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1/1/11

Free subscription to 'Traders' magazine

This looks good enough to offer the esteemed IKN readership; a free offer (you'll note this one is USA residents only) subscription for Traders magazine. Click through, fill in the form (no credit card or payment details required.....these offers we run really are 100% free and no strings) and get yours. Easy peasy lemon squeezy.

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Traders
Traders Magazine publishes unparalleled coverage of the entire trading process, including equities and options, major trends, financial industry news, executive profiles and the technological developments that keeps Wall Street running.
Traders Magazine is the industry's leading source of information for the Institutional Trading Community on the buy and sell side since 1967. As the leading provider of news, analysis and opinion in the cash equities trading business, Traders Magazine covers the business of trading, including a heavy emphasis on the buyside, the sellside and the technology and products that they use, as well as the regulations that oversee the process. Traders Magazine not only focuses on electronic trading tools -- like algorithms and program trading -- but also on the trading venues such as crossing networks and exchanges, and the latest news and analysis on trading, technology and regulation.
 
Geographic Eligibility: USA
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Dilma swears in

Another woman in a world top job. This is good.

UPDATE: Bina got the two best photos from the Dilma inauguration shindig today. They might even resurrect IKN's Kaption Kompetition segment next week, good as they are. Go see.

Evo's U-turn

By some fluke your author actually caught this announcement live last night but was too busy drinking champagne to post on it. Here's Bolivia Weekly with its version.

Today just hours before new year President Evo Morales gave a press conference where he announced that he will “obey the people” and annule Supreme Decree 748 which he had his vice president announce while visiting Venezuela on December 26th. Vice President Alvaro Garcia Linera had announced on December 26th that Bolivia spends 380 million dollars subsidizing fuel each year.  The decree had caused gasoline, diesel, jet fuel, and vehicular natural gas prices to skyrocket by 57% to 82% and led to a nation wide bus and transport strike that paralyzed the country during the holidays. Morales’ spokesman Ivan Canelas had announced to the national press that this move to cut subsidies was “valiant and patriotic” because the gas subsidies were “shedding Bolivia’s blood and neoliberal” and “this is why all the right-wing opposition leaders and ex-mayors of neoliberal ex-presidents agree in denouncing this decree.” Morales has spent the past 4 days justifying his decision to end gas subsidies, calling them “neoliberal” and blaming transport workers for raising prices. Bolivian groups have been almost unanimous in denouncing the gas-hike, even the coca growers unions which Evo used to lead decided to block the Cochabamba-Santa Cruz road.CONTINUES HERE

I also like Bolivia Weekly's end comment: "To learn more look at any Bolivian newspaper", but click through to BW and read the rest, because it does a good job in covering the bases.

What's noticeable is that word "neoliberal".....the subsidies were neoliberal so had to go...then protesters said Evo's decision was neoliberal....now the decree has been overturned because of its neoliberal opposition. In other words, the only spark of good about this episode is how everyone uses 'neoliberal' as a term of disparagement in Bolivia....we're all Marxists now, baby. But really, although it's good that he had the guts to U-turn on this, the last week in Bolivia will go down as an embarrassment for Evo and a real Banana Republic moment for the country.

12/31/10

The Friday OT: Red Hot Chili Peppers; Dani California

Ten bands in one!


The Chilis do (in order) Elvis, Beatles, Hendrix, Funkadelic, Bowie, Pistols, Misfits, Motley, Nirvana and themselves....and then at 3:49 you get one of the best guitar solos of the decade. I can think of no finer way of rounding off IKN2010 then letting John F's guitar sizzle your eardrums, so enjoy the show and then turn that volume to 11 for the last blast. 

See you next year.

Bolivia is the subject of IKN's first prediction for 2011

Your humble scribe stares deeply into his crystal ball, goes all misty eyed, proffers up an offering or two to the Gods and says:
"You won't be hearing much about Bolivia's fuel hikes and protests one week from now. It's already blowing over, the "massive calls for Evo's resignation" as seen on CNN, Fox and other dumbass sources of information on all things LatAm amounted to about 20,000 people (and 20,000 does not a resignation make), the transport strike has already been called off, there are no runs on banks as the rabid right tried to suggest, Evo will take a temporary hit in the polls but will get through this just fine. So sorry Stratfor, sorry Economist..no blood on the streets this time."

