CTA Trading Desk Morning Report
[7:00am ET] Good morning, Geoff here.
Here is a review of our longer term stance:
The S&P 500 has failed to hold above the 1255 area. On major dollar weakness last week, the S&P did break above that resistance level, only to fail as the dollar bounced higher over fears that the European solution was not as positive as originally thought. The S&P also needs to rally above the 200 dma – clearing 1275 would do it. So; the index needs to clear both those hurdles for us to get real bullish.
However, we do believe that Central Banks will be providing future liquidity in some form or another, regardless of any sound bite to the contrary – they simply have no choice. That liquidity will lift stocks, the timing of that is unknown at this point but a bullish stock market will mark the new inflow of liquidity.
Liquidity will also rally gold and silver. Currently, the gold chart looks very constructive and a rally to new highs in the next few months is not out of the question. We are also getting into the strong season for gold, which is also bullish. I do have to mention that if the US dollar rallies further on renewed European issues, that rally would create headwinds to the bullish gold stance. However, the dollar did pop higher the last few days and gold held up. That is a good sign for the yellow metal.
Mining shares have underperformed gold itself for the entire year to date. We believe that that underperformance will change course and the mining shares will start to outperform the metal.
If everything goes according to plan, which it seldom does exactly as we want it to, the global Central Banks will be printing money as a solution to the mess that they are in and that will cause inflation in stocks and commodities and the biggest beneficiary will be the mining shares.
One of the problems with writing about trading is that many times I end up sounding like the economists that President Harry Truman complained about:
“I was in search of a one-armed economist, so that the guy could never make a statement and then say: “on the other hand””. - Harry S. Truman.
But, we are traders and we need to keep an eye on risk.
So; where is the biggest risk to the plan above? Obviously Europe remains front and center. But what I am most worried about is how the MF Global bankruptcy will affect other banks. The derivative daisy chain still exists so how much risk do the counterparty banks have especially in the credit default swaps? I have a feeling that we don’t want to know the answer to that question.
Overnight, more issues regarding Greece debt issues and possibly getting kicked out of the EU were pressuring stocks globally although futures are slightly higher as I write this. I repeat, the financial authorities will do whatever they can to stop a meltdown should there be that possibility.
Have a great trading day!
.
Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
| Symbol | Name | Last Trade | Change | Related Info |
|---|---|---|---|---|
| ^ATX | ATX | 1,957.00 |
 22.00 (1.14%) |
Components, Chart, More |
| ^BFX | BEL-20 | 2,093.00 |
22.30 (1.08%) |
Components, Chart, More |
| ^FCHI | CAC 40 | 3,159.64 |
49.05 (1.58%) |
Components, Chart, More |
| ^GDAXI | DAX | 6,072.03 |
106.40 (1.78%) |
Components, Chart, More |
| ^AEX | AEX General | 298.92 |
 8.58 (2.79%) |
Components, Chart, More |
| ^OSEAX | OSE All Share | 434.51 |
6.38 (1.49%) |
Components, Chart, More |
| ^OMXSPI | Stockholm General | 303.47 |
2.91 (0.97%) |
Components, Chart, More |
| ^SSMI | Swiss Market | 5,641.92 |
30.87 (0.55%) |
Components, Chart, More |
| ^FTSE | FTSE 100 | 5,513.14 |
29.04 (0.53%) |
Components, Chart, More |
| FPXAA.PR | PX Index | 914.80 |
9.40 (1.04%) |
Chart, More |
| ESI500000000.MA | IGBM | 870.69 |
8.37 (0.97%) |
Components, Chart, More |
| MICEXINDEXCF.ME | MICEX Index | 1,477.96 |
10.90 (0.73%) |
Chart, More |
| GD.AT | Athex Composite Share Price Index | 764.92 |
19.28 (2.59%) |
Chart, More |
http://finviz.com/futures.ashx
http://finviz.com/fut_chart.ashx?p=m5&t=ES
http://finviz.com/fut_chart.ashx?p=m5&t=ZB
http://finviz.com/fut_chart.ashx?p=m5&t=DX
http://finviz.com/fut_chart.ashx?p=m5&t=GC
http://finviz.com/fut_chart.ashx?p=m5&t=SI
http://finviz.com/fut_chart.ashx?p=m5&t=CL
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.
