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4/4/09

Where can you buy Inca Kola?

Today's the day I clear this one up once and for all.

Inca Kola, for those that don't know, is the Peruvian soda that outsells Coca-Cola in its home country (factoid; Inca Kola in Peru and Thums Up in India are the only soft drinks in the world that outsell Coca-Cola in their home market, or so I'm told). It's bright yellow in colour and the flavour is often described as bubblegum (though I detect notes of banana in there). It's best drunk ice cold so that you don't realize just how much sugar is hitting your bloodstream. My personal fave funfact about IncaKola is that the cheap copies of the stuff made in Peru by other soda companies are usually known as "yellow flavour", which is the most adorable name possible.

I've been asked on several occasions how to buy Inca Kola in North America and another mail arrived last night. The answer is on this link. For U$7.95, some company called MexGrocer will send you a 6pack of the stuff. And no, I'm not on commission for this one. Just a public service announcement to further the cause of diabetes in our modern world. Have a nice Saturday.

Wrapping up the World Cup qualifiers


I didn't want to overdose the blog with soccer posts during the working week, so this is the belated post to wrap up what happened with the South American World Cup qualifiers on Tuesday and Wednesday.

Firstly the bets. True to form (and proving that Saturday's 2 from 2 really was the fluke I said it was) we flunked on both wagers. Chile held Uruguay to a 0-0 draw (I bet Chile) and Venezuela whupped Colombia 2-0 (I bet the draw) so the IKN virtual cash hoard is now down to $141 for the next round. And again, a reminder that thse bets are only theoretical and you'd be stone mad to follow me with real money on these (proved in style on Wednesday).

The real shocker was Argentina being hammered 6-1 by Bolivia (see all the goals here). Paraguay's point away from home at Ecuador puts them all but guaranteed for the finals. Brazil surprised nobody by beating Peru 3-0. Peru has managed to lose seven of its 12 matches now. Truly abysmal.

So the next two rounds are due June 6th to June 10th. Hasta la vista, baby.

US unemployment chart

The data is from this interesting post by Mish.


1. Downward revision on the way

2. You honestly think that last week saw the end of the recession? Wanna buy a bridge?

4/3/09

Trading Post (nosebleed edition)


Cosan (CZZ) up 22% at $3.45. Whoosh! From being very (and I mean very) close to being stopped out earlier in the week, I've just sold all my CZZ at a $1/share profit. Gotta love this Hope™ thing, yeah? It's strange how much dumb luck works in this game as if I'd set the stop loss just a couple of cents higher I'd have missed all the fun. Still, this trade has made my week. My month, in fact.

UPDATE on Cosan: Gotta laugh. I've just found out what was behind the move in CZZ. Yet again it just goes to show that you can identify all the value you like, but things only happen when the sheep catch up. Or in other words, Citigroup called CZZ a buy today. Here's the moneyline:

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The market "has yet to realize" the positive impact that higher sugar prices and a weaker local currency will have on the sugar producer's cash generation, said Citigroup analyst Tereza Mello in a note to clients Friday.
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Minera Andes (MAI.to) UNCH at $0.65. I opened a space for this yesterday at 63c and might buy some more now there's a decent cash position in the trading port. Short-term trade envisaged here. DYODD.

Exeter Resources (XRA) (XRC.v) down 8% at U$2.78. Oh dear. How sad.

Fronteer (FRG) (FRG.to) down 3.4% at U$2.29. Another offering tremendous value. You have to think that the stock is sleeping on the news today, as this Sandman JV project with NEM is now clearly a possible mine in the making.

UPDATE: The nice people over at the stock exchange offered me U$2.25 on FRG. So I took it. DYODD.

Applause for a Bush in Texas


No, not that Bush family.

Stuart Bush is an analyst for RBC and based in Texas. He gets serious applause from IKN for having the cojones to call "sell" on a stock and being correct and staying correct over an extended period, all this in the face of plain vanilla bullying from the company.

Both this humble correspondent and the higher powers know what independent analysts go through when they have the temerity to say "that company sucks" in print. Even this corner of cyberspace has had to suffer foul-mouthed hatemail and wild, unsubstantiated accusations from company management (up to and including CEOs) and their blind sycophants (from retail shareholders to famous pundits and newsletter writers) who delude themselves about certain companies that have been mentioned here (regular readers can guess the rest). It must be even worse for an analyst such as Stuart Bush with a company salary and buyside clients who want to hear good things about potential investments, not bad things.

So hats off to Stuart. Here's the first part of report in the Globe&Mail today and the link to keep reading. And thank you TM for passing the link on.

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From Friday's Globe and Mail

Stock analysts are often accused of being too cozy with the companies they cover. Then there's the case of Stuart Bush, an analyst at Royal Bank of Canada's investment arm in Texas, and Zsolt Rumy, chief executive officer of Zoltek Cos. Inc., a St. Louis-based maker of carbon fibre used in wind turbines.

The two have been battling each other for months. Mr. Rumy says Mr. Bush "has an axe to grind" and that one of his reports about Zoltek last summer was so negative that Mr. Rumy received death threats from shareholders. He has stopped talking to Mr. Bush and banned the analyst from company conference calls.

Mr. Bush, who has a "sell" recommendation on Zoltek, stands by his analysis and says Mr. Zoltek is just angry that the analyst's industry sources are so good.

Relations between the two sank to a new low yesterday when Mr. Rumy issued a press release attacking Mr. Bush's latest report, dated March 27 and titled "Pricing and Order Pipeline Deteriorates Further: Reiterate Sell."

In it, Mr. Bush lowered his estimate for Zoltek's profit, revenue and share price and questioned Mr. Rumy's "overenthusiastic outlook."

He also said the company's head of sales had resigned over a disagreement with Mr. Rumy and he said several customers might cut purchases.