You get what you pay for in Colombia (and vice versa)

Today's LatAm weirdnews translation, from this report:


Condemned For Not Paying For Sex With Employee
In the city of Pereira, a man was condemned to pay his domestic employee for sexual services she had given him that had not been remunerated.
Judge Eisenhower Zapata, speaking on Caracol Radio, explained that the patron paid his employee her salary for housework and had also agreed a payment of 20,000 pesos (U$10) for each sexual favour.

The domestic employee "made note in a notebook how many times she had slept with him for four years until the relationship soured and she demanded the payments be liquidated."

The judge added that the domestic employee "had proven that she had slept all those times with the gentleman and that he didn't want to pay her."

The man was ordered to pay on consideration that "prostitution is age-old and is as respectable a profession as any other."

Chart of the day is....

...copper, monthlies.

Nuff said.

12/30/10

Chilean salmon: What could possibly go wrong?

Yes, of course you can pump farmed fish full of chemicals, ignore how nature works and expand your industry to cater for 50% of The USA's salmon consumption. It's progress, it's the 21st century and the way to measure success is growth and profit, not old fashioned concepts like health and sustainability.



Esp for setty

So what's your favourite part of the latest Mercer Gold (MRGP.ob) quarterly report, Otto?

Ooooh, probably this bit, all things considered:

Based on our current plan of operations as set forth above, we estimate that we will require approximately $1,000,000 to pursue our plan of operations over the next twelve months if we complete Phase I only, but approximately $2,000,000 over the next twelve months if we also proceed to Phase II during that time frame. As at November 30, 2010, we had cash and cash equivalents of $87,597 and a working capital deficiency of $186,987. However, we may require additional financing to pursue our plan of operations over the next twelve months. There can be no assurance that we will obtain any additional financing in the amounts required or on terms favorable to us. If we are unable to obtain additional financing, we may have to re-evaluate or abandon our business activities and revise our plan of operations.
We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our plan of operations going forward. In the absence of such financing, our business plan will fail. Even if we are successful in obtaining equity financing, there is no assurance that we will obtain the funding necessary to pursue our business plan. If we do not continue to obtain additional financing going forward, we will be forced to re-evaluate or abandon our plan of operations.

Y'see, you guys out there can read all the soft soap bullshit on junior miners you want, cos there's plenty of that about thanks to the paid pump scene, idiotic bullboard posts and über-massaged corporate presentations. Personally, I like regulatory filings as my DD reading matter. And while we're at it, let's see how this scam fronted for stock fraudster Brent Pierce is doing in the markets, shall we?

Hmmm, all that and dilution to come, too. Just not happening, is it Rahim? Our  mucker Jivraj is doing his reputation wonders for the future. Lie with dogs get fleas, my man....

A Flash update...

...was sent out to subscribers a few minutes ago (before 11am EST). We have made over 100% in a position in less than three months and we're taking profits on it.

And a very prosperous new year to you, too.

Coro Mining (COP.to) and Owly

First, Coro Mining's (COP.to) news release:

Press Release Source: Coro Mining Corp. On Thursday December 30, 2010, 9:10 am
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 30, 2010) - Coro Mining Corp. ("Coro" or the "Company") (TSX:COP - News) is pleased to announce that the Interdisciplinary Commission for the Environmental Evaluation of Mining Projects ("CEIAM" in Spanish) of the Province of Mendoza has completed its compilation, collation and evaluation of the previously completed sectoral reviews; the outcome of the public hearing and public consultation process; and the results of additional hydrological studies completed earlier this year, and has recommended that the EIS be approved by the provincial government. The CEIAM is comprised of the various entities which completed individual sectoral reviews of the project in 2009 and 2010, together with representatives of the pertinent Provincial Government ministries.
The recommendation of approval is conditional upon the Company's Argentinean subsidiary, Minera San Jorge ("MSJ"), complying with the highest standards of environmental protection, control and monitoring prior to, and during the construction and operation of the project, including the requirement for the paste tailings deposit to be made impermeable with a liner. The CEIAM's report will now be submitted to continues here
Now, our friend the owl gives us worthy analysis on the situation:

The funny thing about this whacky world of markets is that you don't have to be right about everything all the time; all you need to do is be right about the battles in which you choose to participate. DYODD, dudette. DYODD dude.

What Evo Said

Here's last night's EvoSpeech to the Nation on the fuel price rise, what it means, the spoonfulls of sugar that he announced and all things in between.



It was a pretty good speech all told, explaining the situation in terms and providing the love via 20% salary rises for police, teachers and healthcare workers (eg doctors and nurses). However the main use of the money is a positive-looking grain purchase plan that will buy produce from farmers at 10% above the market rate....that one gets the large rural population onside quickly.

