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- Is Greece In Default Again?
- Casey Research: Marin Katusa Talks Gold, Energy, and What He's Buying
- Medbox Rises From CNBC Mention Despite Bad News Earlier
- This Is What $315 Billion Worth Of Gold Looks Like
- The Gold Market In One Fantastic Chart
- Currency Positioning And Technical Outlook: Stirred Not Shaken
- South Africa's Rand Refinery considering Chinese refining plant
- $700,000 of gold dust missing from Pfizer lab in Missouri
- Silver gains favor as an investment asset
- Investor Alert: How Gold Miners Can Leverage the Price of Gold
- Three King World News Blogs/Audio Interviews
- Gilead Sciences Leads The Race In Developing A Hepatitis C Pill
- More Options For Options Traders
- Links for 2012-12-07 [del.icio.us]
- Bob Fitzwilson: 2012 is the “Most Difficult Year Ever” for End-of-Year Financial Planning
- MADNESS 3: ADDENDUM – Don't Say You Weren't Warned
- fabian4liberty: Goldman Sachs HIDES 8.3 Billion Dollar Trading Position & More
- Ben Davies: Gold Shorts Are Now Exposed To a Price Spike
- Are Dividend Stocks In A Bubble?
- U.S. and China both might be manipulating gold down, Leeb tells KWN
- The BLS Jobs Report Covering November 2012: Hollow Gains
- Profiting from the Dismal State of Gold Miners and Explorers
- Chris Waltzek interviews: Gerald Celente & Peter Grandich 12.7.12
- By the Numbers for the Week Ending December 7
- Silver and Beavers
- Chris Whalen & Barry Ritholtz: Derivatives Market Poses a Clear Danger
| Posted: 08 Dec 2012 10:54 AM PST By Felix Salmon: When S&P downgraded Greece to Default on Wednesday, I thought it was a bit silly. After all, here's a chart of the benchmark 2042 bond, since issue: although it's trading at just about 30 cents on the dollar, that represents an all-time high, and the price has trebled since the end of May. When an issuer's bonds were trading at 10.65 in May and are 30.63 today, that's not the kind of price action you expect from a defaulting entity. (click to enlarge) When one of the big two ratings agencies says that an issuer is in default, that's an important determination. But S&P doesn't seem to be keen to own it: the stated reasons read a bit like "we're only following rules, there's nothing else we can do". The logic goes like this: Greece is buying back its debt at a substantial discount to face value Complete Story » |
| Casey Research: Marin Katusa Talks Gold, Energy, and What He's Buying Posted: 08 Dec 2012 10:39 AM PST We had a great talk with Marin Katusa from Casey Research (http://CaseyResearch.com) from visionvictory: ~DF |
| Medbox Rises From CNBC Mention Despite Bad News Earlier Posted: 08 Dec 2012 09:46 AM PST By Just when it seemed sanity was returning to Medbox (MDBX.PK). A month ago the shares had risen 3,000% for no fundamental reason whatsoever and its rise was merely due to a brief mention in an article in the Marketwatch section of the Wall Street Journal, reminiscent of irrational euphoria of the 1990s dot com era. Literally over night, MDBX.PK became a multi-billion dollar market cap company trading at over $200 per share for no rational reason. The next morning, MDBX.PK warned in a press release: "While we are pleased by the share attention, Medbox shares have traded between $2.75 and $3.45 over the past several months. Our fundamentals and market potential are improving, especially with the potential of our new Rx product line, but we temper investor expectations at present price points." The founder, Vincent Mehdizadeh, even logged onto a message board and warned: "I Complete Story » |
| This Is What $315 Billion Worth Of Gold Looks Like Posted: 08 Dec 2012 08:06 AM PST Get a load of this old white guy's 'fro. :4_1_72::4_1_72: But don't let that distract you, great video. |
| The Gold Market In One Fantastic Chart Posted: 08 Dec 2012 07:10 AM PST |
| Currency Positioning And Technical Outlook: Stirred Not Shaken Posted: 08 Dec 2012 06:06 AM PST By Marc Chandler: We have been tracking the deterioration of the US dollar's technical tone over the past three weeks. That ended abruptly. Weak euro area data, a more dovish than expected ECB, and heightened political uncertainty in Italy, saw the euro reverse lower after briefly moving above an eighteen month-old downtrend. The UK also cut its growth outlook, and poor data increases the likelihood that the BOE may have to resume its gilt purchases in the new year, though consumer inflation expectations have ticked up recently. At the same time, there appears to be little progress on the US fiscal talks. Whenever a top official signals this, the dollar seems to tick up on risk-off considerations, though with diminishing impact. The stronger than expected November employment data is not sufficient to stay the Fed's hand, and the FOMC will most likely expand the long-term assets purchased under QE3+ at its Complete Story » |
