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12/24/11

The IKN Weekly, out now


IKN138 has just been sent to subscribers. A shortened edition this week, as I have a turkey to cook. Ho ho ho.

12/23/11

The Friday OT: Robert Earl Keen; Merry Christmas from the family

It's that time of year and, of course, IKN again features the world's number one best ever Christmas song ever but ever on its pages:



If you know it already, sit back and enjoy. If it's your first time, get ready for a festive treat.

Wishing all readers a very merry Christmas.

Moral: Don't get thrown out of windows by married men when their wives come home unexpectedly

Story here, translation below.

Buenos Aires (Agencies): A woman suffered various injuries and traumas after falling from the second floor window of a building located in the Argentine province of Salta.


The injured person, identified as Yesica Tarifa, 23, was found injured and unable to move on the sidewalk. Paramedics took her to a nearby hospital where she was admitted with a fractured tibia and collar bone.


According to reports, before falling from the window the young woman was having sexual relations with Sebastián Alberto Madrazo, 27, lead singer of the folklore group Los Teuco, in an apartment in the building. Apparently when he heard his wife open the door to the apartment, and to avoid his infidelity being discovered, Madrazo grabbed the girl and threw her half naked out the window.



Argentine Police later detained the singer, who admitted that she was the girl he threw out the window due to his desperation about not being discovered by his wife, who is also a friend of the girl.

Catalyst Copper (CCY.v) insider buys

Right here on this six month chart ripped from the relevant Canadian Insider page.


As for one line on the backlground, CCY.v is a Greenslade (BAJ.to) thing with an optioning-in deal with Teck on a Mexico copper gig.

The Peru Nuevo Sol (PEN) versus the Chilean Peso (CLP), 12 month chart

This one for Peter K:

Thoughts arising:
1) Sorry, but wasn't the Piñera gov't the right wing one and the Humala gov't the bunch of raging lefties?
2) Gold is an asset class, copper isn't.
3) So tell me again, Mister Chilean Central Banker, how free-floating of a currency is the only possible way and that managing a country forex never works.

The Economist's "Democracy Index 2011: Democracy under stress" report

Via the excellent Aguachile blog, your humble scribe hears about this report from EIU (The Economist's Intelligence Unit) which is a free download, you just need to fill in a simple form. House opinion here at IKN is that The Economist can be a bit hit-or-miss, with its LatAm coverage particularly patchy (to name two countries as examples, it does Peru well but is full of ideological claptrap on Bolivia). Aguachile likes the 48 page report and for sure it has some decent insight, but your author, simply by noting where the LatAm countries are (or are not) featured in the general ranking of the 167 countries has his doubts. Here's that list, with local ranking to the left, where the country sits in the overall EIU ranking and then the country name:

For a start, countries such as Uruguay and Costa Rica simply aren't featured. Then we note that those old Brit colonies Jamaica and Trin/Tob get higher scores....a bit of wistfulness about Blighty's grand past showing through at The Economist, perchance. But more significant is the way Chile (yawn) tops the local rankings again, despite routine police brutality and close government control of its press....or how Ecuador is marked down....or how Venezuela (you know that one) or how Colombia is higher than the "Axis of Evo" countries despite being (you know that one, too). 

Summing up, the ranking smacks of samo samo, strong flavours of "nothing ever changes down there" (wrong, it does) and nuanced undertone hints of white man's burden. Still, the greater report is detailed, up to date and is worth your time to download. After all, deciding for yourself is far smarter than listening to the opinions of a loudmouth blogger.

Chart of the day is...

...copper, futures chart showing the last five days.
A bit better, with a 1% move today that, according to this report at least, is down to a combo of "hopes for US economy" (ugh, seeing hope in US context makes me cringe about the way I actually fell for all that Obama campaign hokey) along with year-end close-out short covering moves from instos...which sounds far more like a decent reason to me.

