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10/18/08

dirty scummy IMF gossip with pictures of the girl and the cuckold Argentine

Why the horns? Ask a Spanish speaker

Do we want a bit of sordid gossip on the site? Yeah, just for once.

According to the seven million news stories now going around, Dominique Strauss-Kahn, the toppy top head honcho of the IMF, has been dipping his wick where he shouldn't (yep, it's a Wolfowitz redux). The nasty bit is that the object of his desire, Piroska Nagy (and here are the photos of Piroska)...

Piroska Nagy is young, blond and smiley

..... is married to current advisor to the governor of the Bank of England, ex IMF dude and ex-head of the Argentine Central Bank, Mario Blejer, 60 (photo above). To complete the vicious circle, Dominique is married to the ultra-famous French journalist (well, famous in France at least) Anne Sinclair. There will be blood.

Love those professional photos, no?

Back to Blejer, and poor old Mario has had a raw deal since finishing his term at the University of Budapest in 2000 (where he presumably fell under the charms of the apparent social climber Nagy). He resigned from the BCRA after a very public falling out with then FinMin Roberto Lavagna. He fiddled around the IMF for a while (and hey!...would ya look at that?? Nagy got a job at the IMF at the same time!! What a coincidence....) and has since then twiddled his thumbs at the BoE waiting for a recall to a ministry job in Argentina that hasn't come. Now according to the reports, he was the one who found the evidence of the affair between Strauss-Kahn and his pretty young wife (via e-mails and texts and all that modern stuff). It all got rumbled way back in February, but up to now the IMF and the people involved have tried to keep it quiet. Not any more.............

So if you feel like consoling Blejer, here's how you can get in touch.

Mario I. Blejer

3022 R Street, NW

Washington DC

20007 USA

Phone 1-202-652-0655 Mobile 1- 202-316-6777

Email marioblejer(AT)blejer.com valueandrisk(AT)yahoo.com mario.blejer(AT)bankofengland.co.uk marioblejer(AT)gmail.com


Tell him Otto sez 'hi', won't you?



Anatomy of a Canadian Stock Promotion (part 7)

Here we go with part seven of the series (the other parts are linked at the bottom). This part is quite a short one and might be subtitled "why you should care about vesting dates". To keep things straightforward, this time I've made some notes on this chart.

Click to enlarge

Now for some further explanation:

Things were quiet between March 2008 and mid July at Dorato. Spring saw the company raise a little over $10m via its seeding placement of 17m shares at $0.60 (insiders taking a lage proportion of those shares). The importance of that placement is to note when the stock vests, i.e. becomes available to sell on the open market. In the case of the DRI.v placement, around 8.5m shares vested on August 19th.

On July 18th, DRI.v announced its deal with big gold mining company Franco Dorada, which may explain why the stock traded at such low levels away from the public gaze. It certainly wasn't the right time to start drawing attention to DRI.v's stock price of $1.60 and above. The deal brought DRI.v extra working capital in exchange for a royalty agreement with Franco Nevada and (remember this one in the future, people) gave Franco Nevada the right of refusal in any future stock placement (on a pro rata basis).

With the deal done with Franco Nevada, it was time to announce to a wide audience the benefits of the Dorato projects, and on July 30th the company released this PR announcing high grade gold returns at the El Tambo property. This would not have been a surprise to anyone that had done a little research on the property, as Anglo had already mapped and sampled plenty of high grade veins there in previous years. This was not news, but it was presented as a material change in the company (see SEDAR filings) .

Curiously, the announcement of these good gold grades was met with a strong selloff, despite the efforts of newsletter writers who had bought into the 60c placement to draw attention to the company (see here). This was because the vesting was drawing closer. So when August 19th came, so did the volume. Sellers of the placement didn't get the $1.60+ returns they might have expected just a month previously, but all the same plenty ran for the door and took prices of between 70c and 90c quite happily. It should be noted that insiders have not (according to official filings at least) sold any stock recently.

Since then, of course, the broader markets have not been favourable to stocks in general and mining stocks in particular. But a look at the DRI.v performance as related to GLD (as a gold price proxy) shows the importance of that vesting period quite clearly. It also brings into question exactly why Dorato decided to release its positive assessment of the El Tambo property at the moment it did.