The Friday Freebie: Free synopsis of "The Wisdom of Crowds" by James Surowiecki



Here's another free condensed book reviews from the nice people at getAbstract. This time the abstract on offer is 'The Wisdom of Crowds', the recent bestseller by James Surowiecki. Find out more below and request your free copy of this synopsis by linking through right here.

PS: check out the full range of titles on offer from getAbstract on this link. With 12 titles to choose from there's something for all tastes. Enjoy

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Know in 10 minutes what it takes others hours, and keep up with the latest trends in your industry.

In this summary you will learn:
  • Why large groups of people seem to be better than experts when it comes to forecasts, valuation and other tasks
  • How scientists prove that crowds are wise
  • Why it matters
Why you should read The Wisdom of Crowds
This well-written bestseller explores the apparent anomaly that crowds of nonexperts seem to be collectively smarter than individual experts or even small groups of experts. This basic insight is at the heart of contemporary financial investment theory, with its emphasis on the difficulty of outguessing the market. Beginning with British scientist Francis Galton’s remarkable discovery in 1906 that a crowd of nonexperts proved surprisingly competent at guessing the weight of an ox, financial columnist and author James Surowiecki skillfully recounts experiments, discoveries and anecdotes that demonstrate productive group thinking. The concept does not come as news to anyone reasonably well read in modern financial literature, but getAbstract recommends this comprehensive, fresh presentation.

About the Author
James Surowiecki is a staff writer at The New Yorker, which publishes his popular business column, "The Financial Page".


Publisher: getAbstract

Positive PR Headsup: Fronteer (FRG)

The press release published this morning by Fronteer (FRG) (FRG.to) is very impressive stuff. Here's the link, go read.

FRG currently trading at U$2.27.

UPDATE: The Canadian traded stock (FRG.to) got a very nice rebound on the news. From sinking to C$2.77 on the general gold market malaise this morning it has popped back to C$2.86.

disclosure: I don't own.

More on the DEA


After this morning's post that shows how Bolivia has been fighting the narcos far more effectively since it chucked out the US DEA, a reader in Venezuela sent me the link to this story published yesterday in Venezuela. The similarities are very clear: 1) a national government fed up with the USA's attitude to Latin America 2) the fairly recent expulsion of the DEA from its territory and 3) how its combat against the drugs scourge has reportedly changed since the DEA left town.

Proven stories of corrupt DEA agents have been around for some time, of course. But what's being called into question here are not a few rogue elements but the whole philosophy behind the DEA. Here's the translation of the whole article.

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The Government Detects that Drug Cartels Operate Inside the DEA

April 2, 2009

The Vice-President of Venezuela, Ramón Carrizáles, states that facts demonstrate that the efficiency of the DEA is a lie.

The Vice-President of Venezuela, Ramón Carrizáles Rengifo, stated this Thursday that drug cartels have been detected operating inside the DEA.

While talking about the delivery of 120 transport units destined for the fight against drug trafficking and illegal use of narcotics, Carrizález stated that during the period of cooperation between Venezuela and the DEA, 2001 to 2004, 153 tonnes of drugs were confiscated, but in the period 2005 to 2008 after the cooperation was terminated, 250 tonnes were confiscated.

"We have nearly doubled the quantity of drugs that were captured when we co-operated with the DEA", he said. "This is proof that the efficiency of the DEA is a lie. Countries show better results when their own security forces fight against drugs." He added, "When the DEA was in Venezuela it didn't do anything except favour drug trafficking".

He reiterated that the Government of Venezuela always says that it is impossible to control and succeed against narcotraffickers if consumption is not controlled and if the biggest consumers of drugs do not accept that the problem is inside their own borders.

"With this act of delivery of (the 120) vehicles to prevent the social integration of drugs, Venezuela is taking an important step in the fight against the production, trafficking and consumption of drugs, the Vice President said.

He detailed that so far this year, Venezuelan forces have confiscated 8,936kg of drugs, including cocaine, marijuana, crack, basuko and heroin "because our fight against drug trafficking is a frontal assault".

Oh Noes! Canada isn't the centre of the world!


  • Maybe it's because people don't like the loonie
  • Maybe it's because people are fed up to the back teeth with Da Boyz
  • Maybe it's because people are sick to death of wanting in to a small miner and are offered 24 on the bid and 29 on the ask by corrupt pigs in suits and ties.
  • Maybe it's because of the regulatory body, the OSC, that has managed to bring just two people to rights this decade (not joking, that's the number of convictions since 2000) and obviously doesn't give a damn about the impunity under their very noses.

But whatever it is, people are voting with their feet. The junior mining companies wise enough to spread their traded stock around other markets are now feeling the benefit of this move. Case in point is one of IKN's favoured microdots, Vena Resources (VEM.to), that traded just 1,000 shares in Toronto yesterday, but 63,000 in Frankfurt this morning and over 126,000 shares on the Lima, Peru BVL exchange yesterday (with closing bell bid at 21 and the ask at 22...that's how you run an investor-friendly exchange). Another one is Candente Resources (DNT.to), doing nearly half a million shares in volume in Lima yesterday. Plenty more examples to choose from, too.

Wouldn't it be funny if one day they rang the bell on the TSE and nobody came to play?

Evo's Bolivia is Combatting Narcos better than the DEA ever did

So much for the DEA. Here are the solid statistics that show how Bolivia has increased drugs interception and confiscation since the DEA were thrown out of the country.

Yes, that says 'increased', gringos. Read on.

Click to enlarge

This top chart shows the amount of cocaine confiscated in Bolivia every year since 2000. The 7.19 metric tonnes so far this year is right on schedule to match the 2008 totals. Remember that the DEA were thrown out in 2008. Since that time drugs interceptions have clearly rocketed.