12/22/11

Wake me up when 2011 is over

Isn't this fun?


Disclosure: long BCM, position opened Nov '11 at $4.40. Staying long til this silliness is over, too.

More on Casey Research's serial hoodwinking

After yesterday's post outlining Louis James' stellar performance in junior mining stocks during 2011, your author receives the following mail from reader 'G' concerning the Casey Research energy letter service run by Casey's liar-in-chief, Marin Katusa (which is fortunately outside normal interests round here, so no need to read it):
Maybe you can get your head wrapped around this, but it makes my head hurt!

Casey's Energy letter had an end of year wrap-up, and some of the percentage losses seemed a bit suspect.  Let's pick an easy target out of the many losers: RPG.

Recommended a couple years ago at 3.00, so, of course, it's about a 90% loss.  But wait!  A few months ago they re-recommend it at 0.55.  So anybody who bought that second tranche lost about 50% of that investment as well.  But for Casey, there's a silver lining - by combining those two losses, they get to report a 64% loss on the total position.

I can just imagine Casey subscribers thinking, "Boy, it's a good thing I averaged down on RPG - I only lost 64% of my money instead of 93%!"

Maybe that's a legitimate way to report the outcome of a couple trades, but it sure doesn't seem to accurately reflect the consequences of the RPG recommendations.  What do you think - shady reporting or just one of the ways math can be counter-intuitive?
IKN back. What do I think? I think when it walks like a duck and quacks like a duck and has a track record of sophistry, obfuscation and outright bullshit lies,...it's a duck. Keep waddling, Marin.

Chart of the day is...

...the revision of growth forecasts for the LatAm region in 2012, according to local UN approved beancounters ECLAC/CEPAL


The region-wide average forecast was 4%, it's now 3.7%

12/21/11

Rio Alto (RIO.v): A roll on the drums, please...

Time for a resource update or two.

Scotia is still copper bullish

A segment of today's Mining Scoop out of Scotia below, that shows the house is still bullish on the outlook for copper. Your humble scribe credits them for being persistent, obstinate or perhaps even deluded. But most of all because we agree with the Scotia call and 2012 will be a good one for copper...and what could possibly go wrong? Here's the excerpt (no link, it's an e-mail thingy):
Copper Cancelled Warrants Up in Asia +7300t Overnight.  Yesterday we noted that copper inventories in Asia (particularly LME Asia) are nearing 5 year lows and the boost to cancelled warrants indicates LME Asia inventories are heading even lower.  Note there is only 36,825t in LME Asia at present.  Copper Premiums in China continue to hold up ($110 to $135/t) despite we are on the forefront of a long Holiday period.  China always slows down before the Chinese New Year and in 2012 it is the earliest it has been/or will be for the next decade.  So the slowness you would normally see in January is happening this year around now.  Very interesting to see Copper fundamentals hold up despite this - Scotia Mining Sales thinks February will prove to be a key month that should translate to a pick-up in seasonal copper demand and given the low inventories - a looming supply squeeze should translate to higher copper prices.  

Congratulations, Louis James of Casey Research!

Two great winners in your International Speculator 2011 editions, Lobito!

And hey, not just two great winners but you also have another one of your 14 selections in the green as well. 

Keep up the great work, dude!

x

Chart of the day is...

...the six month price chart for Regulus Resources (REG.v)


Today I learned a new (well, new for me anyway) expression and it comes from Japan, apparently.


"One should not tie one's shoelaces while crossing the neighbour's rice paddy."


Which according to the reader who sent it in is useful for those moments when "...even if what we do is above board we will still be lumped in with the thieves if we look like thieves and be hated or even get our asses kicked". I think that's a really nice expression. I also think I have some pretty wonderful readers. Thus endeth the puerility.

