Subscribe via email, get all daily posts sent to you next day (and without all the annoying ads)

Which will be worth more at end 2015?

4/9/11

Peru: Eve of vote polling

These numbers are not allowed to be published inside Peru but have been made available to foreign journalists and commentators by the relevant polling companies. There is no margin of error nor is there the sample number given with the polls, so you just have to go with the headline numbers and be done. And sorry, no links either. So here we go with the numbers from IPSOS/Apoyo and from CPI:

IPSOS/Apoyo
Ollanta Humala 29.5%
Keiko Fujimori 21.5%
Pedro Pablo Kuczynski 20.5%
Alejandro Toledo 19.1%
Luis Castañeda 12.1%

CPI
Ollanta Humala 29.5%
Keiko Fujimori 22.1%
Pedro Pablo Kuczynski 21.5%
Alejandro Toledo 19.1%
Luis Castañeda 11.5%

UPDATE: The numbers above are good, but strangely Reuters is now quoting a different set of numbers for the IPSOS poll (they also have the sample number, 6000). Reuters goes:

Ollanta Humala 28.1%
Keiko Fujimori 21.1%
Pedro Pablo Kuczynski 19.9%
Alejandro Toledo 16.8%
Luis Castañeda not mentioned in Reuters note

UPDATE 2: More polling noise here, with Venezuela's Globovision reporting on pollster's IMASEN and its vote simulation poll today that puts Toledo in second place. It also has numbers for the CPI and Ipsos polls that are different to the above numbers. Methinks disinformation is the order of the day and that we really need to wait 24 hours to find out some solid stats before going any further. IKN signing out for Sunday.

When an IKN reader hijacks the Ottotrans™


Your humble scribe got this mail from A. Reader yesterday, which was 1) fun 2) worthy of sharing and 3) spot on with its economic geology...unlike the BS merchant who wrote the NR for Nuinsco (NWI.to). Read on....



Title: You  should run this through the Ottotrans™
 
I love the part I underlined (and now in red)... Translation: "extremely low-grade mineralization suggests the potential for high-grade mineralization". Freedom is slavery, ignorance is knowledge...

And, uhh, uranium values exceeding 1 ppm are "accepted as being significant"?? They're also accepted as occurring almost everywhere on Earth. Hmm...

TORONTO, ONTARIO--(Marketwire - April 7, 2011) - Nuinsco Resources Limited (TSX:NWI - News; www.nuinsco.ca) today announced that recent drill results grading up to 71 parts per million (ppm) uranium (U) continue to indicate the potential for high-grade uranium mineralization at its Diabase Peninsula project in Saskatchewan's Athabasca Basin.
"Uranium values exceeding 1ppm are accepted as being significant, with values exceeding 10ppm suggesting the presence of an alteration zone and the distinct possibility of a lens of high grade mineralization in the immediate vicinity," said Nuinsco President Paul Jones. "Drilling has encountered such significant uranium grades at numerous sites on the property, including our November-December 2010 program where uranium values peaked at 71ppm."
The November-December drilling tested coincident TEM and Gravity geophysical targets near to holes from a 2007-2008 drilling program which encountered highly-anomalous uranium values of up to 707ppm U (0.083% U3O8) located at or near the contact between the sandstone layer and graphite-bearing basement rocks (the "Unconformity") - the prime site for the occurrence of uranium deposits in the Athabasca Basin.
All holes in the five-hole, 2,321m program returned uranium values as follows:



-- ND10-01 encountered 14.69m of 25.29ppm U from 378-392.69m, including 71
ppm U over 2.61m immediately at the Unconformity;
-- ND10-02 averaged 4.26m grading10.8ppm U below the Unconformity;
-- ND10-03 cut 18m of 18.06ppm U straddling the Unconformity from 379.5-
397.5m;
-- ND10-04 drilled from the same setup as ND10-03 encountered 19.25m of
11.99ppm U at the Unconformity. The final sample of the interval graded
24.8 ppm U; and,
-- ND10-05 intersected1.5m grading 14.9ppm U below the Unconformity.
"These  results continue to enhance our understanding of the geology at  Diabase, and are sufficiently encouraging that we have begun another  round of drilling," Mr. Jones added. "This 2,000m program will again  concentrate on the core of the property where numerous factors point to  the possibility of a nearby uranium deposit."
Analytical facilities of the yada yada continues here

Weekend Coxe

First up, check out the weekly Don Coxe conference call on this link right here (and in the words of the person who sent over the link, "listen to the next to last question and Don Coxe's answer on the webcast....That tells us all we need to know, IMO").

Next. real Coxe fans out there will want to make a date in their diaries for Tuesday April 12th at 11am, when Don Coxe will be answering questions from all-comers in a two hour session. Here's the page with all the details, including how to get your question in. Thanks due to reader MP for that link.

4/8/11

The Friday OT: Bruce Springsteen & The E Street Band: Prove it all night

This is why he's called The Boss.



I've had the luck to have found some great rock videos for The Friday OT over time, but this one beats the whole lot. This is rock at its peak; the players, the atmosphere and the charisma that drips out of Bruce. But then there's the musicianship on offer too. For a start, if you can't play live go home and Springsteen/E Street will always be one of best live shows ever, but on top of that there's THIS SONG, recorded back in September 1978, that nails the top live group at top form. The whole thing is spellbinding, but do watch out for what The Boss does between 2:30 and 4:00.

This was sent in by reader 'BC' and I thank him profusely for doing so. Rock at its best and mere words do it no justice, so just hit play and enjoy.