| South Africa's Rand Refinery considering Chinese refining plant Posted: 08 Dec 2012 05:40 AM PST  The world's biggest gold refiner, South Africa's Rand Refinery, is considering setting up a refining plant in China within two to three years, joining hands with a local partner on its first such plant abroad, a senior executive said on Friday. Rand is targeting Asia, home to the world's top two gold consumers, China and India, as a key region for future development. It expects to complete a sampling and assaying facility in Singapore by the end of the year. "During the past year, we have identified one or two possible opportunities to partner for a potential initial refinery footprint in China," Peter Bouwer, chief strategy officer at Rand, told Reuters on the sidelines of a conference. |
| $700,000 of gold dust missing from Pfizer lab in Missouri Posted: 08 Dec 2012 05:40 AM PST  Pfizer Inc.'s medical research lab in St. Louis County is missing $700,000 worth of gold dust, and police are trying to determine if it was lost or stolen. The St. Louis Post-Dispatch reports that Chesterfield police began an investigation this week after a Pfizer employee conducting inventory couldn't find the gold dust purchased last year for use in research. Police Capt. Steven Lewis says no one is "sure if they just didn't account for it and it was used naturally, or if it was stolen or misplaced." |
| Silver gains favor as an investment asset Posted: 08 Dec 2012 05:40 AM PST  Silver's more popular and volatile than ever, ready to finish the year with gains more than double those of gold, as the industrial staple wins more favor as an investment asset. "The evidence is clear that investment, not industrial demand, is what is driving silver prices higher," said Mark Thomas, chief investment strategist and author of SilverPriceAdvisor.com. Last month, Thomson Reuters GFMS said investment demand will likely be the prime driver of the silver price this year. The precious-metals consultancy forecast that implied net investment would jump 82 million ounces to 234 million in 2012 from 2011, even as demand for silver in industrial applications is expected to fall nearly 28 million ounces. |
| Investor Alert: How Gold Miners Can Leverage the Price of Gold Posted: 08 Dec 2012 05:40 AM PST  Gazing into their crystal balls this week, Wall Street firms interpreted differing futures for gold next year. Morgan Stanley awarded gold the "best commodity for 2013" while Goldman Sachs called the end of the metal's hot streak. After seeing 11 consecutive years of positive performance from gold, one needs to be wary of research analysts' price forecasts, as they have consistently underestimated the shifting dynamics driving the precious metal higher. |
| Three King World News Blogs/Audio Interviews Posted: 08 Dec 2012 05:40 AM PST  The first blog is with Egon von Greyerz...and it's headlined "Here is the Gold Market in One Fantastic Chart". The second [and last] blog is with Citi analyst Tom Fitzpatrick. It's entitled "9 Charts to Help Understand the Direction of Global Markets". The audio interview is with Ben Davies. |
| Gilead Sciences Leads The Race In Developing A Hepatitis C Pill Posted: 08 Dec 2012 03:31 AM PST By Peter Geschek: The race to develop a hepatitis C pill is one of the most dramatic in the pharmaceutical industry. Almost no month goes by without surprises, good as well as bad. Incivek from Vertex (VRTX) and Victrelis from Merck (MRK), revolutionary direct-acting antivirals approved just last year, are already considered antiquated because they require interferon injections with unwanted side effects. Many blockbusters generate billions of dollars in annual revenue for a decade or more, but sales of Incivek, the top act in the industry, are already fading after only a year and half on the market. At the moment, it seems that Gilead Sciences (GILD), the long time champion of HIV treatments, is in the lead. Hepatitis C bigger than HIV Worldwide, an estimated 170 million people have contracted hepatitis C. In the U.S., the number of cases is about 4 million, making the disease more prevalent than headline-grabbing Complete Story » |
| More Options For Options Traders Posted: 08 Dec 2012 01:10 AM PST By Kim Klaiman: NYSE Euronext U.S. Options Exchanges announced on November 12, 2012 that they are expanding the listing and trading of their Short Term Option Series program from a single week to five consecutive weeks. The initial list of the underlying vehicles approved for the new program included the following stocks and ETFs:
This is excellent news for all options traders. Till now, you could trade options expiring in one week, one month or longer. This presented a real dilemma to traders. For example, if you wanted to buy weekly options, you could be burned by high negative theta (time decay). At the same time, if you wanted to Complete Story » |
| Links for 2012-12-07 [del.icio.us] Posted: 08 Dec 2012 12:00 AM PST
