Saturday, October 26, 2013

Goals


That loony in Peru is all about some soccer player named Filthy Sanchez scoring a goal by kicking it over the goalie.

So here are some real goals:



Jagr was a flashy player, and he scored flashy goals, and he always enjoyed rubbing the other team's face in it. But there's still nobody better than Mario Lemieux:



Lemieux literally transcended everyone on the ice. Everyone always looks asleep when he scores; he doesn't even have to move, the puck just launches off his stick into the net.


Meanwhile someone kicks a sissy ball over a goalie and gets lauded for it.

Feh.

Remember what Jim O'Neill said about India?


Here's a fantastic example of what India's like:

Reuters - India eyes $15 billion rollover of subsidy costs into next budget.

Really, seriously. Their fuel and food subsidies were going to put them over their deficit limit, so the Congress Party is now going to hide the cost of this year's subsidies in next year's budget so they can say they met their target.

And that's okay because they hid last year's subsidies in this year's budget.

The nice thing, though, is Modi could probably save about $60 billion a year when he takes office. Apparently, most of the subsidy for food goes to waste instead of feeding the poor; most of the fuel subsidy goes to rich Indians running diesel gensets because the electrical system can barely even be said to exist.


An educational video for junior gold investors.


Here's an educational video for junior gold investors.





Friday, October 25, 2013

Some evening reading


Calculated Risk - ATA trucking index up sharply in September. So the US hasn't peaked.

Calculated Risk - stronger vehicle sales in October despite government shutdown. So the US hasn't peaked.

Michael Shaoul - Japan September CPI. He seems to think price inflation is all that's needed to make Japan turn the corner... I don't get it.

IKN - why veterans and "key players" such as Frank Giustra, Randall Oliphant, Frank Holmes and Paul Reynolds are now saying they're bullish on gold and resource stocks. Here, I'll help you solve it:
1) They want to sell them to you, stupid.  
2) They've bought all they can and now want your money to push them higher before they sell to somebody even more stupid than you are. 
3) They're being totally open and honest about their financial viewpoints for the first time since they entered into the capital markets arena. And if you believe this one then you're really stupid.
4) The CEOs and chairs, via their paid-for whore newsletter writers and brokerage captains, need OPM and are looking to run placements in their own companies soon.
They need other peoples' money.

Or, maybe among the more honest, they realize they'd go out of business if they suddenly switched their newsletter coverage into something broader than gold stocks. Cos you can't make money in the broad equity markets while parroting Tea Party garbage.

Thoughts on gold and the miners


The reason I haven't yet really bought into this:


is because, despite it being Diwali, stupid Americans are only positive on gold because they think a couple inconclusive economic reports mean QE will continue on forever, therefore inflation. That is wrong.

Therefore, gold is only up because of bullshit 30-second 8:30AM moves, instead of being up on true fundamentals. And therefore, the miners' advance has a fragile basis: the next good economic news out of the US (which we will get soon enough) might be expected to cause the manipubots to puke gold $50 before the NY market opens, which would mean any position I hold overnight is potentially deadly.

So forget it. I want to be long gold when it becomes apparent Narendra Modi is the next Indian PM, and after the fallout from the November plenum is sorted through and Americans realize China isn't doooomed. Because at that point, gold will have a sound fundamental basis, and no amount of Comex shorting will be able to hold it back; the specs will see the writing on the wall and go net long, and maybe that speculative premium can become as large again as it was in 2010.

$HUI is at 244, and is up 15% or so from its recent bottom. I don't fucking care, because downside risk times downside probability is high, while the market's perceived upside risk times immediate upside probability is low.

If and when $HUI conclusively moves back towards 500, I'll be riding it. But that won't be a one-day move; it should take at least 6 months to go up 100%, maybe even over a year.

My ability to survive the downside has proven to me that I'll be able to make far more than a 100% profit on a 100% upside advance.

Til then, other things look better than the miners.


Friday videos - a song for all the shitty explorecos out there


Message to Mickeyman:

If you're going to pick a Joy Division song to describe the state of the exploreco scene, then for crying out loud pick the right one.



And no, you don't use "Dead Souls" either, because that would suggest that exploreco crooks have souls.

Thursday, October 24, 2013

Jim O'Neill tonight on BNN


Here's Jim O'Neill on BNN, now retired and spending his days down at 't pub in Manchester, wearing a flat 'at, drinking with Mark E. Smith and Peter Hook:

part 1
part 2
part 3

In part one, he notes that if the EMs want to "become adults and be treated as such", they have to fix their economies so that they're no longer so dependent on easy, lazy American investment. Because the days of low EM interest rates are over.

