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9/8/12

Kate Bush: A Sky of Honey (full album)

No need to watch the images somebody has put together to accompany the music (may be your taste, may not be). It's the music that counts here and I will evangelize, oh yes I will.






Five days of metals and miners; September 8th

Our regular Saturday slot of the last five days' worth of action in the gold bullion ETF (GLD), the silver bullion  ETF (SLV), the miner ETF (GDX), the junior miner ETF (GDXJ) and the copper ETF (COPX).


Now that's what  I call a good week, with gold up 5% and underpinning a major rally in the other, more volatile tracked devices. Great performances all round but if I had point my bony finger at just one it'd be the 7% blast the industrials tracker COPX put in on Friday as that has the look of a sea-change move.

9/7/12

Footy win

Both of our World Cup qualifier football bets outlined on Thursday won, thanks to the 2-1 Peru win this evening, which puts the IKN fund back up to $151.05. So on to Tuesday's matches, which we'll preview and consider on Sunday evening (when the real work is done).


The Friday OT: Pulp; Common People

Because of the video greatness



And the lyrics.

Oh look, we're all genuises

Markets are up and the massed newsletter anal yst dumbasses are already giving it the toldyasos. Well fair enough, what did you expect from a bunch of Pavlovian hounds, anyway? As for IKN175 out this weekend, we'll be opening up a new position on a gold producer. A short position. Cos contrarian is as contrarian does.

Questions about gold

Question one is whether QE3 is now more likely thanks to that jobs report. The market says...

...yup, the market speaks very loudly. The other question is the influence an eventual QE3 will have on the metal and how much is now baked in. That's a tougher one to call, but right now today I suspect the market is baking a whole lot of Hope™ into gold and me boring, moaning inner-grinch is telling me to be very careful.



US Jobs

One mightily awaited news release from the BLS linked right here. The headline number is 8.1%.

Update. gold shot up (now U$1713/oz) and the US Dollar dumped. On a first pass look at the BLS report, we have in our hands a very politicized document with plenty of bad news under the headline (eg 571k left the payroll, July revised down) but Obama won't care because he has a shiny 8.1% headline number to show his friends. Or in other words, it's the same bullshit as ever. And I look at the dollar action today....

.
...and can't help but think that Draghi + BLS is no coincidence.


Chart of the day is...

...copper, dailies.


If your idea of a plan is to base your investments around the declarations of a European banker, it's time you took a good, long hard stare in the mirror.

9/6/12

The South America World Cup Qualifiers: September part one


The international futbol is back, with two rounds of the South American World Cup Qualifiers to be played this week and next. We home in on the first rounds coming up Friday in our post (second round of September games happen next week) and take what's left of our original $100 kitty (precisely $90.25 from back here) and try to conjure up a win or two to get back on track. So to the matches (in cronological order) and the odds, as supplied by Ladbrokes dot com:

Colombia 11/8   Draw 21/10   Uruguay 13/8
Ecuador 2/5   Draw 11/4   Bolivia 6/1
Argentina 2/7   Draw 7/2   Paraguay 7/1
Peru 11/10   Draw 9/4   Venezuela 19/10

Four tricky ones to call but this time I think I've ID'd a winner. Venezuela may have improved in the last few years as a team and the Vinotinto is no longer the joke end of South American football, but the fact remains that they've never won a competitive match in Lima versus Peru. Not once, and with Peru's stars very likely to be back and playing uninjured (Farfan, Vargas and Pizarro start, the only slight doubt is with Guerrero and the latest is that he's probably recovered enough from a recent knock to play) which makes a change from their first sets of matches when they cried off injured in droves, Peru might be in last place in the table right now but they're a good bet to pick up three points. The price of 11/10 isn't a knockdown bargain, but it's better than the other obvious home wins at Ecuador (versus a very weak Bolivia) and Argentina (that under Sabella is finally starting to look more like a real team and less like a collecion of 11 fabulous players who don't communicate well, see previous managers' efforts for evidence).

So to the bets: We go

$30 on Peru to win at 11/10, inplying a theoretical total return of $63 ($33 winning + $30 stake return)
$10 on a Peru (11/10) Ecuador (2/5) Argentina (2/7) treble (which means they all have to win for the bet to succeed), that will pay $37.80 if successful (and nothing if it isn't)

We're therefore risking $40 of our 90-and-bits kitty on this weekend's games but before we leave, remind readers that the bets suggested are virtual in nature (as I don't throw 40 dollars at football matches) Let's see how we get on.

Chart of the day is...