Related Posts
Anatomy of a Canadian Stock Promotion (part one)
Anatomy of a Canadian Stock Promotion (part two)
Anatomy of a Canadian Stock Promotion (part three)
Anatomy of a Canadian Stock Promotion (part four)
Anatomy of a Canadian Stock Promotion (part five)
Anatomy of a Canadian Stock Promotion (part six)



Disclosure: I would like to remind you that at no point will I make any sort of recommendation to buy or sell any DRI.v securities. I would also like to make it clear that to the best of my knowledge the promotion techniques used and to be used by Dorato are totally legal. Finally, I would like to make it clear that I am not passing any moral judgement on Dorato Resources, and will try to avoid any insinuation of judgement in future posts in this series. The aim is to educate readers about some of the ways promotion campaigns are used and the company structures behind them.

Vamooo Lo Millooo Carajoooooo

Tomorrow is the Superclasico, River Plate (my team) vs Bosta Juniors. I don't care how much you stick up for you own local derby, cos there really is nothing like River/Boca in the whole world. This is what happened in 2006 in the River Stadium when Boca was tipped to win by everyone.



More of the same tomorrow, please. This next 30 second video gives you an idea of what it's like in the crowd on a River-Boca day.

Guess what? Bolivia wants peace...all Bolivia

"Jaw jaw is better than war war."
Winston Churchill (a man who knew about both)

Leaders of Bolivia, militants, national and local governments, indigenous resistance goups, fascist shock troops; please take notice.

Yesterday the United Nations released a survey taken of over 2,000 Bolivians from all departments and all walks of life (margin of error on survey +/-2.11%). The results might surprise people who've never been to Bolivia or bothered to speak to any of its citizens before opening their mouths and opinionating about what's going on. Bolivians recognize the need to change their country, they don't not support violence, they want to two sides to talk for as long as necessary in order to reach an agreement etc etc. and according to the suvey that's as true in the "rebel states" of Santa Cruz and the other medialunas as it is in the eastern pro-Morales states.

Here are some charts that the UN put together to present its findings yesterday. All I've done is translate the question over each one. All in all it looks like the average Bolivians are a lot smarter than the people that claim to be their leaders.

Do you agree with this phrase? It is important that Bolivians support the re-start of dialogue (between the gov't and the medialuna states)
Dark green = strongly agree, green = agree, orange = disagree, red = strongly disagree

Which of these two phrases is closer to your way of thinking?
Green = The country needs to change but without violence:
Red =Some violence is always needed when the country wants to change

Do you agree with the following phrase? However difficult or long it may be, we must continue negotiating until we reach an agreement
Dark green = strongly agree, green = agree, orange = disagree, red = strongly disagree


Do you agree or disagree with the people who say that sometimes violence is needed to support the process of change that the gov't proposes?
Dark green = strongly agree, green = agree, orange = disagree, red = strongly disagree

You're unlikely to hear about the F-16 fighters Holland is selling to LatAm....

......because Venezuela isn't buying them.

Chilean newspaper 'La Tercera' reports that Chile wants to add 16 F-16s for 2009 delivery to the 28 it already possesses. But don't worry, because these new fighters are just to replace the F-5 planes currently in its fleet. Y'know, just like all the recent arms puchases made by some dude named Chávez, but don't let that confuse you.

There will be no talk of arms races in the Miami Herald. There will be no analysis of the social programs that could have been funded with the money spent on the jets by the Cato Institute. Oh, the advantages in having a country not named "Venezuela" are manifold, are they not?

Good weekend reading from respected bruddasites*

Trend and Value makes a very good point about the optimism still baked into US stock prices, even after this 5,000 point drop in the DJIA. Forward price/earnings ratios are still pretty optimistic compared to the state of the real economy, it seems. Plenty of food for thought in this post.

Ecuador Mining News proposes that Correa's Ecuador is now shaping up as pro-mining, and examines the evidence carefully, too. A very nice editorial from Silvia Santacruz.

