saveyourassetsfirst3 |
- Analyzing Friday's Noteworthy Insider Trades In The Basic Materials, Energy And Industrial Sectors
- Dollar Bid, Critical Events Loom
- Thompson Creek: A Basic Materials Play Trading Below Book
- Samsung, Apple Going From Frenemies To Enemies
- Sentiment Hit Hard By Big Gold Sell-Off..
- gartman cites bankster manipulation of gold
- Australian Gold Production Drops in 2011
- Citigroup Predict Gold at $2,400/oz in 2012 and $3,400/oz "In Coming Years"
- SmartKnowledgeU Discusses Gold & Silver Manipulation on the Keiser Report
- View From the Turret: Pick & Roll…
- Erste Group – ‘Nothing to Spare’ – Oil Outlook 2012
- ‘Fresh Liquidation Expected’ if Gold Falls Below $1,690
- Top analyst Rosenberg: The best currency to own right now
- This development could signal the end of the "RISK ON" rally
- Federal Reserve "mouthpiece" hints at Ben Bernanke's next move
- Citigroup Predicts $2,400 Gold In 2012
- Silver Stocks Building for Breakout in 2012
- Hyper Report: Silver Silver Silver
- Silver Price Hurt By Chinese Growth Concerns Share
- WATCH: Silver & Gold to Explode Higher
- Gold May Drop as Stronger Dollar Erodes Demand, China Lowers Growth Target
- Citigroup: Gold at $2,400 in 2012 & $3,400 Ahead
- Will the Gold & Silver Smackdown Deter Investors?
- LISTEN: “Why Gold and Silver and Why Now”
- Silver price hurt by Chinese growth concerns
- SGT: The Bullion Banksters Are Doomed
- John Wolstencroft and Dominic Frisby on investing in mining stocks
- China is in on gold price suppression too
- Chris Cook: The Ghost of Enron Past Explains Oil Market Manipulation
- On the Continuing Oxymoron of Ethics at Harvard
| Analyzing Friday's Noteworthy Insider Trades In The Basic Materials, Energy And Industrial Sectors Posted: 05 Mar 2012 06:32 AM PST By Ganaxi Small Cap Movers: We present here three noteworthy buys and five noteworthy sells in the basic materials, energy and industrial sectors from Friday's (March 2nd, 2012) SEC Form 4 (insider trading) filings, as part of our daily and weekly coverage of insider trades. These were selected by a review of over 530 separate transactions in over 300 different companies filed by insiders on Friday. The filings are noteworthy based on the dollar amount sold, the number of insiders buying or selling, and based on whether the overall buying or selling represents a strong pick-up based on historical buying and selling in the stock (for more info on how to interpret insider trades, please refer to the end of this article): Centerpoint Energy Inc. (CNP): CNP provides electricity transmission and distribution, natural gas distribution and sales, interstate pipelines and gathering operations to customers in AR, IL, IA, KS, LA, MN, MS, MO, OK, TX, Complete Story » |
| Dollar Bid, Critical Events Loom Posted: 05 Mar 2012 06:12 AM PST By Marc Chandler: The U.S. dollar is posting modest gains against most of the major and emerging market currencies to start what is likely to be among the most important weeks here in the first quarter, with numerous central banks meeting, first tier economic data and the deadline for the Private Sector Involvement (PSI) in Greece. The yen is bucking the generalization, recovering from its pre-weekend losses helped by cross rate gains. Global equity markets are lower, with the MSCI Asia Pacific Index losing almost 1%, with Chinese Premier Wen cutting China's GDP target this year to 7.5% and the sub-50 reading on the official service sector PMI (48.4 from 52.9) taking a toll on regional bourses and sending the yuan to a four week low against the greenback. European equities have followed suit. A downward revision from the flash service PMI (48.8 from 49.4 flash reading and 50.4 in Jan) and concerns Complete Story » |
| Thompson Creek: A Basic Materials Play Trading Below Book Posted: 05 Mar 2012 06:01 AM PST By Sol Palha: Thompson Creek Metals Company Inc., through its subsidiaries, engages in mining, milling, processing, and marketing molybdenum products in the United States and Canada. The company's principal properties include the Thompson Creek Mine and mill in Idaho; a metallurgical roasting facility in Langeloth, Pennsylvania; and a joint venture interest in the Endako Mine, mill, and roasting facility in British Columbia. It also holds interests in development projects comprising the Davidson molybdenum property and the Berg copper-molybdenum-silver property located in northern British Columbia; the Howard's Pass property, a lead and zinc project situated in the Yukon territory-northwest territories border; and the Maze Lake property, a gold project located in the Kivalliq district of Nunavut. The company produces molybdenum products, primarily molybdic oxide and ferromolybdenum, as well as soluble technical oxide, pure molybdenum tri-oxide, and high purity molybdenum disulfide. As of December 31, 2010, its consolidated recoverable proven and probable ore reserves totaled Complete Story » |
| Samsung, Apple Going From Frenemies To Enemies Posted: 05 Mar 2012 05:34 AM PST By Dana Blankenhorn: Samsung (SSNLF.PK) has had a great run lately. While the South Korean Won has been rising in value against the dollar, shares in SSNLF have actually been increasing in value, up about 16% so far this year. Some of those gains come from Samsung's being the big dog in the Android phone market. Some come from Samsung being a key supplier to Apple (AAPL) . All this puts the Korean company in a very unique position. As a vertically-integrated semiconductor and parts supplier, it has far more control of the mobile market than any company not based in Cupertino. And it has not been afraid to use that control to its advantage. But the strength of the Apple relationship is now open to question, as Apple prepares to launch an iPad Mini on Wednesday that will reportedly shut Samsung out of the supply chain and as the two companies continue Complete Story » |
