Bill Cara's Blog for Apr 14, 2011 [See Post-Close report]

It's getting worse...Greece's 5-year spreads now being quoted at 1100bp, 1-year at 1500bp

http://twitter.com/GavanNolan

You can blame Schauble for the euro's demise. El-Erian also weighing in saying Portugal, Ireland and Greece will restructure their debt.

Here is a case of a bank CEO loaning (giving) his nephew a huge real estate loan on a property that the bank also previously wrote off. By the way, the nephew was associated with the first write off. The bank receive a lot of TARP money.

http://www.bloomberg.com/news/2011-04-11/fed-direc...

Earl,

While Soros seems to have identified the problems as having been ignored or covered over and made even worse by this, he is in my opinion, missing the real danger.

What he sees as a solution deals strictly with "financial systems". He says "All countries must agree...", and that the problem was "...caused by the market itself"

I totally disagree with that assessment. He is not a native-born American and is in favor of "world solutions". He pointed out that the Tea Party is made up of self-reliant individuals, but thinks they don't understand what happened.

Many people do understand. They know Markets don't do things — people do. His is the same mentality who think guns, not people, kill people. Well connected individuals, many we can name did this over a period of years and started by eliminating any possibility of prosecution for their scheme.

Any attempt at an agreement of "all countries" would lead to a UN-type of conundrum where our individual freedoms and liberties are diluted and ignored even more than what recent legislation such as the Patriot Act, TARP, ObamaCare and others have done.

We don't need more laws we need more independence. Let the free market work by removing the training wheels ignoring toxic mortgages on the big banks books. Limit Congressional power and lobbyist influence and governance. Stop the creation of unfunded mandates.

We don't need to depend on a financial system for our quality of life. Let the Constitution work as it was designed.

Grym

Edit: The UN put Gadhafi on their Human Rights Commission — think what could happen with a One-World Governance of Finance.

GOOD MORNING TO ALL.
I need some information or opinion about what is going on in

CSKI, CVVT, YONG

Thanks a million

http://stocks.overthefalls.com/

try researching them yourself with this stock browser tool.

When I get the chance, I'll jump right on it for you.

Hi All - Thanks to Kaimu for guidance on this one. Seems like a good day to enter. Inflation expectations higher, gold heading back up and PMV beat down a bit. Pretty much out of the market since mid March except for PMV, EVG and RBY/RMX. Happy Trading

Grym,

While I agree with you on most points your desire to deal with all problems by ourselves is somewhat naive. When we are dealing with multi-national corporations we may need multi-national cooperation to deal with them. A man doesn't have to be a native born American is not a requirement to see that. There are some very smart people in this world that haven't been born in the United States.

Heading for the exit door on the Russel?

April 6: http://tinyurl.com/3rsvecv

April 13: http://tinyurl.com/3manjs9

RUT to 625 (LT): http://tinyurl.com/3g9lszj

Yeah, I think the market is setting up that way. All bad news out of the way with yet?

Read this, 2nd
http://bit.ly/h6VuCX

mayhem991,

My point about Soros not being native born has nothing to do with financial matters. I never said Soros is not smart, just that he seems not to value individual and national independence. He is thinking in money terms.

I think we definitely can deal with this problem nationally. To think we can ever get international thinking to coincide is disproven by history. Check the recent attempt to export democracy to a tribal region. The European Union is a financial organization which is just beginning to run into the problems of diverse national systems and thought. I want no part of a similar, but larger organization.

Letting central banks and Wall Street run things is exactly what caused the problem here and allowed it to spread thought out the world. Our major corporations dumped loyalty to their fellow citizens under the guise of Free Trade. GE pays no taxes and Jack Welsh was adamant about exporting jobs for personal gain. Bankers made totally predictable "bad" loans to line their own pockets — no individual would make such loans (including Paulson, Greenspan, Franks.,etc.) with their own money, but were willing to do so with OPM.

The same kind of thing spread across all major markets and would do so faster if run by an international cabal. I see such as surrendering our national sovereignty to financial leaders.

The US has, as yet, made NO effort to deal with the problem and has violated the rights of millions to favor the few who caused it all.

My main contention is that the USA IS... because of the War For Independence — NOT the War for International Financial Gain.

There are things more important to me than money.

Hi All - New release of deep (3000') intercepts in the covered middle section of the venerable Carlin District: from four drill holes results include 10.1 meters at 11.09 grams per tonne Au (33.1 feet at 0.324 oz per ton Au) including 3.1 meters at 29.75 grams per tonne Au (10.2 feet at 0.869 oz per ton Au. These types of intercepts are huge in this setting suggesting a robust new discovery in the district amenable to underground mining development. Happy Trading

on 10 calls - is that enough? Naw

Edit - out at 22.5% - will reload later. April/May are not traditional good months for NG but had to try that trade. I hope the shorts at SA are having a good day.

regards,
Earl

ALOHA!!