Jurgen Schuldt has written two excellent articles this week. This one gives an overview in Spanish about the structural weaknesses that caused the USA finance crisis. Then this post (complete with handy chart) shows the continued evolution of Peuvian inflation and how the vast majority of Peruvians are still suffering under a significantly higher inflation rate than the official numbers.

Borev takes a look at how media reaction to the US nationalizations has been....let's say different to the way it covered the Venezuela nationalizations. I wonder why...........

* and sistasites, Silvia. Paz y amor, hermana

10/17/08

Venezuela: Let the Austerity Begin

Today's lesson in political symbolism

Today PdVSA announced that the new refinery it planned to build in Nicaragua would go ahead, and would be refining 170,000bbl/d of crude by the year 2018.

What? Sorry? What was that? When the first stone was laid in a joint ceremony between Presidents Chavez and Childmolest last year, the thing was supposed to get going in 2011. Then a few months later Chávez mentioned the year 2013 as most likely. So now we have 2018 pencilled in, and that may as well be 2028 for the wants and needs of Nicaraguans.

Yep, the oil price drop has started to show itself in proposed budgets at PdVSA. Quite right, too, as they'd be damned to merry hell by all and sundry if they didn't cut back on some of the more lavish projects in the books.

Coincidentally (?), the $4Bn budget for the Nicaraguan refinery is precisely the same number as the line of credit that RBS cut to PdVSA today (according to CNBC anyway, but I haven't seen any official confirmation of that yet). However that cut line of credit is more of a "errr...yeah....I know we said we'd lend you the money if you wanted it, but now ....errr...we don't want to do that business any more". When bankers refuse finance business you know there's a totally different kettle of fish in play. PdVSA will get on just fine without a relatively piddly (for them at least) $4Bn credit line it hadn't even touched, and it shows the Northern bankers in a far more precarious situation than the the local oil producers.

Human Rights Watch proves my point

Equal opportunities pain-in-the-butt Vivanco demonstrates
his mastery of the dance "The Hokey Cokey"

Back on September 18th, Human Rights Watch (HRW) released a report saying bad things about the Venezuela of Hugo Chávez, things kinda like "well, they threaten the news media a bit" and "the courts of justice are biased" and accuing the Chávez gov't of "flounting human rights". It wasn't that big a deal, really, because you could say those kinds of things about virtually every LatAm state if you looked hard enough for evidence, but this report got airtime because y'know...it's was Venezuela. It would have been just another pop at Chávezlandia that would have died down had Hugo&Co not reacted by throwing HRW out of Venezuela in a fit of pique. But they did get chuck 'em out, and the international news media had its little field day about the dictator Chávez yada yada etc.

To Hugo's defence came the left wing, accusing HRW of total bias, making mountains out of molehills and minutely examining the past history of HRW's founder, José Miguel Vivanco to accuse him of being Pinochet's best friend or some such nonsense.

Not I. Your humble correspondent wrote these lines at the time:

In Venezuela, Hugo Chávez (you might have heard that name before) plays straight into the hands of his slavering opposition by throwing Human Rights Watch (HRW) out of Venezuela"descent into intolerance". There are plenty of valid arguments that you can throw at HRW for its report, from bias to the HRW funding background to political grandstanding to the two questions Justin Delacour correctly poses at LANR. All fine. However there are two other basic things to say:

a) HRW pisses everybody off, not just Chávez&Co. As just one example, last year at a private dinner in the US, Colombia's Alvaro Uribe ended up having a near apopletic fit while arguing with HRW chief Vivanco over the the things he'd written about him, his gov't and his country. HRW is an equal opportunities pain in the ass.

b) Chávez (well, officially minister Maduro, but you know what I mean) is a total dumbass for rising to this bait. All he had to do was to let HRW have its 15 minutes and this report would have been filed next to the rest of the guff written about Venezuela. But no, Chávez had to cause a drama and boot 'em out. Now we can "look forward to" endless months of righteous indignation from the rabid right. A really basic dumbass error, Hugo.


