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5/16/09

Chávez in Argentina: The Caption Competition

This photo from yesterday. Add your captions to this photo via comments below or mail.


Best answer wins......err......something.

The IKN weekly, out tomorrow

Here's a quick rundown of what subscribers can expect in tomorrow's IKN Weekly:

  • A fundamental analysis of New Gold (NGD)
  • A look at mining political risk and a case study of how one mining company is doing the right thing in the right place at the right time.
  • An update on Fortuna Silver (FVI.v) including, whats, whys, wherefores and a new price target for traders.
  • A 'Stocks To Follow' list that went further into profit over the week and updates on the companies covered
  • Pointers for various near-term trading opportunities
  • etc

There's also a section this week that attempts to explain just how a fool such as I can combine support for the Evo Moraleses of this world with a fascination for capital markets. It all makes sense in Otto's little parallel universe...promise. So if you're not on board as yet, feel free to use those buttons on the right hand side of the blog. Subscribers (and the list is getting longer, I'm glad to say) can expect delivery on time as usual Sunday afternoon. Enjoy your weekend, folks.

Weekend Freestuff Special


Over at Miguel Olivera's blog, Exabruptos, you can download the English language version of the bestseller Bad Money by Kevin Phillips.

As this NYT review notes, Phillips was calling the present situation pretty accurately when Bad Money first hit the shelves last year. The book doesn't stop at the present time though, as it makes its case for the future of the USA and the world...and it doesn't look good according to Phillips.

An excellent read for the weekend and a good way to sum up how we got to where we are. Thanks to Olivera it's also a totally free PDF download. When your over at Miguel Olivera's site click the link that says "les dejo para bajarse" to get the download. The other link gives you the front cover of the book (above).

5/15/09

The Friday OT: la ville s'endormait (Jacques Brel)

The most wonderful song.



An esoteric, melancholic, intelligent, wise and heartbreakingly beautiful song that Brel recorded in 1977. He was living his last years in the island of Les Marquises and knew he was dying of lung cancer. He returned to Paris to record his last album, called simply "Brel" and this is, for me and many others, the standout track. A year later he passed on.

joke of the day

LIMA (Dow Jones)--Peru's gross domestic product expanded 3.05% in March compared to the same month a year earlier, the National Statistics Institute, or INEI, said Friday.

hahahahahahahaaaaaaaaaa

What an impressive country: 10,000 mine workers sacked and mining industry growth hits +6.3%. They should lay off another 100,000 and give us 63% Yoy growth

THEY ARE LYING TO YOU

Trading Post (Wedding Anniversary edition)


Yes indeed, it's Otto and Madam Otto's wedding anniversary today. You'll excuse the lack of posting this afternoon, as the lunchtime got rather cocktail-y.

Guyana Goldfields (GUY.to) up 10.7% at $3.00 and reacting very well to the PR news this morning.

Nadagold (NG) up 5% at $3.53 and puts my short position 3% underwater. But I don't care..I've been out drinking with the missus.

Fortuna (FVI.v) down 2.1% at $0.92...last chance to board the elevator ride. The market is marking down FVI.v after the mediocrity in results from peers (eg EDR.to..woof woof). Otto sez bargain price.

Troy Resources up 2.6% at $1.20. YAY! more to come. DYODD

And now..siesta. Clients can expect The IKN Weekly (in all its sober glory) out on time Sunday afternoon.

Guyana Goldfields (GUY.to): A very interesting financing

The IFC is on board and shareholders already on board are buying chunks too. From what I hear, GUY.to is ignoring overtures from big gold mining companies and is fully prepared to take this project to production (and that ain't just talk this time). Here's the whole thing:

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Guyana Goldfields Inc. announces $12,050,000 non-brokered private placement

TORONTO, May 15 /CNW/ - Guyana Goldfields Inc. (TSX:GUY) ("Guyana" or the "Company") is pleased to announce a non-brokered private placement pursuant to which Guyana proposes to issue up to 4,381,818 units ("Units") at a price of $2.75 per Unit for aggregate gross proceeds of up to $12,050,000. Each Unit will consist of one common share and one-half of one common share purchase warrant. Each whole warrant shall be exercisable at any time for one common share at a price of $4.00 per share for a period of three years following closing. The Company shall have the right to call the outstanding warrants should the closing price of its common shares exceed $6.00 for 30 consecutive trading days after one year has elapsed from the closing date.

The International Finance Corporation (IFC), the member of the World Bank Group focused on private sector investments in developing countries, and a current shareholder in the Company, has agreed to purchase $5,000,000 (1,818,181 Units) of the private placement, subject to approval by its Board of Directors. Upon closing of the private placement the IFC will hold an aggregate of 3,548,181 shares (5.6%) of Guyana. Claude F. Lemasson, P.Eng, MBA, the recently appointed President and Chief Operating Officer of the Company has agreed to purchase $1,000,000 (363,636 Units) of the private placement. Current and existing shareholders have agreed to purchase the remaining $6,050,000 (2,200,000 units).

The net proceeds of the private placement will be used to complete the previously announced Definitive Feasibility Study undertaken by AMEC, Canada, to continue exploration of the Company's portfolio of gold exploration properties in Guyana, South America and for general working capital purposes. The private placement remains subject to the approval of the Toronto Stock Exchange.

The securities described herein have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States unless registered under the Act or unless an exemption from registration is available.

About IFC:

IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. IFC fosters sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. IFC's new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit www.ifc.org.

About Guyana:

Guyana Goldfields Inc. is a Canadian based mineral exploration company primarily focused on the exploration and development of gold deposits in Guyana, South America where the Company has operated since 1996. The Company is currently undertaking technical studies to advance and develop the Aurora Project in Guyana.