Cara on Trends & Cycles
Vad's Catch of the Day
Kaimu's Sound Money
CTA Trading Desk Mid-Day Report
CTA Trading Desk Post-Close Report
Jeff Borsato's Hidden Truth
This piece in yesterday's Globe and Mail is a classic example of financial filler that is becoming all too common in F-TV and print these days.
A high-flying fund from 2010 fails to capture similar gains in 2011 but the story places it's focus on the sunny side:
Salida's Capital Growth Fund:
down %46 for the year...
down %37 in September alone...
but wait, some good news: a gain of %5.6 in October...
but that failed to match %7.5 gains in it's parent index...
Here's a clip of the story, tell me if this is newsworthy and how it brings any value to the table. And people say I'm nuts for writing for free, I say the Globe is nuts paying these guys to write.
The author Boyd Erman writes some quality material for the Globe and Mail, so it is somewhat confusing why this piece was crafted. Based on the response to my comments posted at the bottom of his article I would say others agree. Boyd can be reached at: berman@globeandmail.com
Jeff Borsato
| Attachment | Size |
|---|---|
| salida.png | 1.42 MB |
Comments
Econoday Today
RSI Summary as of EOD 2011-11-02
Accumulation Zone: Monthly 6, Weekly 4, Daily 1
Distribution Zone: Monthly 9, Weekly 9, Daily 2
As a reminder of what's at stake
Or who owes what to whom.
http://nyti.ms/vCCio3
P.S.
Italy has €300bn in maturing debt which is due for repayment next year.
Non US economic data
PMI Services UK sliding towards contraction levels (Oct)
PURCHASING MANAGER INDEX SERVICES (UK)
Actual: 51.3 Cons.: 51.9 Previous: 52.9
Australian retail sales remain sluggish
RETAIL SALES S.A. (MOM)
Actual: 0.4% Cons.: 0.5% Previous: 0.6%
The Aussie real estate market is no longer a guaranteed ATM.
http://www.fx360.com/calendar/
Cara 100 Ratings Changes For Thursday
Good morning.
08:30 Initial/Continuing Claims (397K/3683K)
08:30 Productivity (3.1%)
10:00 Factory Orders
10:00 ISM Services
------
QCOM - PT Lifted from $70 to $75 @ FBR. Outperform
QCOM - PT Lifted from $60 to $65 @ Oppenheimer. Outperform
QCOM - PT Lifted from $67 to $70 @ Sterne Agee. Buy
------
Other stocks of possible interest:
AEM - Agnico-Eagle upgraded to Buy from Hold at Dahlman Rose citing valuation following the Goldex write-off. Price target is $50
------
"President Obama just announced a new student loan plan that will forgive debt after 20 years. Yeah, Obama said that forgiving debt is the most honorable thing someone can do. And then he repeated that in Chinese." -- Jimmy Fallon
BBC - Papandreou 'to offer to resign'
Greek soap opera never ends-
Greek Prime Minister George Papandreou is expected to offer his resignation within the next half-hour, sources in Athens have told the BBC.
http://www.bbc.co.uk/news/world-15575198
The BBC reporting that Papandreou resignation imminent
The BBC reporting that Papandreou resignation imminent
ECB cuts rate to 1.25
Draghi moves quick -
http://www.ft.com/intl/cms/s/0/100604ca-0600-11e1-...
Pre Market
thanks Geoff for the big picture outlook.
Yes, impressive bounce back in metals again during London trading. Ridiculous the strength in the Euro, so it makes me wonder if the Fed is giving a hand in trying to get the dollar down, when it can lend no visible hand to the Europeans in order to help keep the market from doing a 2009 redux.
Or perhaps its the present rumours that Papandreou may call off his referendum that is reversing the Euro's course this morning? Who knows - the story is likely to change many times during this conference.
http://www.bloomberg.com/news/2011-11-03/treasury-...
Need help with my dilemma
Recently I almost feel like a bipolar person: one day I read on macroeconomics or long term charts and see clearly recession coming sometime in 2011-2012, another day I look at some other indicators that clearly show we are recovering from a deep oversold conditions. This conflicting info is producing a lot of stress as I try to internalize the info.