On to the perhaps even-more impressive bottom chart. Although cocaine is the headline drug of Bolivia, the country is also a big marijuana-growing area especially in the eastern provinces of Santa Cruz and Beni. This second chart shows the really impressive job the Bolivia FELCN anti-narco police force has been doing against the marijuana traffickers since the US DEA left town. In the first three months of 2009 Bolivia has already confiscated more marijuana than in the whole of 2008, in itself the all-time record year. Again, it surely makes you wonder what the DEA was doing all this time, doesn't it?

Oh, and by the way, since January 2008 the FELCN has grounded nine light aircraft used by the drug scum out of commission and locked away 4,363 people, too. All details from the relevant website right here.

It's strange that left to its own devices, Bolivia (as it said it would) has become far more effective in the fight against drug trafficking. Remember that the USA took away the ATPDEA preferential trade deals in late 2008 because it said it wasn't doing enough in the so-called "war against drugs", but even without trade deals and DEA leadership, Bolivia is doing a far better job than at any point under the US anti-narco lead. As the Vice Minister in charge of operations, Felipe Cáceres, said yesterday:

"Despite the fact that the opposition and media want to discredit the work of the FELCN, the national government is hitting this illicit activity hard. "The neoliberal governments that protect nacrotraffickers and repress coca producers ran between 3,000 and 4,000 operations every year, something that doesn't happen with this government that, under its policy of zero cocaine and zero illegal drugs, is leading a massive struggle against the people and family clans involved in narcotrafficking, and with positive results."

Seriously, it's about time people started asking the DEA exactly what it was doing all this time in Bolivia and whether, as both long-standing rumours and the recent statistics indicate, the DEA really was part of the trafficking problem and not its solution.

And what are they doing in Colombia?

Chart of the day is....

...Argentina retail sales for March 2009 by item.


Recession anyone?

4/2/09

Exclusive: Zo-Lik the Financial Robot to Save World


At the G-20 conference today, Lula won the hearts'n'minds of the blue-eyed whiteys by unveiling his grand plan: Instead of putting the FateOfTheWorld™ in the hands of the very same robberbaron bankers that got us into this clusterf, top Brazilian scientists have designed and built the first ever fully automated financial robot to instil Hope™ throughout the world. Named Zo-Lik by Lula, one will be sent to the Central Banks of each G-20 member in the next 20 days.

  • "The robot will perfectly implement all financial mandates and is 100% corruption and bonus-free" remarked President Lula. "As for the design, we decided to go for a mix of Kraftwerk's "I am the operator of my pocket calculator" and Arnie's Terminator, as the Semtex installed in each Zo-Lik will be triggered by the proximity to embezzled accounting files."

If all goes to plan, major banks will be equipped with one per boardroom by the end of 2009.

Trading Post (punk rock classic edition)

s

London calling, yeah, I was there, too
An you know what they said? well, some of it was true!
London calling at the top of the dial
After all this, wont you give me a smile?
The Clash, London Calling, 1979

Highly recommended is this article on Gold from Jon Nadler yesterday. Apart from the slightly jokey Aprilfool type title, the contents are spot on about gold, inflation and all those big things that you guys up there love to worry about.

Southern Copper (PCU) up 7.5% at U$19.38 and was up higher earlier. I never touch my longterm portfolio holdings, it's a matter of previously stated conviction. However I was sorely sorely tempted to sell a few PCU this morning (it's my largest equity position in the LT port) on the back of the HopeFest and the news that Grupo Mexico has upped their stake in PCU to 80% (here's Reuters). However, I resisted the temptation.

Cosan (CZZ) up 10% at $2.64. I'm still holding and now in the profitzone. Always said it'd be a wild ride. I was right.

Exeter Resources (XRC.v) (XRA) down 7% at C$3.73. By Casey's will it shalt be done.

Minera Andes (MAI.to) down 3% at $0.63 and got whacked yesterday after the YE results were posted. Silly sales really, but the reaction wasn't unexpected. I mean, whoever bothers to look further than the headline numbers these days? Fundamentals? Nah, complete waste of time...

Well hear this, people; MAI.to is now a raging short term buy. Pick some up today at 63 and 64c, and sell 'em next week to the New Yorkers who are gathering at the Yale Yacht Club to hear Rob McEwen speak at their luncheon next week. The target is an easily gettable C$0.74, offering us a 17% potential gain. For the record, I just bot a few at 63c.....Ohhhhh Winthorp!

DYODD

The G-20 final communique


You can read it yourself by clicking right here, "it" being the official PDF from the G20 London summit. But in a nutshell the idea seems to be to empower the world bankers via the IMF, the body of suits that screwed Latin America into the ground in the 1980's and 1990's, to get us out of the mess caused by the world's bankers.

I mean, what could possibly go wrong?

Solidarity


Clarin now estimates that 70,000 people have filed past and paid respects to Raúl Alfonsín as he lays in state. The line was non-stop all through the night and also this morning under heavy rain. His cask is about to be taken from Congress to his final resting place, and so this will be IKN's final post on South America's biggest story of the week, nay year.

Meanwhile, the following countries have marked the death of Alfonsín by declaring days of official nation mourning; Colombia, Brazil, Paraguay, Uruguay, Chile, Peru. Notably, the countries that suffered the most under far-right military dictatorships are those to step up and officially doff their caps to Alfonsín. It's times like these that you realize how much South Americans understand and appreciate their own history. Be clear that all the above listed countries will be remembered by Argentinians for their gestures of goodwill.

Equally, it's times like these that you realize just how little people outside the region know or care about South America, as the passing of a great democrat has caused hardly a ripple in the psyche of the wider world. So be it. That will surely be remembered, too.

Peru: Downward GDP revisions coming thick and fast

Don't say you haven't been warned.


Now be honest with me, have a good close look at that chart above and ask yourself whether you can see a pattern beginning to appear :-). Follow the bouncing ball, people;
  • November 2008: President Twobreakfasts tell the annual Peru bizpeople's conference that 2009 growth will be 6.5% and that the country's growth is "armour-plated" against the world financial crisis.
  • January 2009: The Peruvian Central Bank revises their growth forecast downwards to 6%.
  • Later in January 2009: Yehude Simon the first official voice to say that GDP growth will be 5% in 2009. The rest soon follow.