He also agrees with me entirely on India, that they could fix their problems overnight simply if they stopped pissing off foreign capital. And, by the way, Narendra Modi will do just that, and then the downward pressure on gold demand will end, and that'll be great for gold, so watch for the May 2014 elections.

And, as others have noted, it'll be a red herring if Whitey freaks out over a BJP minority win with regional parties holding the balance of power. India's had that before and governance turned out fine.

In part 2, he outright mocks the people who expect a low China growth rate. Don't expect below 7%. And he thinks a "China credit event" is a silly idea too.

Also, he brings up the idea of "new China versus old China" - he says stay away from the old, large industries like state-owned and commodities; you want the "new" China, which is consumer-focused and tech-centred. Essentially, he says his China strategy is "short Caterpillar long Samsung".

Which is nice, that justifies my interest in QQQC.

And in part III, it's more of the same. The last 2 minutes are some short comments on Brazil.

Watch the entire interview. It's great to see a BNN host who recognizes that a smart guy is talking, and lets him just continue talking.

Michael Shaoul on BNN


Here's Michael Shaoul on BNN.

He still thinks that the US economy's performance has been "adequate".

He thinks there's simply no point in being in the bond market, and the asset allocators will be rotating out of bonds into equities.

He thinks Europe is lagging Europe by a year or two, and now news is exceeding expectations.

And he thinks developed market commodity demand will more than counterbalance softening EM demand.


Jim O'Neill on BNN at 5:30


Today, Thursday, Jim O'Neill will be on BNN at 5:30.

He's one of the few people worth listening to about anything, so tune in!


A question on China tech's direction


You have to wonder if China tech stops its advance here:




Because FXI has taken a dive on the "OMG China banks debt writedown DOOOOM" talk:




And China all-cap looks similarly weak:




But all that might just be because they're ETFs, and Americans buy China ETFs, and they might just have decided to switch to puking China ETFs right now, because the Shanghai exchange actually looks like this:



So which way does China tech go from here? Chinese are still making money, and still using it to buy goods on the Chinese internet, and still hanging out on Chinese social media websites.

So the question is one of China tech fundamentals versus what is stupid American money thinking of right here.

Sandstorm and Franco charts


Check out Sandstorm:


Check out Franco Nevada:


Your average gold miner, to me, represents the market's short-term attitude towards the price of gold, while these two streamers to me represent the longer-term attitude towards gold.

As in, say, something like Yamana probably is more of a 2-year call option on gold, while FNV or SAND is more like a 5-year call.

SAND's chart is looking very positive (so it's good that there was never any liquidity in their A warrants for me to dump into, I've still got them) but FNV's almost looks like it's about to break out.

SAND right now is threatening to break above it's daily SMA(50), while FNV is threatening its weekly SMA(50) which is even better.

I dunno, this is starting to get too hard to ignore.

In the interest of fairness, I'll report PVG is rocketing back up today


Well, look at this:


PVG's recovering.

You'd have to wonder if maybe Strathcona is hastily telling people that their "no resources, therefore no reserves" statement was not a professional opinion on the validity of PVG's resource's NI-43-101 compliance.

Cos it was being interpreted that way by a number of lawyers as of yesterday, and after all there's no guarantee that any of the law firms had the slightest clue what the meaning of a NI-43-101 "resource" was, which seemed to be the basis of their lawsuits alleging conscious misrepresentation. "How do you apply the NI-43-101 definition of a 'resource' to an extreme lognormal vein system" might actually be a valid defense, especially as geologists seem to have been at odds over the VoK for the past several years to begin with. They all know there's gold there, they just seem to disagree as to what'll happen when you try to mine it.

Who the hell knows. I'm not speaking for Strathcona. Maybe this is all down to someone going on BNN this morning? Anyone know?

At least Bob Quartermain can take his F-350 off Kijiji for the time being.

The question now is whether this is just a flood of retail buying based on chatter, or whether all the instos that dumped on the Strathcona news have found some reason to buy back. I doubt it could possibly be "all", but whatever.


Some morning news

Market summary:

Yesterday people decided to sell everything because China banks wharrgarbl Mario Draghi wharrgarbl, and now they're buying back because poor initial claims means no taper wharrgarbl.