Today, HRW proves my point. Vivanco isn't after Chávez and he isn't on some political agenda; he really likes pissing everybody off. HRW today published a big report (142 pages, not quite as extensive as the 230 page ballbuster on Venezuela, but big enough) on the parapolitica situation in Colombia and accuses President Alvaro "Dubious Past" Uribe of obstructing the course of justice amongst other such niceties. Here's the link to get your copy of the 24 page overview or even the full report...all free, gratis and for nothing (personally I'm not going to read it, as there's enough to read about Colombia in Spanish that depresses me without reading it again in English via the filter of arch publicity seeker Vivanco).

So, message to my lefty friends: You're wrong about Vivanco. Just don't rise to his bait (as Chávez mistakenly did) and feed his ego any more. Hugo was a true dumbass in the way he reacted to Vivanco; now watch Uribe do a better job of making his protest and then letting it all die down.

Snippety stuff (beaten up LatAm juniors edition)

Blog sponsors Vena Resources (VEM.to) hit the airwaves with this press release update on its Pucara gold/copper project. The thing is long and deserves more than a couple of lines here, so go and read the whole thing. Suffice to say that work continues apace there and it looks like they're going to start getting some cashflow from the project soon.

Fresnillo's approach for MAG silver (MVG) (MAG.to) is now getting wider media attention. Here's Mineweb on the story, and note that they're wise enough to quote this humble corner of cyberspace as they explain to the wider world that MVG is now in play.

Farallon Resources (FAN.to) has released two significant pieces of news this week, Firstly this presser that announced it has started metals deliveries from its G-9 mine in Mexico. Secondly it reported today it has secured $7.75m in rollover and capex financing (and it's no mean feat to get such a capital injection with the wider market the way it is). The downside is yet more dilution to its share base, but at least FAN.to looks like it will be able to mine its ore competitively through this metals price slump. If this is as low as it goes, it's worth giving it some of your DD time, perhaps.........

Gold Hawk Resources (CGK.v) is still fighting the good fight and trying to get its Coricancha mine re-opened. It has paid a few shares and gotten itself an extension on its financing. Here's the press release. I shot a mail to the IR guy at CGK.v Jason Mercier and asked him whether the financing deal is dependent on collecting on its insurance policy (the insurers are dragging their heels a bit, but it looks like they'll pay soon enough). Here's the reply I got from Jason:

1. The extension of the loan repayment schedule is a show of support from our lenders and allows the Company to use its working capital to complete the permitting and approvals process and make plans for the restart instead of paying back the principal.

2. The cooperation of our lenders is a big show of support when you consider current financial markets and is another positive step towards restart.

3. The receipt of permit is absolutely key to returning to production, which is in part why we have not had much news since our submission in mid-August – saying that we are waiting on the Peruvian gov does not give much satisfaction. The expedited process has been speedy and we are being patient.

4. The insurance is a separate matter and there is not a connection to permits or loan extension.

So now you know a few more details about where CGK stands.

I think we saw the market bottom yesterday....

Can you sniff the bottom, too?

....but I'm not betting on it, not yet anyway. I'm still very much in cautious whuss mode and want some decent, solid evidence before jumping in in any great way, shape or form. No heroics, no "nailing the bottom", no diving in from your boring, boring Otto.

As a reminder, apart from the LT port (simply doesn't count) I've been in cash bar a few SLV for weeks. I've had a couple of splash'n'dashes along the way and even made a buck or two, but nothing serious and nothing held for more than a couple of days. So that cash is sitting there waiting for a home, and it'll get one if the dollar drops and the market either holds or rises at the same time. I'm not worried about mssing the first 10% of any move, as long as the move is backed up by some decent fundies....and I'm beginning to sniff a few.

UPDATE Friday morning: Here's another reason to sniff that bottom: headlines such as these these this morning...
...and the broad markets rally off early lows. That's a good sign. And I forgot one of the best signs of all; Jim Cramer called "panic sell" last week.

Fortuna Silver: If you needed proof that the market is crazy......


.....Fortuna Silver (FVI.v) is now fully priced only on its cash at bank.

With U$46.6m in cash at bank (yep...real cash. Folding bills. Don't confuse it with 'working capital' either, as that stands at U$55m) and shares out at 85m, this means each share has C$0.65 of cash to back it up. The share price is now C$0.55.