Remember Otto's prediction is 2.25% for 2009 and that smarter people than I are calling for 0% growth. Nuff said. DYODD and don't believe the BS they feed you.

Related Posts
Peru: The first of many downward revisions (Jan 10th 2009)
Chart of the day (January 15th, 2009)

Morning Mailbag: Apoquindo, Chariot and Doug Casey

"Well, call me crazy, but it is my philosophy that in
order to be successful one must project
an image of success at all times."
Buddy King, American Beauty (1999)

I haven't done one of these posts in a while, so as three worthy candidates have come my way in the last few hours here we go.

Apoquindo (AQM.v): After this post on Tuesday IKN received the following comment from the management at AQM.v yesterday via the comments section, so by way of 'right to reply' here it is in an open post so that more people see it. For the record I agree totally about Villarzú's integrity and his good standing in the copper industry. All I'm saying is that his price predictions on spot copper suck, the puff-piece interview with that copper-ignorant and backpocket-biased Andrew Mickey dude is way too suspect to be taken seriously and the IR company in the middle of the whole thing needs to take a long, hard look at how it's doing its job if it wants to build a worthy following instead of just court the fickle, popular vote. I mean, check the share price action:
So here's the reply from AQM.v. Fair dos to Ms. Ashton, she defends the company corner well.

I want to defend Juan Villarzu as a person with great integrity. You may disagree with his views, but they are genuinely held. I am a director of Apoquindo Minerals, Stephanie Ashton, and the title King of Copper was not made by Mr. Villarzu, he would not call himself that. Basically, to further explain his view, Mr. Villarzu believes that the current crisis is fundamentally a crisis in confidence, and that regaining confidence could change the economic situation very rapidly. He also says that the current crisis differs from other crisis in history, since never before has there been such a massive, concerted and rapid response by governments and central banks worldwide, and this will cause the recovery to be quicker. He believes in copper growth in China, and that alone will mean enough demand for copper, along with production cutbacks, that will result in a higher copper price. Yes Kin Communications is the IR company for Apoquindo, and I do not see what is the problem with the IR company doing its job. Most people disagree with Juan Villarzu´s opinion, as evidenced by the Cru conference presentations currently occurring in Santiago, but he is not alone in view, and it is genuinely held. He is a believer in the metal, as we all are here at Apoquindo.

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Chariot Resources (CHD.to): CHD.to has been a pain in the side of Tom Meyer, analyst at Raymond James, as he rode his pick down through 2008. However Meyer deserves credit for sticking to his guns (though lowering his prices target by an order of magnitude) because 1) Meyer is very good at working the numbers and seeing underlying value and 2) copper has been coming back some and there is light at the end of this tunnel. So with that context, here's Meyer's latest update on the company, out this morning.


Chariot Resources Ltd. CHD-TSX
8th Delay in the Feasibility Study - The End Must Be Near
Tom Meyer, CFA, P.Eng

RATING STRONG BUY 1
Target Price (6-12 mths) (C$) 0.50
Closing Price (C$) 0.24
Total Return to Target 108%

Event
Chariot announced, before market open on Mar-31-09, yet another delay in the release of the feasibility study on its 70%-owned Mina Justa Cu project in Peru. The study is now planned to be released on or before Apr-23-09 (prev. 1Q09).

Action
We reiterate our STRONG BUY rating and are increasing our target to C$0.50 (prev. C$0.40). In anticipation of the "almost done" feasibility study and our view of possible M&A activity as the miner's balance sheets improve with the rebound in commodity prices, we have increased our target P/NAV multiple to 0.30x (prev. 0.20x). This increase more than offsets our model adjustments to account for the added delay and capex and opex uncertainty (we biased our numbers slightly higher). All told, we have reduced our NAV estimate to C$1.65 (prev. C$1.81).

Analysis
- Capex/Opex uncertainty. Similar to the explanation given for the previous delay, management indicated that it is currently in the process of estimating the most up-to-date capital and operating costs. We estimate an initial capital cost of US$490 mln and a life of mine average operating cost of US$0.77/lb [opex includes sulphide flotation mill (additional capex of US$135 mln) starting in year 3 of project life].

- Mine planning parameters. According to management, the feasibility study envisions processing 12 million tonnes per year with an average grade of 0.58% Cu through the vat leach plant to produce up to ~60,000 tonnes per year of cathode and processing 5 million tonnes per year with an average grade of 1.25% Cu through a concentrator to produce up to 56,000 tonnes per year of copper in concentrate. We estimate first production in 2H12.

- Liquidity. According to the press release, Chariot has ~C$19 million in cash and is responsible for funding 70% of the project's US$8 million budget in 2009.

Valuation
CHD shares trade at a P/NAV of 0.15x versus its peer group weighted average at 0.62x. Our target price is based on a 0.30x P/NAV multiple and is in-line with risk and liquidity-adjusted historic multiples for advanced projects

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Doug Casey: Following yesterday's TradingPost, here's a mail from a regular reader, initial "R". Good to see that the smarter among you consider him, at best, a stage along the way.

I've developed a real dislike for that guy (Casey). I hate to admit I was a subscriber for a while. His entire operation is one big marketing drive. You sign up for one service, they tout another. And another. And another. Too many layers, and way too much appeal to elitism. Way too little in the way of performance too. He buries you in more picks than you could ever afford, then selectively touts the winners while tap dancing the burning match routine when his losers blow up.

And what's with the Salta crap? Like I'm gonna sip wine and play polo all day with Mr. Risty while the rest of the world burns? **** that. I hope he gets overrun by Marxist guerillas.