IKN recommends: A new blog on junior miners and metals


For those of you itching to get more interwebnetpipes words written on mining, the markets, gold, silver and all things tradery, there's a new blog in town that looks quite good (i.e. better than the crummy corner of cyberspace you're reading at the moment, at least). Called Yukon Cornelius's Silver And Gold it does nice overview posts, links to interesting articles and the dude that's running it (I have no idea who he might be and I'm only assuming "he" from the blog name) obviously knows his way around the block and his observations are not only smart but backed up by evidence.  Perhaps most importantly he's actively encouraging comments from readers (unlike IKN) so you get to be part of the conversation and should benefit more accordingly. He's also kind enough to have linked to IKN (which is how I found out about the blog, fwiw) but that's beside the point.

I've put Yukon Cornelius's Silver And Gold on my RSS today and I've also added it to the links over there on the right. I encourage all readers into the metals market and junior miners to go over and check out this young and promising-looking space. Here's the link again, just to make sure.

You Ess Ay Tee Ay Day

I've been told 72c by a couple of TA heads, 72c to 74c by another, but for sure we're close to seeing USA.v breakout and the moment it goes and reaches for a share price that better reflects its current earnings potential.

Because in the end , screw the TA. With $40/oz silver and even taking into account the company hedge, this thing is on less than 5X forward earnings. It's going over a buck as long as silver behaves itself in the next few weeks, take that to the bank. Dirt cheap here, even if production is merely adequate.

UPDATE: sing it loud, sister:

Only in Peru

Just under a week ago I wrote in the subscriber's weekly that a Pedro Pablo Kuczynski 2nd place in this weekend's elections would be a very surprising result, but as Harold Wilson once said, a week is a long time in politics. With this news today that the current governing APRA party is at least some unofficial backing to PPK, he now has a leading chance of beating Keiko Fujimori for the second spot behind Ollanta Humala.

The race really is too close to call for second, but what I will say is that I was wrong to write off PPK's chances last weekend. Also, perhaps the biggest shock of this year's campaign has been the crumbling of support for Alejandro Toledo. Nobody can accuse Peruvian politics of being boring, that's for sure.

Update: Message to subscribers. The details may change and round one is in flux, but the baseline call...the important one...is 100% unaffected.

Chart of the day is....

....gold, this week's action.

Three percent up in a week, not bad for a zero-alpha, archaic commodity. Want me to link through to a few more "gold about to drop" articles from a couple of weeks ago so we can have a good laugh together?

4/7/11

The other way the Casey frontrunning scam works

And so begins another tale of Casey Research frontrunning and general ripping off of its plebeian subscribers for your education and edification.
Yeah owly, really. On February 25th Louis Lobito James, the senior metals analyst at Casey Research with no formal degree in geology or metallurgy to his name, decided to call buy on Gold Bullion Development Corp (GBB.v), a small Quebec junior gold explorer. That's fair enough, but the problem is that he only told a fraction of the people who subscribe to Casey Research that it was a buy. Here's the start of what he wote at the time:
Gold Bullion Development Corp. (V.GBB, C$0.52, 158.5M SO, 188.1M FD, C$82.4M MCap, C$6M Cash)
BUY (First Tranche, on Spec)—The CEO here is Frank Basa, whom I was (continues)

At the time, the stock was 52c, but Lobito didn't pronounce his positive conclusions on GBB.v far and wide, because this information only went to the privileged few that pay extra money for the A-list "alert" Casey Research 'Alert' service (they call it something else I think, but what it boils down to is "pay more and frontrun the cheap seats"). GBB.v then made a small upmove on improved volume due to buying from his privileged A list before....well, it dumped hard straight afterwards, in fact and bottomed out a full 26.9% lower than his buy reco price at 38c before floating on for a month or so in the low 40s.

But there's always good news when it comes to being a Casey A-lister, because if you manage to find yourself in a dog stock you can rely on Lobito and his gormless B-listers to bail you out. How so? Simply, if the reco doesn't work out he'll then reco the same stock to the B-list that gets the monthly International Speculator publication at a later date, they'll wade in like the sheep they are and those who bought in badly earlier have a neat and voluminous exit point...no harm done, on the to next

And sure enough, in this month's Intl Spec GBB.v was featured as a new buy and...


...sure enough, the volume surge saw it bought up to 51c (see the above chart)...all the out you could have wanted from this stale pick. Ain't that lucky?

One of the things I like most (well, 'like' in a rather perverse way) is the sheer barefacedness of the way these serial price manipulators go about their dirty work and to that end I've made sure that clipping from the Casey rag includes their "disclosure". In essence what they're saying iwith that disclosure you see there is "We're frontrunning you AGAIN and now that you know you're getting front-ran it's perfectly alright and we can carry on ripping you off...thank you for not noticing our little scam". For sure it's probably not illegal (note the word 'probably' there, because one of these fine days, if there's enough moolah involved I reckon there's plenty of room for an ambitious lawyer to have fun with these guys) but what this crowd of crudballs do on a regular basis sure is morally despicable. Under normal circumstances the three-card trick they play will prime a stock for an A-lister easy win, with the later Intl Speculator reco giving the tipped-off buyers a volume-laden exit point and easy percentage gains, but even if the whole thing goes wrong on Lobito and his pick turns out to be a dud, there's always the "palm it off on the sheep" exit for the A-listers....and the poor saps on the B-List who bought today will just have to learn the hard way (or not at all)

To round off, IKN would like once again to make the case for the Casey Research 'A List' expensive "hear it first" service and we're doing Casey Research a favour by marketing its expensive subscription for them all. Really, if you get the Intl Speculator but not the A-listers service, you're not doing yourself any favours whatsoever and you're also THAT clsoe to finding a real way to beat the market and rig the whole game in your favour. Why are you still on the cheapseat B List when 1) you're getting reamed by the A-listers every single month and 2) you too can sign up for the expensive Casey service and frontrun the poor saps that only get the Intl Speculator, too? So if you're a morally bankrupt piece of shit with zero scruples who enjoys making money at whatever cost, the boys at Casey will suit you down to the ground. Give them a bell today...and ask for that A-listers' thing, yeah?