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| Posted: 07 Dec 2012 11:33 PM PST As the Fiscal Cliff looms ahead, as well as the implications of new legislation at both the Federal (e.g. "Obamacare") and state (e.g. California's Prop 30) levels, financial advisers are furiously working to calculate the impact these developments will have on their clients' net worth in 2013 and beyond. Add to that the ugly macroeconomic environment of spiraling sovereign debts and deficits, currency devaluation, and underfunded entitlement programs. At this point, the prudent assumptions to make are that taxes will go higher over time, the money printing machines will run at maximum speed, and — when the system really begins to collapse under its own unsustainability — the rules will be changed. Perhaps that means capital controls; perhaps it means new restrictions on large asset pools like pension and retirement funds; perhaps it means wealth taxation. At this point, no one knows for sure. No wonder this is such a difficult moment for end-of-year planning. So, what to do? from chrismartensondotcom: ~DF |
| MADNESS 3: ADDENDUM – Don't Say You Weren't Warned Posted: 07 Dec 2012 11:26 PM PST 'Madness 3: Addendum' features critical information from my original interviews that hit the cutting room floor and didn't make it into Madness 3, but should have. Jeff Nielson, Chris Duane, The Doc, Bix Weir, Fabian Calvo, and Daniel Ameduri, provide a body blow for those who still don't believe the end of the Dollar is near. from sgtbull07: ~DF |
| fabian4liberty: Goldman Sachs HIDES 8.3 Billion Dollar Trading Position & More Posted: 07 Dec 2012 11:22 PM PST Listen to the Fabian4Liberty program every Monday and Friday on American Freedom Radio from 8pm EST to 10pm EST http://www.americanfreedomradio.com/listen_live.html from fabian4liberty: ~DF |
| Ben Davies: Gold Shorts Are Now Exposed To a Price Spike Posted: 07 Dec 2012 11:07 PM PST Today Ben Davies spoke with King World News about the shorts now being vulnerable to a price spike in gold. He also discussed surging Chinese demand and supply troubles. But first, here is what the rising star had to say about the action in gold: "I actually think we are in and around the lows now, and the market will continue to stabilize here. The other point would be that the fundamentals behind gold, in terms of mining supply, the cost of extraction, the grade degradation, this is a real issue." Listen @ kingworldnews.com ~DF |
| Are Dividend Stocks In A Bubble? Posted: 07 Dec 2012 09:53 PM PST By Plan B Economics: Many investment pundits are making the case that dividend stocks are in a bubble. I believe they are wrong. The bubble argument begins and ends with investor enthusiasm for income. As the argument goes, the massive flows into dividend stocks (and other income vehicles) are a tell-tale sign of herd behavior. Pointing to bubbles past, the argument suggests that dividend stocks will collapse when investors rush for the exits. The catalyst they point to is rising interest rates. Wrong, wrong, wrong. I believe dividend stocks - in general - are not in a bubble for the following reasons: 1. Valuations By segregating non-dividend payers and dividend payers within the S&P 500 Index (SPY), I was able to provide context to valuations for dividend payers. After separating the two categories of stocks, I then calculated the average P/E ratio, forward P/E ratio and P/S ratio for each. Note that these Complete Story » |
| U.S. and China both might be manipulating gold down, Leeb tells KWN Posted: 07 Dec 2012 09:22 PM PST |
| The BLS Jobs Report Covering November 2012: Hollow Gains Posted: 07 Dec 2012 09:01 PM PST By Hugh, who is a long-time commenter at Naked Capitalism. Originally published at Corrente. I suspect that the Bureau of Labor Statistics report covering November 2012 will be heralded as a solid report, but as usual there are a lot of negatives behind the headline numbers. Seasonally adjusted, 146,000 jobs were added to the economy and the unemployment rate dropped two-tenths of a percent to 7.7%. For those of you who are conspiratorially minded, after upward revisions in the months preceding the election, last month's jobs number was cut by 33,000 and September's 16,000. October 171,000 > 138,000 The potential labor force as represented by the noninstitutional civilian population over 16 increased 191,000 in November from 243.983 million to 244.174 million. Multiplying this by the employment-population ratio (58.7%) gives us an estimate of the number of jobs needed to keep up with population growth: 112,000. The difference between this and the number of jobs created in November is 34,000. While beating population growth, this is still a dismal number. At that rate, it would take 2 1/2 years to create a million jobs above population growth for the unemployed, and there are 12.029 million (SA, seasonally adjusted) unemployed, –even under the BLS' highly restrictive definition of what constitutes being unemployed. It makes me wonder if our political classes are pinning their hopes on baby boomers exiting the labor force and eventually solving the chronic crisis in unemployment for them. Turning to the Household (people) data, the labor force declined, seasonally adjusted, 350,000 from 155.641 million to 155.291 million. Unadjusted, it declined 826,000. Basically, there was a big increase in October with the November numbers reflecting a drop back to the September levels for the unadjusted number and half way back for the adjusted one. It is unclear where the October spike came from. These drops were reflected in the participation rate which fell three-tenths of a percent unadjusted