| Sentiment Hit Hard By Big Gold Sell-Off.. Posted: 05 Mar 2012 03:49 AM PST
Gold has been drifting downwards again as investor sentiment has been hit hard by the big, apparently paper, gold sale which caused the price dive last week – the intention of those who initiated it. by Lawrence Williams, MineWeb.com: That the gold market can be manipulated on COMEX by big forward paper sales now seems to be obvious from the major dive suffered by gold last week when the yellow metal initially fell over $60 in a matter of minutes – and then got pushed down further before making a relatively minor recovery. Talk about shades of the big end-April-early May silver sell-offs last year when silver was knocked even further in percentage terms, initially by a huge out-of market hours sale, widely believed to be a concerted move by big short sellers seeing the need to drive prices down to cover huge potential losses. What is particularly worrying for the markets though is the massive effect this has had on sentiment for gold investors. Some comments see the big gold sale as a move to drive weak holders out of the market so the big boys can maintain control. A cynic would see this as yet another way big money tries to manipulate markets to make huge returns at the expense of the small investor as money is just used with little more purpose than just to make more money – no real productive use of it here. Read More @ MineWeb.com
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| gartman cites bankster manipulation of gold Posted: 05 Mar 2012 03:44 AM PST mr whipsaw is onto something :wub: http://www.gata.org/node/11058 Moving on to the gold market, we remain bullish of gold in yen terms, and having made that statement yet again, we note something wholly out of the ordinary on our part: the prospects that something manipulative and perhaps even nefarious took place Wednesday in the gold market. The market's plunge may not have been solely the result of pure market forces, but may have been the result of a very real effort to "manipulate" the market lower ... perhaps on orders of a central bank hoping to break the market in order to buy gold more cheaply after the surge of selling, or perhaps on the order of a government wishing to drive gold down for the "optics" of weaker gold prices. |
| Australian Gold Production Drops in 2011 Posted: 05 Mar 2012 03:40 AM PST by Roman Baudzus, GoldMoney.com:
Read More @ GoldMoney.com |
| Citigroup Predict Gold at $2,400/oz in 2012 and $3,400/oz "In Coming Years" Posted: 05 Mar 2012 02:29 AM PST |
| SmartKnowledgeU Discusses Gold & Silver Manipulation on the Keiser Report Posted: 05 Mar 2012 02:24 AM PST |
| View From the Turret: Pick & Roll… Posted: 05 Mar 2012 01:42 AM PST
The days are getting longer (and warmer), we've got daylight savings time coming up at the end of the week, baseball pre-season has started, and the March Madness basketball tournaments are just around the corner. March is looking like an interesting month for equity traders as stock prices perform their own version of the pick and roll maneuver. On Friday, the broad indices backed off from their recent highs – but the weakness was particularly acute in the S&P Smallcap Index which dropped 1.6%. This action put the Smallcap Index below a tight consolidation it formed throughout the month of February – and it now looks like the index is stalling out at a key resistance area on a long-term chart. If the Smallcaps follow through on Friday's breakdown, it will be a major sentiment shift for speculative traders. The prospect of a "risk-off" move – with bulls fleeing to the sidelines – has us watching our risk points carefully and looking for opportunities to set up counterbalance trades that will help to offset our current bullish posture. There are a number of key sectors that are either reversing at key resistance points, or have already established bearish trends. The key is finding proper entry points that allow us to set reasonable risk points – and have expectations for a strong reward-to-risk ratio. Below are some of the area's we're tracking for potential trades this week…
Looking for a Professional Trading Platform? Check out the DMA platform from TradeStation Prime Services. It's the platform we use for our Mercenary Trader executions. Click here for more information. Discount Retailers Stalling Out It's a tough time to be making a living by selling products to budget-conscious consumers… Despite the "global economic rebound," the majority of shoppers are still very price sensitive, seeking the best value for their dollar. Over the past two years, we have seen a widening chasm between the "have's" (affluent customers with plenty of money to spend) and the "have-not's" (price sensitive consumers struggling with tight budgets). Retailers who have always catered to the low-price consumer did well initially. After all, their target market broadened much faster than the increase in competition. But over the past few quarters, middle-of-the-road retailers have been adjusting their product lines to capture market share from these deep-discount retailers, creating a more competitive environment for all. Late in February, we saw a sharp break in Wal-Mart (WMT) as the company announced that it was struggling to maintain attractive profit margins. This was a direct result of new competition in the discount retail market. Last week, via the Mercenary Live Feed, we noted the declining patterns for retail stocks – and put subscribers on notice for potential short setups in the near future. From the Live Feed:
On Friday, Big Lots Inc. (BIG) broke down sharply after reporting fourth quarter earnings that beat estimates, but at the same time issued guidance for lower margins in 2012. As discount chains break down and then consolidate or drift, we should be able to set up numerous short trades in the months ahead.