... Petaquilla Minerals (PTQ.to), three year chart:


Inmet (IMN.to) must be pretty keen on cleaning up their Panama image. Spend $112m and remove this wart from their $7Bn copper project? Yeah, why not, what with Fifer now under judicial charge for his environmental scumbaggery of a few years ago.

In other news, your author receives his brother at his humble abode today and will therefore most likely take the day off.

9/5/12

Colombia's oil production numbers drop again in August, now negative YoY growth

It's another round of the cat ate my homework from Juanma Santos and his "million barrels by end of 2011 by March 2012  in two months time won't be long now honest errr...I'm not really sure any more" as Colombia's ANH bureau supplied preliminary figures of 918,000bpd for August production, which looks like this on our tracking chart:


And perhaps more tellingly, looks like this (-3.27% YoY) in our month-to-month percentage growth rates:


Then there's another twist in the tale, because on this report the blame is put on "maintainance for the central oil pipeline" but in other reports, the blame is put on terrorist attacks on infrastructure. C´mon guys, get your excuses in line at least...

OT: Brighten your day with four and a half minutes of totally kick-ass rock music

Simply turn up the volume controls on your computational device, hit play and allow The Foo Fighters to play their song 'Miss The Misery' for your pleasure and enjoyment. A public service brought to you by IKN.



Holy crap, this rocks so much it hurts.

7.9mag quake off Costa Rica (update: USGS drops estimate to 7.6 mag)

Tsunami Watch has been called.  Here's the USGS data.

Magnitude7.9 (Preliminary magnitude — update expected within 15 minutes)
Date-Time
  • Wednesday, September 05, 2012 at 14:42:09 UTC
  • Wednesday, September 05, 2012 at 08:42:09 AM at epicenter
Location9.931°N, 85.462°W
Depth20 km (12.4 miles) set by location program
RegionOFF THE COAST OF COSTA RICA
Distances
  • 80 km (50 miles) S (180°) from Liberia, Costa Rica
  • 151 km (94 miles) SSW (209°) from San Carlos, Nicaragua
  • 153 km (95 miles) W (268°) from SAN JOSE, Costa Rica
Location UncertaintyError estimate not available
ParametersNST= 38, Nph= 38, Dmin=148.1 km, Rmss=1.42 sec, Gp= 94°,
M-type="moment" magnitude from initial P wave (tsuboi method) (Mi/Mwp), Version=1
Source
Event IDat00m9vsu9

Here's the USGS map

Hope everyone's ok over there as on a scale of 1 to not-funny, a 7.9quake is classed as very not funny.

UPDATE: The USGS has just dropped its estimate to 7.6 mag for the quake, which is still more then enough to frighten the veritable crap out of you if you were close. Location is just off the Nicoya Peninsula. Reports from those in the area (mostly San José at 100 miles from the centre) are that it was a very long-lasting quake. As for damage, too early to get a full picture but reports of a church spire down, broken objects in homes, power failures, etc. Early days on that, though. 

AuRico (AUQ), always good for a laugh...

...as long as you're not stupid enough to own shares in the company. And if that's the case, you'd have trouble laughing at anything. Honestly, I don't know what's funnier about this company NR today. It could be the massive guidance drop for FY12 and FY13 at Ocampo of course, but overall I think the best is this line near the end:
"For the remainder of 2012 and into 2013 and beyond, AuRico fully anticipates meeting its targets and creating long term value for our shareholders"
Reading that from one of the worst run bunch of serial liars in the gold business this morning was a coffee-on-screen-wipe-off moment Chez Otto. And how's that there share price doing today?


Waddya say, owly?

Yeah, though you'd say that. So what will it be this time, oh sheep-like Canadian brokerage anal ysts contractually obliged to pump this überdog to your long-suffering clients? "Bring Back Rene Marion, All Is Forgiven" perhaps? No wait, he's the dumbass that drove the company into the ground....but don't tell the people that pay your salaries that, willyaz?

A flash update...

...went out to subscribers about 45 minutes ago, before the bell today. Just sayin'


I have seen Bolivia's Navy

No joke, its base is at the Lake Titicaca port town of Copacabana, and you pass its boat (singular) when you take the ferry trip from there to the Isla del Sol. Anyway, this factoid was remembered when reading this report from the USA's Courthouse News Service dated September 4th 2012, today's piece of bizarre.