As previously announced, (see press release dated December 8, 2008 at www.sedar.com under the Guyana Goldfields Inc. profile, "Guyana Goldfields Announces Increased Resource at Aurora 3.69 Million Ounces Measured and Indicated and 1.72 Million Ounces Inferred"), the Aurora Gold Project contains a Measured resource of 8.08 million tonnes @ 4.11 g/t Au., an Indicated resource of 21.06 million tonnes @ 3.87 g/t Au. and an Inferred resource of 19.97 million tonnes @ 2.77 g/t Au. Mr. D. K. Mukhopadhyay, MAusIMM, Senior Mineral Resource Geologist of Micon International Co. Limited, reviewed and approved the technical data in his capacity of a Qualified Person under National Instrument 43-101. For further details, please refer to the technical report of Guyana dated November 23, 2007 entitled "Technical Report: A Mineral Resource Estimate For the Rory's Knoll, East Walcott and Aleck Hill Zones, Aurora Gold Property, Guyana" available on SEDAR at www.sedar.com.

Forward Looking Statements - Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Guyana, including, but not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with the uncertainty of resource and reserve estimates, currency fluctuations, dependence upon regulatory approvals, the availability of future financing and exploration risk. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

%SEDAR: 00022477E


Source: Canada NewsWire (May 15, 2009 - 9:23 AM EDT)

Luis Carranza, Finance Minister of Peru and barefaced liar


It always happens eventually; the liar gets caught in his lie.

Yesterday Peru's FinMin and nation's number two liar Luis Carranza (numero uno above) gave a presentation on the prospects for his country's economy. If anyone wants a copy of the powerpoint show (49 slides of fun with dense numbers, graphs with arrows pointing UP! UP! UP! and Spanish language) send me a mail, but suffice to say the whole idea must have been to blow smoke in the eyes of the dumbass nodding donkey journalists present. That's because anyone with a basic understanding of economics....and i mean basic really is enough...can see just how much BS was on display yesterday.

For one thing, the full-on statistician Farid Matuk was quick to point out that MEF has quietly dropped something called GDP elasticity from 3 to 1. What this means in practical terms is that they are suddenly toeing the line of the Central Bank and assuming a currency devaluation to maintain growth at all costs (esp to the cost of those poor Limeños with mortgages in dollars). However a different statistic that I noted was that the breakdown of Carranza's fantasy 3.5% GDP growth this year assumes a 5% growth in mining GDP.

Whaaaaaaaaaaaaat?????? We're supposed to believe that Peru's mining industry will contribute 5% more this year than it did last year...remember copper at $4/lb, Zinc and Lead at $1/lb and silver at $18/oz, people? Here's a chart using final metals exports as a proxy to total GDP activity in Peru's mining sector (as nearly all the metal produced in Peru is exported). We see the 2008 export figures for Peru, the first three months of 2009 and what Peru will need to export to get that 5% growth Carranza masturbates about.


It's asinine. It's just a heap of barefaced lies. Nothing else. There's no way that monthly exports can suddenly jump from under $1.1bn to over $1.83Bn and stay at that average for the rest of the year. More likely is a $6bn gap between the cash Carranza wants and the cash he's going to get. And $6Bn in Peru is a significant chunk of annual GDP.

There's only one question left to answer now: Will this man do the honourable thing and resign when his ridiculous economic projections are proven false by the end of this year?

FCX and Trend&Value

Lucas at Trend&Value has been doing a good job of laying out the trade on Freeport McMoRan (FCX) in his newsletter recently. So on the blog yesterday he gave a quick resumé of his ongoing analysis, put up the charts and gives his target, too (for the record, plenty of money to be made between now and the forecast). Go take a look.

Damien Reynolds has left the building


Rules of capitalism:

1) buy high and sell low with your own money = become poor




2) buy high and sell low with other people's money = become unemployed


And so farewell Damien Reynolds, ex-everything at Longview Capital (LV.to). Moral of the story? Uranium in Paraguay ain't the way. Buffalo Gold? Ooops.


Vancouver, BC – Longview Capital Partners (TSX: LV) announced today that Damien Reynolds, Chairman, CEO and founder of the Company has resigned his official positions, to take effect May 31, 2009. Hein Poulus, Lead Director and the largest shareholder of the Company, has been appointed Chairman, and John Icke, currently President and COO, will become yada yada continues here

Revolutionary downtime

Chávez slips the bellboy a tenspot and
explains
where he wants the bags left

Even figureheads of rrrrrrrrrrevolutions need quiet moments, so Hugo Chávez is going is chill down in Argentina for a cupla days this weekend. First he flies into Buenos Aires today and does presidenty things with Klishtina, then they and their families (Hugo has his daughters tagging along) hightail it down to deepest Patagonia for a long weekend. They'll all be staying at El Calafate, a town that the Kirchners have made their own and converted into a snooty tourist trap.

Malbec served

Charts of the day are...

....all about the Bolivian economy, starting with the answer to yesterday's quiz.

And as most of you correctly called, it is in fact Bolivia that has added record reserves since Dr Morales took over the country. Congrats to all the correctos, but special congrats to reader "JW" who got the right answer in like greased lightning. He wins a special prize that, due to the circumstances, must remain a secret. All I can say is "you got your wish, JW :-)"

Meanwhile, check up on other parts of the Bolivian economy, we see that money supply is largely under control....

Particularly good to see M2 flattening and even dropping off this year, the sign of a well managed currency. The practical result of reeling in M2 is that inflation is coming down quickly from last year's peak...