 For-Profit Education – Pressure From All Sides Education stocks have had more than their share of ups and downs over the past few years. As employment numbers dropped, investors flocked to education companies because they believed that laid off workers would have incentive to beef up their education to qualify for better jobs. But The group ran into severe regulatory issues after it came to light that Federal student financing programs were helping students get their degrees – but the degrees were often useless in terms of leading to employment that provides enough income to cover the education costs. Taxpayers were paying for defaulted loans, and the Fed began investigating enrollment practices, and graduation rates. Over the last few quarters, the group finally got relief as it looked like the regulatory hurdles had been cleared, and new standards for enrollment were in place. But last week, Apollo Group (APOL) dropped a bomb on the sector – warning of lower enrollment due to the new standards. Education stocks arre now reversing their 2011 gains and look extremely vulnerable. In addition to the regulatory issues, the most recent employment reports have been encouraging – showing more job growth. Whether you believe the published employment data or not, the perception of a better jobs market may encourage would-be students to go ahead and move into the work-force. It's certainly something on the mind of investors in the for-profit education sector. Now that APOL has gapped sharply lower, we're watching names in the group for "drift" patterns. A stock that breaks down suddenly, is likely to continue the pattern as investors look for opportunities to bail out. As traders, we want to see a consolidation first – giving us a chance to short on a continuation move – with a reasonable risk point above the high of the drift pattern.
Oil Service Stocks Perk Up With oil prices continuing to hold above $100 per barrel, oil service companies are seeing improvement in their business. After bottoming in the fourth quarter last year, several of these names have set up healthy bases and now sport bullish formations.Schlumberger Ltd. (SLB) looks particularly interesting after breaking above resistance in February – and now drifting back to key EMA support. The stock has a 1.4% dividend yield, which is attractive in the current "zero rate" policy environment, and analysts expect earnings growth to increase more than 20% both this year and next year. A new surge higher would represent an interesting buy opportunity as the breakout would be confirmed. Even in an environment where small caps break down and managers reduce risk, SLB could hold up well based on its defensive characteristics – along with an attractive valuation and dividend yield.
Last week's fade could embolden the bears and invite short sellers to step back into the fray. Or we could see renewed buying as bulls defend the trend and use the pullback as a buying opportunity. This is a tricky spot with plenty of good arguments for both camps. The beauty of the situation for us is that we don't have to hold an allegiance to either side of the argument. Using price action as our key indicator, we can dial up the exposure, or cut back quickly – and we have plenty of great setups for either camp – should one group emerge the clear victor. So this week, manage your risk carefully, pay attention to the indicators, and keep an open mind in terms of direction. Opportunities abound for traders who keep their capital intact. Trade 'em well this week! |
| Erste Group – ‘Nothing to Spare’ – Oil Outlook 2012 Posted: 05 Mar 2012 01:39 AM PST Download the entire 82-page research report at the end of this message. HOUSTON -- Our good friend Ronni Stoeferle of Erste Bank in Vienna has just published a comprehensive review and forecast for the global oil market entitled "Nothing to Spare - Oil Outlook 2012." The introduction to this important and timely research begins: "We see the risks for the oil price heavily skewed to the upside. At the moment, the market is well supplied, but the smouldering crisis in the Persian Gulf could easily push oil prices to new all-time-highs should it escalate. We believe that new all-time-highs can be reached in H1, at which point we could see demand destruction setting in. We forecast an average oil price (Brent) of USD 123 per barrel between now and March 2013. (Continued next page.) The latently smouldering Iran crisis seems to be close to escalation. The most recent manoeuvres, ostentatious threats, sanctions, embargoes and the shadow war currently ongoing, have heated up the situation further. It seems we may soon see the last straw that breaks the camel!s back. Even though Iran could probably only maintain a blockade of the Straits of Hormuz only for a very limited period of time, the consequences would still be dramatic. The oil price would definitely set new all-time-highs and could reach levels of up to USD 200. The still low reserve capacity makes the oil price vulnerable to geopolitical tensions. With the exception of Saudi Arabia, no country holds any significant reserve capacities. But since Saudi Arabia has never exceeded the barrier of 10 mbd on a sustainable basis, we harbor doubts as to whether the country can actually produce 12.5 mbd. Risks are that it will take a supply side crunch to find out whether the alleged reserve capacity actually exists to the extent proclaimed. At any rate, the decision of IEA to tap the strategic reserves during the Libya crisis is a clear indicator of the strained supply situation. The belief in a quick substitution of fossil energy carriers by alternative forms of energy seems illusory and naïve, given the current investment volumes and lip service. But we still believe that - much like Julian Simon forecasted - high oil prices cause shifts in efficiency and technology. Or as Mark Twain said, "The reports of my death are greatly exaggerated". Further topics: - High liquidity, low interest rates, and QE should create a positive environment for oil - Does the skyscraper index signal a weaker oil price? - Excursus: Oil price development from the perspective of the Austrian School of Economics - Petrodollar exiting through the back door? - Break-even oil price (BEOP) suggests rising "floor"- Sharply rising oil consumption in the exporting countries could trigger shortages in the long run - US natural gas has an attractive risk/reward profile - "Clean fracking" will make shale gas production more efficient, cleaner and cheaper"