WASHINGTON (CN) - The National Marine Fisheries Service has lifted trade restrictions on importing bigeye tuna from Bolivia and Georgia.     The move implements a 2011 recommendation by the International Commission for the Conservation of Atlantic Tunas.     ICCAT members had prohibited imports of Atlantic bigeye tuna and its products from Bolivia and Georgia since at least 2003 due to fishing practices that thwarted ICCAT conservation rules.     The NMFS foresees no socioeconomic impacts on U.S. traders, because the two nations had not been importing of Atlantic bigeye tuna into the U.S. prior to the implementation of the prohibitions, and no attempt to import the tuna is expected.


Thanks due to reader 'JR' for the headsup and the yoks.

Chart of the day is...

...soybeans, 2004 to date:


Guy's gotta eat. Or in the case of China, country's gotta eat. Anyway, Brazil Argentina and Paraguay would like to thank you for the extra money. 

6

Time really does fly


Feliz cumple mi amor

9/4/12

Mexico remittances are in reasonable shape, so don't believe the hype

During your humble scribe's trawl through the mighty world of the interwebnetpipes today, a report from China's State news agency was chanced upon that had a scream in its headline:


"Golly gosh and blinking flip, 12% is a lot", thought your humble scribe, because remittances of monies from outside of Mexico to people who live there are an important part of the country's overall economy. Also, as most of Mexico's remittance money originates from the USA, a sudden big drop would suggest some change in the economic make-up of Mexico's Northern neighbour. However once the surface is scratched, the data revealed and the context understood, there's really much less than meets the eye to all this. For a start, that 12% drop is compared with the previous month of June 2012 and NOT July 2011 (which is always a more reasonable comparative). And that suspect headline data gets confirmed with a bit of the body of the Chinese report that states (translated), "The U$1,866.26m [remitted] in July 2012 is 1.65% less than the same month of 2011, when the figure came to U$1.897m". So the real comparative difference is 1.65%, not 12%, which is the type of small fluctuation that can happen from an extra holiday day or Jan Brewer kicking out a bunch of illegals from Arizona. Whatever, 1.65% doth not a trend make.

So what about that month-on-month drop? Well for that we need a bigger dataset, so off we went to the Mexico Central Bank site and its page on remittances and a few kicks and an XLS download later, we made this pretty chart:


So the 12% drop is wholly seasonal and on the whole, things have been getting better as regards remittances to Mexico. We're still not up to the heady days of 2006/7/8, but the trend has been gently upwards for the last couple of years, seasonally adjusted.

And today's moral? Journalists are assholes who want you to read their headlines and swallow prejudices, even in China. Now there's a shocker, eh?


Ecuador: Mining Windfall Tax plan to be postponed

Holy stars, Ecuador's government has finally seen a little bit of sense. According to this BNAmericas report today, Ecuador plans in the next few days to send to its parliament a law bill that will delay the implementation of its Windfall Tax charges to mining companies (currently set at 70% of revenues above an agreed minimum price level for the metals in question, particularly gold and copper) until the time when the mining company has recouped its initial capital investment in their mine or mining project.

Probably a deal thrashed out between Kinross (KGC) (K.to) and Correa over Fruta del Norte. It also explains why the August 23rd meeting between Correa and mining executives in Ecuador was planned for 90 minutes but went on for over three hours. Smile for the camera, girls and boys:


dyodd, dude

Sooooo...160m of 10.16% Cu Eq...that good or bad

That good. 

Cos it's 223lbs of CuEq for every tonne of rock they drilled through and that's a very lot of money once it's been through a mill. A very very lot. NR linked here, chart reaction to today's news here:

With 43.3m shares F/D and a JV with FCX coming in strong, Reservoir Minerals (RMC.v) is showing that the spec market is still alive and well. Just show 'em a drill result.




Wonderwall

And thus, the mere mention of a hint of a clue that your humble scribe is considering purchases in the junior mining sector this morning brings mail-borne pushback, "...b-b-b-but haven't you seen China PMI/iron ore prices/gold chart obviously topping/weallgonnadie..." etc. Well yeah I have, so rest assured the bull and bear cases have been mulled upon already. Thing is, the old "climbing a wall of worry" case for a bullish standpoint isn't just an optional extra in rallies, it's a necessary, fundamental part of them. The bottom line is that rallies do not begin, never ever begin, when the whole world is feeling confident about the macroeconomic macrofinancial outlook; quite the opposite in fact, as that sentiment turns up at or near the end of a bullish run. The early stages of any bullish rally absolutely need, as a 100% obligatory part of their make-up, bears out there making good, strong and logical cases for a market drops, sags, fades and even outright crash-scenario disasters. 

So in the end, buying now is a subjective call that's being made, no more and no less. Just like anyone else's. Ignorance is bliss.