...with the double-digit days of 2007 and 2008 now very much a thing of the past. And I'd like to remind you that the gov't forecast for GDP growth this year is +4%.

I never cease to be amazed by the good job the Evo gov't is doing with its economy. This is, of course, why the robotic and idiotic English media never mention the subject when talking about Bolivia. It must pain them no end to compare the neat an effective macroeconomic policies of a coca chewing indio to the unmitigated disasters of countless blue-eyed whiteys that screwed their own country in return for a fat personal bank account. Hey Enders...try reporting some facts next time, dumbass racist apologist.

5/14/09

Bolivia and the slaves of Santa Cruz: Anyone got an Italian phrasebook handy?

Excuse-for-a-hack and racist apologist John Enders is put to shame by this BBC report. This is exactly the same place that the dumbass working for the Miami Herald pretended to report about, but somehow totally missed the racism and feudalism of the people he held up as the shining bastion of free markets and capitalism.

Here below is the first part of the report (click through for the rest, it's only fair on the Beeb). But watch out for the name of the person the BBC interviewed to give the ranchers' side of the story, a certain Eliane Capobianco. Capo? Bianco? Whatever could it all mean? LOL!

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Outrage at 'slavery' in Bolivia

A senior UN official recently described as "unacceptable" the alleged forced labour of indigenous people by landowners in Bolivia. The BBC's Andres Schipani reports on the contentious issue of "slavery" from the eastern province of Santa Cruz.

Teresa Barrio was born on a patch of scrub on a Bolivian plantation. This is where she has lived and worked. This is where she expects to die. But she has no affection for this place.

The 65-year-old grandmother knows little of other people's lives but she knows her own has been harsh: toiling in fields for a pittance, sleeping in a mud hut, losing sight in one eye and losing five of seven children to disease.

There is no cash in the pockets of her ragged skirt, nor, she says, does she feel free to leave the vast farm where she has worked hard all her life.

"All my life I've been here and at the end of it I have nothing and have nowhere else to go," she says.

Her hamlet of 13 Guarani families - all workers on the plantations near the town of Camiri in Alto Parapeti region in the eastern province of Santa Cruz - built a school but ranchers destroyed it, she says

"They didn't want us to learn, they want things to be like they always have been," Teresa's granddaughter, Deisy, says.

Beside the ruins is the replacement school - five desks beneath a blue tarpaulin draped from an algarroba tree.

Over the past two years, Bolivia's government and several indigenous groups, have been giving a controversial name to Teresa's type of existence - slavery.

CONTINUES HERE

Peru: Monterrico, Majaz and the putrid stench of impunity


A sickening development has come to my attention today.

Remember the case of the torture of 29 indigenous locals at the Monterrico Metals mining camp at Majaz (now re-named 'Rio Blanco' to protect the image of the scum involved)?


This week CNR Peru reports that the fiscal (public prosecutor) that was present and was an eyewitness to the events, even taking part himself, has had all charges against him dropped by the Peruvian judiciary (in the parlance, his case has been 'archived'). It all happened very quietly two weeks ago and has only come to light this week. The reason given by the putrid, corrupt judge in charge is that there "is not sufficient evidence that he was aware of the torture suffered by the members of the community".


So please note that the corrupt judge in charge, Sofia Milla of Piura, recognizes that the 29 people were in fact tortured. However she refuses to recognize that the fiscal present, Felix Toledo Leiva, knew about the torture even though;

  • all 29 victims testified he was there
  • all 29 victims said he was an eyewitness to the brutality
  • there is photographic evidence that shows, without a shadow of a doubt, that he saw what was going on
  • the photos show him in the presence of injured and tortured individuals
  • various of the tortured individuals, including the women victims, testify that he shouted insults, made physical threats and even violently pulled the hair of one of the women

So due to the bribed judge Sofia Milla and the corrupt, money-at-all-costs APRA government of Twobreakfasts, a man who should rot in jail as an example to all walks away without a care in the world. This is the Peru that those blind morons at Fitch think is worthy of your money as investment grade.


Hat Tip to the excellent blog, Huanca York Times

sent in by reader 'PA'


Thanks, man.

Trading Post (Mixed Bag edition)


Fortuna Silver (FVI.v) down 8.2% at $0.90. Any reason? Nah, don't think so. My $1.08 target is still in place, so I reckon there's a 20% short term profit going begging here. The 1q09 results are published tomorrow and I expect good things. DYODD, but I'm going to try to add a few at 90c here. This kind of downdraft is the reason I keep plenty of cash in the a/c...opportunity knocks.

Troy Resources (TRY.to) up a penny at $1.17. Slowly slowly catchy monkey.

Minera Andes (MAI.to) down 3c at $0.66. The latest news on the San José mine walkout is that the strike may well extend to other mines and even other regions. On the one hand it's not good (for the publicity), on the other hand it will likely hury a resolution along. I'd consider any drop from here a buying opportunity in MAI.to.

Cardero (CDY) up 4.4% at U$1.19. The low volume is the story here. No weak hands left to shake out, Henk...sorry :-)

UPDATE: Just snagged a few FVI.v at 90c. Quite a chunky position now.

The IKN Weekly subscribers knew

  • On Thursday May 7th IKN Weekly subscribers received a flash note with very positive noises about a company that had just released an excellent set of drill results.
  • In The IKN Weekly issue two (May 10th) there was a write up explaining the call, the position and a target price for a short-term trade.
  • Since the initial call, the stock has risen 17.3% (and is showing particular strength on good volume today).
  • Neither the stock nor the trade were mentioned on this blog.

