look like that idiot 110 Yen move we saw just last month - as in, temporary.

Calculated Risk - Dallas regional mfg surges in June. To the best of my memory, regional manufacturing reports have generally stank; so several strong mfg reports in a row is a positive sign for the US economy, no? Or is manufacturing not "organic" enough for you?

Economist's View - the intellectual bankruptcy of the Austerians. Maybe once that movement gets killed off we can move to holding the hard money clowns up for some ridicule? Cos they really need it.

Krugman - dead-enders in dark suits. The recent BIS gets utterly dismantled by the cold scalpel of reality. I like Krugman cos he knows when to punch 'em hard in the ballsack.

Michael Shaoul - Italy consumer confidence rising. So we should be at a bottom for Italy now.

FT Alphaville - weapons of mass Ponzi in China. Again, 1.5T yuan in WMPs matures by the end of this month. And I think I said this was the point, even before FT ripped off Bill Bishop.

FT beyond brics - PBoC cash crunch statement. They've finally owned up to it.

Michael Shaoul - the PBoC's relationship to Chinese markets. So... it's a bad thing that real estate and construction will be slowing down in China?

Reuters - Indian jewellers join government campaign to cut gold buying. Uh-oh! Y'all be fucked now, Cletus.

FT beyond brics - the shaken complacency of EM leaders.

Reuters - Barrick to lay off 30% of its office staff. If they're anything like my company (which isn't particularly mining-related), they probably have a grossly bloated HR department who spend most of their time either posting on Facebook or coming up with stupid ideas that don't involve digging rock out of the ground. Quinton, your dream of mass layoffs of the suits is coming to pass! - China's voracious demand for copper. Y'know, I'm not totally negative on the base metals - I just question if demand can go up faster than new mines can get built. The developing world is still full of billions of people who make crap out of reeds and heat their houses with poop.

BI - hey interns! You're lucky to have a job. In my industry (engineering), we pay our students... not well, maybe, but they have to get something cos we need competent staff to not quit our company for a $5/hr raise somewhere else.

As for media interns? Here's how you fix the situation. Find out where your boss' kids (or grandkids) go to school. Kidnap them. Cut off an ear or a nose - something identifiable, not too big cos you want to save postage - and send it to the boss. I guarantee you you'll be able to negotiate a decent raise.

I'm pretty sure this is how they do things in more enlightened countries.

Let's check in on that whole "reach for yield, get your arm cut off" thing

S&P 500 is down today, obviously; so how about bonds?

Yup, emerging market bonds are still -3SD.

Junk is still -3SD today.

And IEF is still -3SD, though at least it's trying to fight back.

Now let's zoom out for a bit of the ol' "perspective" thing....

OK, emerging market bonds have erased basically the last 18 months of gains. At what point do they become fairly priced? 

The HYG move has actually been reasonable. Not that much damage to your portfolio once you include the income - and income is why you bought this in the first place, right?

Hey, do you think US corporates are as much a piece of junk as Zambian municipal debt, now, or is there a qualitative difference and a more positive outlook?


Seriously, if the threat of worldwide deflation was a reasonable fear starting in mid-2011 with the deepening of the Euro depression, the peak in commodity prices, and the beginning of some obvious underperformance in the Chinese economy and the $SSEC, then shouldn't you expect the UST10Y to be back up around here now?

Do you want to live in a world with the UST10Y yielding 1.5%?

I'm starting to think this downward bond volatility will end the way the short Yen long Nikkei volatility ended - with everyone on the wrong side of the boat and the boat tipping them over. Back to the sea of mediocrity for all the hedge funds who think short-UST is a slam-dunk.

Then again, maybe we all truly are going to die. Punished by the hand of a vengeful Christ for our sinful worship of fractional reserve banking.

Sinocism comments

I figure the point of the Sinocism blog is not just to read the news articles, but to read Bill Bishop's comments as well.