How do you do it?
Here is the thing, everyday we hear on the news on high profile companies filing for bankruptcy. This is not something you hear in a bull market. A lot of highly esteemed economists with a pristine track record issued a recession call for 2011-2012. We well know that china is slowing and their housing bubble is probably busting.
On the other hand (LOL, just like Geoff said), we don't know how close we are to the recession and how many head fakes the markets are going to throw at as. I still vividly remember trying to short banks in 2007 and being stopped out several times before giving up on this "bad" trade for good.
So, my dilemma is, are we trading the 2007 or 2008 script? I'm not worried about stocks, I'm not touching them. I'm worried about miners. They did well in 2007 but poorly in 2008.
Some securities trade just like in 2007 (ie GLD), but some assumed the 2008 script (ie EEM), dollar closely replicates the 2008 script, yet TLT look like we at at the end of 2008 already!
FD: I'm 100% long miners via GDX, GDXJ, HL, and PNPFF, but itching to cash the gains and go short.
Re: The BBC reporting that Papandreou resignation imminent
an easy exit from a nightmare scenario.
Re: Need help with my dilemma
"FD: I'm 100% long miners via GDX, GDXJ, HL, and PNPFF, but itching to cash the gains and go short."
Jack, in my own experience cashing gains and going short are 2 separate calls that when played together can really crush your position. Cashing out then going short right away is basically trying to predict 2 separate events (market stops going up and market starts falling).
This doubles your chances of gains but also of losses. Its essentially a leveraged call. imho
Cara 100 Update
FCX - is covered at Overweight @ Barclays.
Look At Gold Go
Presently trading at $1760
Looks like Bill's call of $1900 gold by Christmas is well within reach.
Re: Need help with my dilemma
You are right, it's speculation and leverage indeed. To clarify, I meant going short equities, not miners. I need to think it through more and develop a clear plan with good entry levels and stops. For example, the Nov 1 gap in SPY will be probably filled.
In the meantime, my miner positions will be on autopilot with trailing stops of sort (not easy to do as some of my long term accounts are retirement accounts with limitations on trading).
I forgot to add I also have small positions in UNG and BAL, but that is no problem.
BTP over Bunds...where to next
http://twitpic.com/7ac122
Re: Need help with my dilemma
Interesting set up.
imho, miners will fall w/ the market as they always have, my continuing strategy is to short miners while long gold at different ratio's depending on how far out the GDX:GLD ratio falls.
CS downgrades SLF to Underperform (from Neutral)
• Downgrade due to higher risk profile, Lowering Estimates & TP to C$23 (from C$26)
• Core earnings disappoint. Although SLF pre-announced results on Oct. 17th, we had no clear picture of core results. On this basis, we put Q3/11 core EPS at $0.47, versus our $0.62 forecast. We have poor visibility on the factors behind the miss, but highlight the following: 1) higher hedging costs; and 2) another quarter of poor claims experience in U.S. Group insurance. SLF is hosting a conference call at 10am (EST).
• Change to hedging cost accounting methodology is more negative than initially expected. SLF's Oct. pre-release indicated that its accounting methodology for hedging costs would result in higher expected profits and a positive capital impact for its primary operating subsidiary (SLA). Revised disclosure indicates that SLF will also face higher new business strain (i.e. negative offset to earnings) and that the positive capital and capital sensitivity impact will be felt primarily at the holding company (i.e. poor visibility). Lastly, the after-tax charge from this methodology change could be as high as $650 million, versus an initial estimate of $500 million.
• Interest rate sensitivity disclosure raises concerns. We believe the street will be surprised to see a 90% sequential increase to SLF's sensitivity to a 100 bps downward move in interest rates. Moreover, the new hedging cost accounting methodology will result in interest rate sensitivities "significantly elevated" from quarter-end levels.