Now, the news:


Ritholtz - now things are up again, who knows why. I guess when you play with the market's emotions, you get hyperactivity. Go figger? His comment:
One headline notes that “U.S. Stock Futures Rise Amid Earnings, China Factory Data” — but we had mixed earnings yesterday, and so far, earnings are mixed today. And Chinese economic data was good yesterday. This leads to my regularly offering up my insight with a big fat I don’t know.

All too often, investors try to construct a plausible explanation, typically in narrative form, as to what is going on. The danger is not so much that they fail — that to be expected — but rather that they confuse their confabulated narrative for truth, and mistakenly believe their own bullshit for reality.
I try to ensure that I ask myself "did this data change any fundamentals? Is it backward-looking? What does this mean for the forward indicators I've been following at Calculated Risk?" But often I don't cos I have emotions like the next guy.

The easiest thing to do, however, is avoid any article that is made up of people's stupid opinions. If some "strategist" or "hedge fund manager" really had a knack of reading the market, he wouldn't be sharing his alpha with some $20K/yr clown from Business Insider or Reuters.


WaPo Wonkblog - another billionaire is predicting doom; ignore him. Basically, another guy suckered by the "fiat money central banks money printing" bull of the paleoconservative hard money crowd. In response Neil Irwin says:
For example, in the second quarter of 1999, if you invested $1,000 in the Standard & Poor’s 500 stock index, you were buying shares that would generate only $33 in earnings, at a time you could have instead put the same $1,000 in a Treasury bond paying more like $58. The only way that investment would have made sense would be if U.S. economic growth would continue its torrid late 1990s pace indefinitely; more commonly, investors weren’t thinking very hard about investing in stock at all, but just saw the market rising at a rapid pace and assumed that would continue. That, of course, did not happen, and the S&P has only in the last few months surpassed its March 2000 high.

By contrast, right now, $1,000 invested in the S&P pays out about $60 in earnings, compared to $25 for 10-year Treasury bonds. There are no guarantees that stocks will keep going up. For all we know, corporate profit margins will fall from recent historic highs, or economic growth will disappoint. But there’s no immediately obvious evidence that the market is wildly overvalued.

Similarly, housing prices really were out of whack in 2006, detached from any historical relationship to what it costs to rent a similar house. It was quite clearly driven by homebuyers motivated not by level-headed analysis of the relative benefits of buying vs. renting, but by a self-fulfilling assumption that home prices must always rise.

But a lot has changed since then. Home prices are 30 percent lower than they were in the spring of 2006, as measured by the S&P Case-Shiller 20-city home price index, even after rising a bit over the past year. And rents for similar homes are up 15 percent in that span. Add it all up, and home prices make way, way more sense now than they did then; by Bill McBride’s calculations at Calculated Risk, the ratio of home prices to rents is back at 2000 levels.
Please forward this to all your hard-money bubble-fixated loon friends.


Reformed Borker (Bork Bork Bork!) - silly little bitches. Oh my, Josh woke up on the wrong side of the bed today! Now he's lecturing people about getting all frothy about the market. He says we're now in "phase 3 of the bull market".


FT Alphaville - warehouse queue conflicts. I can't believe I'm quoting Izabella Kaminska:
The biggest risk of the proposed LME rules, which plan to force warehouses which have queues of more than 100 calendar days to load-out at least 1,500 tonnes per day more than they load-in, is that they will divert that supply elsewhere, outside the LME system completely, obscuring the picture of real supply and demand even further.

That is to say, that supply won’t just hit the physical market as most people expect it will, it will get parked in private warehouses god knows where.

Without the market being aware of how much inventory there really is out there, demand from passive speculators could end up having a disproportionally strong effect on futures curves, sending incorrect signals to producers and users.

The thing to remember is that speculators aren’t motivated so much by demand and supply fundamentals as they are by a lack of real-returns elsewhere. Consequently, they aren’t going to stop overpaying for commodity exposure — in a way that create an incentive to hoard commodities — just because the LME has changed some rules.

Chances are, if and when US and western central banks raise interest rates, those queues will alleviate themselves of their own accord.

Mineweb - India hikes import duty on Thai jewelry. Again, they could fix their CAD by exporting things and learning how to not drive away foreign capital.


Wednesday, October 23, 2013

Some evening reads


Some evening reading:

Reformed Borker (Bork Bork Bork!) - Matt Yglesias is not impressed with your perennial crash call. And he shouldn't be. Most important quote:
One of the worst things about 2008 was that it bailed out a lot of misanthropes who were then able to capitalize on their "prediction".
"Misanthropes", by the way, means people like Albert Edwards and John Hussman and Marc Faber.