The IKN Weekly is published every Sunday afternoon, giving subscribers plenty of time to digest the information before trading begins. Subscribers also benefit from a flash update e-mail service (another flash went out last night that talked about recent events in Minera Andes (MAI.to) and Cardero (CDY) (CDU.to).

Yes, this is a plug for the newsletter service (how did you guess?) :-). More details on this link and if you have any questions, feel free to drop me a line. At just $25 a month you could have covered a couple of years' subscription with the single stock trade idea that was sent out last week.

UPDATE: Oops! My mistake. It's in fact a 25% winner in one week. Send me a mail and I'll tell you which company it is. Sales pitch now complete. Have a nice day.

Other posts concerning The IKN Weekly

Bloomberg: All the Brazil, all the time


Message to Bloomberg: Brazil is one third of Latin America's population and one third of its economic output. Please try to reflect that there are other countries in the region.

Here is the menu at Bloomberg's Latin America page right now. Of the eight headlines chosen as representative of the region, six are about Brazil and one (the EM markets story) isn't even about Latin America. Truly pathetic regional coverage.

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Banco do Brasil Profit Slides 29% on Increase in Loan-Default Provisions Banco do Brasil SA, Latin America’s biggest federally controlled bank, said first-quarter profit declined 29 percent as it set aside more funds for loan defaults.

Stocks in Emerging Markets Drop for Fourth Day; Oil Falls, Treasuries Gain Stocks fell, led by the biggest decline in emerging markets this month, and commodities dropped on concern the recovery from the first global recession since World War II will falter.

Brazil's Real to Extend Rally for Three Month Before Falling, Embraer Says Brazil’s real will extend a six-week rally for two to three months before weakening again as commodity prices slump, according to Empresa Brasileira de Aeronautica SA, the nation’s largest industrial goods exporter.

Bovespa Stock Futures Fall on Retail Sales Slowdown, Commodities Decline Brazil’s Bovespa stock futures dropped, indicating the gauge may extend its three-day retreat, after commodities slumped and retail sales expanded less than expected in Latin America’s largest economy.

Usiminas Posts Unexpected First-Quarter Loss on Lower Production, Prices Usinas Siderurgicas de Minas Gerais SA, Brazil’s second-largest steelmaker, unexpectedly posted a loss, the first since 2002, after production plunged.

Brazilian Retail Sales Rose 1.8 Percent in March From Year Earlier Month Brazil’s retail sales rose 1.8 percent in March from a year ago, the national statistics agency said.

Ecopetrol Profit Falls 30% to 1.61 Trillion Pesos in Quarter As Oil Slumps Ecopetrol SA, Colombia’s state- controlled oil company, said first quarter profit fell 30 percent because of declining crude prices.

Brazilian Steelmaker CSN Says First-Quarter Profit Slumps 52% on Demand Cia Siderurgica Nacional SA, Brazil’s third-biggest steelmaker, said first-quarter profit plunged 52 percent as it cut output to match lower demand amid a global economic slump.

Copper: Is sanity prevailing?


If you want to get anything done in this country
you have to complain til you're blue in the face
Monty Python, Dead Parrot Sketch (1969)


Yes, I'm still bearish copper. Why? Because there's no demand for the stuff. I'm one of those boring, fundy-based people, remember. And as I hark back Adam Smith and his weird, out-of fashion concepts of supply and demand and then look around at the numbers the world throws at me I can't help but conclude that because THERE'S NO DEMAND FOR THE STUFF among end users of copper right now, the price of copper eventually has to drop some.

For sure there are other factors; the Keynesian stimuli and stockpiling in China has to affect copper to the upside...and it has been affecting it, of course. The only question left is whether China takes those 78 squillion dollars in reserves it has and keeps buying all the copper in the world at $2+, because as there's currently NO DEMAND FOR THE STUFF among end users it really has the playground to itself.

Most likely it doesn't. China is populated by smart people, and smart people know that when they are the only buyers they can dictate the price. So I reckon China will happily watch copper slump a bit before going back to market and adding to that large mountain of surplus-to-demand metal it's creating.

That's the general ballpark plan Chez Otto, at least. So excuse me as I continue to rant and rave against the illogic of the market (a place that can ignore me forever if it likes...it's my windmill and I'll tilt at it all I want, thank you very much) and repeat my call for a $1.70/lb Cu forward target. Cos there's no demand for the stuff right now, y'see.

Peru = Block


It's the only keyword you need.

Peru plans to block homosexuals from its police force. It will also bar anyone caught having an extramarital affair. The reason for both groups beng barred is so as not to "damage the institution". Hopefully these new laws will only apply to new recruits and not existing officers, as your humble correspondent wouldn't like to see 30% of the country's police out of a job so quickly.

The Peru block on flights to and from Mexico has been lifted. The mortality rate is shaping up at 1%, so even though it's nasty it's not the end of the wooooooooooooooorld.

The Peruvian town of Choropampa has blocked the road to Yanacocha, South America's biggest gold mine that's run by NEM and BVN. They are complaining about the total lack of everything aimed at them from the now famous mercury spillage nine years ago. We covered the story last year and here's the link to the article. The basic truth is that these people are forced to break the law and bring Yanacocha to a standstill before anyone, company or government, bothers listening to them. This humble corner of cyberspace applauds Choropampa and shouts "BOO HISS" to Yanacocha. Shame on you, Newmont. Shame on you, Buenaventura.

Chart of the day is.....

....a quiz.

To which country does this chart correspond? The first correct answer (via comments section or e-mail) wins something...I still haven't decided what, but you win something.