to 63.5% and two-tenths of a percent adjusted to 63.6%. Seasonally adjusted, employment fell 122,000 from 143.384 million to 143.262 million. Unadjusted, it fell 490,000 from 144.039 million to 143.549 million. While employment fell, unemployment did not rise. Seasonally adjusted, unemployment fell 229,000 from 12.258 million to 12.029 million. Unadjusted, it fell 337,000 from 11.741 million to 11.404 million. Because employment fell in November, this means that the decrease in the number of unemployed did not come about through their finding jobs but from them being defined out of the labor force. This in turn means that the drop in the unemployment rate from 7.9% to 7.7% (SA) does not reflect any improvement in the economy. Interestingly, the broader U-6 measure of un- and under employment declined from 14.6% to 14.4% (SA). The U-6 is made up of the 12.029 million unemployed (down 229,000 from October), the marginally attached (unemployed have looked for work in the last year but not the last month) 2.505 million (up 72,000), and involuntary part time workers 8.176 million (down 168,000) for a total of 22.710 million. What I take to be the BLS' measure of its undercount (those who do not have a job, want one, but have not looked for one in the last month, not seasonally adjusted) increased 353,000 in November to 6.495 million from 6.142 million, or a rough return to the September level. As I always note at this point, this measure of the undercount does not reflect well changes in the economy. So I have developed an alternative to it. In my alternate calculation, I compare the current labor force to where we would expect it to be in a solid economic expansion: labor participation rate of 67% (as boomers retire I may have to adjust this figure). The difference between these two is my measure of the undercount. .67(244.174million) = 163.597 million (where the labor force should be) This is an increase of 478,000 from the October number of 7.828 million, or approximately back to the September level. This is the capture of the undercount that the BLS misses. With this number we can now go back and calculate where the U-3 and U-6 really are, that is the real unemployment and real disemployment rates. Real unemployment: 12.029 million (U-3 unemployment) + 8.306 million (undercount) = 20.335 million (up 249,000 from 20.086 million in October) Real unemployment rate: 20.335 million / 163.597 million = 12.4 % (up from 12.3% in October) Real disemployment: Real unemployment + involuntary part time workers = 20.335 million million + 8.176 million = 28.511 million (up 81,000 from 28.430 million in October) Real disemployment rate: 28.511 million / 163.597 million = 17.4% (unchanged from October) The long term unemployed decreased 216,000 from 5.002 million to 4.786 million. Because employment overall was down, I would assume most of this decrease came from workers being exited from the labor force by the BLS definitions. By race, white unemployment decreased from 7.0% to 6.8% and African-American unemployment decreased from 14.1% to 13.2%, but again these declines are mostly from workers being removed from the labor force. In the Establishment survey, the headline increase in jobs seasonally adjusted jobs was 146,000 from 133.706 million to 133.852 million. Essentially all of these were in the private sector (147,000 private sector vs. -1,000 public sector). Unadjusted, net job increases totaled 367,000 going from 134.702 million to 135.069 million. In terms of the mix of jobs, seasonally adjusted, retail trade gained 52,600, professional and business services 43,000, leisure and hospitality 23,000, and healthcare 22,000. Manufacturing lost 7,000 and construction 20,000. Unadjusted (you know the place where we live), the whole story is unsurprisingly the Christmas retail trade which increased 466,000. Secondarily, leisure and hospitality declined 185,000. Wholesale trade changed remarkably little, rising by 10,000. Healthcare increased 53,000. Weekly hours for all workers (private nonfarm) remained unchanged at 34.4 hours. Average hourly wages for all earners increased 4 cents to $23.63. Average weekly wages increased $1.37 to $812.87. Weekly hours for production and nonsupervisory employees (blue collar/retail clerical) increased a tenth of an hour to 33.7 hours. Average hourly wages increased 3 cents to $19.84. Average weekly wages increased $2.99 to $668.61. This represents a 1.28% increase Nov. to Nov. The CPI has been running at 2.2%. So real wages remain in decline. Conclusion The November jobs numbers were not actually that good. They would have been at or below population growth levels if there had not been bleed through from seasonal retail positions. The mix of new jobs remained poor with most in lower paying professions. There continues to be little movement in hours and wage gains remain below inflation. Unemployment declined but this was due to a contraction in the labor force and employment, neither good signs. October gains look like a fluke. Boomers began turning 65 in 2011 but the participation rate began heading south in 2001 and again in late 2008 after the meltdown. So it may take some time to tease out how much of the ongoing declines in the participation rate stem from the ongoing economic crisis and how much from secular trends (boomers retiring). And there could well be countervailing tendencies: boomers staying in the labor force because their savings and pensions have been decimated. In any case, November's participation rate seasonally adjusted was 63.6%. January's was 63.7%. Household data (Employment/unemployment) Establishment date (jobs)         |