• Downgrading to UNDERPERFORM (from Neutral). Although we expect the shares to open lower on these results, we nonetheless believe that the stock's longer-term performance will trail peers. Of note, we believe a higher than expected (and poised to rise) level of earnings sensitivity, lack of clarity over potential interest rate reserve strengthening requirements, and reduced earnings outlook will weigh on the stock. We are reducing our target to C$23 from C$26, to reflect a 6% decrease to our 2012E EPS to C$2.52 from C$2.69. We are lowering our 2011 EPS estimates to C$2.30 (from C$2.49).
Cara 100 Update
AAPL - rated new Overweight at Evercore. $600 price target. Company continues to grow, despite weak consumer sentiment.
ADBE - target raised at Citigroup to $35. Long term benefit from subscription likely to accrue to growth and margins. Buy rating.
IBM - rated new Overweight at Evercore. $210 price target. Company is carrying a lot of operating momentum into 2012.
------
For goldbug58:
FST - numbers boosted at Credit Suisse. Shares of FST now seen reaching $21. Estimates also upped, given solid production growth across the board. Outperform rating.
Re: Need help with my dilemma
I just realized that both SPY and IWM did fill the gap this AM. QQQ didn't, neither $VIX did.
Mining For A Heart of Gold charity party tonight 4pm-last call
http://www.youtube.com/watch?v=YclT9gu1_l0
http://www.youtube.com/watch?v=40Pk1cezyhw&feature...
http://www.youtube.com/watch?v=yy_EFmV6lq0&feature...
Strathcona Hotel, Toronto: hope to see you there
Torex Gold
Looks interesting, thoughts?
what makes OWS unique
Best explanation of why OWS works on a different plane than most protests and why it is effective:
"OWS protests are a hysterical outburst that provokes the master, undermining his authority, and the master’s question – ‘But what do you want?’ – disguises its subtext: ‘Answer me in my own terms or shut up!’
So far, the protesters have done well to avoid exposing themselves to the criticism that Lacan leveled at the students of 1968: ‘As revolutionaries, you are hysterics who demand a new master. You will get one.’"
Slavoj Zizek
Cara 100 Update (Final)
QCOM - estimates, target raised at Citigroup. Shares of QCOM now seen reaching $62. Estimates also raised as company delivered above consensus expectations both near and long term. Buy rating.
QCOM - Qualcomm estimates, target boosted at Credit Suisse. Shares of QCOM now seen reaching $70. Estimates also upped, as the company has several potential growth drivers. Outperform rating.
WFM - estimates upped at Morgan Stanley through 2012. Company continues to deliver solid growth. Equal-weight rating.
Guyana Goldfields (GUY.TO $10.00) update
From Raymond James report:
Action:
We recommend investors buy shares of Guyana Goldfields as we eagerly await the results of the Aurora feasibility study. We believe investors can win either as the company continues to “de-risk” its Aurora project or if it is acquired – we believe GUY’s size, exploration potential, large and prospective land package, and mining-friendly jurisdiction make it an attractive “strategic takeover” target.
Analysis:
Timeline: We expect a number of potential catalysts over the next couple months – late November Permitting & Mining License, late November Aranka resource update, December Aurora resource update and January 2012 feasibility study.
Aurora Feasibility Study: We are forecasting commercial production in mid-2014, producing 325,000oz of gold on average at operating cash costs of ~US$425/oz (total cash costs $525/oz) for the first 10 years.
Capex: In our valuation we are forecasting the initial capital requirement to be roughly US$550 mln (total capex assumption of $775 mln if incl. $225 mln to complete UG development which is expected to be covered by internal cash flow). In our valuation we assume a 50%/50% split between debt and equity with the IFC and equipment lines accounting for a large part of the debt requirement.
FD: I hold a 7.71% portfolio weighted position with ACB of $7.54. My 12-month Price Target is $15.00
CEO Patrick Sheridan, if he's in Toronto, will be at the MFAHOG charity party tonight.
SALIDA CAPITAL
ALOHA!!
One of the preeminent price prints of 2008 was the hit the juniors took. What the funds similar to SALIDA CAPITAL forgot was the illiquid nature of the junior exploration sector. I recall RAB CAPITAL called Doug Macquarrie after the fact to apologize for selling off its entire holding in PMI GOLD(PMV), which is how I bought it at $0.03 and $0.05CAD in the open market. Just because RAB had troubles and needed to liquidate holdings to cover redemptions did not mean the gold PMI GOLD had in the ground was gone!
