Friday, January 3, 2014

And IKN responds by intentionally spiking my blood pressure

Never rile a Geordie. IKN responds to my teasing by forwarding a link to this:

24hgold - Early Xmas for Chinese silver miner, says David Bond, where he mounts a sterling defense of Silvercorp, the Chinese silver miner that was accused of fraudulently misleading investors.

David Bond, by the way, was the guy who last year mounted a sterling defense of Liberty Silver, long after higher-quality, more-conscientious analysts (Bob Moriarty, Jeb Handwerger, James West) had already disavowed the company (and in some cases deleted their writeups).

Bond's sterling defense of Liberty Silver can still be read at 24hgold (though I'm unsure if the content has changed recently; I don't remember his article mentioning Silvercorp before). Here, let me quote some of it for you, with highlights:
Wallace, Idaho – Speaking of scams, wouldn't it be nice if just once, just once, the Securities and Exchange Commission bore down on one or two of the sleazy short traders in the silver and gold markets? No. It's only the longs who get to be the bad guys. When have you ever seen a short trader in handcuffs, being led off the Comex floor to the awaiting bubble-top? Right. Me neither.

Our current case study is Liberty Silver (LSL on the TSX). Liberty, which is commanded by some of the most credible people in the financial and mining sectors of Canada. What Liberty has is a vast acreage of low-grade, cheaply recoverable, silver on the ground near Lovelock, Nevada within a stone's toss of Coeur's legendary Rochester Mine. It has a name and its name is Trinity. In my dotage I don't need to go down a deep dark hole and be courted by some name-upon-request geologist to be directed to some vein he says bares such-and-such gold or silver. I'd rather look him in the eye in the daylight of the portal.

After a property visit this summer, we decided that Liberty was a no-brainer. Get a track-hoe, lay down a pad, and start making silver (and money). Then, while we were there, LSL acquired its neighbour, the Hi-Ho property, which will in essence double or triple the play.

This writer, along with Midas Letter's Jim West, liked the property and the proposition. (I was hired by David Morgan to go take a look at the place and write it up as best I saw it, whether a dog or a winner. Morgan does not instruct his writers to reach a foregone conclusion, and I would never write (nor have I ever written) for someone whose standards were different. Morgan said: go down there and tell me what you see. I did and I wrote about it on David's subscriber's website.)

I digress, but my angst about resource newsletter writers is boiling to the surface here: They are 92 percent of the time bullshite artists, and they have taken a long or short position in a mining proposition long before they tell you poor snivelling paid subscribers about it. There should be laws against most of what is written in this field. And maybe there are here in the U.S., which is why when the concerted short assault got launched against Liberty Silver, it came from an off-shore source.

Liberty's management is above reproach; the enthusiasm for Trinity's development at SRK's Reno office infectious. I find it incredible that guys like Geoff Browne, Bill Tafuri, John Barrington, Paul Haggis, Tom Hodgson, George Kent, John Pulos, or Timothy Unwin – all of them world-class stalwarts in their respective fields (please, please, do a Google search on any one of this lot!) would participate in a penny-stock scam. It just ain't gonna happen.

So: A world-class management and a silver hole in Nevada ground. What could be possibly wrong about this? Oh, wait. Bobby Genovese bought into the play. Who is Mr. Genovese? There is no doubt that Bobby G. can charm the socks off a centipede, but is that a fault? He likes the Liberty play and so do I. When we first spoke about Trinity he was right up-front. He holds a fair bit of LSL's free-trading shares. “I've put money into this project and I would like your opinion,” he said to me. There was no offer of shares. No gimmes. In fact, I had to beat the travel costs to look at the mine ($900) out of him. Beginning. End. But somebody dropped a dime on Liberty with the U.S. SEC. Too much market cap considering the reportable historical asset, because the bean-counters at Liberty wisely decided to understate the value of Trinity and LSL's now-concluded acquisition of next-door neighbour Hi-Ho. Well, damn! A company that understates its asset value? Now, there's a first.

The short run on Liberty was indeed short. Due to an unpardonable regulatory screw-up, the Toronto tarantulas halted trading in LSL shares fully a half-hour after the U.S. S.E.C. halted trading of LSL shares, which sent LSL into free-fall in Toronto, where it had opened at a buck-fifty and closed at 97 cents. Who's going to jail for that stunt? When the regulators staggered off their bar-stools a week later and reopened LSL shares for trading, the stock opened no-bid, then quickly recovered. Who's going to jail for that? Who will make the longs whole?
Does that now make it obvious to you how useful David Bond's opinion is about Silvercorp? If not, look at this chart:

Since David Bond's sterling defense of Liberty Silver, it's fallen from $1.20 or so down to 4 cents. Has the chart proven David Bond correct, do you think?

(The news flow in the past few months has been especially hilarious; go do a websearch if you're interested cos I no longer care.)

So what about David Bond's opinion of Silvercorp? Well, compare his article to the following.