The final straw was when he hired some so-called ex-CIA spooks to snoop for poop. As if. Show us your badges hosers. Don't got any? Thought so. Oh, and the hijacking of ERIS, as if he had clue one what Anton Wilson was about. That really irritates me. He and Tony Robbins should get together.


Chart of the day is....

....the amount of money the gov't of Peru just handed over to Doe Run Peru (DRP) to avoid closing the plant compared to the amount of money DRP still needs to spend on its much delayed environmental cleanup program that has October 31st, 2009 as its completion deadline.


There has been much talk in Peru about whether or not DRP should be given a bailout by its host government, however yesterday's decision was predicted as inevitable nearly two weeks ago by IKN. DRP's owner, Ira Rennert, knew from the start that the continuance of DRP is more important to Peru than to him. He's made his money, screwed the environment and vacuumed his company clean; why on earth should he actually be responsible and leave working capital inside the company for some idiocy such as "helping people" or "being responsible"? That's just silly Socialist talk!

It is frankly incredible that DRP as an asset isn't expropriated from this uncaring and unfeeling crook. Knowing the totally corrupt core of the García government, you have to wonder just how muh money has changed hands in unmarked envelopes over DRP.

An excellent and roundup of the DRP story in the last few days can be found right here at the evergood Huanca York Times.

What democracy means in Latin America

This is what it means.

Click to enlarge

It's getting difficult to estimate just how many people have lined up to pay their respects to Raúl Alfonsín today. I've seen 30,000 people mentioned, and heard 50,000 quoted on Radio Continental this evening. By midday tomorrow when his mortal remains are taken from Congress to their final resting place in the famous Recoleta cemetery, both those numbers will certainly be underestimates by some distance. Clarin reports:

"From midday, the queue strung out like a ribbon along the whole width of Callao Avenue. Every ten minutes, the rounds of applause and shouts "viva!" made the intervening silence be felt with greater intensity, in notable contrast to the habitual routine of hurried pedestrians and congested traffic."

The obituaries for Raúl Alfonsín from the more lucid Argentine journalists and commentators have not ducked the imperfections of Alfonsín's presidency. The writers gain credit for this, they do not lose it. However nobody in Argentina today doubts the enormous and positive legacy that Alfonsín gave his country and his continent. From Jorge Lanata in Critica:

"I heard yesterday, many times, that we owe our democracy to him. Alfonsín must be there in heaven smiling (and saying) "At last they've realized."

The above photo is packed full of ordinary folk just like you and me. The humanity, mutual respect and plain goodness depicted is heartwarming. This is far more important than petty political bickerings, far more fundamental than the development and outcome of a financial recession, far more telling than anything that might happen at a conference in London tomorrow.

Alfonsín taught his lesson well and it has been remembered. Now the people of Argentina are passing his lesson on. Thank you, Raúl.

4/1/09

Bolivia 6, Argentina 1: Here are all the goals

This is not an April Fool's joke.



Bolivia has just beaten Argentina 6-1 in La Paz and here's a 2 1/2 minute youtube with all the goals. To put it into context, this is the equal worst result ever for the Argentina national team. They lost 6-1 to Czechoslovakia back in 1958 at the Sweden World Cup finals. There was also the famous 5-0 defeat at home to Colombia in 1993. In other words, today is one to remember for soccer afficionados. Welcome to international level football management, Diego.

As for Evo Morales, he got on a plane from Qatar early and made a 15 hour flight back to Bolivia specifically so that he could get to the game on time. His reaction, according to this report, can't really be translated but it's still great. "¡Que goleada, papá!"

Peru macro update

First the good news; Peru managed to run a small trade surplus in February. This will take some pressure off the currency (as usual, click on any chart to enlarge);


Now the bad news. Exports might have been up slightly on January numbers, but February is like that. But exports also showed their second worst month since January 2007. Imports didn't fare much better, registering their lowest month since June 2007.


But the really bad news is when you add up total import/export activity. Total trade movement is down 26% in the first two months of 2009 compared to the same period of 2008.


Why is this important? Because total impex movements comprise around 50% (yeah, fifty percent) of Peruvian GDP. So much for Twobreakfasts and his shock-proof economy, as Matuk so rightly points out today.

Trading Post (bleat to the beat edition)


MAG Silver (MAG.to) up 5% at C$5.91. The reason for the sudden jump at 12 midday? Casey just told his sheep to buy.

Exeter Resources (XRC.v) down 2.9% at C$3.98. The reason for the sudden drop at 12 midday? Casey just told his sheep to take profits.

I'm not making either of those up, BTW. Just goes to show that Casey has a following, but whether that's good or bad is another story. Thanks to reader R for the headsup.

Fortuna Silver (FVI.v) up 5% at $1.06. FVI.v just unleashed its Year End report on the world, and you can get your copy on this link right here. At first skim the numbers look spot on to me and that may be why the stock is moving up now. However I need to read it more carefully before shouting anything too loudly.

Freeport (FCX) up 3.3% at $39.31. Aw gawd, I really ballsed this one up. It suddenly dropped towrds the bell yesterday afternoon and I sold my very-short-term-trading play out at a pre-commish profit but post commish loss. Today it bounces way past my $39 target. Oh well, no nice Argentine vino for me this weekend. I truly suck at daytrading.

Gold Hawk Resources (CGK.v) up 33% at $0.04 and volumes are good (though due to the share price, absolute volumes of cash being moved are low, of course). IMHO there's room to see 5c on this move. DYODD though.

MAG Silver (MVG) (MAG.to): Get Real

If you've been following the wheels and deals at MAG Silver (MVG) (MAG.to), you'll know that despite the recent surge in Hope™ for the metals and mining sector the company's stock price has dropped back from the recent U$6+ prices to sit back at the price offered by Fresnillo in December. Here's a chart that wraps up the whole timeline.

click to enlarge

Now let's play Reality Versus Fantasy

Fantasy: Fresnillo is desperate to get its hands on MAG Silver's assets
Reality: It's a bear market. That means it's a buyer's market.