| Profiting from the Dismal State of Gold Miners and Explorers Posted: 07 Dec 2012 08:20 PM PST Source: Brent Cook, Exploration Insights (12/4/12) "Grassroots exploration by the juniors will be virtually dead next year (tough to raise money on concepts and soil anomalies) and aggressive drilling will be seriously curtailed (tough to raise money if you miss)."
In our Nov. 11 Exploration Insights letter (see excerpt below) we discussed the dismal state of the junior mining sector. Today we will expand on this theme, looking at the state of the larger gold miners and the obstacles they face going forward. The objective is to lay out an investment thesis premised on mining and exploration trends that indicate we are entering a rather unique and potentially very profitable period of time in the junior mining sector. From EI Nov. 11: "Nevertheless, money for exploration will remain tight for anyone that cannot demonstrate a potentially significant success. A persistent theme from many of the companies at the various resource conferences I attend is: 'When the markets pick up in January we will finance'. I doubt it." Conversations with a number of companies at the reasonably well-attended San Francisco Hard Assets show reaffirm our previous observations—there will be a very long line of micro-cap juniors desperately seeking money early next year. I don't think it will turn out well for most, and suspect that next year's junior company exploration and wine cellar expenditures are going to be severely curtailed. A further observation from the San Francisco and New Orleans shows was that those companies with just enough cash to survive next year will be doing little more than making property payments while their geologists sit on their hands, "looking for an opportunity." Consider: It costs in the order of $100,000 ($100K) just to cover the public company filing fees, pay for the financial audits, and share an office and phone line. If you have a secretary, president, and geologist on staff you're looking at around $400K a year minimum. Add to that, property payments, a few field trips, and samples and you're nearing $800K. Drilling and serious work using consultants or staff puts your junior company over the $1 million ($1M) mark just to do a little work on a long shot exploration property. Based on data collected and published by John Kaiser, about 50% of the Venture-listed companies will fall into the category of being unable to cover basic costs, while another 20% can't afford to explore. As of September filings, there are over 600 junior explorers with less than $200K in the bank! Welcome to the land of the walking dead. Accordingly, grassroots exploration by the juniors will be virtually dead next year (tough to raise money on concepts and soil anomalies) and aggressive drilling will be seriously curtailed (tough to raise money if you miss). Frontier regions like the Yukon and Colombia will be empty compared to the previous three years, with much of the ground coming free (expensive to explore and keep up property payments). Worse, the industry's only real hope for new large discoveries, deep and blind targets, are for the most part not going to be tested by the juniors because of the high cost and even higher risk ("technically encouraging" results are tough to sell). Discovery takes time, patience and money; all of which will be in short supply next year. This all bodes ill for the major gold miners that desperately need new large and economic deposits and have been increasingly relying on the juniors to supply them. Here's why: Since 2006, major gold equities have significantly underperformed gold bullion. The primary reason for the underperformance is that, despite the ~20% annualized increase in the gold price, major producers have only seen an 8% annualized margin growth since 2002 (Fig. 1 below). This equity underperformance has left many institutional investors who got the gold price investment thesis right sorely disappointed in the mining sector and recognizing it for what it is—a lousy business. They are unlikely to pile back into the miners; hence the high valuations for royalty companies whose exposure to cost pressure is less. (Fig. 1: EBITA margins of six major producers compared to annualized gold price increase. From Nick Holland, CEO Gold Fields Ltd. Melbourne Mining Club; available here.) The reasons for the poor economic performances are many and, to some degree, company specific; overall, however, it comes down to mining costs (which have shown an annualized increase of 32%), and the declining quality of gold deposits. Exploration, development and sustaining capital costs have gone through the roof, resulting in a