Chart of the day is...

...the gold(silver ratio, 12 month timespan:

There are times when I just keep a single lazy eye on this ratio and there are times like now when I watch it carefully and actively, because it's about the only chart I actually understand care about in this crazy game and consider truly useful and practical.This week it sets attention because of the macro elements in play and because I'm looking to buy a couple of things (for a change).

9/3/12

Peru, inflation, forex, international currency reserves, things like that

Your humble scribe noticed over the weekend the Peru CPI rate for August (well, to be exact it's the consumer price index for the Lima & Callao conurbation rather than Peru as a whole, but that's been the local benchmark for inflation since the year dot and will remain that way for sure) came in at 0.51%, which was higher than expected. The inflation spike-ette was mainly driven by food price increases and that's never popular for elected governments, as it's the type of inflation that eats into the pockets of the lower strata more than those with excess cash to spend on the fripperies of life.

The 0.51% hike needs a bit of context though, so we'll start with this chart that shows the inflation rate since all that world crisis stuff happened in late '08 (we start the clock at Jan 2009, it's good enough).


We see that inflation has dropped from above 6%, then climbed back to nearly 5% by late 2011, but this year has been tracking back towards the Central Bank target of 3% max (Peru uses an inflation targetting policy and the current band is set at between 1% and 3%, for what it's worth). That's a good thing of course and when it's combined with the type of growth numbers we've seen in Peru recently it implies more spending power to the average Peru pocket. So with relatively tame inflation and GDP growth, your humble scribe's thoughts immediately turned to the forex rate between the US Dollar (USD) and the Peruvian Nuevo Sol (PEN). Here's a five year chart ripped from Yahoo that shows...

...an ever-strengthening local currency, now at 2.60 to the greenback and roughly 20% better off than at the start of 2009. "Hmmm...", thought your humble scribe, "betcha that's keeping down inflation on imported goods that these newly wealthy Peru dudettes and dudes suddenly want to buy because it's all fashionable and cool to have foreign designer branded goods in the house because they tell me that on the TV and the people on TV never lie to me or have ulterior motives, do they?". And so it was back to the Peru Central Bank (BCRP) website to check and sure enough...


...the underlying rate of inflation looks like it's being kept in check by cheaper imported goods in Nuevo Sol terms, because a stronger Sol means dollar-bought goods are cheaper for locals to buy. That's fine, but what we need to ensure now is that the Nuevo Sol keeps up its good work against the dollar because now Peruvians have developed a taste for those snazzy foreign goods and services, if the Sol puts in a significant drop against the dollar, dollar-priced imports (basically all of them) will get more expensive and drive up that inflation rate...and governments don't like higher inflation rates. But fear ye not, help is at hand thanks to the BCRP's policy of aggressive adding to the country's international currency reserve.


Peru's currency reserves have basically doubled since 2009 and now stand just a tiny tad under U$60Bn (that's $2k for every man women and child in Peru). What that means is the currency has increased backing from the world's reserve currency (and like it or not my shiny goldbug friends, the dollar is the way the world saves its money, period). Which means the Sol isn't going anywhere as long as the Peru GDP growth keeps clicking on. Which means the currency will remain strong relative to the dollar and hold back the spectre of imported inflation. Which just reminds me once again how much of a total dumbass Steve Saville looks when he tries and fails to talk about basic economic realities.

UPDATE: Oh looky looky, Reuters right on cue with a report today entitled "Peru's central bank offers to buy dollar as sol gains"

Frank Giustra interviewed by Tommy Humphreys of Cambridge House

Tommy Humphreys bags 44 minutes of Q&A time with Franky G and not a word about his Venezuelan connection with Robert Allen Stanford, but that nitpick aside it's a good interview with Frank still clearly bullish on gold's prospects. Sounds like he's buying juniors, too.



Also check out Tommy's drumroll intro over at his site, here. Which is fair enough, as it's a decent scoop getting Frank G on camera

Chart of the day is...

...gold in Euros and in dollars, 12 months (courtesy of those very pleasant and wholesome lasses and lads at Kitco):


Near that all-time high for gold in Euro terms, just the August 2011 spike to beat now.

The IKN Weekly, out now


IKN174 has just been sent to subscribers. Because there's a sudden outbreak of photos in this edition it's a bit heavier than normal at over 2Mb, so please make sure you have room in your mailboxes, people (I've had one bounceback already, so email address "richards______@____  .com", please mail me when you're ready to receive).

9/2/12

Couldn't have put it better myself

From the DNC protest rally going in now, via Greg Weeks who picked up on this tweet