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| ‘Fresh Liquidation Expected’ if Gold Falls Below $1,690 Posted: 05 Mar 2012 01:18 AM PST Gold prices briefly fell back below $1,700 per ounce for the second time in a week during Monday morning's London trade, as stocks, commodities and the euro all dipped lower before recovering some ground, following news that China has cut its official target for growth. |
| Top analyst Rosenberg: The best currency to own right now Posted: 05 Mar 2012 12:52 AM PST From Zero Hedge: ... Bernanke, after all, now seems reluctant to embark on QE3... barring a renewed economic turndown while the ECB is moving further away from the role of a traditional central bank to take on the role of quasi fiscal policymaking. The German central bank, after all, is responsible for 25% of any losses that would ever be incurred by the massive Draghi balance sheet expansion. Why would anyone want to be long a currency representing a region with a 10.7% unemployment rate, rising inflation rates, and free money? Mind you — the same can be said for the U.S. (where the U-6 jobless rate is even higher), which is why the best currency may be... Read full article... More from David Rosenberg: Top analyst Rosenberg: Six "pins" that could pop the complacency bubble Top analyst Rosenberg: This could be the best way to profit from gold now Top analyst Rosenberg: Seven new tax developments that could "shock" the markets |
| This development could signal the end of the "RISK ON" rally Posted: 05 Mar 2012 12:48 AM PST From Kimble Charting Solutions: The S&P 500 has done well since last fall, with a large percentage of its gains taking place after the dollar peaked in mid-January. The lower left hand chart above reflects that the dollar's decline has been helpful to the S&P 500 index and to gold over the past six weeks. The top of the "cup and handle" pattern, which is line (1) has been support and resistance numerous times over the past few months. Ever since the dollar crossed below line (1), it has struggled to get back above the top of the cup resistance. The dollar needs to... Read full article... More on the U.S. dollar: Trader alert: The U.S. dollar is at a critical level AGAIN What has to happen before there's any real correction in stocks This unusual gold development could signal the death of paper currencies |
| Federal Reserve "mouthpiece" hints at Ben Bernanke's next move Posted: 05 Mar 2012 12:45 AM PST From Bruce Krasting: Jon Hilsenrath, at the WSJ, must have had a phone call with Ben Bernanke on Saturday. Accordingly, Jon put an article out just in time to influence the market on Monday morning. The headline says it all: Fed Takes Break To Weigh Outlook No doubt, Bernanke is watching the price of crude and the tape is telling him his inflation forecast is no good. The leak this evening is just Ben's way of hinting to the market that he understands where we are on inflation, and he is not going to stir the pot anymore than he has. The WSJ article indicates that the Fed is on hold for at least three months, until June. Moreover, Bernanke can't do anything big on the monetary front within five months before a national election. Therefore, the next legitimate time for another LSAP/QE is... Read full article... More on the Federal Reserve: The Federal Reserve openly admits plans to crush the dollar Ten things every American should know about the Federal Reserve An incredible -- and controversial -- take on unemployment, debt, and the "real" economy |
| Citigroup Predicts $2,400 Gold In 2012 Posted: 05 Mar 2012 12:13 AM PST
from GoldCore: Gold's London AM fix this morning was USD 1,698.00, EUR 1,286.17, and GBP 1,073.60 per ounce. Friday's AM fix was USD 1,714.50, EUR 1,292.99, and GBP 1,076.14 per ounce. Gold fell $3.10 in New York Friday and closed at $1,711.60/oz. Gold fell in Asia prior to modest price falls in Europe which has gold now trading at $1,696.43/oz. Gold fell by nearly 3.5% last week – the largest one week fall since the week of Dec 18. Gold's intraday and monthly low from the "Leap Year Gold Massacre" is $1,688/oz. Technical damage continues and a breach of this level could see gold quickly fall to support at $1,650/oz. Read More @ GoldCore.com |
| Silver Stocks Building for Breakout in 2012 Posted: 05 Mar 2012 12:11 AM PST "Silver does display a high degree of volatility and I believe its fundamentals are far superior to those of gold" from TheAUReport.com:
The Gold Report: You last talked with The Gold Report in January 2011 and at that time you gave us your view on the prospects for silver for 2011. What's your analysis now as to what happened in 2011? Sean Rakhimov: 2011 was a breakthrough year for silver. Last time we talked I think the title of the interview was "Silver Going Mainstream," which I believe it did last year. The silver price did run up to $50/ounce (oz). It settled back slightly under $30/oz, and sometime around the end of last year and the beginning of this year I believe we put in a major bottom in both gold and silver. The markets have been looking up since then. Read More @ TheAUReport.com |
| Hyper Report: Silver Silver Silver Posted: 05 Mar 2012 12:05 AM PST |
| Silver Price Hurt By Chinese Growth Concerns Share Posted: 04 Mar 2012 11:57 PM PST from GoldMoney.com:
The gold price is currently trading around an important support level at $1,700, while the silver price is falling back towards that trading range that has dominated the silver market since last autumn: $28-$35. Just when the bulls thought they'd made it out of the woods last week with a decisive break above $36, here we are again below $35. Read More @ GoldMoney.com |
| WATCH: Silver & Gold to Explode Higher Posted: 04 Mar 2012 11:53 PM PST … and Why the Monetary Base Will Never Shrink. from EXP0SEtheFRAUDS: ~TVR |
| Gold May Drop as Stronger Dollar Erodes Demand, China Lowers Growth Target Posted: 04 Mar 2012 11:30 PM PST Sale! Gold may decline for a second day in New York as a stronger dollar cuts demand for an alternative asset and as China lowered its growth target. The dollar was little changed after reaching a two-week high versus six major currencies before U.S. data that economists said will show service industries expanded, while China pared its economic growth target to 7.5 percent. Bullion slid the most since December last week even as holdings in gold- backed exchange-traded products rose to a record. "Gold still faces near-term hurdles such as bouts of dollar strength, broad risk reduction and profit-taking," Suki Cooper, an analyst at Barclays Capital in New York, wrote in a report today. Still, "this is a healthy correction and, in our view, the broader macro backdrop remains gold favorable, given the negative interest-rate environment, longer-term inflationary concerns and lingering sovereign debt uncertainties." Gold for April delivery fell 0.3 percent