Just an FYI that since Sept 15th Golden Reign Resources(GRR:TSXV) has sold off and now thanks to JeffB I see SALIDA CAPITAL has problems and probably had to start covering redemptions. It seems SALIDA CAPITAL holds GRR as I believe I have posted on that prior, so that could account for some of the downward pressure on GRR just prior to the CTA Conference 2011 in Whistler. I do not know that for sure. In the event that FUNDS like SALIDA or RAB need to go to cash quickly they will sell off what they deem their more risky holdings first. I wonder what other juniors SALIDA CAPITAL is holding or was!
I thank RAB CAPITAL for selling me PMI GOLD at $0.02USD and now they have the benefit of hindsight to see that LEHMAN BROS, a 100 year old company full of blue chip derivatives, was way more risky than a tiny junior gold exploration company based on one of the most prolific gold belts in Ghana. Once again proof of concept that positioning oneself inside the "monetary trend" on the ASSET side of the Balance Sheet proved to be the most highly profitable strategy since flipping dotcoms at Morgan Stanley! Thank you RAB CAPITAL for a 6,000% gain ... There are more ways to short the derivative laden blue chip than there are ways of not saying "Greek default"! Clearly the return of the DOTBOMB is now the CMEBOMB! Tic-tic! I seriously doubt you will ever be able to buy PMI GOLD(PMV) for $0.02USD again, but I feel confident you will be able to buy derivative laden US blue chip banks at $0.02USD! I know all the major PMI GOLD shareholders by their first names except Macquarie Bank Group, but if MQ gets in trouble and finds its derivative position bleeding red then I know at least four shareholders who will gladly relieve them of their shares. My guess is that all those ex-LEHMAN BROS employees now wish they had bought PMV instead of LEH.
US PENSION FUNDS beware! They are still positioned, for the most part, on the LIABILITY side of the monetary trend! For that matter so long as Grandpa Warren insists on holding bank derivatives he is positioned on the same side as US PENSION FUNDS. However junior explorer shareholders need never fear that US PENSION FUNDS will ever sell down their shares since they have none, unlike AUSSIE PENSION FUNDS which are full of juniors! In that event steer clear of ASX listed junior explorers. I mainly hold ASX listed producers.
Re: Guyana Goldfields (GUY.TO $10.00) update
Bill,
What does "ACB of $7.54" mean ?
I was just having a look at this GUY.TO when I saw your post. Looking at the chart, I was hoping to buy this in the $8.60 - $8.80 range (just above the 50, 200 dma) if it pulls back. I'm nervous about chasing the price after its recent run up. Any thought about this ?
Re: Guyana Goldfields (GUY.TO $10.00) update
ACB, go to:
http://www.investopedia.com/terms/a/adjustedcostba...
Re: Need help with my dilemma
To follow up on my plan, I took profits in HL calls. Keeping the core miners position for a time being.
THE FRED SPREAD!
ALOHA!!
If you think the Aussie or Chinese housing market is in trouble then try not to overlook the US housing market! How good can it be when the two entities that control $5TRIL of US mortgages still need bailouts?
Freddie Mac reports Q3 loss, asks for $6B in aid
Freddie Mac reports $6 billion loss for third quarter; asks for $6 billion in federal aid
AP
Derek Kravitz, AP Economics Writer, On Thursday November 3, 2011, 10:11 am
WASHINGTON (AP) -- Government-controlled mortgage giant Freddie Mac has requested $6 billion in additional aid after posting a wider loss in the third quarter.
Freddie Mac said Thursday that it lost $6 billion, or $1.86 per share, in the July-September quarter. That compares with a loss of $4.1 billion, or $1.25 a share, in the same quarter of 2010.
This quarter's $6 billion request from taxpayers is the largest since April 2010.
Freddie's losses are increasing mainly for two reasons: Many homeowners are paying less interest because they are able to refinance at lower mortgage rates. And failing and bankrupt mortgage insurers are not paying out as much money when homeowners default.