5/13/09

Peru's Nuevo Sol (PEN) currency weakens sharply

On the back of the 1+% drop in the Nuevo Sol (PEN), the currency dropped another 1.5% today. The move is being explained by "strong demand from local banks to cover short dollar positions".

Or in other words, the dumbasses in suits in Peru actually started to believe the hype that FinMin Carranza has been dishing out recently. In the end, money talks and BS walks and the move charted out above isn't some orderly downward move conducted by the Central Bank. It's semi-panic as people with money run for cover. Joe Public will find out the truth once the money dudes have covered their tushes. DYODD.

Trading Post (too long at the party edition)


Lots of red on my screen. What is this Hope™ of which you speak, gringo?

Nadagold (NG) down 5.4% at U$3.35. Oh dear. How sad. Whoever pumped this dog yesterday is going to look tehstoopid soon enough. A nice start to my short...but it's only just beguuuuun (c'mon, join in the chorus dudes).

Cardero (CDY) down 9.2% at $1.18 and nerves are setting in before the big "will they or won't they" announcement coming soon. A roll on the drums, please......... (IKN Weekly subscribers will be getting an update tonight on this stock).

Fortuna (FVI.v) down 4.9% at $0.98. Volumes not high and nothing really more than the general sector downdraft. Holding through and still looking at $1.08 as an exit price, no worries.

Troy Resources (TRY.to) up 7.4% at $1.16 and upping on the back of the impressive, high volume surge in the Aussie listing last night. Gotta love this stock at this price.

Fronteer (FRG) down 7.5% at U$2.95, and even the best companies are being sold into this swoon today. So be it.

Mexico's Economy: A visual forecast

Necessary and deserved hat tip to the most wonderfullest source on all things Mexico, The Mex Files.

Peru economic "growth": it's not just me that sees through the lies

What Otto feels like when told Peru is growing

A sigh of relief was heard Chez Otto this morning when your humble correspendent read that respected and independent Peru econ-watchers aren't buying the BS soap soap lies about Peru's fantasy growth that's constantly spun by its most awful of governments.

Hugo Perea of BBVA bank was asked by El Comercio to comment on yesterday's announced 7.45% drop in manufacturing activity in February. Acording to Perea, the March figure (currently estimated at -3% by the gov't liars) will come in much lower, more like -7% again, noting invenmtory levels dropping rapidly amongst other telltale signs. Another indy consult group, Maximixe, was asked about the outlook for April and May and also came out with a dose of necessary reality; "Our scenario is pessimistic, because there are still sectors with important weightings in our industry that are declining."

Meanwhile, Peru's chamber of exports, ADEX, had this to say. "We were hoping that things would get better in March, but they continued dropping. And acording to our associates things will continue showing a similar behaviour in April and May, as there still do not exist signs of recovery."

Yes indeed, folks. Reality. This is the country run that depends on trade with the world to survive and grow that had an YoY drop in imports of 11.2% and a drop in exports of 9.6%....and the self-serving corrupt liars that run the show insist that Peru will grow by 4% this year.

Wanna buy a bridge?

Shorted Nadagold (NG) at the bell

From Webster's thesaurus

Noun1.nadanada - a quantity of no importance; "it looked like nothing I had ever seen before"; "reduced to nil all the work we had done"; "we racked up a pathetic goose egg"; "it was all for naught"; "I didn't hear zilch about it"


I couldn't resist it any longer and shorted NG at the bell at U$3.46 with a short-termer's outlook. Nadagold (NG) popped hard on no news yesterday and I suspect some fool newsletter got his followers to buy...but that's just a guess. Anyway it's now in the realm of stupidhigh and being over U$3 makes the short easier to grab, too. DYODD.

Results season


The 1q09 results are coming in among the miners. Here are a couple that caught my eye.

1) New Gold (NGD) which has always been a bit of an underachiever, put in a nice quarter and beat all estimates (including my own, and by some way) by posting a 6c EPS. However that total includes a $10.1m one time gain on a bond (well, secured notes to be exact) buyback. The fusion with WGW is on track. NGD popped 10% yesterday and has its CC this morning.

2) Amerigo Resources (ARG.to) posted a $4.78m loss for 1q09 that isn't a surprise to anyone, but is guiding positively for the rest of the year. This will be good news for at least one regular reader of IKN (hi "A" :-).

In The IKN Weekly this weekend I'll be including a NOBS report on New Gold (NGD), bang up to date and including analysis of the latest quarter. Another reason to come aboard if you haven't already. So if you feel like taking a flyer and risking U$25 on a month's subscription the button's over there on the right of the page. Remember that if you do and decide it's not for you after a month, the unsubscribe is quick, easy and no quibble. The last thing I'm going to do is trap you into a service that you don't want.

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

...spot copper, 24 hour chart.


Normally I can ignore the intraday stuff to a greater extent, but there's a fight brewing in commods, I think it's coming to a head right now and copper is the normal lead indicator. But my fight isn't "goes up or goes down", rather "stays where it is (2 to 2.10) or goes down?"

Semi OT, I liked Cam Hui's note this morning. He did better than me and called the relief rally well, but now he's writing things like....

"The market has a way of saying “what have you done for me lately?” Now that a recovery is getting built into investor expectations, these negative fundamentals could prove to be a nasty surprise in the near term."

DYODD

5/12/09

IKN Exclusive: Osama Bin Laden Seeks Political Asylum in Peru


As Borev noted today, Peru has fast become the international safe haven of every scumbag delinquent who squeals "Hey, Political NotFair!!" and hightails it over to the land of ceviche and purple corn. Borev dixit:

Way to go, Peru. Your generous asylum policy extends to, let's see, Venezuelan coup conspirators, embezzlement scam artists, and now a Bolivian minister "charged with genocide in the 2003 killing of dozens of protesters," yikes.