Let's put this as simply as possible: Buy FVI.v stock at C$0.55 and you get C$0.65 worth of cash. And that doesn't even include:
  • A working mine that made over $4m last quarter
  • $14m worth of plant and equipment
  • A hedge book that sells a large slug of its zinc and lead production at $1.10 to $1.20/lb
  • A very large and exciting silver mine project in Mexico that is already a long way down the development track
  • Wonderful new rich vein finds at the Caylloma mine that promise to extend mine life way way into the future
  • A damn good management team
  • etc
So if you like, buy the company out at 55c, sell the machinery, keep the cash, give the two properties away to charity or something and keep the twenty five million dollar profit that you make. It wouldn't be a bad day's work, would it? And I bet the charities would be happy, too.

The bottom line is less flippant. All the above is an example of market inefficiency, and this is what the investor should always be on the lookout for. It might be very tough on junior miners with no cash at bank at the moment, but if the market thinks their properties aren't going to get developed any time soon and they have no cash to support themselves, then at least the market has a reason for pricing them way way down (be that reason proved correct or false over time). But pricing a working mine with positive cash flow at the amount of cash it has in bank? Gimme a break!

I suggest you do some DD on Fortuna Silver, folks. I'm quite sure that once you do you'll come to the same "it's a buy" conclusion as I do. Here's the link to the company website.

10/16/08

Argentina: The Big Bicycle

In Argentina they have a slang verb; "bicicletear". It literally means "to bicycle" but on the it street means to put off paying someone for the longest amount of time possible, an art perfected by generations of Argentines that is now being put to good use by the Klishtina government. In fact, October 2008 could mark the start of the biggest bicycle in recorded history.

It's all about the defaulted debt, and even though I really don't like to say 'I told you so' on this one......well.....how can I put this? Hmmmmmm...yeah....


I TOLD YOU SO.

When the debt swap at a significant haircut was annoucned by Klishtina in New York (oh how convenient...all those tough questions that didn't need answering on her US jaunt) I was already pretty incredulous about it. Then suddenly on October 8th your vigilant Otto posted on a press conference in which the gov't said (via Interior Minister Randazzo):

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
"... the gov't was reconsidering the Paris Club payback, and the operation may be indefinitely delayed due to "unpredictable" nature of the financial crisis. In the words of Randazzo (translation Otto):

"At the moment it's something we are analyzing. We have made a commitment and commitment are to be fulfilled. In any case, we are negotiating with the Paris Club to determine exactly what is the debt and how it is to be paid."

If you're not aware, "negotiating" in LatAm politikspeak means "drag this sucker out as long as possible".
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

You thinkthe Paris  Club debt and the default swap are different stories? Think again. Cut to today, and the report in Critica headlined "The Opening of the Debt Swap Has No Date (Timing)".

At today's presser, Cabinet Chief Sergio Massa was the talking head. This is one of the classic delaying tactics already showing its head; keep changing the mouthpiece, then come time later they have the "I didn't say that! Who said that? That can't be true! Hmmm, I'll have to consult with my colleague on this, it seems..." stalling tactic to fall back on. But anyway, Massa today started by saying the same thing as Randazzo, namely that Argentina would meet with its obligations on all matters of debt (ah how nice). But then he said;
  • Argentina would "start the process working for when Argentina believes it to be convenient."
  • The operation would be complex because the debt "is being held by a lot more hands" than before (he said that twice, in fact).
  • But this one is my favourite; "We're not stupid. We'll look at the situation and we're going to choose the timing that most suits the country. We have to be alert, with sights set on production, employment and industrial activity."
This has all the makings of one very large bicycle, people. Massa said the payment process would start before Christmas. Otto says 'seeing is believing'. So for those holding the defaulted bonds and thinking they're in for a quick payout, here's my translation of all the things Massa said today in just four words: DON'T HOLD YOUR BREATH.

Brazil sees the funny side of the crisis

While one sector of Brazil goes all crazy hysterical, others in the land of carioca have thankfully kept their sense of humour. Thanks to a headsup from kind reader "PS", here come a selection of company logos specially adapted by the website "tosorto" (link to tosorto right here). Some are play on words that use the local company motto or advertising slogan, while others are fun in any language.