Fantasy: Fresnillo is about to sweeten the bid
Reality: Check the chart.

Fantasy: A rival bid is on the way.
Reality: No company with a sane CEO would make a hostile/white knight counterbid for an asset that it would have to share with Fresnillo afterwards.

Fantasy: January and February share price at MAG Silver
Reality: March and April share price at MAG Silver.

And if you still need a dose of reality after all this, check the comparative chart of MVG versus (my own fave silver play) Fortuna Silver (FVI.v) and the silver ETF (SLV) as a proxy to the metal. Any further questions?


Moral: Don't start fights that you cannot win. The end.

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Self-defence classes


At 9am Lima time, the last chapter in the loooong courtroom trial of Alberto Fujimori begins to be written. After something like 16 months of comings and goings, Fujimori himself takes the stand to mount his so-called 'self-defence' which is supposed to last two or three days (but it might turn out to be weeks, the way this trial has gone).

This is the moment that media-types have waited for, so expect a sudden avalanche of coverage between now and the verdict (which is expected just a few days after Fujimori stops talking). For your information, Fujimori will be trying to explain why he's not guilty of kidnapping and murder.

This humble corner of cyberspace hasn't covered the trial very much so far and quite frankly that's not likely to change in the next couple of weeks. However Lillie over at Memory in Latin America has been doing sterling work on the whole issue in the English language all through the stages of the trial, so why not find out all you need/want to know from her?

Gold Hawk (CGK.v) releases good news

Check out the latest press release at this link from Gold Hawk Resources (CGK.v). The company is definitely on the way back here and for the first time in months I'm happy to say that it's clearly worth more than its present share price of 3c...imho at least.

Of course it's still high risk (it's a three cents stock, let's not be silly) but there's now light at the end of the tunnel and, most importantly, movement towards the light. The new resource calculation is good because with the numbers involved (e.g. rock worth $200 on a $80 ceiling cash cost) the comapny will be able to sit down with people and say "lend us the money we need to get going and we all make a profit".

Best of luck to all at CGK.v; great to see some good guys catching a break and winning through for a change.

Buenos Aires, the corner of Santa Fe and Rodriguez Peña streets last night

Of all the tributes last night from all the talkinghead people, one (and I can't remember who it was or where I read it) stood head and shoulders above the others.


It said that the ultimate ambition for any Argentine President is to be able to walk down the street safely once their term is over. Alfonsín was the only one who could do that.


UPDATE: Thanks to this well written (as usual) obit at MexFiles that picked up on the same quote, my memory is jogged. It was Zaffaroni who said it last year.

UPDATE 2: This photo shows the number of people lining up outside Congress (where Alfonsín's mortal remains are laying in state) to file past and pay their respects. With the emphasis on 'respect'.


Chart of the day is.........

.....the Gold / Silver ratio.

I think this chart really does speak for itself. Click to enlarge this important alert.

UPDATE: As in anything to do with money, it pays to read the small print:

3/31/09

Alfonsín

R.I.P.

Ay que pena me da esa noticia. Se fue un grande. Que en paz descanse, Raúl Alfonsín.

Argentina has called three days of official national mourning.

This blogger is in mourning.

King of Copper? The flip side of Juan Villarzú's recent interview


Gloucester: The trick of that voice I do well remember; Is't not the King?
Lear: Ay, every inch a king!

Shakespeare, King Lear, Act 4, scene 6



Today, when the third different reader mailed me with the link to an interview with "The King of Copper" featuring ex-Codelco headman Juan Villarzú pumping the metal to $2.00 or $2.50 or $3.00 per pound (I'm still not sure which one really is his target), the slightly annoying BS being served up for the masses just got under my skin once too often. Here we go with the antidote:
  • The interview in question was conducted by a certain Andrew Mickey of Q1 publishing (and you're not alone, as I've never heard of the dude or his company, either).
  • Mr. Mickey interviews Villarzú, the chairman of Apoquindo Minerals (AQM.v) and ex-head of Codelco.
  • AQM.v is a junior copper miner in Chile, so has everything to gain from a higher copper price. Mr. Mickey discloses that he is long AQM.v.
  • However, Mr. Mickey also writes that SQM is a "leading copper producer" and waxes lyrical about how it has benefitted from the recent Cu rebound. This is strange, as SQM is the well-known and very large Chilean potash/iodine/lithium company. Not copper. Not even close to copper.
  • Meanwhile, in the interview itself Villarzú informs us of his call for copper. JV says, "I think copper will be at $2 by the end of the year, and will be above $2 next year." Villarzu then goes on at length about China demand for copper as the reasons behind his bullishness. Of course, all this is immediately turned into some type of gospel, because Villarzú is "The King Of Copper" and (in the words of Andrew Mickey) "...has an impressive track record many mining executives would envy."
  • Today, this press release hits the wires from Kin Communications that repeats in big bold letters that; “I think copper will be at $2 by the end of the year, and will be above $2 next year.” says Juan Villarzu, Former President and CEO of CODELCO Chile, world’s largest copper producer. Kin Communications is the investor relations people for Apoquindo Minerals, by the way, but don't let that worry you.
Well, it's good to know what Villarzú thinks of copper going forward isn't it? Personally I find it a vital piece of information, because when it comes to predicting the price of copper the dude has FREAKIN' AMAZING TRACK RECORD AS A CONTRARY INDICATOR.
  • For example, in October 2005 he said that copper prices would drop to U$1.25/lb in 2006. It zoomed to way over $3/lb.
  • In February 2006 with copper over $2.30/lb, he called for it to drop to $1.50 to $1.70/lb in 2006, citing Chinese demand reasons. Copper finished the year averaging $3.06/lb. Oops, not the right call when you're the CEO of the biggest copper company in the world, is it?
  • It was at the same time as these calls that Villarzú "was allowed to step down" at Codelco, being replaced by José Pablo Arellano. Strange coincidence that, isn't it?
Please don't get me wrong, though. I'm not saying that Villarzú is a dummy at copper. He was Pres&CEO of Codelco for nine years and saw the company make significant productivity advances. He was once chairman of the ICA (Intl Copper Assoc) and in his time was even a senior economist at the World Bank.