number of gold deposits being put back on the "maybe someday" shelf and out of the economic reserve category. Recent examples include Barrick Gold's decision to hold off on the development of 19 million ounces (Moz) at Donlin Creek and 17 Moz at Cerro Casale because they "do not meet investment criteria." Just this month, Gold Fields also pulled plans for open pit development of its 7.5-Moz Chucapaca deposit due to high capital costs. Even smaller deposits like Richmont's ~2.5 Moz (Measured Indicated and Inferred) Wasamac gold deposit has been pulled because "it generated a less than adequate return" following the results of a number of optimization studies. I suspect there are many more large- and small-scale projects to be pulled; companies want to avoid the dilemma Barrick faces at Pascua Llama–an initial $3.5 billon ($3.5B) capex estimate is now over $8B, with no turning back. Total industry cash production costs have increased since 2002, from about $200 to nearly $700 per ounce (oz) (Fig. 2 below), while all-in costs are between $1,100/oz and $1,500/oz (depending on your source). Over the same period, the average mined grade of deposits has fallen by about half, while the mine reserve grade is projected to be only about 1 gram per tonne (g/t) this year: a 60% drop in 10 years. (Fig. 2: Gold mining costs and grade, 2002 to 2011. Video link to Denver Gold Group presentation here). The declining mined and mineable gold grade is a direct result of the industry's inability to discover new high grade/high margin deposits. This lack of discovery has required companies to go after the lower grade/lower margin material around their current mines, using the increasing gold price to "find" the new ore. In fact, the Metals Economic Group estimates that the 99 significant discoveries (defined as greater than 2 Moz) found between 1997 and 2011 could replace only 56% of the gold mined during that same period. Further, these discoveries only account for 18% of the reserves and resources in the current producing and development stage projects, again demonstrating the dearth of new deposits. This can't go on forever, and how the gap between current mine production of ~83 Moz and the rapidly declining discovered economic ounces plays out is going to be really interesting and profitable to those of us in the discovery game (Fig. 3). (Fig. 3: Gold discoveries, production, and the gold price 1990 to 2011. The "gap" represents a serious discovery deficit. [Extracted from my recent San Francisco Hard Assets presentation] Source, Metals Economic Group) Another interesting data point to ponder when considering the 83 Moz of annual mine production, is how much it really costs the industry to maintain that production. Over the last six years, the major gold producers have spent 40% of their entire market capitalization building new mines (Fig. 4). In order to sustain that level of production going forward, published capex estimates project that the major miners will need to spend 60% of their market capitalization building the new mines, at a cost of $400B—and that figure doesn't even account for the nearly universal capex blowout we have witnessed over the past six years. Ouch! (Fig. 4: Six major producers' market cap and capex—past six years and projected six years) The Bottom Line The major gold producers desperately need new, quality gold deposits yet can't afford to build many of the large deposits they already have on the books. These companies are facing margin squeeze in the form of increasing production and capital costs, taxes, royalties, regulations, etc., and are responding by cutting exploration, firing geologists and cancelling projects. That is a tough and illogical way to find new deposits. As for the junior exploration sector, it is in the midst of one of the worst financing environments I have seen and, unless things change drastically over the next six months, faces mass extinctions. Without a new infusion of cash into the sector we will see much less work (exploration) of substance and far too many companies just covering expenses and business lunches. These situations exacerbate the economic discovery deficit problem the gold industry faces. Therefore, and this is a not a revelation to long-time readers of Exploration Insights, the very few companies that have high quality gold deposits should be in more and more demand as this story plays out. Likewise, any exploration company with the property, competence, and cash to discover and define a quality deposit will be in even greater demand, due to the discovery leverage they offer. Conversely, a company with no cash and no property success means no more money and successively lower financings as they head off to the bone yard. There are currently many junior mining stocks that are, or at least appear, "cheap" scattered across the decimated venture landscape. They could get much cheaper. How one measures cheap, however, had better be relevant to the real issues at hand: underlying value and quality as opposed to last year's share price or the price one paid. Specifically these are some of the questions that need to be addressed when considering "cheap."