Click on any logo to enlarge.

Enjoy

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International Section





Banking Section


Telecoms Section





Some Local Knowledge Needed

Confirmed: 19% of Peruvians are officially and certifiably insane

Chile player Orellana, about 0.7 seconds after scoring Chile's winning goal against
Argentina last night....have a guess what word he's about to scream?

The following two survey results cannot possibly be a coincidence:

1) President Twobreakfasts García has a job approval rating of 19%

2) 19% of Peruvians think their national football team can make it to the World Cup finals in 2010.

Nineteen percent! In the world they call "bleedin' reality, mate", both of those percentages should be stuck at zero. This can only mean that if you ever walk round Lima the chances are that 19% of the people you meet will be saying "wibble wibble" a lot and having long conversations with dogs and their own shoelaces and things like that.

Be clear; Peru cannot and will not make it to the Finals and anyone who understands the offside law can see that one. Meanwhile, Otto proved again last night that he totally sucks at soccer betting, as none of his three selections came in and his bankroll is back to zip nada nothing. At least Otto isn't mad enough to actually bet real money on his own selections......

Bolivia does good business with foreign oil company: Shockingly the story is missed by English media

Evo shows his true colors

Yesterday, the gov't of Bolivia (via its state-owned oil company YPFB) and Spain's Repsol signed off on its deal and fomally created their joint venture company known as YPFB-Andina. The JV company is 51% Bolivia and 49% Repsol. The ceremony and related comments were missed almost entirely by the English speaking media.....after all, the last thing anyone needs to hear about Bolivia is their willingness to work with foreign investors and come to fair agreements that suit everybody.

Make no mistake; this deal is a big one for Bolivia because the JV controls 40% of all hydrocarbons production in the state. It is rightly being fanfared in Bolivia today as an important step forward for both future fiscal revenues and wider stability. However, don't expect Bolivia to come up on your mainstream news media until Evo says "Yankees go home" again.

Oh yeah, nearly forgot: I say "almost" missed the story, as AP manged to scrawl ten lines on the event. Here is their report in its entirety:

Bolivia takes control of Repsol local subsidiary

LA PAZ, Bolivia: Bolivia's state energy company has completed its takeover of the local operations of Spanish company Repsol.

Repsol YPF and the government signed an agreement Wednesday making Bolivia's YPFB the majority stakeholder in Repsol subsidiary Andina, ending months of negotiations. The company will be known as YPFB Andina SA.

President Evo Morales said at the signing ceremony that Bolivia needs "partners who will be respected by the state as long as they respect (the country's) sovereignty."

Repsol executive Nemesio Fernandez promised investment but did not give details.

Morales ordered Bolivia's hydrocarbons industry nationalized in 2006. The government is still negotiating with three other foreign companies over compensation.

As you might expect, even this single note on the agreement between Repsol and Bolivia is missing facts and slanted its own way...I mean, I just love the way the title implies Bolivia is stealing something from the poor, hard done by Spaniards who in turn are al vague and "we dunno what to do now" about the new JV. Just another piece of crap reporting on Bolivia to add to the pile, folks. So if you're versed in Spanish take a look at this note that gives plenty more, including comments from the Repsol side that "....the new agreement between the shareholders will achieve growth for the company and ....the Spanish/Argentine company respects the rules of every country (in which it operates)."

Respect Bolivia? Ahhhh!...NOW i understand why the English press didn't bother covering this story!

Venezuela and the oil price and supplies and stuff...and Bloomberg nails the story

Scuse me while I kiss the sky

As could only be expected, the shouts of "Venezuela is going bankrupt hooray hooray" are doing the rounds again, what with WTI at $75/bbl right now. As your diligent Otto pointed out in this post, Venezuela isn't going bankrupt any time soon. When WTI hits $60/bbl, give me a call and we can run the numbers again, but until it does the chatter is just so much hype from people who care more about their own politics than they do about society. By the way, note that serious voices agreed with my call a posteriori.