Michael Shaoul - WSJ blog entry on the NFP. Basically, the NFP is chock-full of statistical noise, so you either have to smooth it out to an average to watch the trend, or be a misanthrope and crow like you're ZeroHedge whenever a bad NFP hits the wire while accusing the Obama administration of manipulation whenever a good NFP comes out.

Calculated Risk - architectural billings up for September. Again, a leading indicator is still positive.

Marc to Market - is China really driving today's price action? Well, it was actually just used as an excuse, as he points out. The other excuse, which people seem to have ignored, is this:

der Spargel - ECB test to reveal system flaws. Article focuses more than needed on Germany, but the point is this explains the EU bank weakness seen today. I guess the people who were buying European stocks didn't know this was coming.

Pretivm Resources - oh crap I hit "post" too early


But wait! In addition to Holestretcher Holestretcher & Fisting, now it turns out Pretivm is entertaining yet more formal propositions for protracted and vigourous anal lovemaking from:

Rosen Law Firm,
Bronstein, Gewirtz & Grossman,
Glancy Binkow & Goldberg, and
Pomerantz Grossman Hufford Dahlstrom & Gross.

In all cases, the concern is
In withdrawing from the Program, Strathcona advised Pretium that "…there are no valid gold mineral resources for the VOK Zone, and without mineral resources there can be no mineral reserves, and without mineral reserves there can be no basis for a Feasibility Study." They also advised that "…statements included in all recent press releases [by Pretium] about probable mineral reserves and future gold production [from the Valley of the Kings zone] over a 22-year mine life are erroneous and misleading."

Dearie dearie dear.

What was this again about it always being a good idea to invest with the best management, with guys who have had multiple past successes turning deposits into mines?

PretiVm - and here come the lawsuits


4-traders - Holestretcher Holestretcher & Fisting announces investigation into maybe suing PretiVm Resources.

Now this has some interesting language!

Holzer Holzer & Fistel, LLC is investigating whether Pretium Resources, Inc. ("Pretium" or the "Company") (NYSE: PVG) and/or certain of its officers complied with the federal securities laws when making statements to investors. Specifically, the investigation focuses on statements issued by Pretium between January 20, 2011 and October 22, 2013 concerning the Company's Valley of Kings gold project in British Columbia. On October 22, 2013, Pretium revealed that Strathcona Mineral Services LTD, which had previously withdrawn from the project, told the Company that there were "no valid gold mineral resources" in the Valley of Kings zone contradicting previous claims by Pretium.

If you purchased Pretium common stock between January 20, 2011 and October 22, 2013 and suffered losses on that investment, you are encouraged to contact Holzer Holzer & Fistel, LLC and its attorneys Michael I. Fistel Jr., Esq. or Marshall P. Dees, Esq. via email at mfistel@holzerlaw.com, or mdees@holzerlaw.com, or via toll-free telephone at (888) 508-6832 regarding your legal rights.

Holzer Holzer & Fistel, LLC is an Atlanta, Georgia law firm that dedicates its practice to vigorous representation of shareholders and investors in litigation nationwide, including shareholder class action and derivative litigation. More information about the firm is available through its website, www.holzerlaw.com and upon request from the firm. Holzer Holzer & Fistel, LLC has paid for the dissemination of this promotional communication, and Michael I. Fistel, Jr. is the attorney responsible for its content.

Oh my.

Dear Holzer, Holzer and Fistel LLC:

If you're looking for clients, here's a list of 75 institutional shareholders of PVG who I'd assume must have lost at least $100M between them over the required time period. I'm sure they'll enjoy your vigourous representation of them, and would probably like to recoup at least a part of their massive losses.

Let's check in on PretiVm's shareholder value creation strategy


Let's see if PretiVm's chart has recovered from yesterday, shall we?


Oh my. Good work Bob Quartermain, CEO of a formerly-billion-dollar exploreco!

I wonder how much institutional ownership this stock saw when it was still over $7? The last data I've found is from June 30, and has the following:



Dude at Weiss must really be patting himself on the back.

You have to wonder if the folks at Royce & Ass., Assport, Scum Valley, Toronto Demon-minion Bank and Sprott (that guy again) are having interesting discussions on the topic of having lost millions in the past few weeks just because Strathcona pulled out of VoK?