Here's an example with a bunch of Bill Bishop comments from last night:

- Financial news makes it pretty clear no reserve ratio cut coming.

- Hu Shuli not too worried about last weeks’ interbank fun, says right move by regulators, as long as now followed by financial reforms, and followed quickly, as the window is narrowing

- last week interbank tightening in part a “real time stress test” by PBoC, which knows it can’t trust made up stress tests?

- so did the PBoC succeed last week in changing banks expectations of easy liquidity?

- 1.5 Trillion RMB of WMPs coming due by end of June, could be an interesting week…

I think those give us valuable hints as to the direction our thoughts should be moving in when it comes to the China situation. Especially the last one: if some WMPs are insolvent and only staying alive by taking out more debts, those are precisely the investments the Chinese should be rooting out and killing. Before you get a US 2008 situation where the whole system falls apart on its own.

A controlled burn is better than a wildfire. I assume, anyway.

Oh and also -

If you work in the investing profession and you're reading my blog for free, I know there's not much I can do about that because you kleptocrats are all about stealing shit from others.

But if you work in the investing profession and you're getting any use at all from Bill Bishop's blog, the right thing to do (which I know you fucking sociopaths don't care about, but still) would be to send him maybe $50-$100 a month for his invaluable service.

Sunday, June 23, 2013

Uh-oh, lease rates ticked up again

"Gee, now that Indian wedding season is done, and China seems to be teetering, and they buy 50% of all gold, and now Bernanke's got everyone worried that rates will normalize, and whiteys all think gold price should go down when interest rates go up, wouldn't now be a totally can't-lose fantastic time to borrow a shit-ton of gold and puke it into the market? Maybe we can get the price down to $1000."

Sunday newsreading

Gotta get all prepped for Monday. Me, I'm pissed that I can't get any good dry mojito at the booze store - just sugary shit, far too expensive too - so god knows how the fuck I'm going to make it through the week on one stupid bottle of Smirnoff Ice.

Here's the news:

Reformed Borker (Bork Bork Bork!) - investors face their Kobayashi Maru. Um, no Josh. It's simply the same old fucking over-correlation circle-jerk that we get every year when the cocaine and meth are flowing freely in hedge fund land.

Economic Times - markets set for more turbulence. Thus an explanation for the high $VIX in the slow uptrend without backwardation: the market is buying puts on everything.

Econbrowser - more on the taper. Basically, the taper doesn't begin at fucking 9AM Monday morning so quit fucking freaking out.

der Spargel - Greek government wobbles. I'm putting this in the list as a test for you. Read the article. Now ask yourself if you still care at all about Greece. No? Then ask yourself why you felt they were so fucking important last year.

Reuters - China cash squeeze exposes risks in short-term funding.

WaPo - OMG China, advice on how to freak out.

Bloomberg - blah blah China DOOOOOM.

WSJ China Realtime - Charting China's cash crunch - the charts that ZeroHedge will use tomorrow to frighten you into buying 300 tons of MREs.

Bloomberg - blah blah China DOOOOOM II.

Reuters - calls for a more transparent Chinese central bank. Yeah, by who? Investors? Wow - the government of the People's Republic of China is really going to give a shit about them! Especially since they're the people who fucked up China's economy in the first place! Bill Bishop points out China's central bank has been very transparent: months ago they told the banking system to straighten up. They didn't. So now the central bank is going to kill all the bankers and sell their organs for transplants in Hong Kong. Quite fucking transparent if you ask me.

Reuters - Xinhua says cash crunch caused by shadow banking. And Xinhua prints exactly what the government tells them to. This article is the government talking. There is your transparency, whiner. Now quit your complaining.
The central bank's refusal to inject cash into the system, despite a spike in short-term lending rates, suggests its monetary policy has begun to shift from one focusing on quantity to quality of market liquidity, Xinhua said.

China's cabinet has vowed to ensure credit growth supports the real economy and to control the flow of new money into industries struggling with overcapacity.
How is that not transparent right there? Are you hedge fund morons illiterate or something?