Eric Sprott's doubletalk on GLD

A very nice catch by Kid Dynamite at this post today. Go read it all but here's the bottom line:

So, to summarize, and again, these are facts$PHYS bought $340 MM of gold.  $GLD saw $340 MM in redemptions (on the same day).

And as KD himself noted in the comments section:
The implications to me are that PHYS, which people like because they think GLD doesn't have real gold, is a completely unnecessary product. Then again, I knew that already.

That's spot on. Eric Sprott, an early contender for this year's Style Over Substance award.

Peru: Latest poll

Due to silly rules that have no concept of the 21st century, polls aren't allowed to be published in the country during the final week before a major election but pollsters are allowed to do surveys and release them to foreign journalists and news media. Here's a paste out of a Reuters wire note just released (now got a link to a Spanish language version here and an English language link here):

(Note: election law forbids publication of polls in Peru a week prior
to April 10 voting.)

   (Adds details on poll, election)
   LIMA, April 7 (Reuters) - An Ipsos Apoyo poll gives Peru's
Nationalist presidential candidate Ollanta Humala 28 percent of the
vote in Peru ahead of Sunday's election, and he will likely face
lawmaker Keiko Fujimori in the second round, a source who had access
to the poll said on Thursday.
   Fujimori had 21 percent of the vote, while former President
Alejandro Toledo and former Prime Minister Pedro Pablo Kuczynski each
had 18 percent in the poll, the source said, asking not to be
identified.
   A second source confirmed Fujimori was favored to face Humala in a
run-off vote scheduled for June 5.
   Humala also leads polls by Apoyo, CPI, Datum and Catholic
University. Those polls have a margin of error of between 2.2 and 2.8
percent. The exact dates and margin of error of the latest Ipsos poll
were not immediately known.
   Investors fear Humala might unwind years of reforms in one of the
world's fastest-growing economies, while Fujimori's critics worry she
would show little respect for human rights.
   Both have disapproval ratings of around 50 percent but are likely
to make it to the second round as a moderate majority splinters
between Toledo, Kuczynski and former Lima Mayor Luis Castaneda.

 (Reporting by Patricia Velez and Teresa Cespedes)
 ((caroline.stauffer atthomsonreuters.com; Reuters Messaging:
caroline.stauffer.reuters.com at reuters.net))

So this poll shows virtually the same numbers as the last Ipsos/Apoyo poll from Sunday 3rd April where Ollanta Humala was given 27.2%, Keiko Fujimori 20.5%, Alejandro Toledo 18.5%, PPK at 18.1% and the others back there.

UPDATE: No link for this one (sorry...blame Peru's archaic laws, not me), but another pollster PUCP now has "unofficial" figures out today that put Ollanta on 26%, Toledo at 20.8%, Keiko at 20.1% and PPK at 18.1%. It's again notable that the PUCP numbers from today are similar to the PUCP numbers of last Sunday, when it was Ollanta 26.3%, Toledo 20.8%, Keiko 20.3% and PPK 18.5%.

UPDATE 2: Kind reader 'Tweetie' adds this in the comments section:

Here's another one, from the nasdaq site:


Private Peru Polls Show Leftist Still Leading For President

LIMA -(Dow Jones)- Two new opinion polls released Thursday confirm the lead of leftist presidential candidate Ollanta Humala ahead of Peru's April 10 general elections.

The opinion polls, which can't be published in Peru due to legal restrictions, show in second place Congresswoman Keiko Fujimori, 35, daughter of jailed former President Alberto Fujimori.

The surveys, conducted by pollsters CPI and Ipsos-Apoyo for private clients, show Humala, 48, with about 28% support and Keiko Fujimori with 21.4%.

Both polls show ex-Prime Minister Pedro Pablo Kuczynski, 72, in third place with 18.4% support.

The Ipsos-Apoyo poll shows ex-president Alejandro Toledo with 18.2% support, while the CPI poll shows him further back.

Both polls surveyed around 2,000 people and have an error margin of about two percentage points.

No candidate is expected to win a majority in Sunday's first-round election and a runoff is scheduled on June 5. Any candidate that wins a majority vote in the first round would be declared winner of the overall election, and cancel any second-round vote.

Pollsters are continuing to do surveys and release information to private clients.

Just tryin' to keep the customer satisfied, satisfied

I've been pretty interested in the new Latinobarómetro press release this morning that the dudes there published yesterday in light of this weekend's Presidential election in Peru. It takes the 2010 data compiled by Latinobarómetro and mostly compares LatAm to Peru on plenty of different criteria. Highly reco'd to Spanish speaking readers (click here to get your own copy) but here I'd like to focus in on one of the main criteria featured, that of "life satisfaction".

When asked (translated), "In general terms, how satisfied are you with your life? Would you say that you are a) Very satisfied b) Quite satisfied c) Not very satisfied d) Not at all satisfied" the answers that called "very satisfied" and "quite satisfied" added together as follows:


(quick note: there was no survey taken in 2002).