There have been 29.8M shares traded since the October 9 press release announcing Strathcona's resignation. You'd have to wonder how much insto ownership remains in PVG, or if all the instos have now bailed, turning PVG into the typical zero-insto exploreco that slowly chews thru retail capital, grinding down a further 90% from here.

In other news, I had go look up "mine dilution" on the internet last night.

Tesla rolling over


I guess here's one area of excitement that has died down.


With all this rotating out of things that people are doing today, I wonder what people are going to be rotating into?


Eric Sprott of Sprott lectures the World Gold Council on gold demand


Sprott Globule Resource Investments Ltd. - Dear WGC executives, you suck and GFMS sucks.

Eric the Half-a-Bee asserts that core gold demand is 5200 tons a year, approximately 3000 tons more than yearly mine supply, and GFMS is woefully under-reporting demand.

His methodology seems to involve re-calcing everything from an ex-domestic-China perspective, and looking for non-GFMS data whenever possible. OK, that's fine, assuming China doesn't start dumping gold on the world market.

But in general, given his data, the fact that any house Sprott-sized or larger could arrive at the same result, and the fact that Sprott is a goldbug, I'd have to ask why the price of gold has fallen down to $1300 if what he says about supply-demand is true.

I question his methodology and would want to see his work before believing him.

Some morning news


Here's some news to get your head into the game today.


FT beyond brics - foreign holdings of USTs down $68B since May. Avantika, I think the explanation has to do with international trade and foreign reserves. In any case, UST10 is now down to a 2.5% yield, so it seems whatever the EMs are selling, everyone else is happily buying.


NYT Economix - federal employment at 47-year low. Obama seems to be doing a great job of reducing the size of government to the point it can be drowned in the bathtub, no? This is yet another headwind to US economic recovery; but of course the Republicans feel they have to do all they can to ensure no black man presides over an economic recovery.


Michael Shaoul - UK September mortgage approvals. The chart looks about to take off:


Then again, maybe it's all down to the Chinese and French buying London real estate? Well, I doubt rich foreigners need mortgages. In any case, the UK is a large economy, so hopefully it can join the US, Japan and the ECU in returning to growth? You think that's stimulative for the world economy? Hm?


Bloomberg - Spain ends 2-year recession. GDP is back to expansion. So buy Spain.


FT beyond brics - Chinese property: hot or not? This chart is an interesting counterfactual to the idea of a Chinese property bubble:

That's right; relative to wages, property prices are in a long downward trend. What does that mean for the part of Chinese credit dealing with mortgages, btw? And heck, what's wages' share of Chinese GDP growth? I like factoids that raise questions.


Bloomberg - China banks triple debt writeoffs as massive wave of defaults looms. This is the article that has everyone selling everything today. Because they just read the title and didn't bother reading the body of the article:
“The banks and the regulators’ interests are aligned in speeding up write-offs,” said Ma Kunpeng, a Beijing-based analyst at Credit Suisse Founder Securities Ltd. “This prepares them for a rainy day.”

The China Banking Regulatory Commission, led by Shang Fulin, urged banks in April to set aside more funds to cover defaults, write off some bad loans and curb dividend payments while earnings are ample to create a buffer in case of an economic downturn.
So there's policy-driven, sensible intent behind it, not an imminent collapse. Also,
Neighboring India will inject 140 billion rupees ($2.3 billion) into government-run banks including State Bank of India and Central Bank of India (CBOI) to guard against soured loans amid forecasts for the slowest economic growth in a decade, the Finance Ministry said today.
If this is the first time you heard that India's economy sucks, you shouldn't be managing other peoples' money.

Back to China:
Allowing the banks to use their “gigantic” loan-loss reserves to eliminate the worst of the debt indicates that China is beginning to adopt a “more modern approach” to credit management, said Jim Antos, an analyst at Mizuho Securities Asia Ltd. in Hong Kong. Putting the provisions to use -- instead of letting them accumulate -- may also give investors more confidence in the reported bad-loan figures.

“Every other banking sector in the world does write off loans that are totally uncollectible,” Antos said. “Finally, we see evidence that this is happening in China.”
Again, not a "massive repudiation of debt as a dishonest system is com..." - oh wait, that saying doesn't apply, it only ever applies to the USA, which is the only country in the world according to some bloggers.

It's not a disaster, is what I meant to say. It's Chinese policy leaders forcing a cleanup in advance of the November plenum.