Globe and Mail - Silvercorp critic caught in campaign by police.
Globe and Mail - Silvercorp slammed on analyst's claims.
Barron's - The high price of digging up dirt in China.
Globe and Mail - SEC probes Silvercorp short-seller fight.
Vancouver Sun - Silvercorp faces class-action lawsuit over allegations in China.
HuffPo - Huang Kun arrested in China after alleging fraud against Silvercorp.
Globe and Mail - RCMP eyes Silvercorp investigation.

oh and also,

Alfred Little - Silvercorp topic.

So on the one hand you've got the Globe & Mail (who were nominated for an award for the one article up there), Barron's, the Vancouver Sun and HuffPo; on the other you've got the opinion of David Bond. Nuff said.

Oh, but there's more:
Oh, of course I owe you a disclaimer. I don't own a single share of LSL, much as I'd like to. Nor does my wife, any of my brothers, nor any of my nieces and nephews, or aunts and uncles I am aware of. I'd like to meet relatives of some of these short-hustlers, though. Preferably under a blanket, ball-bats in hand.
So, for all those people who've shorted, or even criticized, LSL and Silvercorp, beware this face:

I'm personally so frightened that I don't even think I want to go to PDAC 2014 in case I run into him!

On IKN and the end of the junior miner rally

IKN - junior relief rally looking short-lived, whinge whinge. Quote:
When you have 1) gold slightly up but 2) the junior rally being led by the cruddy end of the sector and 3) in general, the quality end of the junior mining sector not following through, it points at best to traders happy to lock in swift profits and then see what happens next or at worst, to the premature end of any rally. 
Let's look at some charts:

GDX is beyond 2SD up, and threatening to rise above the SMA(50). I'd think we should expect some resistance here, maybe even a drop to $21.20, even in an uptrend.

GDXJ is more than 2SD up, and very close to its SMA(50). Again, this is where we should expect it to fall back, maybe even down to $31 for a gap fill, even in an uptrend. Quit whining, your favourite Peruvian junior is already way above its SMA(50).

For the past 2 months, gold has never gotten this far above its short-term mean without dumping back down. And today you have three different Fed speakers who are going to be saying things that result in immediate knee-jerk movements in the gold price by the trading bots. If that's a bad thing, why hold gold miners instead of the S&P 500 or Eurozone stocks?

So sure, people might sell and book profits. For one day. That's what the market does when all its participants, including the anal ysts, are thinking in terms of intraday moves only. It's abused child syndrome, that's all. Question is, what happens by Monday afternoon?

A warning for goldbugs today

Just as a warning to the goldbugs:

Apparently there are three different occasions today where some Federal Reserve person is going to be speaking somewhere about something, with Bernanke Himself the main act sometime in the afternoon or something. Go look it up if you want details.

Point being, whenever someone from the Fed talks about something, there are instinctive knee-jerk moves in the PMs. And maybe they'll be amplified today by a lack of volume?

And, of course, people know this ahead of time, so it might even be that people sell ahead of the speeches. And that anticipatory selling will be amplified by lack of volume.

Personally I am more interested in the fact that gold has popped twice on the China open.

Friday videos - more Violent Femmes

Here's some more archival footage of the Violent Femmes:

Thursday, January 2, 2014

BREAKING NEWS: Miley Cyrus is into girls

Life & Style Magazine - Miley Cyrus having secret hookups with women, says Miley's publicist.

Next time someone tells me they're a lesbian, I'll respond with "Why? Do you have a new album coming out?"

Some news for the evening

Here's a bit of stuff for you:

Bonddad - New Deal Democrat vs Calculated Risk: deathmatch! They have totally divergent opinions about housing in 2014. Personally, I'd take Bill McBride's side of the bet. The US economy certainly can handle 1% higher mortgage rates; in fact, rates rising off the zero bound might be a tremendous boost to the US economy, as Rosenberg has noted.

FT Alphaville - mountain of maturing loans in China. If there is a severe market correction in 2014, it'll be because of this. After which you'd expect US manufacturing to take off, as it all gets reshored.

Toronto Star - end of the gold rush. Quotes:
Investors dumped as much gold from exchange-traded products in 2013 as had been purchased in the previous three years, according to data compiled by Bloomberg. They sold 789.3 metric tons since the start of January, pushing holdings to the lowest level since March 2010 and wiping $67.5 billion from the value of the funds.
So the people who drove the gold bubble have basically all sold by now, eh?
Speculation now is that a U.S. recovery will curb demand for the metal as a safety net. “The economy is picking up and everyone is very bullish on the U.S. dollar, which is not a great backdrop for gold,” adds Hartnett.
Let me know when Indian and Chinese people start holding US dollars instead of gold.
The good news for the industry is that metals-hungry China still has a voracious appetite for gold.

China’s net imports of gold from Hong Kong reached 129.9 tons in October, the second highest total on record, Bloomberg reports.