So Peruvians are plenty under the regional average and score consistently low over time, as well. Seems to me that all this economic growth hasn't managed to make it to the poor...strange that, innit? And just to give that more context, here's the LatAm-wide results for 2010, with the percentage score of each country's satisfaction with life given (lowest Bolivia 52%, highest Costa Rica 86%)



By the way, don't tell Fox News who's in third joint second (rightly corrected by reader). Well on second thoughts you can, cos they'd never report it anyway.

Brazil's Real

This morning the Brazilian Real dipped under 1.60 to the US dollar for the first time since the 08 crisis (right now 1.595) and looks like making all-time highs against the greenback in short order. It also cocked a snook at Brazil's FinMin Guido Mantega, who just yesterday rolled out the latest set of controls on foreign capitals flowing in to Brazil that was supposed to stem the tide. Here's Merco Press News with a straightforward and decent report on the whole issue and here's an excerpt of the top paragraphs designed to get you to click through and read more:


Underscoring the urgency in senior levels in the Brazilian government to tackle the rising Real, during a prime time televised news conference Mr. Mantega announced the new measure: an extension of a 6% tax on short term foreign-currency loans to longer dated paper, from 360 to 720 days.

It was at least the fourth capital control introduced by Mantega since October.


CONTINUES HERE.

These days,  Brazil's currency muscle is measured not only in dollar terms down this way. You only need to look at the number of deals Brazilian companies are looking to make in other LatAm countries (and really, there are too many to note here but all sectors, from minerals to manufacturing, are seeing companies in Spanish speaking South America snapped up by Brazilian companies) to get a better feel. Another way is to visit Brazil's metropoles, such as Rio or SP, and note the cost of living is on a par with any "first world" country for foreign visitors.

UPDATE: Reader, site friend, Brazil expert and all-round good egg Drunkeynsian leaves this in the comments section and fwiw it sounds spot on to me:

Brazilian government doesn't want to mess with the level of the currency. Since Central Bank decided not to raise rates aggressively to contain inflation, any help from import prices is welcome. Exporters complain and get some fireworks, but it seems clear to me Brazil is choosing a quite radical Ricardian approach to its future: sell commodities, forget about the rest, and pray for a very long cycle. The other side of that is a net foreign liability of US$ 700 billion, but nobody seems to care about it now.

Chart of the day is....

...the Peruvian Nuevo Sol vs the US Dollar, January 2009 to date:

Just to put into perspective the recent weakness of the Sol on political risk that saw it move from 2.76 to 2.81. Chart courtesy of Trading Economics, which is a pretty decent site for macro data on countries, it turns out.

4/6/11

Focus Ventures (FCV.v) and The Yorkshire Tell

Here's a freebie for all concerned. People from Yorkshire England are famous for being...well, what's the diplomatic phrase here?....errrr...."CAREFUL WITH THEIR MONEY AND HOW THEY SPEND IT" * and so when a Yorkshireman born and bred goes out on a limb and puts his own hard-earned cash on the line, pay extra attention because it's a big tell for the near-term future.

Focus Ventures Ltd. (FCV)

As of April 5th, 2011
Filing Date Transaction Date Insider Name Ownership Type Securities Nature of transaction # or value acquired or disposed of Unit Price
Apr 05/11 Apr 01/11 Cass, David Maurice Direct Ownership Common Shares 10 - Acquisition in the public market 16,000 $0.390
Apr 05/11 Apr 01/11 Cass, David Maurice Direct Ownership Common Shares 10 - Acquisition in the public market 9,000 $0.385

IKN leaves you with this as further evidence:


DYODD, bah gum.

*aka tighter than a duck's sphincter


UPDATE: Reader "D" mails in:

Hello Miss

I wish to register a complaint.

These Python chaps obviously  think it is clever to mock individuals who emanate from Gods own country when they obviously have no idea of the hardships that have been endured there ( well apart from that Palin one and he is from Sheffield so that doesn't count really ).

I really lived for three months in a brown paper bag in a septic tank. We used to have to get up at six o'clock in the morning, clean the bag, eat a crust of stale bread, go to work down mill for fourteen hours a day week in-week out. When we got home, our Dad would thrash us to sleep with his belt! It is true I tell you.

I am so disappointed that such a fine purveyor of research such as yourself has taken such blatant anti yorkist propoganda as gospel.

 We are the most generous people within the British Isles - why, I remember clearly buying my brother a pint for the millenium celebrations ( not that he returned the favour... git!).

Otto please... your impartiality and balance of judgement are clearly failing.

 Recant without delay and make atonement by offering a discount to all subscribers who emanate from the broad acres.

Your sincerely

(Sir) Geoffery Boycott 
 
IKN Adds: Reader D's argument is made suspicious by the mis-spelling of Boyk's name. Surely no true Yorkshire blood would do such a thing?

A Flash update...

...was sent to subscribers this morning, commenting on two news releases that came this morning from two of our covered companies. They were pretty strong NRs, too.

Spanish slang: Today's word is "pepera"

In Peru, the concept of the 'pepera girls' or 'chicas peperas' is well-established. For a bit of background on the subject, check out this post over at 'life in peru' that comes with this extract:

"....chicas peperas are girls that.............. get guys to buy them a drink, or bring the guys a drink themselves (servers typically don’t wear uniforms, so you don’t know). Next thing the poor guy knows is when he wakes up in the middle of the Plaza de Armas…
  • Where’s my wallet?
  • Where’s my cellphone?
  • Where are my clothes? What happened? (continues here)

So you would have thought that all the gringo companies and foreign places of employment would have warned all staff about the pepera concept by now. Not so, apparently, as The United States Embassy in Lima is today featured heavily in local press for this story (translated from this article, click through for the embedded video):

Staff Member of the US Embassy Assaulted by Peperas
The man invited two women to his apartment that he had contacted via the internet. Police urge users not to be surprised in the same way.