But hey, the world markets got really overheated these past few days, so let's see some selling to bring them back down from overbought.


Tuesday, October 22, 2013

John Kaiser in the Gold Report


The Gold Report - John Kaiser interview.

Evening reading


Here's some more stuff and junk:


Calculated Risk - chemical activity barometer for October. This is bullish for the US economy.


Michael Shaoul - on the NFP release. Quote:
In the normal course of a year we would expect better data to be released during Q4, which has significant seasonal tailwinds helping the report. This time around we will have the distortion from the shutdown to contend with, making the October and November reports even more of a lottery than normal. Our advice would be to simply move on from today's report and assume nothing major has changed, with perhaps the most important effect being that the bond market may have bought itself a little more time.

Calculated Risk - construction spending increased in August. Old data, but it's still bullish for the US economy. Really, I don't see how someone can call this "the final parabolic move of the cyclical bull market". Quote:
To repeat a few key themes:

1) Private residential construction is usually the largest category for construction spending, and is now the largest category once again. Usually private residential construction leads the economy, so this is a good sign going forward.

2) Private non-residential construction spending usually lags the economy. There was some increase this time for a couple of years - mostly related to energy and power - but the key sectors of office, retail and hotels are still at very low levels. I expect private non-residential to start to increase.

3) Public construction spending increased in August and is now 4% above the low in April. It is possible that the drag from public construction spending is over. Public spending has declined to 2006 levels (not adjusted for inflation) and was a drag on the economy for 4 years. In real terms, public construction spending has declined to 2001 levels.

FT Alphaville - the kids are moving out. Which would mean an expected increase in household formation.


Sean Brodrick - look for a hidden boost in consumer spending. Cos gasoline is coming down.


Yle Uutiset or something - Finns make diabetes vaccine breakthrough. Yup, Type 1 diabetes is caused by a virus. Not diet and bullshit.


Yet more blog stats fun


Here's some more fun with blog stats!


Yeah, someone from the Grope & Flail must be researching an article today. The professional way.



I honestly can't believe there's a person in Lima who's visited my blog over a thousand times. Otto, you have any idea who this is? Is this that "famous name" "influential" person who you refuse to identify to me?



My putting the boots to Bob Quartermain today was obviously so popular that it's making the rounds thru the mining industry. Here's Rob McEwen visiting for a bit of a gloat.




Royal Bank must have a very bearish outlook for the world economy if they think they have to begin researching the evacuation of the earth.



And, of course, the OSC also visits this site for research. Because that's what we've come to expect from the OSC.


Lydian is having a bang-up day


Well, Lydian went voom:


And it can't plausibly be the results of the met study, released today.

It also can't be hopefulness about the revised feasibility study, which the NR says is still delayed to Q2 2014.

So I guess it's because some guy with $300,000 has all of a sudden changed his mind about the likelihood that the Russians are going to try to steal this deposit by dicking around within the Armenian government?


On Louis James and his PVG call


I don't know the guy, he might actually be nice, so I'm not interested in putting the boots to him the way IKN likes to, such as today.

Nevertheless, there is rarely any bait as irresistible as this quote from Mr. James:
Net: there's no real reason to believe there's anything wrong with Pretium's Valley of the Kings deposit.
Hey! Louis! Check this out:


Louis, would you admit the possibility that the price action in that chart suggests there might be something wrong with PretiVm's Valley of the Kings deposit?

Cos that chart suggests to me that you might be in immediate need of a supplier who sells Astroglide in 50-gallon drums.

Stockhouse reaction to the PVG fiasco


I'll just give some quotes from today, spelling mistakes and all. After all, the point is really to illustrate how much damage even a (formerly) billion-dollar star exploreco with bonanza veins can do to the entire junior scene in Canada.

"They should of waited until the entire bulk sample was done and released the results. These partial results obviously has the market in a tizzy as does the fact that Strathcona found 94% less gold than Snowden.The bounce off of $3.08 was most likely short covering. They have turned this market into a casino at best."
Yup... great way to rescue the integrity of the exploreco scene, eh? I mean, investors have a choice of (a) just buying SPY at the initiation of this ten-year 500% bull market in US equities and then going on with their life, or (b) dicking around day-in, day-out with a bunch of casino stocks in a notoriously corrupt goldbug scene. So is it any wonder that investors have fled the goldbug field?