So the transport workers will strike today and try to make their 100% price increases stick, while the government insists they only have the right to hike prices by 30%. The jury is still out, but the timing of the fuel subsidy cut and the populist moves in Evo's speech last night are scoring good points for the government side right now...chances are that Evo will get his way once the militant mood dies down.

Chart of the day is....

...road traffic deaths in Latin America.


We know the region is batshit crazy when it comes to the way it drives, but here we get an idea about which places are the batshittiest craziest of them all. Leading the field are Venezuela, Peru and Mexico, all showing more that 20 deaths per 100,000 inhabitants per year. The next batch see Guyana, Paraguay and Brazil all pretty batshit, then things start to trail off. Unbatshit crazy drivers in the region are Ecuador and Colombia, with a death-per-100000 rate lower than that of The USA.

12/29/10

Peru's luck-based economic growth, part 562

Here are the monthly production numbers for gold in Peru, 2009 to date (November's numbers out today):


Here's that gold in dollar value per month (using the average London Fix for each month, data from kitco).

So, Peru produces less and less gold but thanks to world market prices gets more and more money per month. And be clear how important gold production is to Peru, as it currently makes up 22% of all the country exports by value. The story in copper (Peru's number one export) is very similar, with stagnated production figures made to look far more impressive by the world price hike. My word, all this sounds like a recipe for a successful long-term economic plan*.


*yes, that's irony

OT: Lost (and found) in translation

IKN NerveCentre™ has kind of a busy day in store and posting is likely to be light after this one, but before we get on with life here's a fun post. Reader HA send in this photo, found at this post.

The post is good reading, as it explains where the "rice-flour noodle" translation derives from (go see for yourself) and ended with a line that rang very true for your humble scribe.
My friend in China theorizes: "I guess all the public sign translations in this country are done by lazy bureaucrats, with the help of Google Translate." It will be sad when these finally go away.

Indeed. The quality of Spanish/English public translation has improved these last few years and your author's encounters with funny Spanglish aren't so common these days, but even though less common they do still happen and every one is cherished. The best always have to have a pretzeled logic between what the person wanted to say and what they actually said (so the park sign once spotted that asked me not to wank on the grass was funny, but not an A1 example). The one I wish I'd taken a photo of at the time was in a restaurant menu in a small town in Peru which offered "Familiar Chicken", still my all-time favourite (knowledge of how Spanish works is key). So three cheers and a hearty Viva! for Spanglish and a thought set aside for what happened to the population of Babel all those years ago.

China's Rare Earth Quotas:

I'm not aware of too many things
I know what I know if you know what I mean
'What I know', Edie Brickell & the New Bohemians, 1988

I know nothing about Rare Earths, something made plain in the past on these pages and also in the subscription weekly. However, I do know when I'm being fed uninformed bullshit by a whole bunch of people that pretend they're now suddenly experts on REE and this week your humble scribe's NumericalBullshitGeigerCounter™ has been going haywire thanks to the announcement out of China for REE export quotas for the first half of 2011.

Typical BS is on this link from the WSJ, who start with "China Cuts Export Quota on Rare-Earth Metals" and then feed the fear with quotes from those who really, really want you to get worried about supplies and how that superduper US defense system or that superduper Japanese flatscreen is under threat. You can tell just by looking at the phonies The WSJ is getting for quotes that neither interviewee nor interviewer has the first clue about what's really going on. So let's go to the numbers and see a bit about what's been happening with China REE export quotas, starting with this chart.


This shows the six-monthly quotas for REEs since 2009, including the latest one for the first half of 2011. Put simply, they had a lot to ship out in 2009, cut that drastically in 2010 and have pitched for a similar sort of level (slightly lower) this year, but also a level that's much bigger than the second half of 2010 (the bit we're still in). However, dig a little deeper into the figures and you see that the dreaded and fearmongered supply crunch....well, that just isn't gonna happen, folks. Here's the 2009 quota total stacked with the actual amount of REE exported by China in 2009:

2009 quota limit 50,145mt
2009 quota used 26,770mt
2009 excess 23,375mt

Yup, there was a quota limit, but in the end the amount exported by China to feed that overwhelming world demand didn't even get close. So since then the Chinese have been working the demand to their favour without choking off supply to those who need these REEs (and before we continue, let's note that 45% of all REE exports out of China are of one REE, Lanthanum (La) a fact that skews any fearmonger's supply/demand idiocy even further out of shape) by keeping quota limits to where world demand is pitching itself...after all, if you own 97% of all the REE out there you're not going to let anyone else start hoarding it, are you?