to $1,704 an ounce by 7:59 a.m. on the Comex in New York. Prices dropped 3.7 percent last week, the most since Dec. 16. Bullion for immediate delivery dropped 0.6 percent to $1,702.97 in London. The metal slid to $1,688.40 on Feb. 29 after the Federal Reserve gave no signal of a third round of quantitative easing, and today traded near its 100-day moving average, currently at about $1,697. Bull Rally Gold prices are in a 12th year of a bull run. Holdings in bullion-backed exchange-traded products rose 1 metric ton to a record 2,405.2 tons on March 2, data compiled by Bloomberg show. Hedge funds and other money managers increased bets on higher prices by 10 percent to 197,552 futures and options in the week ended Feb. 28, the highest level since Sept. 6, Commodity Futures Trading Commission data show. China's target for economic growth is down from an 8 percent goal in place since 2005, according to a state-of-the- nation speech that Premier Wen Jiabao delivered at the annual meeting of the National People's Congress in Beijing today. Officials will also aim for inflation of about 4 percent this year, unchanged from the 2011 goal. "Gold is being weighed down by industrial commodities, which are lower today because people are worried about China's revised growth target," Steven Zhu, operations manager at Yinjian Futures Co., said from Shanghai. "Many economic uncertainties still exist in the world today and those who were looking to China to save the world may be less optimistic now." Platinum Falls Silver for May delivery fell 0.3 percent to $34.435 an ounce. It's the best-performing precious metal this year with a gain of 23 percent. Palladium for June delivery was down 0.4 percent at $710 an ounce. Platinum for April delivery dropped 1.2 percent to $1,672.20 an ounce. Gold's premium to platinum was at 2 percent in London today, compared with as much as 15 percent at the close on Jan. 6, according to data compiled by Bloomberg. Automobile sales in China, the world's biggest car market, may be having their worst start in seven years as a slowing economy and record gasoline prices keep consumers away from dealerships, according to a Bloomberg survey. The China Association of Automobile Manufacturers will release industry data later this month. Platinum and palladium are mainly used in jewelry and pollution-control devices in vehicles. Impala Platinum Holdings Ltd. (IMP) is in the process of restarting production at its Rustenburg operation, the world's biggest platinum mine, in South Africa after more than a five- week stoppage caused by a pay dispute, spokesman Johan Theron said today. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net http://www.bloomberg.com/news/2012-0...th-target.html |
| Citigroup: Gold at $2,400 in 2012 & $3,400 Ahead Posted: 04 Mar 2012 11:04 PM PST Gold is being supported by Asian physical demand, which has picked up again and was robust in Asia overnight. Asian jewelry makers are reported to have been using this dip to stock up on gold. |
| Will the Gold & Silver Smackdown Deter Investors? Posted: 04 Mar 2012 09:52 PM PST The amount of volume during the sell-off in both gold and silver was simply staggering. In a matter of minutes, more than 150 million paper ounces of silver were sold into the market. This represents more silver than Mexico, the world's largest silver producer, mines in an entire... |
| LISTEN: “Why Gold and Silver and Why Now” Posted: 04 Mar 2012 09:00 PM PST
Contact: david@thevictoryreport.org ~TVR |
| Silver price hurt by Chinese growth concerns Posted: 04 Mar 2012 09:00 PM PST Doubts over the Greek bond-swap deal and worries over Chinese growth have hit the markets this morning, with gold and silver prices suffering owing to "risk off" liquidity concerns. Though ... |
| SGT: The Bullion Banksters Are Doomed Posted: 04 Mar 2012 08:52 PM PST A SGTreport silver update. The Banksters prevented the Pan Asia Gold Exchange from ever doing damage to their fractional reserve bullion banking monopoly, they won't be so lucky a second time. from SGT: For the Andrew Maguire KWN interview, click Here. Much More @ SGTReport.com |
| John Wolstencroft and Dominic Frisby on investing in mining stocks Posted: 04 Mar 2012 08:45 PM PST In this podcast private investor Dr John Wolstencroft and Dominic Frisby, of the GoldMoney Foundation, talk about investing in gold mining companies. Wolstencroft explains the "18 Stages To ... This posting includes an audio/video/photo media file: Download Now |
| China is in on gold price suppression too Posted: 04 Mar 2012 08:37 PM PST |
| Chris Cook: The Ghost of Enron Past Explains Oil Market Manipulation Posted: 04 Mar 2012 05:10 PM PST By Chris Cook, former compliance and market supervision director of the International Petroleum Exchange I outlined in a recent post my view that the oil market price has been inflated twice by passive (inflation hedgers) investors, albeit with short term speculative spikes from active (speculators) investors: once from 2005 to June 2008; and again from early 2009 to date. In attempting to 'hedge inflation' passive investors perversely ended up actually causing it, and allowed oil producers to manipulate and support the oil market price with fund money to the detriment of oil consumers. But there has always been a missing link – precisely how has this manipulation been achieved? A comment thread at the FT Alphaville blog a month ago shed light on the esoteric subject of collateralised commodity borrowing by BP, who with Goldman Sachs were the heroes of a January post. While Izabella Kaminska's Alphaville post was as interesting as usual, the real nugget on this occasion lay in the extremely well informed discussion which followed. The protagonists were firstly, Patrick McGavock – a very clued up former banker whose blog rejoices in the name of the "Complete Banker". The second commenter – whose nom de plume is "Free Again" – not only had technical mastery of a subject that has me reaching for an icepack for my head, but also displayed a comprehensive knowledge of Enron's modus operandi. Volumetric Production Payment (VPP) versus Prepay The very name is enough to make the eyes glaze over, but in essence a VPP is a loan secured against a flow of production which remains in the ownership of the producer. Prepay, on the other hand, is a forward sale of a commodity where the ownership rights to production pass to the financier. The Alphaville dialogue is instructive as to the difference. Free Again (to McGavock): Enron did two types of related transactions: Sales of Volumetric Production Payments (described below), which are being done today in much the same way, and Prepay transactions, which were round-trip