All I'm saying is that it sucks being named "King of Copper" by a paid hack who owns stock in Villarzú's junior copper company but clearly doesn't know Jack about the copper industry.

Then getting this obviously biased and uninformed puff-piece stuffed in my face from the same company's IR dep't and a bunch of people who should turn their own bullshit alarms on sometimes really sucks.

And Juan Villarzú's track record in calling spot copper really, really sucks.

DYODD.

It's Kafka time! Miss Universe visits Guantanamo Bay

Dayana Mendoza (for it is she)

I really, truly and honestly don't know where to start with this report of Miss Universe 2008, (Dayana Mendoza of Venezuela) and Miss USA (Crystle Stewart) recounting their fun days out at Guantanamo Bay, Cuba. So I'm just going to translate it directly with no further comments and let you enjoy it, too.

Translated via Ottotrans™, and here's the original Spanish report to prove that I am not making this shit up. I promise I'm not. It's word for word. Enjoy, gentle reader.

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YVKE World: International

"It was an incredible trip"


Venezuela's Miss Universe: "Guantanamo Is So Interesting"

Venezuelan Dayana Mendoza, Miss Universe 2008, visited the Guantanamo military base two weeks ago to "entertain" the soldiers stationed there. The beauty queen said that she had been in the detention camps. "We saw the jails, where they bathe, how they are entertained with movies, art classes, books."

YVKE Web Press / Agencies
Tuesday March 31, 2009. 3:30pm

Miss Universe 2008, Dayana Mendoza of Venezuela, and Miss USA, Crystle Stewart, paid a visit to the US naval base and detention centre for alleged terrorists at Guantanamo Bay and found it "interesting".

On her web page, Mendoza explained that both beauty queens visited the Guantanamo Bay base in Cuba on Friday March 20th in order to greet and entertain the military personnel stationed there.

"It was an incredible experience," said the Venezuelan. "They (in Guantanamo) knew that Crystle and I were coming to visit and the first thing we did was to sit down to an enormous lunch. Later we went to one of the bars they have there."

Since the beginning of 2002, the USA has held hundreds of men at Guantanamo, captured in different parts of the world as supposed terrorists and has held them prisoner without trial or appeal. Many of them have been subjected to torture, according to reports from human rights organizations.

Mendoza said that she and her friend talked with Guantanamo personnel "about the base and what life was like there, and in the following days we had a great time, it was a really memorable trip." The base personnel took the two women on a visit in a 'boat', unidentified by Mendoza, and a sightseeing tour that "was a lot of fun."

"We also saw the military dogs and they gave us a cute demonstration of their obedience", added Mendoza. "All the army people behaved themselves very well with us".

"We visited the detention camps and saw the jails, where they bathe, how they are entertained with movies, art classes and books", she added. "It was very interesting". The young Venezuelan added that "the water in Guantanamo Bay is sooooo beautiful. It was incredible and we were able to enjoy it for at least an hour."

UPDATE: The NYT's lede blog is running the story too. I could have saved myself all that translation bother. Thanks for the link, RB.

Trading Post (back to the drawing board edition)


Cosan (CZZ) down a penny at $2.36. I still own but got very close to the auto stop-loss this morning. This stock is bumming me out; it's one of those situations where the price tells you "you're wrong" even as you still try and convince yourself you're right. If the stoploss hits I'll be out by 10%...as it stands it's still a minor losing position. Ho hum...won't be the last time.

Freeport (FCX) up 0.4% at $38.70 and my heads-or-tails quicktrade from yesterday will make me the price of a decent botle of wine if I sell 'em now (once commish is deducted). I'll sell 'em before the bell today whatever happens, but something over $39 would be nice...could buy a mixed case of a fair Argentine Malbec.

ECU Silver (ECU.to) down 2.15% at $0.455. ECU.to released this PR today that told us they're capable of building a processing plant...I think. Best commentary came from reader 'B' who wrote and said about ECU's PR, "personally, I would be more impressed with a longer list of achievements...like, umm, restocked the bathrooms with lightbulbs and paper products and cleaned the toilets...". It made me laugh at least.

Troy Resources (TRY.to) down 5.8% at $1.13 on pitiful volume (though bid is now $1.16). The best laid plans of mice and men. Fortunately this is not like the CZZ situation, as 1) i'm already 35% or so up and 2) I'm happy to give this stock all the time it needs. DYODD

Corriente Resources (CTQ.to) (ETQ) up 4% at C$5.98. This PR put through the Ottotrans™ sez "Tongling doesn't want to pay our asking price." Caveat emptor, baby.

Mexico confuses me

Call me slow if you like, but how can a country that

  • has a currency like this
  • and that according to this Bloomie report, is about to accept thirty to forty billion dollars in bailout cash from the IMF
How can it still be classed as "investment grade"? Can somebody please explain this one to me?

Argentina: The Merval Index changes its name.....

.....to "The Tenaris Index".

Chart courtesy of here

Here's a new chapter in the ongoing saga we know as 'Only In Argentina'. Every quarter the headline Merval index of the Buenos Aires Stock Exchange (BCBA) changes its composition. Normally the bigwigs at the BCBA change the percentage weighting of the companies on the list, and sometimes they add or take away companies.