In essence, what China is doing is sticking to its own policy of keeping REEs inside China and promoting the construction of Rare Metals applications factories inside the country. It's using its near-monopoly on REEs to promote its own economy, but what it isn't doing is choking off world supply and harming other country economy; it's letting out enough REE for the rest of the world, but no more than that. when the 2h11 quota comes around, we'll see China adjusting its export quota, up or down, as a function of the actual exports and demand (and prices) seen in 1h11. So apologies to those who like to drum up hype and/or blame China for their own shortcomings, but you're talking out your butts....again.

Chart of the day is....

....the gold/oil ratio.


The tinfoilhatter goldbugs amongst this audience might not like the idea, but the development of this ratio in 2009 and 2010 really does say "no inflation out there".

12/28/10

Good news: The horse is feeling fine

This evening Ex-President of Colombia Alvaro Uribe fell off a horse, got kicked by the animal in the knee and was immediately taken to hospital for surgery on said joint. 


Here's the flash out of Colombia's RCN which shows Uribe showing off by riding and holding a cup of coffee. The clip was taken just before the unscheduled dismount and leg-crappery, so no moneyshot. Unconfirmed reports of the horse's stable being wiretapped by the DAS were immediately denied by government security forces. We'd also like to make clear that any relation between this accident and the traditional mafia culture punishment of kneecapping is purely coincidental.

UK local time, 00:55am Wednesday December 29th 2010

For those that understand.

Retained!

Heatwave!

With Buenos Aires, Argentina, currently sweltering through a humidity worsened heatwave that has the temperature sensation hitting 40º and the electricity system overload from all the aircon units causing regular blackouts in the city, IKN sends out a message to friends stuck in the horridness.


Go Palito!

Goldfails, 2010

In a year like 2010, when gold bullion hit new highs and the world finally began to wake up, smell the coffee and look at gold as a decent safehaven alternative, anyone who aimed some cash at the junior gold producers should have been on a good winner, right?

Well maybe yes but maybe not, because amongst the leveraged wins there's a group of gold producers with more than one thing in common:
1) They're small gold producers working in Latin America
2) They have a dubious track record of promising more than they can deliver
3)  Their share prices have all performed much worse this year then their main product, gold.
4) They all quote on the US exchanges
5) They've all, in their time, been pumped to death by brokerages and analysts who care more about the commissions and cheap shares thrown their company's ways than decent, unbiased analysis

So a warmly sarcastic round of applause as we ask these three 2010 goldfails to step forward: Give it up for Minefinders (MFN), Gammon Gold (GRS) and Jaguar Mining (JAG):

The chart shows the 2010 year-to-date performance of MFN, GRS and JAG compared to GLD, the gold ETf that serves as an accurate proxy to the metal. So Minefinders has managed to scrape out an "unchanged on the year" performance due to a late year rally, but it's still some 20% under an investment in gold, certainly not the type of performance that wins friends an influences people in junior mining. As for JAG and GRS, it just goes to show (once again) that you gringos will buy anything, especially if it's available on the NYSE and has the word "gold" in its corporate title.

Wikileaks Panama: Superb coverage from Bananama Republic on the Martinelli leaks

The reaction from the recent Wikileaks revelations in Panama may mark the first case when the leaked cables have significantly weakened a current government administration and a country President. Okke over at Banamana Republic has done a great job of stringing together the scandals so far and the three posts over at his site are today's required reading.

The first post is on how the country's Veep called the the current Panama Canal expansion "a disaster", which is interestng enough but nothing destabilizing. However it was a mere hors d'oeuvre for what followed in....

...the second Banamana Republic Wikileaks post, an absolute gem. Here we get a great rundown an analysis of the big scandal currently hurting President Martinelli and his government, how he tried to strongarm the US into giving him illegal phonetaps on his political enemies, plenty more rogue behaviour detailed and a character assessment of the Prez dude from the US ambassador that will remain for the ages; "His penchant for bullying and blackmail may have led him to supermarket stardom but is hardly statesmanlike. He risks losing the good will of his backers in the Panamanian elite and business communities. Martinelli is not a member of Panama’s traditional elite, and he could be on thin ice if his “anti-corruption” measures end up being seen primarily as shake-downs for fast cash."

Then yesterday we had the third installment of Bananama Republic's Wiki-coverage, with the fallout from the wiretap revelations and more on the DEA in Panama.

Go read them all now, especially that second one. Top stuff and we very heart Bananama Republic.