But tonight, IKN can EXCLUSIVELY REVEAL that Osama Bin Laden has slipped over the border into Peru and is spending the night at Machu Picchu on his way to Lima to claim asylum from (and I quote the BinMan) "All those nasty men who keep following me. Allah be praised."

Judging by the recent record of the Twobreakfasts government, it seems as though he's set fair for a quiet life by the seaside now.

Freedom fries served.

Massive cocaine bust in Ecuador


This week has not been a good one for the narco scum. First there was the cocaine factory discovered and dismantled in Santa Cruz, Bolivia on May 7th. It was just being set up, had U$1m of chemical raw materials ready to roll and was estimated to be able to churn out 1.5 metric tonnes (MT) per month. The Bolivian specialist (and brave and very successful) FELCN, without the aid of the DEA, did the legwork.

Then yesterday, Venezuelan authorities arrested three people and confiscated a cool 2MT of cocaine. Again, no DEA. Again, a country supposedly unhelpful in the fight against narcotrafficking.

But today the mother of all seizures went down today in that other AxisOfEvo country, Ecuador. Three Ecuadorians and two Russians arrested, and 17MT (yep, seventeen metric tonnes) of cocaine that was on its way to Spain. In fact, the Ecuador police are still counting up the haul (it was hidden in a cargo of molasses) and say it might even get to 21MT.

Meanwhile, all quiet on the confiscation front in Colombia and Peru, the world's two biggest suppliers with an anti-narco squad run by the US DEA. Funny that, innit?

UPDATE: My mistake, Peru along with a US frigate managed to grab 250kg of cocaine in an offshore raid.


Guatemala: President Alvaro Colom accused of murder by the murdered man

Check out this CNN report (extract below) that has Rodrigo Rosenberg Marzano, now dead, accusing the President of Guatemala of his death from beyond the grave and explaining why his President had him killed in meticulous, 18 minute detail in the youtube video that follows (it's part one of two, it's nine minutes long and it comes with good English subtitles...you can link thru to part two once it finishes).

Heavy, heavy stuff.

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(CNN) -- The Guatemalan government has dismissed allegations that it was behind the death of a lawyer who left a video saying President Alvaro Colom would be to blame if anything happened to him.

The lawyer, Rodrigo Rosenberg, was shot dead Sunday while bicycling in Guatemala City.

A video surfaced Monday in which Rosenberg -- seated behind a desk and speaking into a microphone -- linked Colom and an aide to his death.

"If you are watching this message," Rosenberg says on the video, "it is because I was assassinated by President Alvaro Colom, with help from Gustavo Alejos," the president's private secretary.

It was not immediately known when Rosenberg made the video. It turned up Monday after his funeral and was posted on YouTube and distributed to other media outlets by the newspaper El Periodico de Guatemala.

The government promptly responded, rejecting the assertions and saying they were meant to create "political chaos."

CONTINUES HERE

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ECH and the danger of spreading too thinly


More semi-random musings.

So as sit back and watch the bullish action continue (let's be clear here..I still say this is a bullish relief rally in the middle of a nasty bear market) and with currencies on my mind, I checked back to see how longer-term pick ECH (the Chilean ETF) has been getting on. Here's the chart....


...and here's the article dated Feb 26th and entitled "ECH: the easy way to play Chile's currency revival". So another 20%+ winner and I'm suddenly wonderful and in the green on another fabbo LatAm call...hey isn't life great and I love me and all that crap. Yep, you got it, there's a very large and stupid ego trap on offer here. The point is that I could have recommended 75 stocks and here, two months later, rattle off a list of 65 winners and only two losses and oh my gawd what an amazing person I am.

Except I'm not. Because if you start that game you can suddenly find yourself further down the line conveniently forgetting about the crappy calls and shouting from the rooftops about the winners only, especially if you like recommending 50% of the stocks on offer to Joe Public. And you start glancing at stocks before calling them a buy, not investigating them and finding hidden value (or hidden problems)....and that's really not my style.

So what's the point here? I suppose that there are a couple. For one thing:

Any fool looks cool in a bull

For another this humble corner of cyberspace is just one guy, it's not a comprehensive news service. Things like Baja Mining (BAJ.to) slip past, for example (you seen that thing fly these last few days? Wowsers!). I miss a nice snippet of news and catch up to it later. I decide something isn't so interesting (and say nothing) when others think it's big news. After all, I'm still just a dude with a blog here. No pretensions. Just a dude with a blog.

So personally speaking, if I start spreading myself too thinly and reco'ing this, that and the other stock (and claiming mega-analytical success afterwards having just mentioned them once or twice in passing) I don't think there's much point to the exercise. Therefore what I'm going to do, on the stocks side at least, is stick more or less to my tiny corner of LatAm junior miners, keep trying to rootle out quality over quantity and not worry my brain too much about telcos in Argentina, real estate in Brazil or palm oil in Colombia....or even when all mining boats rise on the same tide and the badduns climb just as much as the gooduns. I'm sure you readers can find better places on the interwebnetpipes for all those companies, anyway. DYODD dude.

Artisan Miners on strike in Peru

The scene in Lima a few minutes ago

Today in Peru, so-called 'artisan miners' started a 72 hour strike this morning to demand the overturning of a Presidential decree that, acording to them, refuses to recognize the rights of the smaller miner. What they're after is to be recognized and registered in the same way as the formal mining sector of the country. This will, in turn, allow them access to the international markets for their production and break their reliance on middle-men such as informal clearing houses and registered mining companies that buy up their production at a discount to world prices.