trades (three parties involved) meant to create the appearance of Funds Flow From Operations, when it was actually funds flow from financing. McGavock (to Free Again): Absolutely right. Although VPPs and prepays are essentially the same thing except for the ownership of mineral rights. A day later came a response which I did not see until recently (my bold). Free Again (replying to McGavock) Yes, I think we agree, but the most interesting distinction, and what may be relevant to the BP discussion, is the reason a company would choose a particular structure. A VPP is a form of (acceptable) off-balance sheet financing. In most cases, reserve risk is transferred to the buyer (though the seller usually retains the operating risk). A Prepay transaction is a little more insidious. It is a form of financing, but if structured as a commodity trade, can be made to look as if it is cash flow from operations. This is particularly important to companies that use mark-to-market accounting, as there usually exists a huge gap between earnings and cash recognition. In order to maintain credit metrics when using MTM, the companies will structure misleading FFFO transactions, as a key rating agencies focus is FFFO/Interest Expense. Prepay Prepay does not move the oil, which stays where it is in the ground or in tank. What prepay does is to create an ownership claim over oil which may be sold either temporarily (Enron-style) as an 'oil loan' to investors, or to refiners, who take delivery in due course of oil for which they have fixed the price by 'paying forward'. Investors prepay for physical oil which goes nowhere and stays in the custody of the producer, who has an agreement to buy the oil back from the investor, typically a month later in a forward contract that looks just like a futures contract. The outcome is that – facilitated by an investment bank intermediary – the producer lends oil to the investor, and the investor lends dollars to the producer. The temporary ownership rights created and sold to investors via intermediaries such as Goldman Sachs essentially enable a producer to act as a private oil bank 'printing oil'. How does printing oil affect the market? First we'll look at the printing process as dollars flow in to the market, and the Dark Inventory which it funds. Secondly, we'll look at what happens when funds flow out and this paper oil is redeemed by the issuer. Printing Oil In early 2009, risk averse money poured into the commodity markets, and a large portion of it flowed in to passive funds such as Index Funds and Exchange Traded Funds investing wholly or partly in oil. Units in these funds are created, and some unit issuers then entered, via investment banks, into prepay agreements with producers. Producers obtain dollars interest-free in exchange for transferring title to oil inventory to the investment bank, and what this means is that the producers do not need to sell as much physical oil to refiners, who must therefore raise their bid price to secure supply from producers, and this is why the price rose rapidly in early 2009 even though the market was not under-supplied. The second effect was that the demand for forward contracts for the producer to buy the oil back again drove the forward price higher, and this created what is defined as a 'contango' market. In fact, it was so pronounced it was called a 'super-contango'. What happened as a result was that traders began to buy oil, and to sell it forward, since the contango difference in price enabled them to pay to insure and finance the oil; to lease tank storage, and even to charter the fleets of tankers which sat as floating storage off the UK coast through spring and summer 2009. Passive investors, for their part, lose money in such a contango market, because the oil lease contracts are rolled over from month to month at a loss to them, since they would (say) sell June delivery oil contracts which they are in no position to perform, and have to buy July delivery oil contracts at a higher price. It is this continuing loss to long term fund investors which funds the 'contango trade' of the arbitrageur traders who charter the tankers. "De-Pay" – Fund liquidation When risk-averse investors ask for their money back, what happens is that the oil leasing agreement comes to an end, the fund units are liquidated, and the dollars are returned to the fund investors. So when the oil is repurchased by the producer from the investment bank, the position is no longer 'rolled over' and no further contract purchase is entered into in the next delivery month. This depresses the forward contract price relative to today's price, a state of affairs which is known as a 'backwardation'. Moreover, the producer now has fewer dollars and more oil, and is exposed to a fall in the price of the inventory which he now owns once again. Of course, the producer could sell to refiners on a prepay basis, which a refiner would be happy to do at a suitably discounted price. Or alternatively, the producer could sell futures contracts to speculators who for some reason expect that prices will increase. There have been two outflows of passive investment from the market, firstly in September 2011 when sentiment turned in favour of T-Bills as safe haven. The second was in December 2011, following the MF Global problem, which demonstrated that unit issuers come with a counter-party risk, since though the issuer may not be taking market risk themselves, they may nevertheless be playing games with the asset. In each case we have seen the physical market go into backwardation, and in my view the record deliveries by the Saudis may be explained by an urgent desire to sell inventory returned to their ownership at high prices before the collapse they know is on the way. But the exit of passive investors from the market has yet to have the effect it did in late 2008 when the price collapsed to $35/barrel from the high of $147/barrel. The reason is that the current noise and rhetoric re Iran has firstly attracted refiners, who have purchased oil forward, and possibly even prepaid, because they fear prices will rise. This forced up the physical price of oil in the current 'spike' which will further kill off demand, while speculators have poured into the market to buy futures contracts, which producers have been only too happy to sell, in order to lock in high prices and insure against a collapse. It is only a matter of time before this spike ends as the market turns, and at this point there is literally nothing holding the market up. Inventories Private inventories are at record lows, and this is mistakenly taken by commentators as a sign of demand. The reality is that traders will only store