Chart of the day is....

....gold, daily candles.

12/27/10

What is a mining engineer?

Sent in by reader 'J', somebody who knows what he's talking about on this subject:

click to enlarge.

UPDATE: George leaves this in the comments section, also very likeable:
I like this quote from the Chairman of Scottish Branch of the Institution of Structural Engineers (1946) “Engineering is the art of modelling materials we do not wholly understand, into shapes we cannot precisely analyze, so as to withstand forces we cannot properly assess, in such a way that the public at large has no reason to suspect the extent of our ignorance.”

Dead journalists in Latin America, 2010

The Press Emblem Campaign is out with its totals for world journalist deaths in 2010 and of the 105 reporters murdered this year, 36 are from Latin America (making it the most dangerous place there is for the job) but to comment on the story like a good gringo, please follow the instructions below very carefully:

1) Wring your hands over Mexico's failed State.
2) Ignore Honduras
3) Ignore Colombia
4) Ignore Brazil
5) Make a big song and dance about the two deaths in Venezuela, even though both murders were non-work related and happened when both were victims of car robberies.

Bolivia raises fuel prices and there's trouble in store

Pretty big economic news out of Bolivia over the Christmas weekend, as the government of Evo Morales (with Veep Garcia Linera in charge while Evo visits Venezuelan flood victims) has bitten the bullet and slashed the government subsidies on vehicle fuel prices. Here's how Reuters covers the story:

LA PAZ, Bolivia, Dec 26 (Reuters) - Bolivia's leftist government raised fuel prices on Sunday by as much as 83 percent to foster oil production and cut state subsidies, in a politically tricky move that set off a transportation strike.
To offset the measure's impact, the government also froze public utility rates and said it will promote wage increases that top the 6 percent inflation estimated for this year.
In 2006 Bolivia's socialist leader Evo Morales nationalized the energy industry, which is centered on natural gas exports.
"We are bringing fuels up to international price levels ... State subsidies cost $380 million a year. We don't want this to continue. We buy expensive diesel fuel and sell it cheap," said Vice President Alvaro Garcia, who is standing in for Morales during the president's visit to Venezuela.
"We had to raise prices so energy producers feel the need and incentive to produce (oil), so there will be more diesel and gasoline and we will import less ... in one, two or three years, we won't have to import any gasoline or diesel at all," Garcia said.
Diesel prices will rise CONTINUES HERE
As for prices, these charts show you the before and after of the subsidy cut and in three different dosages (for ease of comprehension). First in litres...

..now in standard gallons (4.546l)

...and here in US Gallons (3.785l)

Be clear, this is a big move by the Morales government and the strike they knew they'd generate as a result isn't one that will roll over and die in a couple of days. This government isn't one that just makes a big decision like this one on the spur of the moment, either, so there's clearly strategic thought gone into the timing of this move (one thing that springs to mind is that tourist and citizen transport is greater than business/economic freighting and shipping over the Christmas/New Year period).

Economically speaking, it does make sense on a few levels. Firstly, Bolivia is a net exporter of natgas but produces little liquid hydrocarbons itself and is a net importer of diesel, gasolines etc. The subsidy that was being paid by the government was a clear net loser for the treasury. Also, the country runs on public transport (private car ownership is low), a medium that can absorb a huge percentage increase more easily. Thirdly, this subsidy cut, somewhat strangely, does appeal to the Socialist leanings of the Morales administration because a fuel subsidy is in effect a subsidy for those who can afford a car etc (the same 'tax break for the rich' argument is often used as a critique of Venezuela's heavily discounted fuel).

So this is a story that's worth watching in the next few days, a real test of the authoritive power of the Morales admin and one that will bring out transportists on a strike that may get ugly. Maybe a negotiation and semi-rollback of the subsidy is the eventual outcome? I don't know, but watch this space. 

UPDATE: An example of US analytical mediocrity: Of all the quotes on this issue that "academic" Greg Weeks could have chosen, he goes for the one that makes himself look like a total dumbass. A better example of total non-comprehension of South America would be difficult to come by.

Chart of the day is....

...the 2010 performances of silver (using SLV, the silver bullion ETF, as proxy) and gold (using GLD, the gold bullion ETF, as proxy).

Or in other words, if your gold miner didn't move up by more than 20% or if your silver play didn't beat 63% this year, you shouldn't have bothered. Yes Wistar, that includes your dumbass silver play.

12/26/10

The IKN Weekly, out now

 a year to remember

IKN86 has just been sent to subscribers. Guaranteed turkey-free.