That doesn't sound like a big deal, but when you consider that artisanal mining has an estimated workforce of 300,000 people in the country and that the sector is estimated to produce 24 tonnes of gold per year (as well as all the other metals and non metallic mining production too) that's a sizeable sector of the country's workforce.

And another thing about artisan miners is that you don't wanna mess with these guys. The protest started today by blocking the main Panamericana highway at Nazca, South of Lima. According to reports, no vehicles are getting through and this has caused full-blooded chaos on Peru's main southern trunk road with tailbacks are already of the "I can see this on Google Earth" variety. The roadblock is clearly illegal and Interior Minister Cabanillas is already threatening to send the police in to break it up. I hope tempers cool on both sides, because if not it could all get rather nasty. Like I say, these are a hard bunch of guys. The next phase of the strike is starting about now, as a large body of the artisanal miners is now marching towards Congress in Lima in protest (see photo above).

Copper currencies

This chart just about sums up what's been playing on my mind this morning.

The loonie has been strong recently. The thing it has in common with Chile and Peru is the exposure to metals in general and our glorious leader Dr. Copper, of course.

Brazil earnings snippets

Petrobras (PBR) reported a quarterly profit of R$5.82Bn. This is down from the 1q08 R$7.24Bn but just beat out analyst forecasts of R$5.71Bn average. So kind of ok for PBR, but.....

Pao de Azucar (PCAR4.sa) brought hom an excellent quarter of R$94.9m, which beat out the Bloomberg forecast average of three analysts of R$75.8m. The most interesting feature of the number is that Pao de Azucar is Brazil's biggest food retailer and reports strong sales for 1q09. The shares are up slightly in early trading.

As for an angle on this retail sales buoyancy in Brazil, how about are old friend Mercado Libre (MELI)?. Definitely not a recommendation but simply a place where you might want to do further DD.

UPDATE: Bloomie also has a report linked here on Petrobras company comments on its results, with the CFO talking 'cost overhang'. Good background.

My new hero nation: Canada


Canada is my new hero country....wild no?

My stereotype-ingrained-pigeonholed opinion about Canada being a quiet, relaxed, unassuming, uncontroversial, agreeable...and plain boring country has been blown out the water by those sneaky conniving Canuck types and their Machiavellian political plotting. YAY!

"So what they gone done, Otto?" I hear you cry. Well, remember back to this photo-op on November 21st?

That Harper dude stood next to Alvaro Uribe of Colombia and watched the lackeys sign the Free Trade Agreement (FTA) between the two countries. Old Alvaro was pleased as punch, of course, and called upon the USA to get on and sign their own FTA with his country and stop moaning and whining about petty things like gov't sponsored paramilitary death squads, phone tappings, kidnappings, extrajudical murders carried out with the approval of ministers...y'know, trifles like that.

But then on April 28th Canada's parliament debated and decided on a few other things. Then yesterday via a press conference in Colombia, Canada delivered a very, but VERY large portion of egg to the face of Uribe when it emerged via a pro-Uribe senator that "a few extra details" must be taken into consideration before the FTA could be ratified. Including:

  • A joint body to study environmental impact in Colombia (big deal)
  • Compliance with labour laws (natch)
  • More work done to combat crime (dunno how they'll measure that one)
  • A study of the number of people made homeless by the ongoing civil conflict (oh...now we're getting warmed up)
  • The government of President Alvaro Uribe must demonstrate a friendlier and more constructive relationship with Human Rights organizations in the country. ZING!!!!!!!!!

Oh how I ROFLed when I read that one. Y'see Prez Uribe classes Human Rights dudes in Colombia as the mouthpieces of terrorists, refuses even the most recognized organizations their permits, chases their personnel out of the country and drowns out their reports of institutionalized killings (there are 22,000 people being investigated in as disappeared in Colombia right now....and no that's not a typo.....twenty-two thousand) by unending ad-hom attacks on the people delivering the message.

And now Canada says "Dude...you don't get your FTA if you don't STFU"...wonderful. What a bunch of subversive bastards you are, frosties. Ah loves you all.

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

.....new bank loans in China, comparing the first three months of 2009 to April 2009.


In the chart I've taken the stylistic liberty of dividing the first quarter new loans money into equal parts for January, February and March, but the U$757Bn full quarter number is still the same in the end. That compares to the U$86.6Bn loaned in April. That's a big drop in stimulus. And while we're at it, I hope you noticed that electricity consumption is down YoY in China, too.

Transport-Trackers Hong Kong: China’s electricity production data for 2009, year-on-year.

January-February: -3.7%

March -0.7%

April -3.6%

Or as I commented to an e-mail friend yesterday, "it takes much less electricity to stockpile iron ore, copper conc etc than it does to smelt them, turn them into steel or tubing or whatever". DYODD, dude.

Understanding South America, Venezuela Edition

In the last few days a friend waltzed through the main Caracas International Airport and, being an observant dude, got a kick out of the main entrance display of the big bookshop at the terminal. Not only that, but being a kind and generous soul he also took a photo to share the happiness with readers of IKN.

(click to enlarge)

Ladies and gentlemen, welcome to South America.

5/11/09

Great Peru Cocaine report from Associated Press


Yes, Associated Press. Not joking, either.

Here comes the first half (click through to read it all...very recommended click, too) of a report by Andrew Whalen of AP on the VRAE region of Peru, the 'Shining Path' terrorists, the local coca growing and cocaine producing trade, the life of poverty and the detachment from Lima felt by these people.