"So how does this finish...one the grades disappoint, or two the grades improve and this "shakeout" was SO UNNECESSARY...either way IMO not very favorable to shareholders, and credibility here continues to erode...very sad, the Gold sector continues to shoot itself in the foot, and give itself a blackeye."
Yup. At minimum, if PVG is in the right, it's still a vicious and painful >50% shakeout. Anyone who wasn't prepared for a 50% drawdown is expelling shares from both orifices as we speak. But hey, maybe the explorecos can petition the Venture exchange for changes to the regulatory system. That'll fix everything, right?

"Yes, and its stated in today's PR - The tonnage processed and the grade of the gold and silver produced from the material excavated from the 426585E development going through these stopes was estimated to be 1,451 tonnes grading 4.6 grams per tonne gold and 6.8 grams per tonne silver, based on the preliminary mill results estimated for the 426585E Stopes."
And yet the stock is down, my good man, which might suggest that your interpretation isn't making you any money.

"This is not the first shake out I have ever seen in a gold Jr and it will not be the last. I love when the sheep start running. The grades so far say mine even though they are not what was expected. The POG is heavely suppressed at the moment and when that supression runs out of steam this property will be a 'Gold Mine'"
I tend to discount any statements coming from a guy who talks about "gold price suppression". I learned that in my Golden Hope days.

"That was the same math running through my spreadsheet and yes, it is significantly less than expected. PVG bulls can come up all types of excuses, but this looks really bad. I was bullish on this stock prior to these revelations. Reporting all types of high grade results over very small intersections of 0.5 meters gives investors the impression that the whole project is of similar grade, which is obvioiusly is not. Seems misleading of managment."
Salient point here: "this looks really bad". Seriously, Bob, why did you go out of your way to make PVG look bad? I mean, maybe I'm just a dumbass, but I'm looking at the price action caused by this ruckus and I'm wondering in what way it indicates the ongoing creation of value for shareholders.

"also, strathcona is now reported in same release as telling them weeks ago, there is NO RESOURCE, reporting well after the fact is pathetic....lets not forget that strathcona was the bre-x scam outters"
So in other words, Strathcona is held in high esteem by the industry? Well, in that case, Bob, if there were flaws in their methodology you should have established that prior to hiring them. Instead of pissing them off.

In the words of Canadian poet laureate bill bissett:

Powerful people can fuck up too

Morning news


Here's a few newsbits:


Reformed Borker (Bork Bork Bork!) - sentiment is frothy. Yet another post I have to quote in bulk:
"Sentiment is Frothy."

Is that all you got?

"This will end badly."

Okay, sure, probably, maybe. But what else?

"Valuations are much higher than they were a year ago."

Yup. That's true. So?

Because you could have said "Sentiment is frothy" in the spring of last year after the market had run up 12% into April.

And you could have said "This will end badly" on the heels of QE2 being announced in the summer of 2010. We're up 100 percent since then and its been more than three years - are we giving that all back? Is that what you meant by "end badly"? Doesn't every bull market eventually end badly? Can you think one that ended congenially? Is that a reason not to participate in investing for the future? Did you avoid dating because of the risk of heartbreak or a thrown shoe?

And as far as valuations being richer than they were last year...well, you could have said the same in 1984 or 1994 or January of 2012 or 1946. I'm not quite sure how a statement like that can be of any importance other than for the sake of conversation.


Michael Shaoul - TV interview. Again with US bonds and equities. He's always a very charming and quietly hilarious fellow to watch.


Bonddad - oil moves below EMA(200). If you can't see how bullish this is for the US economy, then you need to get the hell out of the market and start stockpiling silver rounds.


Slate - Chinese bonds: stop being wrong. Matt Yglesias on how the "omg the Chinese will dump our bonds!!1!" clowns are utterly wrong in the most basic of ways.


Yahoo! Finance - Corvus Gold responsible for high overtime charges at the BCSC. Corporate presentations, videos, and PEAs all get yanked or redacted now that Phil McCracken of the BCSC has come back from his 5 years of paternity leave and has started doing his bloody job.


Josh Brown on David Rosenberg


Reformed Borker (Bork Bork Bork!) - poor David Rosenberg.

I'm sorry, I just have to quote this in its entirety:

Poor David Rosenberg.

By getting more constructive on the economy and the markets this year, he's learned the truth about many of his fans and followers - it was never about his analysis, it was always about him adding intellectual heft to their pessimism and quasi-political, partially religious desire for the collapse of the system.