The desire to have a moment of pleasure and fun cost a staff member of the US Embassy in Lima dearly, as he was a victim of 'peperas' he had contacted by internet.

Investigations note that the man entered the website "adultfriendfinder.com", chose to chat with a woman and later invited her to his house along with a friend of hers. The women surprised the functionary by spiking his drink with drugs to make him sleep.

Once the US staff member was asleep, the thieves stole everything they could: a laptop computer, cellular phones, cash, jewelryt and cameras.

Police Colonel Óscar González Rabanal, director of Divinat (high tech crimes division) asked internet users to be more cautious in using these adult websites and take necessary security precautions.

Hey wow, isn't it just the wildest surprise to find that the US State Dept employs utter dumbasses with too many hormones, no common sense, zero street cred or any idea of how foreign cultures operate in their overseas embassies? 

Chart of the day is....

...gold, monthly.

If you look very very closely, you may be able to spot a trend.

And on the subject of gold, I invite all readers to check out this link, sent in this morning by kind reader 'KP'. In the annals of gold analysis stupidity, the article you'll read by one Conrad deAenlle entitled "Why Quantitative Easing Is Bullish for the Dollar and Bearish for Gold" has to be up there in the top ten of utter dumbassery of the highest water. It's a sobering thought that not only are market commentators this moronically stupid, but their mediameisters actually let piffle like this through their editing procedure and allow it into the interwebnetpipes. Another reminder that this gold bull run has a long way to go.

4/5/11

A Flash update...

...was sent to subscribers tonight. And this one is actionable.

Peru's election: The results are now available

This report a direct translation from this Spanish language AFP note this afternoon:


Peru: Shamans Predict That Humala and Toledo Will Go To The Second Round Run-Off

Using potions, coca leaves, snakes, cards, flowers and skulls, Peruvian shamans in mystic ritual predicted this Tuesday that left-wing Ollanta Humala and ex-President Alejandro Toledo will get through to the second round run-off in this Sunday's election in Peru.

"The majority of the master shamans have visualized that the candidates Ollanta Humala and Alejandro Toledo will pass to the second electoral round", Juan Osco, known as 'The Shaman of the Andes', told AFP. Ten Shamans from the Andean region shook their maracas and threw flowers at photographs of the five principal candidate for the Presidency of Peru; Ollanta Humala, Alejandro Toledo, Keiko Fujimori, Pedro Pablo Kuczynski and Luis Castañeda.

"We have taken ayahuasca (the potion of the spirits) to give this forecast", said Osco after finishing the ritual in the centre of Peru's capital city, Lima.

Osco said that in the second round, ex-President Toledo would win the elections with 60% of the vote.

Humala, a retired army officer who in the year 2000 led a mutiny against the government of Alberto Fujimori, has according to opinion polls a 7 to 8 point lead over ex-President Toledo, congresswoman Keiko Fujimori and ex-minister Kuczynski who are in a technical dead-heat for second.

Throwing the kitchen sink at gold (from IKN100)

The intro to last weekend's edition of the weekly took a slightly different tack and went off on the price of gold. By the looks of the action in gold today, it's working out quite well as a think-piece. Here it is:

Throwing the kitchen sink at gold
This publication doesn’t really exist to make comments on the macro scene for gold made in countless other places and spaces. So to prove that’s a lie, here’s a thought or two on gold that formed as I was taking the bus down to see the doctor last Friday morning and crystallized into written words on Saturday evening.

On Friday morning your author was only one of the 18 people packed into a small bus* going too fast on balding tires over bumpy roads and tight corners, so it’s fair to say it was another typical bus ride in urban South America and the physical sensation tied into the thoughts of how despite having all sorts of flak thrown at it so far this year gold was still showing stout resilience at over $1400/oz (most of the time at least). This simple chart of GLD YTD  gives the basic idea.

The latest go at gold came on Friday on the back of a U.S. Employment report that headlined 8.8% unemployment, down from 8.9%. For sure this is good news (less unemployment is better than more unemployment) but the immediate rush to conclusions saw one percent knocked off Au in seconds and the spike going over 1.5% before the rebound set in.

We’re getting used to this kind of pseudogoldbearish action. I mean, does anyone remember Plosser of the Fed and his “high hurdle” for QE3 that hit gold at the time? That was back in the ancient history of....ten days ago, did the same kind of thing to gold for basically the same amount of time. Then, as now, the yellow metal picked itself up, dusted itself off and set about returning to previous price levels (and yes, guilty as charged of a nasty case of anthropomorphism, but as my Eng Lit prof would say, if it’s good enough for Walt Disney, Tolkien and the authors of The Bible it’s good enough for me). But back to last Friday’s action and this little snippet from the invaluable Calculated Risk (1) on Saturday neatly sums up the reality behind that US jobless number:

“The March employment report was another small step in the right direction, but the overall employment situation remains grim: There are 7.25 million fewer payroll jobs now than before the recession started in 2007 with 13.5 million Americans currently unemployed. Another 8.4 million are working part time for economic reasons, and about 4 million more workers have left the labor force. Of those unemployed, 6.1 million have been unemployed for six months or more.”

(Aside: Calculated Risk has been mentioned in these pages on several occasions and it gets another no-holds-barred reco today; for a guy like me who needs to keep a tab on what’s going on in the US without wanting or needing to go into the minutae, it’s the perfect one-stop statscruncher read, taking up a minimum of my screentime and handing over good analysis without much in the way of op-ed spin. It really is must-read material for anyone involved with the markets, cannot be reco’d highly enough and one of the few high-traffic blogs where I’m happy to drop a coin in its tip jar on a regular basis).