oil if they are able to afford to store it and sell it at a profit. The problem is firstly that many traders are being starved of credit by the banks, which will make it difficult for them to act as a 'buffer' through buying surplus oil Secondly, the market is in fact in backwardation, which means that holding oil costs traders money, and if producers have cash flow problems, they too have an incentive to sell at a discount. Refiners' Demand for Oil No investment bank with oil funds to sell you will ever come up with any reason why oil prices will ever go down, but their faulty economic logic can reach laughable proportions. For instance, falling demand for products in the US and EU has seen massive closures of refineries, to the extent that some 2m barrels per day of US East Coast refining capacity has closed. This is of course good for the refineries left standing since it can create local shortages and opportunities for high margins and profits. A very well respected investment bank analyst recently suggested in the FT that the resulting higher US gasoline prices would increase the demand for crude oil and hence – surprise, surprise – was bullish for oil prices. What he was ignoring was that all of the crude oil which used to go to the refineries which had shut will be looking for another home. By way of example, Hovensa joint venture refinery at St. Croix in the US Virgin Island, which used to receive 350,000 barrels per day from the Venezuelan state oil company PDVSA which was one of the partners, has now closed. It is hardly likely that the PDVSA will now increase the price of their heavy crude oil when offering it to (say) the Chinese. The point being that oil refiners have been caught between the rock of a manipulated and inflated crude oil price and the hard place of cash-strapped consumers. So in a nutshell, demand in the West is dropping like a stone. I do not believe for a minute that demand for consumption in the East will make up the slack. In my view much of that demand (if not wishful thinking and hand waving by analysts) is financial, being the building of strategic reserves and refinery stocks as a physical hedge. It will be seen that the effect of Prepay on the oil market has been to create a parallel financial market in 'paper oil' which means that most participants are completely misled as to the true state of the market. In summary, as I previously outlined, my analysis is that the oil market stands like an Oil-e-Coyote – running hard beyond the edge of a cliff, but not having yet looked down……… Window Dressing Enron For those with short memories, Enron fraudulently concealed their financial position from investors and the rest of the world through a variety of sophisticated techniques. One of the most egregious was the use of prepay transactions with investment banks via a special purpose vehicle in a tripartite agreement which essentially misrepresented what was in reality a loan as a forward commodity purchase and sale. In other words, Enron – facilitated by investment banks – was window dressing its balance sheet and fraudulently misleading investors and counter-parties alike. Window Dressing the Oil Market It appears to be the case that BP and Goldman Sachs have for many years been directly or indirectly enhancing BP's balance sheet and cash flow through enabling BP to lend oil to passive inflation hedger investors and in return obtain interest free dollar funding and literally monetising oil. Possible accounting legerdemain by BP is one thing, but the greater problem by far has been the effect of passive investors entering the market en masse via this route. As I explained, these transactions have eroded the foundations of the oil market, which have become entirely financialised and have lost touch with the reality of physical production, consumption and storage. The fact that oil market inventory has been prepaid in this way creates a two tier physical market, where the tiny minority who have knowledge of the resulting 'Dark Inventory' of oil in temporary investor ownership have a massive advantage over the majority who do not and who enter into derivative contracts upon a completely false assumption as to physical supply and demand. Whether or not this is illegal, and if so, in what country, is an interesting question. But as a former head of regulation of a global energy exchange I have no hesitation in saying that the result has been a complete perversion of the oil market, which has become, for maybe as long as ten years, in every sense a 'False Market'. The sheer scale of this oil market manipulation, and the staggering sums involved, make Yasuo Hamanaka's ten year $ multi billion copper market manipulation for Sumitomo look like a car boot sale. If my analysis of the oil market is correct, many if not all prepay transactions have been terminated in recent months as passive investors have pulled out and the market has become free again of Dark Inventory. However the oil price has been kept inflated by a massive wave of speculative buying attracted by rhetoric and noise about Iran. With the market's underpinnings eaten away by fulfilment of these pre-paid contracts (which will temporarily depress physical demand), a collapse in the oil price is inevitable once speculators exit. After this, perhaps steps may then be taken by producers and consumers collectively to free the oil market from the pernicious control of middlemen, and to completely reconfigure the market through a new settlement. I'm not holding my breath, but I do live in hope. Author's Notes: Peak Oil
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| On the Continuing Oxymoron of Ethics at Harvard Posted: 04 Mar 2012 05:00 PM PST There is so much crookedeness among our elites that it's hard to know, absent more systematic study, whether Harvard is playing a leading role in this decline. However, the glaring gap between Harvard president Drew Faust's talk on ethics and her recent actions has stuck with me and I've concluded it merits discussion. One of the basic rules of corporate behavior is that who you pay, promote, and appoint to plum jobs sends strong messages about what sort of behavior the organization really values, as opposed to the ones it professes to value. One common way in which companies signal that the official policies don't matter all that much is via the Big Producer Syndrome. That occurs when individuals or units not only reap high compensation and other rewards, but are also subject to lower oversight. Most Wall Street firms, in the days when they were partnerships, recognized the need to strike a balance between giving employees the latitude to grasp fleeting opportunities and making sure