Yes, I think the resignation was a "non-event", but perhaps there was some name confusion between all the "Macquarries" ... who knows? I do know that probably some of the long term loyal shareholders may have sold some or all due to the resignation but that does not change anything about the property and the gold in the ground. Nor does it change the fact that there are some world class managers and directors on board(ex-Red Back Mining)who call the PMI properties "Probably the best exploration ground in the world right now!" Lets put it this way ... After the Kinross buyout of Red Back Mining at a share price of $35 these guys were set to retire for life, but they decided against retirement to get involved with PMI. That in my mind speaks volumes and pretty much takes care of the "jockeys" for this horse! That's why I bought another 50,000 shares yesterday. There are a lot of high powered entities in PMI now that did not exist a year ago. So what has changed? Well, for starters the deposits that exist on these properties haven't changed since forever. Four past producing mines and there is still gold to be mined. This strategy of looking where past producing mines exist has worked well for those who were first on the scene. Thanks to Doug Macquarrie, the guy who just resigned; not the bank, PMI has quite a lot of gold in the ground assets on two of the most prolific gold regions in human history. Now we have the funding and the management on board with no debt and lots of cash.

ON GRR
Speaking of another past producing mine strategy take a look at Golden Reign Res-GRR. Now that story is just incredible with regards to what American mining engineer Charles Butters did in the 1920s. He was also joined by an even more famous miner Thayer Lindsay.

Thayer Lindsley, the father of such mining giants as Falconbridge Ltd., Ventures Ltd. and Frobisher, has been described as the greatest mine finder of all time. Not only did he found Falconbridge, a multinational organization ranked now among the largest mining companies in the world, but throughout his long and extraordinarily dedicated career, Lindsley either found or was involved in the development of such other famous Canadian mining names as Sherritt Gordon, Giant Yellowknife, Canadian Malartic, United Keno Hill, Lake Dufault and Opemiska Copper, Connemara in Southern Rhodesia and Whim Creek in Australia.

Both men saw great promise in the current GRR properties and both spent much time and money bringing the San Albino mine into production in 1927. But even before these two mining entrepreneurs spent hundreds of million of dollars(2010 denominated) on PP&E the Spaniards beat them to it and discovered gold at San Albino in 1790. I mean talk about a historical gold and silver district. It predates anything in Canada or the USA.

History aside now things start all over again working on completion of the first NI43-101 since 1790! It seems to me as I follow the assays and exploration that history is being proved up here more than expected. The latest assay report shows some very good high grade veins near the surface in trenches expanding into new gold zones.

Golden Reign Resources Ltd.: New Gold Zone Discovered in Southern District-Trenching Intersects 12.8 Metres of 16.05 g/t Gold

These are the same types of gold intercepts in similar geology that is what Silver Lakes Res(SLR-ASX) has been hitting on some of their shallow open pit past producing mines in Western Australia. All these assays are less than 25 meters deep and now they are into new zones. The share price reflects the new high grade discoveries. What is overlooked here is the silver content as well. Go to the latest shallow trench assays and you will see Ag grades as high as 51.5 g/t Ag. In mining parlay ... "Shallow good"!

Today the GRR.V share price hit another 52 week high at $1.21, up 16%. This week has been very profitable. On April 8th the share price was at $0.89CAD or up $0.32, up 36% in five trading days.

Most of the shares I bought were through private placements ranging in price from $0.05 per share up to $0.45 per share. An 800% gain in less than a year.
FD: PMV.V 995,000 shares; GRR 600,000 shares

50 cents.

I could not find anything positive about the stock but in my search I found that Thomson Reuters likes CAMP which after reading up a little I like it too.
regards,
Earl

ballena - the SLW:$SILVER chart is less horrid if you back out to "weekly" timeframe.

I can't quite figure out if its saying silver is overpriced, or SLW is underpriced.

(US) Fed's Plosser: Fed needs to shore up inflation fighting credibility; No "imminent danger" of overall inflation; Policy tightening coming in the near future
- Sees "ample" signs of sustainable recovery in US.
- Does not explect high employment to reduce inflation pressure.
- Need to prevent higher oil and commodity prices from accelerating inflation.
- This is the right time to adopt specific inflation targets.

ALOHA!!

And when we finally wise up and elect this guy he will do this to those corrupt politicians and bankers ...

LINK: http://www.youtube.com/watch?v=de_P2aUZJyA&feature...

SLW:SLV looks bad on any time frame as it's making lower highs and lows. However, SLW:GLD looks OK. I think problem is with SLV going up on short squeeze alone and not pulling other PM with it. When short squeeze is over it will drop hard.

BTW, there could be also short squeeze happening in crude oil. Not so much WTIC but Brent.