So sell gold on that kind of scenario if you must, but in my personal opinion we’re still a long, long way from any macro that is truly gold bearish. As for the threat of no QE3 this year once QE2 comes to its programmed end, all I can say to Bernanke & Co is “Go ahead punk, make my day” because I still have cash in the accounts waiting for knockdown bargains. Seriously, who is out there begging to buy up the bonds that The Federal Reserve is currently buying?
This chart of the ten year note interest rate speaks its own volumes. We know what happened in late 2008. Then our eyes are turned to 2010 when the deflationary scare started all over again, the Fed implemented mo’QE in August and then, as the desired effect didn’t happen, upped the ante in November 2010 and started buying back treasury securities (a cute way of saying ‘printing money’) at an increased clip. Only then did the market react. And these people are trying to tell me that they’re just going to turn off the spigot and stop the buybacks once the QE2 program is done without any sort of deflationary pressure building that will scare the pants off of them as a result? Again, the simple question:  Who is out there ready to take the Fed’s place and buy those bonds? They think we’re that stupid?

And this is the real story with gold and its current action. People aren’t buying into the jawboning and headline flash numbers for more than the minimum amount of time these days, because anyone who can see further than tabloid/yellow press headlines knows that (to steal one of übersmart Gary Tanashian’s favoured phrases) “It’s inflation all the way”. So thanks all the same to you readers who have recently (and kindly with all best intentions) sent in links to this-or-that market commentator or who is calling his-or-her market top in silver, or gold, or junior miners, or copper explorers or whatever, be their calls of the short-term-it-needs-a-break-and-can-drop-10%-here-before-moving-back-up-again type or the final-top-now-we-all-gonna-die-ice-age-Armageddon-oh-no variety. There’s a whole industry out there that feels the need to feed the beast and keep up the non-stop chatter on gold and silver, so it’s pretty natural that these chatterers need to chatter about something...so why not call a top in silver? After all, the parasitic end of financial commentary world is full of charlatans good at remembering successful predictions at a later date but tending to suffer acute amnesia about bad calls made.

I digress. Yes, thanks to those sending in links to market soothsayers about the imminent demise of gold, but I have to say I take little notice. For one thing, short-term calls aren’t my strong point, I don’t tend to enter that arena much and I don’t care much about the noise generated by writers on the subject, no matter how widely read they might be. But more importantly, even if there is some sort of short-term downwards movement there’s no reason to panic out and sell positions at the moment, not with the state of macro play being obviously bullish for gold over the time periods that really matter. As I wrote to a regular mailer and longtime subscriber on Saturday, “Be long gold, it's so obvious it hurts my brain”.

*For the record, we do not own a car and have no plans to change that

Mining PRs and the Ottotrans™, Part 38


Today's example of "mining NR to real English" comes from Crystallex (KRY) (KRY.to), known in politer circles as "the stock that dare not speak its name".

This is what they wrote:


TORONTO, ONTARIO--(Marketwire - 04/05/11) - Crystallex International Corporation (TSX:KRY - News)(AMEX:KRY - News) has been advised by the NYSE Amex that trading in its common shares has been halted by the NYSE Amex based upon its determination that the Company no longer meets the qualitative standards for continued listing because NYSE Amex believes at this time that the Company is no longer an operating Company.
The Company expects to receive a letter from the NYSE Amex today as an initial step to begin a delisting process. The Company intends to appeal this determination and if necessary request a hearing before an NYSE Amex listings qualifications panel.

And this is what it means:

TORONTO, ONTARIO--(Marketwire - 04/05/11) - Crystallex International Corporation (TSX:KRY - News)(AMEX:KRY - News) has been advised by the NYSE Amex that trading in its common shares has been halted by the NYSE Amex based upon its determination that the Company no longer meets the qualitative standards for continued listing because NYSE Amex believes at this time that the Company is no longer an operating Company. Haha! PSYCHE! All this time AMEX thought we were an operating company! My stars we laughed when we got the mail from the market guys. Anyway, we'll appeal because it's a gross injustice and....what was it again? Oh, I forget. But we have lots of gold and we're bound to win our action against Hugo and he's bound to pay up without saying a word, so buy our stock. Who needs an Amex listing anyway?

Chile's GDP growth over the last six years

While data mining for some other stuff, Chile's GDP readings plopped themselves into my lap this morning and after putting together a quick chart, I thought I'd share it with you because it's interesting enough (although displaying the same pattern as many other South American countries, so hardly an outlier).

So here it is.
No commentary or extra conclusions, just the chart.

Chart of the day is....

...copper, monthly candles.

When an overdose of hand-wringing about the weakness in copper is the illness, Dr Copper prescribes a quick look at this chart....you'll laugh at the momo dumbasses, too. Meanwhile CotD tips its hat to the big bad CECSO Copper Week now happening in Chile. For a decent rundown of  the conference, check out this link to a Reuters PDF that aggregates many stories out of the bunfest.

4/4/11

Eurasia on the Peru Presidential race

Here's the latest take on the Peru Presidential race from regional think-tankers Eurasia Group. Sorry, no link available as it was handed on by a recipient of the Eurasia mailing service. FWIW, I'll definitely stick to my own call made last night.