South China Morning Post - China's gold consumption set to overtake India this year. Y'know, I'm thinking more and more that the liquidity situation in China probably won't affect their gold purchases that much. Yeah, I'm worrying less now. The other gold investors might not though.

Reuters - golden era to end for EM bond ratings. Explain how the EMs get back to their previous growth rates with bond yields 2-3% higher. Can't? Of course not.

Lawrence Williams enjoying his holiday in Madeira

Mineweb - Gold price nearing the cusp. Lawrence Williams writes this piece from Madeira, where he's swimming in a pool of vodka surrounded by hot Russian gymnasts & tennis stars.
We have often said that fundamentals are not necessarily the key influence in the path of the gold price – sentiment and fear are perhaps the main influences on the yellow metal’s price movements.
Dude, it's a refreshing change from when you guys in the gold scene all said fundamentals didn't matter to the gold price, because gold is the only real money and blah blah hyperinflation. 
But, eventually fundamentals have to play a role, even if not the defining one.  At $1200 perhaps a third or more of current newly mined gold would be being produced at a loss on an all-in costs basis.  At $1000 this figure rises probably to over 50%, perhaps even higher[....]
Nothing against you, Mr. Williams, but because of my past experience with reporters, I'd prefer to see cold hard stats on this topic. Still, yes, your point is an important one.
What this all means in reality is that profitable miners faced with lower and lower gold prices are going to shut down uneconomic mines rather than mine at a loss.  And less profitable companies, which may not have this option, will just disappear.  If shareholders are lucky, their assets will be snapped up by cash rich companies which understand that mining is a cyclical industry and can afford to keep currently unprofitable operations and projects on a care and maintenance basis until the cycle reverses again – as it surely will.
Now please point out what production overhang means to any future upmove in the gold price.

Oh - also, point out how much ETF gold has to get puked back into the market before ETF gold holdings stabilize at their new lower quantity. Um.. but you can't. Cos we don't really know yet.

Watch the GLD inflows.

Today's blog stats fun

Apparently some German message board saw some troublemaker link to my Lupaka post of a few days ago. So I'm famous now.

Here's some blog stats:

Barkerville Gold Mines? Yeah, apparently they hired dozens of other consultants to comb through Peter George's Lovecraftian 43-101. Still haven't released any info yet, still under review by the securities guys, still not trading, don't get your hopes up kids.

Daniela Cambone? Yeah, not as much news coming out of Kitco recently. Every TA clown they bring on gets mercilessly disproven by the market within 24 hours. Seriously, Daniela, you should see if you can get a reporter job at a Montreal TV station. Or hey, how about MuchMusic - would you wanna be a VJ at MuchMusic? No, me neither I guess.

Is Jeff Berwick "Simon Black"? I think I checked into this ages ago and found "Simon Black"'s writing is far too lucid and organized. But frankly, who the fuck cares who "Simon Black" is? Do any of you guys care who I am? Does authorship matter at all in the post-modern age? Am "I" really anything other than just a haphazard bundle of half-reasoned narratives?

And actually, sorry to burst all your little libertopian bubbles, but Simon Black is actually Otto Rock.

It's true.

No, honest - fuck dude, really - fine - if you don't believe me then go ask Mickey Fulp, okay? Ask Mic... shut up! I'm tellin' ya, ask Mickey Fulp, he'll confirm it. Otto Rock is Simon Black.

Lydian and Rick Rule? Ha ha. Rick, you dumb sucker. You were buying at $1.50? How does that make you feel now: better? Or worse? Still going to stick to your idiotic Ayn Rand theories about hard money, and gold is the only real currency, and all that money printing hyperinflation blah blah yadda yadda? Or are you going to face the cold hard reality that I've been putting right in front of you for months?

Massive declining C wave? Great name for a psytrance album. As for economic theories, put it right up there with Planet Nibiru and the Anunnaki. Which btw is a great name for a psytrance act.