The new composition starts tomorrow (the beginning of the 2nd quarter) and as well as removing three minor-weighting companes from the index (Mirgor, Molinos Rio and Aluar) the sages have decided to raise the weighting of seamless tubemaker Tenaris (US-listed as TS) from 35.22% to 46.48%. Or in other words, nearly half the index is now dependent on a foreign company*. Add the 13.69% weighted to second placed Petrobras, another non-Argentine entity, and over 60% of the supposedly Argentina index is made up of two non-Argentines that happen to do a minor part of their business in the country.

How Argentina still manages to get a seat at the G-20 summits is quite beyond me.

*Sorry guys, we've been through this before; whatever Argentines might try to tell you Tenaris is most definitely not an Argentine company. I've won money betting on this line item.

Latin American Minerals (LAT.v): Play them at their own game

Attractive and successful Sheldon, attractive and successful
wife, attractive and successful necktie

This post is about Latin American Minerals (LAT.v), a tiny and normally very unlikeable junior exploration play with a real mixed bunch of assets in South America. It's a bit of a departure from my normal way of searching for a possible investment, but as it's been itching at me for some time and today brought a possible news catalyst let's write up the general line of thinking.

Firstly, and by way of a preamble, let's look some of the recent issues around Colossus Minerals (CSI.to). We can sum up what we need to consider in the following way:
  • CSI.to has a gold project in South America (Brazil)
  • It's a well-known artisanal mine in the area
  • The project has rich gold-bearing mineral and drilling in the right place is all but guaranteed to return excellent grades
  • The area has serious political issues, especially with the local artisanal miners, that the company either ignores or claims are not important
  • Sheldon Inwentash of Pinetree is on board with a sizeable investment
  • The recent upmove in the stock price has come on the back of press releases containing those excellent drill returns and a concerted PR campaign (that has totally ignored the political risk) from people like....Sheldon Inwentash. I particularly loved the way he said that CSI.to was "almost too good to be true"....a real hoot! Here's the three month chart of CSI.to
Here's the three month chart of CSI.to to show that the pump worked a treat.

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So let's imagine, for our purposes at least, that CSI.to is some kind of blueprint for what might be about to happen at Latin Amerian Minerals (LAT.v). The basic idea here is that LAT.v is doing a Mini-Me on CSI.to. Consider the following:
  • CSI.to has a gold project in South America (Paraguay)
  • It's a well-known artisanal mine in the area
  • The project has rich gold-bearing mineral and drilling in the right place is all but guaranteed to return excellent grades
  • The area has serious political issues, especially with the local artisanal miners, that the company either ignores or claims are not important
  • Sheldon Inwentash of Pinetree is on board with a sizeable investment.
Now the LAT.v stock price hasn't really moved yet........

....especially considering LAT.v went way above a loonie once upon a time when the company got pumped by the normally astute Coffin Brothers (hey...nobody's perfect), but that's the point of considering it as a possible splash'n'dash investment right now. Better to be chased than to chase in this game. Also, LAT.v isn't an exact apples-to-apples with CSI.to as it has its own baggage (including diamond-hunting and that very silly lithium potash thing in Argentina that they might use to throw stardust into the eyes of the unsuspecting), but what is true is that our Sheldon has been picking up chunks of LAT.v in the last couple of months:

Mar 27/09 Mar 20/09 Pinetree Capital Ltd. Indirect Ownership Common Shares 10 - Acquisition in the public market 100,000 $0.180
Feb 26/09 Feb 17/09 Pinetree Capital Ltd. Indirect Ownership Common Shares 10 - Acquisition in the public market 434,500 $0.204
Feb 13/09 Feb 04/09 Pinetree Capital Ltd. Indirect Ownership Common Shares 10 - Acquisition in the public market 100,000 $0.145
Feb 11/09 Feb 02/09 Pinetree Capital Ltd. Indirect Ownership Common Shares 10 - Acquisition in the public market 200,000 $0.134
Feb 04/09 Jan 26/09 Pinetree Capital Ltd. Indirect Ownership Common Shares 10 - Acquisition in the public market 50,000 $0.080
Feb 02/09 Jan 23/09 Pinetree Capital Ltd. Indirect Ownership Common Shares 10 - Acquisition in the public market 51,000 $0.080
Jan 30/09 Jan 22/09 Pinetree Capital Ltd. Indirect Ownership Common Shares 10 - Acquisition in the public market 150,000 $0.080
Jan 23/09 Sep 19/08 Pinetree Capital Ltd. Indirect Ownership Warrants 00 - Opening Balance-Initial SEDI Report

Jan 23/09 Dec 23/08 Pinetree Capital Ltd. Indirect Ownership Common Shares 10 - Acquisition in the public market 74,000 $0.075
Jan 23/09 Dec 19/08 Pinetree Capital Ltd. Indirect Ownership Common Shares 10 - Acquisition in the public market 400,000 $0.063

That's a chunky 1.5m shares to add to the bunch previously held at Pinetree. So with this press release today to tell the world that LAT.v is drilling once again at its Paraguay gold prospect and that visual returns have been good, the chances are that the next press release(s) contain(s) drill returns that everyone at the company knew would be good....much like the recent Colossus tactics, to put it bluntly. Give 'em the old razzle dazzle, boyz.....

The bottom line is that although LAT.v is more than a bit suspect as a long term investment (errr...that's putting it as diplomatically as possible...I've been trying hard to avoid the S word while writing about both CSI.to and LAT.v today) it may be about to get the full-court Canadian pumperooney treatment. I personally have this whole BS integrity baggage that stops me from buying into these things normally, but there are times when I tell myself to "lighten up dude...just buy a few...it ain't illegal" and I might just do that this time. This kind of attempt to second-guess the market is a high risk activity, get that straight in your head and crystalline in its clarity, but LAT.v does have the hallmarks of being set up for the mark right now. We shall see.

Über-important to DYODD on this one, dudettes and dudes; check out that latest press release and if you speak Spanish I'd recommend that you Google "Paso Yobai Paraguay" and find out more about the local issues involved with the project.