The government rescued McLean, Va.-based Freddie Mac and sibling company Fannie Mae in September 2008 after massive losses on risky mortgages threatened to topple them. Since then, a federal regulator has controlled their financial decisions.
Taxpayers have spent about $169 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates it could cost up to $51 billion more to support the companies through 2014.
Freddie and Washington-based Fannie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion. Along with other federal agencies, they backed nearly 90 percent of new mortgages over the past year. END
Now does anyone here have confidence in the following statement?
"The government estimates it could cost up to $51 billion more to support the companies through 2014."
By GAO estimates they can't even audit the government's financials much less Freddie and Fannie!
Also make note that FY2011 the US Treasury injected $3.8TRIL USD into the economy with very little effect other than barely preserving the political status quo a few more months. I mean what is a 80% disapproval rating? I guess it takes 100% for all of America to abandon the whole PC thingy! Look at that with the perspective that the US Treasury just injected enough QE to buy 24 million US homes in one fiscal year. Given that the GSEs own $5TRIL of mortgages(half of total US mortgages) which equates to 31 million US homes. Do the math. It takes the US Treasury 2.6 fiscal years to print the entire US real estate market! Now that is what I call VALUE DESTRUCTION!!!
Now go back to my last SOUND MONEY and read the OWNERSHIP speech George "Dubya" Bush gave back in 2003. Who here still thinks politics has no bearing on the markets? I recall a few years ago people here would actually give you a debate on that fact! Eyes wide shut ...
Re: Need help with my dilemma
To add to my confusion, the TED spread is barely in the mid 2006 range and not quite yet in mid 2007 range. This is surprising considering the euro drama. Sign of printing press?
Re: Torex Gold
SyncMaster152T -
Let's start with your thoughts first.
Morning report
Thank you for the clear morning report Geoff.
Bear E
Re: Guyana Goldfields (GUY.TO $10.00) update
ACB = Average Cost Basis
MF Global danger
I think everyone should be aware of the risks of contagion here. Client funds have been mingled with the firms, the banks called the loans on the firms' risky positions on PIIGS debt, and grabbed the client's money too. When this happened to REFCO the CEO went to jail for 12 yr. Let's see what happens to Corzine. The irony is, it could be Goldman who pulled the plug.
Read here. http://brucekrasting.blogspot.com/2011/11/on-mf.html
(GR) Greece PM Papandreou:
(GR) Greece PM Papandreou: New elections at the moment would be 'catastrophic'; Referendum provides a solution for alliances and decisions; will provide answers domestically and internationally
- Notes that he trusts the 'wisdom of the Greek people'; highlights that EMU partners have acknowledged the rights to hold a referendum.
- Notes that the options he saw available were a referendum, consensus or new elections; eventually settling on a referendum as the only option.
- The Brussels bailout deal from October 26th would be the central issue to be debated in the referendum.
- Rejection of the bailout deal would signal the beginning of Greece's departure from the euro zone.
- Plans to have further talks with opposition parties, cannot accept or reject their terms out of hand.
- Conditions for cooperation are specific policy ideas. One condition is for the Socialist Party to be solidly united, confidence vote on Friday is crucial, confidence bote will guarantee Socialist party cohesion.
- Nothing is off the table in talks with the opposition.
***Reminder: Earlier the ruling party indicated that new elections may result in a bankruptcy
Re: (GR) Greece PM Papandreou:
It all depends how they word the referendum ie
would you like stay in eurozone and get free money?
vs
do you agree to belt tightening and say good buy to your oversize pension?
Re: MF Global danger
westcoaster -
That is the most frightening opinion I've read all year. In essence, GS may have first position on your trading account with a coordinated attack on your broker. I read that even IB bailed on a takeover deal of MF Global upon discovery that customer account cash was gone, gone, gone ... really gone. Deep Throat must have met an IB director in the corporate parking garage ...
Interesting times.
referendum scrapped
markets going up.
Sell on news #2?
RE: putting the MF in Manulife Financial....
bbarberayr,
is MFC still a buy after reporting a 1.28B loss?
http://www.cbc.ca/news/business/story/2011/11/03/m...