Thus, at this juncture it is critical to review your stock holdings in the light of what could prove to be a very difficult period in the resource sector, yet one that offers exceptional opportunity when value is eventually realized sometime down the road. Significant economic deposits have been defined or will be discovered, and mining companies desperate to replace reserves and decrease overall costs will acquire them. There is no second option. My experience has been that during bear markets like today's, one can often recognize and purchase deposits at a steep discount while the market wallows in self-pity. This is when tenbaggers are bought; but you had better know the value behind the deposits because there isn't much dumb money left to buy mistakes. That's the way I see it. Brent Cook, Economic Geologist and Editor of Exploration Insights Disclaimer This letter/article is not intended to meet your specific individual investment needs and it is not tailored to your personal financial situation. Nothing contained herein constitutes, is intended, or deemed to be—either implied or otherwise—investment advice. This letter/article reflects the personal views and opinions of Brent Cook and that is all it purports to be. While the information herein is believed to be accurate and reliable it is not guaranteed or implied to be so. The information herein may not be complete or correct; it is provided in good faith but without any legal responsibility or obligation to provide future updates. Research that was commissioned and paid for by private, institutional clients are deemed to be outside the scope of the newsletter and certain companies that may be discussed in the newsletter could have been the subject of such private research projects done on behalf of private institutional clients. Neither Brent Cook, nor anyone else, accepts any responsibility, or assumes any liability, whatsoever, for any direct, indirect or consequential loss arising from the use of the information in this letter/article. The information contained herein is subject to change without notice, may become outdated and may not be updated. The opinions are both time and market sensitive. Brent Cook, entities that he controls, family, friends, employees, associates, and others may have positions in securities mentioned, or discussed, in this letter/article. While every attempt is made to avoid conflicts of interest, such conflicts do arise from time to time. Whenever a conflict of interest arises, every attempt is made to resolve such conflict in the best possible interest of all parties, but you should not assume that your interest would be placed ahead of anyone else's interest in the event of a conflict of interest. No part of this letter/article may be reproduced, copied, emailed, faxed, or distributed (in any form) without the express written permission of Brent Cook. Everything contained herein is subject to international copyright protection.  |
| Chris Waltzek interviews: Gerald Celente & Peter Grandich 12.7.12 Posted: 07 Dec 2012 07:48 PM PST
Chris Waltzek interviews: Gerald Celente & Peter Grandich Dec. 7, 2012 Featured Guests: Gerald Celente & Peter Grandich. Listen @ radio.goldseek.com ~DF |
| By the Numbers for the Week Ending December 7 Posted: 07 Dec 2012 07:32 PM PST This week's closing table is just below. Vultures, (Got Gold Report Subscribers) please note that updates to our linked technical charts, including our comments about the COT reports and the week's technical changes, should be completed by the usual time on Sunday (by 18:00 ET). |
| Posted: 07 Dec 2012 03:14 PM PST S7 continues to be even more ridiculous. Today's Ag update is brought to you by beavers. from syyenergy7: A tribute to BJF ~TVR |
| Chris Whalen & Barry Ritholtz: Derivatives Market Poses a Clear Danger Posted: 07 Dec 2012 03:08 PM PST The unregulated multi-trillion dollar derivatives market exceeds global GDP and poses a clear danger to the global economy, Chris Whalen, Senior Managing Director at Tangent Capital Partners, and Barry Ritholtz, CEO at Fusion IQ, tell Bloomberg Law's Lee Pacchia. from bloomberglaw: "The fix is very simple," says Ritholtz, "repeal the Commodities Futures Modernization Act and suddenly this becomes like every other financial instrument." Whalen notes that the financial industry is reluctant to change the way derivatives are managed because they generate large returns at a time when banks are less profitable than before. "The super normal returns that they earn from derivatives subsidize the rest of the business," he says. One way or the other, Ritholtz and Whalen believe the financial industry needs to get used to the idea of making less money. ~DF |
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