Meanwhile, credit where credit is due; I recently pulled Matthew Walter of Bloomberg Venezuela apart for writing crap (his editors let it pass, so they need the finger pointed at them, too). However Walter has just published this report that picked up on a Vz gov't communique from yesterday, crunched it nicely and (apart from the 2.36Mbpd figure used by Bloomie that they cream from the EIA and is a crock...but that's not Walter's charge) hits the nail on the head.

It's a very good piece of reporting by Walter because it lays out the growing relationship between Russia and Venezuela without lapsing into a shrill voice. It points to the growth in VZ oil exports to China. It also notes that, according to the H-man himself, Venezuela is currently subsidizing 300,000bbl/d of oil for its less developed neighbors (the Petrocaribe initiative, etc). The 300Kbbl/d number was a fair guesstimate that was doing the rounds but it just got a lot more weight thanks to the Chávez confirmation.

This is what we want from pro-journalists: Sharp, concise reports that lay out the facts and lay off the hype. Good job, Matthew Walter: Is it too much to ask that this standard is kept?

Before it was "Think Zinc", now it's "Sink Zinc"

Zinc has been my worst call this year. Period. I called it higher and it went lower. Got it wrong, wrong and three times wrong. Fact is that (and this may rub against the image that others may wish to create for themselves) we all get 'em wrong occasionally and the trick is always to limit the damage of one's own stupidity. In this case I managed to do that by noticing what reality was telling me and acting on it before I definitively changed my mind on the deeper fundamentals and saw where I'd gone wrong. Here's a chart:

So now that nobody is making money from the metal, what can we expect? Well the first thing to note is just how far Zn has fallen in the last few days; the suggests that the metal metal lead the stocks out, and it's going to have to lead by a long way. The metal will have to rebound nearly 40% before that $0.75/lb break even line is found.

The supply side is getting a lot tighter, and quickly too. Here's the link to a Reuters article yesterday that listed all the recent mine closures. The list is 13 names long, and started on July 14th. So at some point demand will beat out supply, especially (as I very much suspect) reports of China's sudden death have been greatly exaggerated.

The bottom line here is that there's still money to be made on a rebound, but that money should first be aimed at the metal and later the stocks.

10/15/08

Susana Villarán on Peru's New PM, Yehude Simon

Susana Villarán and Yehude Simon

Susana Villarán is an IKN blogfriend (check out the interview we did here) and an all round good egg. So it's good to see her interviewed tonight by El Comercio, Peru's newspaper of record, on the appointment of Yehude Simon as Cabinet Chief and new Prime Minister.

The interview is linked here for you Spanish speakers, and below is the full text in OttoTranslation. Well worth reading to see how things might change in the Peruvian scene (though I have to say I'm more pessimistic than Villarán after watching 10 of the "resigned" ministers get their jobs back yesterday, even though Simon today said that two or three of them won't make it to Christmas).

Here's the translation of the Villarán interview. Enjoy.

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Simon Is One of the New Leaders of the Democratic and Modern Left

The ex-Minister of Women and Social Development, Susana Villarán, today said that the new Head of Ministers, Yehude Simon, will ad more weight to the fight against poverty, and was confident that this politician has become one of the new leaders of the new, modern left-wing of Peru.

"We greet Simon as new Prime Minister. He is a decentralizer and we believe that with him (in charge) this issue will be important in the government agenda. Simon will also add great weight in the issue of the fight against poverty and exclusion", Villarán told elcomercio.com.pe.

She laso said that other issues that must be tackled by debates in this government are the eradication of extreme poverty, the absence of political manipulation in social programs as well as the unrestricted respect for human rights.

She emphasized that before the resignation of ex-premier Jorge Del Castillo, the government had not looked for multi-sector agreement to fight poverty, but had rather looked to politicize social programs. "This is very dangerous", she commented.

Villarán said that inside the new democratic left Simon had taken a role of leader, alongside other figures such as Vladimiro Huaroc (president of the Junín region) or Jesús Coronel (president of the Cajamarca region). "It's good that the democratic left is not lacking leadership", she said.

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Related Post
An interview with Susana Villarán

Other Sites
Link to Susana Villarán's blog