12/20/11

Bizarre suicide at the Mercosur summit

This morning the body of Iván Heyn, under-secretary of foreign commerce in the Argentina government of Cristina Fernandez de Kirchner, was found hanged in his hotel room at the Radisson in Montevideo, Uruguay. Heyn was in Uruguay with the rest of the government team attending the Mercosur summit. At this moment, no third party foul play is suspected and the death is being treated as suicide. On hearing the news, Cristina was overcome and retired from the main meeting, seeking medical help from her team of doctors.

Heyn came from the youth wing of Kirchner sympathizers known as 'La Cámpora', an organization headed up by Cristina's son and of growing political power in Argentina. He was only given his job as under-secretary of foreign commerce two weeks ago.

UPDATE: The death of Heyn, aged just 33, has apparently brought the Mercosur summit to a premature close. The official agenda has just been changed to "no further business".

UPDATE 2: The lightning fast Argentina media is now supplying heaps of background on Heyn. Amongst other things, we know he was a member of the board of directors of Alu maker Aluar, lived with his girlfriend in Buenos Aires, was a fitness/jogging fan, had a reputation for hard-work and job dedication, was considered one of the brightest lights of  the 'La Cámpora' Kirchner youth movement...and that his father attempted suicide 10 years ago due to depression after seeing his manufacturing business fall apart during the crisis at that time. For Spanish language coverage of this breaking story, here's as good a link as any.

UPDATE 3: He was hanged by his own belt, found by hotel staff on opening his room after calls from fellow delegates that morning were left unanswered, the mandatory autopsy has found no signs of violence on the body, no reason to suspect any foul play and the body has now been released "to the disposition of family members" which means as far as the police are concerned it's case closed.

Bad news for Santa Claus

According to US new home starts numbers today, he's going to have even more chimneys to do this time next year.


Apart from that, all good. Bejeepers this market was due a little light relief. Ho ho ho.

Andean growth end year sad reality check thingy

Hey man slow down, slow down
Idiot slow down, slow down
The Tourist, Radiohead, 1997


Chile's Central Bank today announced a downward revision of 2012 GDP growth, cutting the forecast from 4.25%-5.25%  (made in Sep'11) to 3.75%-4.75%. It's worth noting that Chile's CenBank people are usually 1) first in the region to spot macro headwinds and 2) conservative in their approach.

Meanwhile in Peru, while official government propaganda claptrap says that country will see 6% growth next year, head of the PUCP University Economics team Waldo Mendoza brings a dose of reality to affairs in this interview. Here's one Q&A excerpted and translated:
Q: But government projections indicated growth of between 5% and 6% for 2012 and the years that follow. What's your opinion?
Walter Mendoza: "Even in an optimistic scenario those projections will have to be cut back, I'd say to between 3% and 4% for the years 2011 to 2015.  Meanwhile it's more difficult to estimate in a pessimistic scenario, but I'd say between 1% and 3%. Therefore I see a complicated period for President Humala because when growth rates drop, various problems appear."

Argentina: Non-Banana Republic

The price of bananas in Argentina is suddenly over 100% higher than it was mere days ago. This is because the latest consignment of bananas from Ecuador imported by Argenfruit (a company that reportedly accounts for 30% of total country supply) has been blocked at the Chile/Argentina border by customs officials. 

According to the national AFIP customs office, those sneaky deaky Argenfruit dudes were trying to import top quality bananas (that are taxed at U$6.90 a case) but telling the world they were second-class fruit (taxed at U$4.44 a case). Thus trucks are not let in and Buenos Aires is bananaless for Christmas

And now for the important yuletide stuff, as all this is just a good excuse for more Swedish Chef.




BORK!