Their worldview was that things were in permanent decline and his sophisticated beige-and-green charts added a veneer of respectability to their pre-existing biases.

And as David's rigorous analysis forced him to warm to the possibility of a healthy investing environment, they flipped out and turned on him.

Now they're going to blame him for the huge opportunity cost as the market rally goes into overdrive and they sit on the bench with nothing but lint in their pockets and a handful of busted junior mining stocks in their brokerage accounts.

"What the hell, Dave? You're a traitor! Your economic song and dance legitimized us! Now what?" You'll notice they're not even mad at him for being wrong, they're mad at him for changing his mind! As though a market pundit ought to think something one day and never allow the facts to interfere as the world changes around us.

They will find someone else who will carry the torch soon enough. They'll gravitate toward Harry Dent or Doug Casey or whomever else wants to be their hero / take their money. And so it goes, here in the manic phase of a historic bull market - the finger-pointing is now well underway. Statues will be pulled down, newsletter subscriptions will be canceled.

These people that would prefer Dave be loyal to their team rather than try to get it right are absolutely demented. He is fortunate to be rid of them.

It's interesting that Josh has heard of Doug Casey.

I'd add that Rosie missed a >100% advance with his bearishness, and that therefore he is little more than a clown and absolutely not worth listening to. Sorry, Rosie, but your job is to get your investors 100% long when the chance is there to make a fortune with little downside; you failed at this, you instead tried to keep everyone scared out of the market: so you are therefore a clown.

Otherwise, I pretty much agree with Josh, whose simplistic bullishness seems to be more in tune with the market than Ritholtz's "wait a sec, something should go wrong any sec now" cautiousness.

Open letter to Allan Quatermain, formerly of King Solomon's Mines


Hey Bob!

You used to be at the head of a billion dollar exploreco.

This business with Strathcona seems to have cut your market cap by several hundred million in the space of two weeks.


Good job!

I expect this means it's going to be easier for you to put your property into production now that your market cap has been more than halved? I mean, without diluting out the upside for your shareholders?

Or maybe you'll be able to sell out PVG at an even higher offer price? Because so many more companies are going to be interested in this property now that Strathcona has quit, right?

I mean, somehow you've added tremendous value for your shareholders with this whole Strathcona quitting thing, right?

I mean, you must feel that the market action of the past few weeks justifies your decisions, right?

What do you say, Bob?

Well the miners sure do look perky


Well, GDX sure does look perky, popping way over its Bollinger and +2SD:


And GDXJ is also quite perky:


The problem I have with this is that they popped on a bullshit pop of gold. Gold only popped because there was a jobs report, delayed by the Republican nonsense, which is rather meaningless because all we care about in jobs is the trend. This is also old data.

And this jobs report isn't going to affect the taper, because the only possible taper initiations were this month (now lost), December (can still happen), and next year (less likely than this year because no matter what the MSM tells you, Yellen is not a dove; she's an empirical realist).

How does a crap jobs report mean gold goes up? How did it change demand in China and India?

And why should a single crap jobs report boost the Q and the SPY?

So therefore I'm going to look upon this with doubt. Gold went up cos a couple algos instantaneously bought gold (go look at the Kitco chart, no seriously); what news tomorrow will make algos instantaneously sell gold?

On the other hand, the gold miners might have just shaken off a big short who's now being forced to cover. But that wouldn't establish an upward trend, just the end (temporary, perhaps?) of a downward trend.

Anyway, I do still have some participation in the miners - Sandstorm warrants, and SBL for what it's worth - but I'm happy enough with my CIE.TO, QQQC and NBG, thank you very much.

I'll wait til I see a primary uptrend established in the miners. After all, I want to own miners when gold goes from $1400-$2000, not when it pops for a couple days before the next fad hits.

Monday, October 21, 2013

four late newsbits


Was busy even thru lunch. So here's a few little tidbits of news:


Calculated Risk - comments on existing home sales. As he has said before:
What matters for jobs and the economy are new home sales, not existing home sales.
Existing home sales don't add much in the way of wealth to the economy.


Bespoke - crude inventories rise more than expected. Again, cheaper gasoline and oil are bullish for the US economy.


FT beyond brics - Sensex advances too much. Then again, has it advanced too much compared to the peak in 2008?


BI - debunking yet another gold scam. Cullen Roche debunks the first five minutes of a "gold is money" advertainment video. Read it, and maybe watch the video, to see how many of their lies are being repeated by your local goldbug blogger or newsletter writer.