Chinese consumer demand for the metal rose 30 per cent in the 12 months through September, according to the World Gold Council. That puts it on track to overtake the world’s top consumer, India, where purchases gained at a slower rate of 24 per cent amid government import restrictions.
Ah... I see. Carry on.

Yahoo Finacne - Indian iron ore companies throw in the towel. And this is a country that's supposed to be able to start up a gold mining industry? Chidambaram and friends really are well-insulated from the coldness of reality, no?

No gold miner should be 3SD up.

I shake my head:

Why should Rio Alto be 3SD up today, when it was sub-$1.40 just a month ago?

Did someone maybe make a mistake selling this down over the past 4 months?

Tuesday, December 31, 2013

One more video - press play at 10:59:56 PM

Further to the last Friday video, here's Seiji Ozawa with the Shin-Yu Kai chorus and the Berlin Philharmonic, really hitting one out of the park with Carl Orff's Carmina Burana:

It's really the best version I've ever heard, except the horns seem a bit flaccid and (it being YouTube and me only having computer speakers) the sound quality is a bit muddy.

Nevertheless, press play at 10:59:56 PM and let Seiji Ozawa ring in the new year for you.

Oh and some news why not

Some reading about stuff:

The Chronicles of Brodrick - man, gold's chart really fucking sucks. Wherein he posts a chart:

Sean, who is left to sell gold down below $1200?

Mineweb - India mulls gold mining revival. I'm sure that'll work. I mean, India's done a great job mining coal and iron, right? But seriously folks, one thing to look out for in a secular commodity bear market is third-world countries artificially depressing commodity prices through state intervention and industrial subsidy. And India is great for state intervention and industrial subsidy, no?

Bespoke - tracking the financial post-crash recovery versus the QQQ post-crash recovery. In which we are presented with this comparative chart:

Now, I already proved just a month ago that the GDXJ has gone through a NASDAQ 2000-style crash. If so, then if you assume the miners have already hit bottom, and that the GDXJ simply follows even just the bank crash as an analogue, it will take 300 days just to get back to $60, and another 700 days after that to break through. Pretty damn sad, eh?

Oh, and that's assuming the GDXJ recovers the way the banks did - via a massive infusion of cash from the US government. Uh... which isn't going to happen. So if you instead assume the GDXJ follows the NASDAQ recovery line, it'll take 1500 days just to get back to $60.

That's 5 years for a double. It's more realistic to expect that from the S&P 500.

Blog stats fun: Vanessa Collette edition

Daniela officially has competition:

And if you remember, I was the one who identified the start of this trend months ago.

Personally I think Vanessa Collette does a fantastic job of keeping a sweet smile on a straight face while insane right-wing goldbug freaks blather on self-importantly about their pet conspiracy theories and utter lack of economics knowledge.


Here's that David Morgan blathering on about how Janet Yellen is the Anti-Christ and silver's going to $100, and yet Vanessa's ineffable sweetness keeps us from clawing our own eyes out.

BTW, David Morgan's website was where you could find David Bond's promotion of Liberty Silver. So you can be certain that Morgan has perfect judgment in all things silver.

Here's Jeff Berwick claiming "Bitcoin could go to infinity million dollars", and yet stalwart Vanessa keeps our brains from melting into a puddle of Statist goo by rocking out in this cute dress & jacket combo.

Oh, and it looks like she's wearing a ring, so there's the answer to your question. Her dude is probably a handsome rich Hollywood actor and brain surgeon. Or something. Which you're not.

By the way: is it just me, or is Jeff Berwick looking more and more like John McAfee as he gets older?

And here's Vanessa listening to Bill Murphy's theories about gold manipulation, and yet the only thing going through my mind is "damn, she looks even cuter with straight hair! My god, is there anything Vanessa Collette can't do?"

Meanwhile all Daniela does nowadays is talk to sane, boring people like Peter Hug.

No wonder, then, that the goldbuggosphere is calling out for a new queen.

Monday, December 30, 2013

The most embarrassing video of 2013: Metallica and Ray Davies not dying in a hail of gunfire

God, this is horrible.

Let's go over the reasons why this is horrible!

1. Metallica;
2. Metallica;
3. Hatfield doesn't even pronounce "Davies" properly;
4. Ray Davies stoops to share a stage with these has-beens;
5. Metallica;
6. I guess the irony's lost on Metallica that the last metal band to cover this song was Van Halen, and Metallica's version sucks more than Van Halen's version, yet once upon a time Metallica considered themselves a more serious and heavy band than Van Halen;
7. I can't stop repeating, Metallica;
8. the guy who originally played the guitar on this song, oh and who parenthetically invented the fucking guitar riff, thus inventing rock music, THUS GIVING METALLICA A CAREER PATH THAT DIDN'T INVOLVE DOING OIL CHANGES OR DEEP-FRYING CHICKEN, isn't on stage because Ray doesn't like that his brother's a poofter or something;
9. Oh and Metallica.