Attention Kinross (K.to) (KGC) Middle Management

You've been wondering all this time how to nail that key promotion? And your loving, caring IKN supplies the answer today. Get Tye Burt one of these for Christmas (a snip at just U$8,080 apiece):

Finest silk – purest gold
Size: 40 KB

True luxury has only one color – gold. A nanometer-thin layer of pure gold now lends ties and pocket handkerchiefs that authentic gold sheen, thanks to a new Empa-developed process. The yarn, which is coated using a high-tech plasma process, is soft and easy to weave. It is also washing machine compatible. A limited number of gold ties will be placed on the market before Christmas, making a truly exclusive present. Further fashion accessories will follow in 2012.
Caption: Tie, bow-tie and pocket handkerchief made of high-tech gold fabric. Plating: 24 carat pure gold.
Gold radiates with a violet hue, at least when it is sprayed onto a surface atom by atom, as can be seen by looking into a plasma coating plant when in operation. This particular plant, which is about as large as a household refrigerator, can be found on the premises of the Tersuisse spinning mill in Emmen. Inside the apparatus a piece of gold is bombarded with fast moving argon ions which knock atoms off the metal surface. These gold atoms fly off and land on a polyester fiber which is slowly pulled through the machine. This is the beginning of the production process which for the first time in the world creates a textile material permanently coated with a durable layer of gold. The precious metal remains attached to the fiber even when it is rolled, kinked, woven in a loom and given a final wash.
The culmination of 10 years of research workThe textile specialists at Empa in St Gallen had been researching for ten years to find a method of finely dividing titanium, aluminium, steel, copper and silver and then allowing these powdered metals in atomic form to rain onto polyester fibers. Originally the project aimed to create silver coated fibers, for which there were ready markets. Silver coated fibers possess an antibacterial effect, something which is of interest to sock manufacturers. In addition fashion designers were seeking durable silver coated textiles. And furthermore, silver conducts electricity extremely well, making the Empa-developed fiber eminently suitable for use in various sensors and as an antistatic filter material for industrial applications.
Sooner or later the project partners had the idea that what was possible with silver might also work with gold, so in January 2010 they began work on the "Gold Fiber Project". Nowadays production in the coating plant has reached a stable level. The first kilometer was generated in the summer of 2011 and in 2012 production is expected to increase further. Further processing of the fiber is completed by two project partners, the Weisbrod-Zuerrer AG spinning mill in Hausen am Albis and the embroidery firm Jakob Schlaepfer in St. Gallen.

Size: 40 KB
Exclusive: 2011, the tie has been manufactured in a first limited edition of a dozen.

The cost of exclusivity: 7500 Swiss francsOne of the first customers for the gold fiber was Weisbrod-Zürrer AG, a spinning mill which specializes in exclusive decorative textiles, ties and accessories and which has also partnered Empa projects in the past. Attempts had already been made previously to create a gold tie using conventional techniques. A textile fiber was wound with the finest gold wire in the same way a guitar string is made. However material woven from the fiber had a rough, metallic feel to it and it was also not durable enough for commercial use. As a result it was only possible to make the freestanding front face of the tie in gold thread – those parts which were mechanically stressed, the knot and the neck piece, had to remain black.
The new gold tie made using the Empa plasma coating process boasts a much more stylish appearance. The golden material, woven from gold fiber and black silk thread, covers the surface of the entire tie and is very soft to the touch. Other exclusive items of clothing from the same material are also imaginable, for example decorative pocket handkerchiefs, bow-ties, scarves, lace decorative work and even handbags. To date material enough for three ties has been manufactured, but a dozen more should be ready in time for Christmas. The first, worldwide exclusive series, tailored in the Zürich tie manufactory Hofmann und Co AG will be on offer to gentlemen with an exclusive sense of style at Swiss francs 7500 apiece.












continues here, thanks to LR for the headsup

Chart of the day is...

...the US Dollar (USD) index, dailies.

Quite simply it's the centre of the universe right now.

12/19/11

Jonathan Fiorello and Baja Mining (BAj.to)

Baja Mining (BAJ.to) is worth watching today. Here's the link, here's how the NR starts.