Most LatAm watchers (me included) roll their eyes when they see an AP story coming through as the newswire has a reputation of spinning out the story that The North wants to hear instead of telling it like it is. But credit where due, this is a great piece of reporting and full kudos and cyberbackslap goes out to Whalen for the note. Now read on and learn a little about how Peru really is.

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Cocaine trade revitalizes Peruvian rebels

UNION MANTARO, Peru (AP) — The last town on a rutted dirt road in Peru's most prolific cocaine-producing highland valley, Union Mantaro has no police post, no church and no health clinic. Its 600 people lack running water and electricity.

Until January, makeshift huts of wood and plastic housed scores of refugees from a government offensive against a small but lethal band of drug-funded rebels, revitalized remnants of the fanatical Shining Path guerrilla movement.

Most have since returned to outlying mountain villages as the rebels frustrated the army's campaign against them, killing 33 soldiers and wounding 48 since the military arrived in August. The rebel death toll is unknown.

The army's setbacks — the narcotics trade does not appear to have been dented — are more than a worrisome embarrassment for the central government in faraway Lima. Critics say President Alan Garcia needs to act fast or risk greater instability.

Peru's cocaine trade — No. 2 after Colombia's — is booming after a 1990s drop-off. The government calls the insurgents who've used it to rearm ideologically bankrupt, but peasants who have coexisted with them don't necessarily agree. At least not publicly.

The gateway to the Shining Path's jungle-draped stronghold, Union Mantaro is a bumpy two-day drive down the Andes' eastern slopes from the provincial capital of Ayacucho, where the movement was born nearly three decades ago.

Along the road into the Apurimac and Ene valley, women and children dry coca leaves on long canvas beds in front of half-built, brick homes. A pro-coca political party has painted the leaf on wooden shacks in villages so poor that parents must chip in to pay teachers' salaries.

Coca production soared in this rugged region just 100 miles from the world-renowned Machu Picchu ruins as migrants more than doubled its population to some 240,000 in little more than a decade.

Growing the crop, a mild stimulant widely chewed in the Andes, is legal in Peru, but authorities say nine-tenths of it goes to the illegal manufacture of cocaine.

"Politicians in Lima don't know what's going on in these communities. If they did, they would know the solution to the problem isn't more soldiers," says Marisela Quispe, a government worker who keeps track of victims of political violence.

Trading Post (funday Monday edition)


Riverside Resources (RRI.v) up 2.5% at $0.41. RRI.v is a stock I've been looking at recently and seems I'm not alone. Rick Rule (via his family trust) already owns a hefty chunk of this thing and last week he added 540k extra shares as part of the recent financing. It's by no means a "hot story" stock but there are reasons aplenty to take RRI.v seriously and consider it as a long-term holding. DYODD, dudettes and dudes. I don't own yet..no rush to enter, methinks.

Fortuna (FVI.v) up 5.4% at $0.97. Good. More to come.

Cosan (CZZ) up 2.4% at $4.61. With sugar trading around the $15.50 level at the same time as Cosan's main selling season, cash flow's looking healthy. Is it a trade at this price? I dunno...and when I dunno I err of the side of whuss and stay away.

Freeport (FCX) down 2% at $50.76 and Southern Copper (PCU) down 3.8% at $19.61. The sisters are taking a rest as copper declines once again. From scanning reports and such this morning I get the impression that the (copper) penny is starting to drop and anal yeasts are starting to realize there is no end user demand out there, not even in China. More thoughts on this later today (or tomorrow if I fall asleep). Meanwhile, here's the three month chart comparing FCX and PCU...yes, we have a winnah


Peru's Emergency Growth Plan Revealed


On the back of the Manuel BraveSirRobin Rosales and his escape from what he calls political persecution in Venezuela (and what normal people call corruption and tax evasion), Bolivians about to face trial are skipping into Peru, too.

Three of the 15 ex-gov't lackeys in the 2003 Goni government accused of the illegal killing of up to 60 people in the El Alto "gas wars" disturbances of that period have made it to Lima and are seeking politial asylum there. So since then we've had a whole new round of name-calling, with, Evo saying that Peru can't turn into a "centre for criminals" calling Alan "chabacano" (which roughly translates as 'tacky' or 'vulgar' under the circumstances) and demanding the return of the exiles, and then Peru's criollo dumbass ruling class wringing their hands and going "Oooooh! He can't say thaaaaat! What a horrible thing to say!" without noting that Peru's education minister Chang used exactly that word against Evo in March and Dr. Morales was just returning the favour.

But it's all clearly a smoke'n'mirrors thing anyway as IKN can exclusively reveal that all these corrupt foreign politics are being invited to Peru because of their swollen back pockets. According to our top financial source* this "bring on the badass rich dudes" ploy is the brand new plan to keep Peru's ficticious growth rate moving forward.


*the guy that sells the morning paper

So what can we expect from Fortuna Silver (FVI.v) in the next few days?

....and also that FVI.v has been returning to and then bouncing off the silver spot price all year (so far)....

.....there's every reason to expect FVI.v will close that gap with SLV in the next few days. As FVI.v is up and SLV down slightly today, that has closed the gap by 4%. So another 14% to go which, if SLV decides to stay where it is, would put FVI.v at $1.08.

Yep, I think that's a reasonable short term target right now. DYODD, dude.

BTW, would the dumbass who steals my posts and pastes them on stockhouse bullboards (without even having the common decency to provide a link) please stop it? It's not big and it's not clever. I had a reader mailing me today asking whether it was me. It isn't, it's a dumbass. I don't do bullboards any more (unless pointed in the direction).