PERU: Humala has become the favorite to win the presidency
4 April 2011 03:15 PM EDT

Nationalist candidate Ollanta Humala is likely to make it to the second round in the 10 April vote and then go on to win the presidency in the 5 June run-off (we are assigning a 60% probability to this outcome). We previously expected moderate candidate Alejandro Toledo to make it to run-off and win, but the latest round of polls suggests the odds that Toledo will be in the run-off have dropped below 50%. While Toledo would probably defeat Humala in a second round run-off, now there is higher probability of a scenario in which Humala faces either Keiko Fujimori or Pedro Pablo Kuczynski. Humala will likely defeat either of the two. If Humala wins, he won't down the Hugo Chavez path, but economic policy will likely take a negative turn.
The latest round of opinion polls released over the weekend show that Ollanta Humala has consolidated his frontrunner position and will most likely make it to the 5 June second round. The race for the second spot in the run-off remains open, however, with three other candidates -- Alejandro Toledo, Keiko Fujimori and Pedro Pablo Kukzynski -- facing a very tight race for this spot. An Ipsos/Apoyo poll conducted with ballots and released on 3 April shows Humala with 27.2% support (up from 22.8% a week ago), followed by Keiko Fujimori with 20.5% (down from 22.3% a week ago), Alejandro Toledo with 18.5% (down from 21.7%), Kuczynski with 18.1% (up from 15.7%) and Luis Castaneda with 12.8% (down from 15.0%). A Datum poll released on 1 April showed support for Humala at 21.4% (up from 17.6%), and Toledo with 17.4% support (down from 19.4% on the previous week) tied in second with Kuczynski, who had 17.5% support (unchanged from the previous week). Keiko Fujimori had 16.4% (slightly up from 16.1% last week) and support for Castaneda dropped to 12.6% from 15.5% last week. A poll conducted by the Catholic University and also released on 1 April shows Humala as the frontrunner with 26.9% support followed by Toledo (20.8%), Fujimori (20.3%), Kuczynski (18.5%) and Castaneda (13.3%). All the polls surveyed both urban and rural areas.

With Humala very close to making it to run-off, the key issue rests on who he will face. We had so far believed that moderate candidate Alejandro Toledo would be his opponent, but have pointed out that there was a growing risk that Toledo would not make it to the run-off. Support for Toledo has been on a sustained downward trend, while support for Fujimori has been more or less stable, and support for Kuczynski is on the rise. Toledo may still make it. The race will probably remain tight (last night's debate on national television will have little impact on voters' preferences), and his chances are now similar to those of Fujimori and Kuczysnki. But this means the combined probability of a second round scenario in which Humala faces either Fujimori or Kuczysnki is higher than the probability of second round scenario in which Humala faces Toledo.

This matters because Toledo would probably defeat Humala in a run-off, but a candidate other than him would probably lose. We have long been arguing that a key driver of this election is the strong desire for change among the electorate, even if most want moderate change, and that most observers have been underestimating Humala's chances (see PERU: Humala may be more competitive than most think, from 18 November 2010). This desire for change helps explain Humala's rise in the final weeks of the campaign and will benefit him in a run-off against candidates that have a center-right profile and are more clearly associated with the establishment. And contrary to what many pundits argue, voter preferences in Peru have been fairly stable, and probably didn't change all that much since the last election in 2006. In 2006, Humala had a similar level of support near this stage of the campaign (26% vote intention in late March). He ended up with 30.6% of valid votes. The other two main contenders were Alan Garcia, who essentially campaigned on a populist platform and Lourdes Flores, the candidate more closely associated with the status quo. Garcia made it to the run-off with a very tight margin over Flores (24.3% versus 23.8%) and went on to defeat Humala by only five points in the run-off after Garcia was able keep his base and obtain support of moderate and center-right voters. This time around Humala will probably be even more competitive, given that he has moderated his discourse in comparison to the 2006 election and, perhaps more importantly, probably will not face a candidate like Garcia that can appeal to such a wide constituency.

If Humala faces Keiko Fujimori, the dispute would be tight, but he would have an edge. The two have a similar base of support among the poor, but Humala would probably look more appealing to voters for two main reasons. First, he would make a more convincing case that he represents the "change" that most Peruvians want. Fujimori, whose father was president for ten years, will probably have a harder time presenting herself as the candidate of change. Second, most voters have a negative recall of her father's government. The latest Ipsos/Apoyo second round simulations show that Fujimori's previous lead has vanished and she would tie with Humala at 42%. Much as we have been arguing, second round poll simulations showing Humala behind should be taken with a grain of salt given that voter intentions are not clearly defined yet. The key is to ascertain how each candidate matches up with broader voter preferences and identify their respective vulnerabilities, and to look at previous voting patterns.

If Humala faces market-friendly candidate Kuczynski or even Luis Castaneda in a run-off, the odds of a Humala victory would be even higher. There has been an impressive increase is support for Kuczynski over the last few weeks, and some observers view him as potentially becoming the "outsider" that many Peruvians would like to see in the presidency. However, Kuczynski has gained support mostly among wealthier Peruvians in Lima, and his profile as a technocrat associated with the elite in the capital probably means that he will face difficulty in gaining much more support among other segments of the electorate and in other areas of the country. Moreover, he was prime-minister and minister of the economy under Toledo, and many voters would view his career path as being at odds with change. According to Ipsos/Apoyo, Humala would defeat Kuczynski in a second round by a slight margin (43% vs 41%), but the odds of Humala winning are probably higher than this results suggests. The same line of reasoning also holds for Castaneda, who still holds a large lead against Humala in second round simulations (46% vs 37%).