VANCOUVER, BRITISH COLUMBIA--(Marketwire -12/19/11)- Baja Mining Corp. ("Baja") (TSX: BAJ.TO - News)(OTCQX: BAJFF.PK - News) today announced that it has received a letter dated December 16, 2011 from Mount Kellett Master Fund II A LP of New York ("Mt. Kellett"), described as a registered shareholder of 19.9% of Baja's shares.
Mt. Kellett says it is requisitioning a special meeting at which shareholders will be asked to approve the appointment of two Mt. Kellett nominees to the Board, either by replacing two incumbent Baja directors or by increasing the number of Baja directors to nine from seven. The requisition letter also proposes to put before the meeting certain non-binding resolutions.
The Company is considering this correspondence and yada yada continues here

And if you're wondering about that name in the title, Fiorello is the dude behind the fund and has been adding to his position all year.

Nobody does a parade like North Korea

What with the country being in the news today, site friend drunkeynesian found this video of a State vist to North Korea by then Romanian President Nicolae Ceausescu.



There is a bit of confusion on the date, as the title of the youtube says 1978 but it seems to be from a visit made in 1971. No matter, what you really need to do here is watch this thing as it's truly impressive stuff (it starts well and just gets better, too). It'll be interesting to see what kind of show they put on for Kim's send-off.

Chart of the day is...

...silver versus gold, 2011 year to date, using the proxies SLV and GLD.

A visual presentation of great usefulness in order for the considered meditation on financial matters and affairs.

12/18/11

The IKN Weekly, out now


IKN137 was sent out a little earlier. Since then been sending stocking fillers, ho ho ho.

Yet more gold sector M&A, as Eldorado (ELD.to) (EGO) buys European Goldfields (EGU.to)

A basically-all-paper deal that values EGU.to at tad over 10% higher than Friday's close. Here's the link, here's how it starts

VANCOUVER, BRITISH COLUMBIA, Dec 18, 2011 (MARKETWIRE via COMTEX) -- Eldorado Gold Corporation (the "Company" or "Eldorado")today announced that it has entered into a definitive agreement (the "Arrangement Agreement") with European Goldfields Limited ("European Goldfields")   pursuant to which Eldorado has agreed to acquire all of the issued and outstanding common shares of European Goldfields by way of a plan of arrangement (the "Arrangement") under the Yukon Business Corporations Act.
European Goldfields is a precious metals development company with attributable gold reserves of 9.2 million ounces and multi-stage assets located in Greece, Romania and Turkey. The company currently operates the Stratoni mine in Greece and is developing the Skouries and Olympias projects in Greece and the Certej project in Romania. European Goldfields is also partnered with Aktor SA, the largest construction company in Greece.
Under the Arrangement, shareholders of European Goldfields will receive 0.85 Eldorado shares and C$0.0001 in cash per European Goldfields share (the "Exchange Ratio"). Each outstanding option of European Goldfields shall be exchanged for options of Eldorado that will entitle the holder to receive, upon the exercise thereof, Eldorado shares based upon the Exchange Ratio and otherwise on the same terms and conditions as in the original European Goldfields option. The total transaction value is approximately C$2.5 billion.
Eldorado's offer represents continues here  

I betcha Centerra will have things to say about this one....a $75m break fee on a supposed $2.5Bn deal isn't setting the bar too high.

Why IKN is on Blogger

1) It's basically unhackable (which is a very good thing as far as your humble scribe is concerned)
2) I don't give two hoots about having some cool URL (dot blogspot dot com does me quite nicely, thank you)
3) According to Royal Pingdom's annual blogs report just published, Blogger is still the most reliable blogging service available.


IKN is a happy Blogger user.

Peru: Ollanta's approval rating drops to 47%

Here's the chart that shows how Ollanta Humala's approval rating has fared in the monthly survey conducted by local pollster Ipsos/Apoyo. Latest data from here:


Seen the pattern yet? Yeah, me too...

Welcome To The New Peru! (just the same as the old Peru)