Thanks Earl, I will look into CAMP

Mark- Personally, I think expectations are too high for GOOG, and too low for INTC. I won't be trading ahead of earnings for either company, but if the above is true, then I think a 2-3 day sell-off precipitated by GOOG might take sentiment to the point where an earnings/guidance surprise from INTC could be the springboard to new highs.

Don't forget that its all about the margins. For the last few months crude oil prices, which are a large input in most mining operations, have been rising faster than POG. I do agree that there are some great deals amongst the gold miners now, but that largely assumes that crude prices settle down a bit now after the recent run

2nd,

Goldman told their clients to sell June 20 calls against stock which they own. Perhaps that is why Intel is in the doldrums. Still a good stock for income.

I know nothing about Google.

Grym

There is a saying in european political circles, "you can always count on the U.S. to do the right thing, after they've tried every other way." The congress of the U.S. has passed the tax laws that allow G.E.,Google, Cisco, western digital, and hundreds of other companies to avoid paying taxes. Those companies have purchased the congress of the United States. If you don't believe my, ask yourself why any group of people would spend hundreds of millions of dollars to put a man into a job that pays $200,000 a year for 4 years. Then ask yourself where the money for those outrageously expensive campaigns comes from.

The real problems come from the politicians. Those who cut taxes and didn't cut governmental services. I am not defending Obama but when he took office our deficit was already out of control. He may not have helped the problem but he certainly didn't cause it. We were fighting two wars, supporting several governments and purchasing everything under the sun that was manufactured in foreign countries.

A central bank is necessary. We have tried running the economy with and without a central bank on several occasions in the history of the U.S. and we have kept coming back to it because it is the best way to keep a stable currency and control inflation. The bank is controlled by men who are appointed because of political ideologies. Those ideologies don't always work. Look at Greenspan, everyone thought he did a wonderful job and the US prospered but his low interest rates paved the way for the greatest recession since 1929.

We can keep this up for a long time but I propose we agree to disagree.

Ed

mayhem991 - "A central bank is necessary. We have tried running the economy with and without a central bank on several occasions in the history of the U.S. and we have kept coming back to it because it is the best way to keep a stable currency and control inflation"

Have you looked at the 100-year chart of the US Dollar's purchasing power? Its lost 96% of its value over that time.

Money must perform 3 basic tasks: provide a medium of exchange, a unit of account, and a store of value. The Fed has abjectly failed in task #3.

Prior to the advent of the central bank, the US dollar was an excellent store of value over the long term. Now then, it might just have been coincidence, but - since they were handed the job of being the guardians of the store of value, they get the blame. They've had 100 years to get it right, and they still haven't done so.

What kind of grade do you give an organization who has lost 96% of the value of an investment over time? Would you continue to keep your money in such a bank, or with such an investment advisor? Of course you wouldn't. Neither should we.

I've always been a fan of Nabors> Act goofy and carry a big stick.

yeh SLV squeezed me good and as pointed out by someone the miners aren't a good proxy for weakness in the metals cause they're lagging. Definitely not time to be shorting silver. Finding support at the 5 day moving average 2 sessions in a row should have been enough for me to cover.

Bought a couple of SLW calls which were looking good for all of thirty minutes. Will hold em overnight.

shorted TZA at the open and set too tight a stop on it before leaving for Aikido. Will remind me to use the LOD as a stop next time. Still, was looking for index bounce and bounce we did, so finding the rhythm again.

I'm gonna tune out of the metals space and search elsewhere for swing trades. Head back to taking downtrend line breaks in the leader stocks.

Hi All - Wonder how the powers that be will sleep tonight at J.P. Morgan? Good Night Blythe. Happy Trading

jack: How do you calculate the ratio? If it's a simple ratio of bulls% divided by bears% then the corresponding results for last week vs 6/20/03 are 3.65 and 3.74 ... which is consistent with the indicated differentials. And granted the reflected results might be an anomaly but, as stated, I selected the 6/20/03 start date as a base because the differential was the highest I could locate. When I have the time and patience, I'll engage in the exercise of exploring some of the other dates mentioned with respect to subsequent, sequential indices % changes. Anyhow, certainly did not presume my presentation of this stuff to be definitive but more a matter of curiosity since I had access to the data. Thanx for the interest and input.

Joe Battaglia has died today of a heart attack. He was 55.

Adios Joe, I always enjoyed your honest comments on the financial markets.

Rest in Peace

So young to die. I first met Joe in 1999 in Las Vegas at an Investment Conference. He attracted a lot of attention on his thoughts on the stock market. He had a wonderful demeaner, a velvet voice. He will be sorely missed. Joe will always be remembered by many of us. God bless him.

Who's in?

Rob McEwen Chairman & CEO invites you to attend US Gold’s
NYSE reception in honor of our recent listing!
With a strong treasury, 15 drills operating company wide and
two projects moving towards production, US Gold is striving to
become America’s premier precious metals company.
Please see NYSE security details and dress code on back.