A likely Humala administration would likely push the limits on macro and microeconomic policies, but most likely will not go down the Hugo Chavez path. (See PERU: Humala won't represent business as usual, but neither will he go down Chavez's path, from 1 April). After he assumes office, he would probably send positive signals on monetary policy and tests the waters of fiscal policy. We expect Humala to appoint respected economists to the central bank's board and keep the bank's autonomy. But he is likely to gradually push the envelope in fiscal policy. Eventually, a more expansive fiscal policy could generate growing tensions with monetary policy if the central back begins a tightening cycle capable of dampening growth. While Humala is unlikely to undermine the central bank's autonomy, he is likely to try and exert more pressure on monetary policy in comparison to the current administration. In the meantime, Humala would most likely seek to increases taxes and expand state controls on key sectors whilst avoiding to overtly breaking contracts. A possible but unlikely scenario (25%) in one in which Humala conducts no meaningful change in comparison to a scenario in which a moderate candidate such as Toledo wins. The least likely scenario is one in which he follows the Chavez path (15%).

Erasto Almeida

Totally OT: Zdenek Kalal and Predator

As impressive pieces of technology go, this one rates a "gotta show it on the blog" even though it has nothing to do with LatAm, stocks, politics or economics. Watch this video (and thanks due to reader MR for the headsup) then when you're done, go and find out more about the way young way smart whizzo Zdenel Kalal, the dude behind Predator, on his page here.


Guaranteed to impress and to make you think of James Cameron movies, too.

It's a pretty quiet day at the office, so...

...let's break the tedium by having a good laugh at Wistar Holt, Mexico Mike Kachanovsky and all the GATA idiots for backing the dog of all dogs, ECU Silver (ECU.to) and shamelessly pumping the stock while on the company payroll. I mean, how you you like your charts?

Five day?

Year to date?
12 month?
5 years?

How anyone can take these idiots seriously is beyond me. You get paid to promote the worst silver company out there (I nearly said 'silver producer' there, but even ECU.to admits it doesn't fall under that category) for years on end, watch it do worse than nothing all this time and still have the brass neck to tell your flocks it's only a matter of time...and any minute now....and now's not the time to give up. Utter charlatans, the lot of you.

Brazil gets a ratings upgrade

The  good news: Fitch has just raised Brazil's sov rating to BBB

The bad news: The upgrade is from Fitch, so nobody is going to give a toss.

Peru's final polls

Yesterday, April 3rd, was the last day polls could be published in Peru for the Presidential election coming up next weekend. Here's an excerpt of yesterday's subscriber weekly IKN100 with two charts and a small snippet of the text that accompanied:


So to finish off, two things to note. Firstly, these two charts sum up the whole basket of polls that have appeared this weekend in Peru (by law, no pollster is allowed to publish in Peru after today April 3rd, so that’s why there such a rush now). The first chart shows how the six main pollsters gauge the scenario (we’ve left out some of the obviously biased polls such as IDICE or the polls published in non-reliable media such as El Expreso):

With those in front of you, this next chart gives you an easier-to-read average of the six polls as seen above.



Clearly, Ollanta Humala is now in a clear lead and looks set for round two. The battle is for second spot and (continues)

Chart of the day is....

...the Peru IGBVL "general" index compared to the US S&P500, 2011 to date:

So much for the emerging market miracle that is Peru, right?

Meanwhile, that ubiquitous and ever-wise commenter "Anonymous" leaves a message on the previous post:
Anonymous has left a new comment on your post "The IKN Weekly, out now":

$40/month to read an angry hypocrite!
You give bad advice and still increase your rate, what is this world coming to....don't you feel bad accepting money for nonsense and bad advice?

I couldn't agree more, anon. It's absolutely beyond me why so many people have signed up and keep sending me their monthly payments. Total Ponzi scheme.

4/3/11

The IKN Weekly, out now

The Don = The Greatest. 
No man has ever dominated any sport the way this man dominated his.
 
IKN100 has just been sent to subscribers. A quick reminder that as of tomorrow (late tomorrow evening to be precise) the price of Weekly subscription goes up to $40/month or $400/year for any new subscribers. Anyone on before the rise will be grandfathered at the current price ($25/month or $250/year) indefinitely and the new price will not apply to them.

Anyway, the Weekly's out. It has words and numbers and I have a dog waiting for his walkies.

Leaked poll numbers for the Peru Presidential elections

Apparently, this is what decent pollster CPI is going to publish some time tomorrow (well, today in fact as it's now seven minutes past midnight Lima time) as the result of its last opinion poll.
Ollanta Humala 28.3%, 
Alejandro Toledo 19.5%, 
Keiko Fujimori 19.0%
PPK 17.5%
Luis Castañeda13.8%.

The source of these numbers has been pretty accurate and fed correct info previously. Please be clear that as today, April 3rd, is the last day pollsters in Peru can publish survey results, we're going to get a whole slew of numbers pushed at us during the day from several different polling companies. In fact we've already has pollster IMA come out with its poll Saturday that puts Toledo (22%) in a clear second place behind Humala (26.1%), with Keiko (17.8%) in third. We'll be taking a deeper look and making some calls on how Peru-exposure may be affected by the run-up and aftermath of next weekend's election in IKN100, out later to subscribers.

UPDATE: IMASEN has its poll out (published in the reputable daily La Republica) which puts Humala on 25%, Toledo on 20% and Keiko on  18.2%. Then comes PPK oon 16.5% and Castañeda on 11.6%.

Setty and PDVSA's creaking pension scheme


Not content with exposing financial shenanigans amongst junior and not so junior quoted oil companies, Setty has now taken it on himself to go after the biggest, chunky oil company in the region, Venezuela's State-owned PDVSA and its wobbly-looking pension scheme. Go read this because it's dynamite stuff.