they didn't wind up doing harm to the franchise in the long term. The firms that didn't manage that tension well over time were less successful than the ones that did. But that concern has long gone out the window in a world where financial services companies play with other people's money and the notion of ethical standards is a quaint relic. Nevertheless, when the ethics of executives generally and some of its graduates in particular come under harsh scrutiny, Harvard Business School tries to do a bit of image burnishing. After HBS grad Paul Bilzerian was sentenced for securities fraud in 1989, which was also when savings and loans and leveraged buyout companies were collapsing, the school went through a bit of soul searching. I was told by someone deeply involved in fundraising that it had concluded, based on some study, that ethics could not be taught, so it needed to rethink how it selected incoming students. I doubt anything came of that, since there hasn't been any evidence of meaningful changes in Harvard's or other school's screening policies. Sociopaths could easily game any questions aimed at getting at ethical stances and real due diligence on that front would take more time and effort than an admissions department could undertake. Fast forward twenty plus years. We've seen widespread bad behavior among the political and corporate elites, with Harvard at least holding its own. Former Harvard president Larry Summers was singled out by Inside Job as an example of corruption among academic economists. That isn't surprising, since Summers protected fellow Harvard economics professor Andrei Shliefer when he and one Jonathan Hay were charged with conspiracy to defraud the US government, and Harvard was sued for breach of contract over an advisors program Shliefer and Hays ran in Russia in the 1990s. Some have claimed the real reason the faculty eventually revolted against Summers wasn't his famed foot in mouth incident about women in math, but simmering anger about the failure to take action against Shliefer given that Harvard paid at least $31 million to settle the litigation. Summers' successor, Drew Faust, has tried to signal that Harvard has changed direction under her leadership, but her gestures range from unconvincing to all too revealing. For instance, she talked a good deal about how Harvard Business School had lost its ethical direction (that of course assumes it ever had one) and made a great deal of fuss about the selection of a new new dean who would help remedy this problem. From the Boston Globe:
If you believe crossing your heart and swearing you will behave in an upstanding manner will make an iota of difference in corporate conduct, I have a bridge I'd like to sell you. Indeedm, Faust seems to be a fan of the sort of ethics posturing that is regularly lampooned by Lucy Kellaway of the Financial Times. Last April, she pointedly refused to take up a call by professor and former Harvard college dean Harry Lewis to criticize (mind you, merely criticize) professor Michael Porter for his role in producing a well paid report that depicted Libya as a shining example of democracy. Per the Harvard Crimson:
I'm sure you recognize the Newspeak. Being paid lots of money to gain access to a valued brand is depicted by Faust as "academic inquiry." In January, Faust again showed what the real game is at Harvard by naming Krishna Palepu, a professor at HBS, as her senior advisor for global strategy. An article in Harvard Gazette makes clear that he's not simply providing input to Faust and other University leaders but also playing an important ambassadorial role:
In case you missed it, "engaging Harvard alumni living abroad" translates as "traveling to fundraise from rich alumni living overseas." Why is this a cause for concern? Palepu is accounting professor turned governance guru who took huge consulting fees by Indian standards while serving as a director of what turns out to be the largest corporate fraud in the history of the country, Satyam Computer Services. An op-ed by Premchand Palety in Mint, one of the biggest daily business newspapers in India, depicts Palepu as a bad role model in the ethics department:
Note that this pointed piece ran on December 28, 2008. On January 7, 2009, Raju admitted that Satyam's accounts were bogus (among other things, Raju had been withdrawing funds monthly to pay for 13,000 fictive employees). Per Wikipedia:
So the apparent message from Drew Faust is that being directly involved in an Enron-level scandal doesn't count if it took place in a third world country. She is happy to have what amounts to a corporate governance fraud as a face to the international business community. Faust can talk all she wants to about ethics. Her actions repeatedly indicate she isn't willing to take any action that might get in way of the University's fundraising or "entrepreneurship" by individual professors. I quit giving money to Harvard long ago, and her stance confirms my decision.
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Recent data from the consulting firm Surbiton Associates in regard to Australian gold production for the year 2011 have failed to meet market expectations for average production. Last year Australia defended its position as second largest gold producing country after China, but in comparison with 2010 Australian gold production dropped by two tonnes. In 2011 Australian mining companies produced a total of 264 tonnes (8.5 million troy ounces) of gold. But commodity markets were expecting data to show an increase in gold production. Nevertheless, with rising gold prices at the global markets, despite this production decline most Australian mining companies have increased their profits.
Welcome to the first week of March – probably my favorite month of the year…
Silver price volatility provides some exciting profit opportunities for investors who develop the right strategies to take advantage of the action. In this exclusive interview with The Gold Report, Sean Rakhimov, publisher of the SilverStrategies.com website, talks about how the global forces of monetary policy and fear are expected to push investment demand for silver much higher and highlights some companies he expects to profit most from the coming silver boom.
Doubts over the Greek bond-swap deal and worries over Chinese growth have hit the markets this morning, with gold and silver prices suffering owing to "risk off" liquidity concerns. Though overall the Dollar Index (USDX) remains flat, the greenback has risen against the euro in early trading, while prices of important basic commodities such as crude oil, corn and copper have fallen.
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