When: Monday April 25, 2011 (6-7:30pm)

Where: NYSE Euronext
Trading Floor
11 Wall Street
New York, NY 10005
RSVP: Maritza Fuentes
rsvp@usgold.com
1-866-441-0690

http://tinyurl.com/2bkpkqk

Take me on a trip upon your magic swirlin' ship
My senses have been stripped, my hands can't feel to grip
My toes too numb to step, wait only for my boot heels
To be wanderin'
I'm ready to go anywhere, I'm ready for to fade
Into my own parade, cast your dancing spell my way
I promise to go under it

Opting out of the market's spell the past two days has given me back my senses and enhanced my sensibilities. I can recall approaching the closed doors of the gym on the afternoon of my first middle school dance in 1967, where the sound of the Byrds on the turntable inside opened my soul to the turmoil of adolescence and the Sixties. A close second would be swinging my boot heels off the sidelines to return to the game after 48 hours in the penalty box. I'm ready to go anywhere, ready to fade the sentiment parade, cast your dancing spell my way, I promise to go under it.

Kind of takes me back to March '09, when we all tossed around the idea of buying companies like TCK and holding on. Talk about turning trash into gold- had we been able to pick up stocks others were tossing away and done nothing more than shelve them for 2 years, we'd have extraordinary gains.

What's being tossed away today? Stocks like BAC/CSCO/INTC rank just a grade above toxic trash. I like toxic trash- but I don't like losing money. The ultimate buy might be INTC post-earnings next Tuesday on bad guidance. It may also be a buy on good guidance. No plans to game INTC ahead of earnings- but anyone interested in opening a position should be prepared ahead of time.

ALOHA!!

the ultimate believer in silver/gold

On the contrary I am not the ultimate believer in "silver/gold" rather I am the ultimate believer that the US FED and the US Treasury will do everything in their power to totally corrupt our currency and devalue it to $0 by turning the USD into the debt derivative it is today.

I am a firm believer in owning no debt and no counterparty liabilities. This has been planned all along the way using one crisis after another, each crisis growing in severity; each crisis enslaving more and more of the Middle Class until all of America is undeniably indebted for generations. It just so happens that "silver/gold" meets my criteria for monetary survival. If I thought excessive debt was the solution for survival I would own T-Bills and Munis, which at one time about 20 years ago I did. You have to adapt or die ...

Re-nationalization is I believe just the beginning of a wave that is starting in the periphery and will move towards the core. Governments hungry for money will look for it wherever they can find it. The direct approach is nationalization (Bolivia, Venezuela), while the indirect but similar approach is heavy "windfall profits" taxation (Australia). This should continue to keep a lid on mining company profits.

Of course the windfall profits are not coming from some unexpected stroke of luck, they're coming from money printing. So on the one hand the governments are madly printing money, and on the other they're seizing "profits" from shareholders in industries that actually produce real things.

I think bullion will be the place to be this time around.

ALOHA!!

Thanks for the link ...

I am glad he is a Director at Castle Peak Mining(CAP.V). Thanks Randy!

kaimu - "One very BIG exception to your rule is the "junior explorers" as you cannot tax gold or silver in the ground. In this case the best deposits will become the most valuable and most sought after'

I have a different take, somewhat less positive. Juniors don't exist in a vacuum. Having a valid exit strategy is required to raise funding, just like in high tech. Juniors depend on two exit strategies: one is to be bought out by a senior gold miner, and another is to get funding enough to start producing.

If the governments make mining a less profitable activity via taxation, sale prices for existing junior projects must necessarily fall because less profit will be realized by an acquirer.

Likewise, funding for juniors will get more difficult, because the upside ROI changes.

As these changes occur, perceived value of "gold in the ground" will drop, simply because the owners of the capital will receive substantially less reward for taking the risk of getting that gold out.

If governments start to seize active mines - or if the perceived risk of this starts to increase - then this will likely place a chill on the entire industry, effectively killing off the goose laying the golden junior eggs.

Think about the windfall profits tax case. Were junior oil drillers unaffected under the windfall profits tax regime in the 70s? You know the history better than I do, but I don't think its possible to just hit one element of an ecosystem leaving the rest intact.

Of course any nation that resists the temptation to tax should bring in a lot more investment, but the investors have to feel secure when making a 5 year investment that the rules on the ground won't appreciably change in the interim.

My gut feeling tells me that this sort of uncertainty helps bullion and hurts miner valuation. A bird in the hand and all that. I don't think this is a happens-overnight sort of thing, but something that will play out over the next 5 years or so.

Michael Moore and other uppity sorts are staging a Tax Day national demonstration called MAKE THEM PAY! Should you consider this an opportunity to challenge the status quo?