Geoff
Curious... recent mention of FSLR.. watching consolidation... possible $ 44.50 on dips ?... noticed efforts to take market share back.. efficency cells increased appx.25 %... lower costs... sneaky feeling oil jumps... Thanks, Robert.
Friday feature interview
As part of the new expanding mandate of the Cara Community Blog, on Friday I will post an interview with Edward Dempsey, CIO of Pension Partners.
I was contacted by Edward to consider giving space to some of this thoughts on the market. I asked him to provide responses to some general market questions that would be posted on the site and open things up for further discussion should anyone see value or have concerns with some of his views.
This is not an advert for anyone, and that much was made clear. Please email me Friday morning after Ive posted the interview if you have any questions and we can post them to Edward for a response.
Thanks,
Jeff
The corruption runs deep...
Papandreou's friends stand to make billions from default insurance. Papandreou sold it off after they found out the level of Greek debt... but before they announced it to the world... guess who stands to benefit from a Greek default?
It is a Greek tragedy indeed...
In a nutshell, they allege that Papandreou and members of his team presided over the sale of 1.3 billion dollars worth of credit default swap contracts (CDS on Greek sovereign debt) on or around December of 2009, shortly after coming to power. The $1.3 billion worth of insurance protecting against a Greek default was bought during the spring and summer of the same year, by the Hellenic Postbank, a public banking arm of the Greek government. (In other words, public funds to be used for public insurance against default).
Were it to be cashed in today, the policy would pay out in the region of $27 billion – a substantial amount to put against spiralling debt management.
http://hat4uk.wordpress.com/2011/06/01/papandreou-...
RE: putting the MF in Manulife Financial....
c2ski;
LOL! The CEO was pleased that his hedges had reduced his losses. I wonder if he has considered counterparty risk? He should check the 'John Hancocks' on his assets.
Thanks for the link.
pulse
Red Lake Boom
5 minute clip describing current boom conditions in a tiny Northern Ontario mining district (picked from c2ski's linked page)
http://www.cbc.ca/video/#/News/Business/1239849460...
(GR) Greek opposition leader
(GR) Greek opposition leader Samaras asked for PM to resign but Pm refused; does not want to govern jointly; want new elections within weeks
- Told the PM to move to a caretaker govt with limited powers that would last a few weeks followed by new elections.
- Need to hold elections as soon as feasible.
- Idea of a referendum is dangerous. PM has been telling lies.
- Follow up: 14:15ET Opposition leaders have walked out on confidence debate
Re: Need help with my dilemma
QQQ almost closed the gap. $VIX didn't but approached mid channel on BB.
Re: SALIDA CAPITAL
I suspect we should know next week how much GRR they have dumped. They previously filed their "Alternative Monthly Report" on Sedar Sept 9th (for Aug) and Oct 7th (for Sept). Sept they were still net buyers but the action did not take place until October
REPORT UNDER PART 4 OF
NATIONAL INSTRUMENT 62-103
REPORT FOR END OF: September 2011
1. Name and address of the eligible institutional investor:
Salida Capital LP (“Salida”)
2 Bloor Street West
Suite 2700
Toronto, Ontario
M4W 3E2
2. Name of the reporting issuer:
Golden Reign Resources Ltd. (the “Issuer”)
3. Net increase or decrease in the number or principal amount of securities, and in the
eligible institutional investor’s security holding percentage in the class of securities,
since the last report filed by the eligible institutional investor under Part 4 of the
early warning requirements:
Since the last report filed by Salida on September 9, 2011, Salida, on behalf of certain
investment funds managed by it (collectively, the “Funds”), has acquired an additional
322,200 common shares (“Common Shares”) of the Issuer in the open market (the
“Acquisition”) representing approximately 0.54% increase in the Funds’ beneficial
ownership of securities of the Issuer as of September 30, 2011, calculated on a partially
diluted basis based on the number of the outstanding of 56,761,768, as reported by the
Issuer in its Management Discussion and Analysis dated August 25, 2011 (the “MD&A”).
4. The designation and number or principal amount of securities and the eligible
institutional investor’s security holding percentage in the class of securities at the end
of the month for which the report is made:
Prior to the Acquisition, the Funds already owned, and Salida exercised control and
direction over an aggregate of 5,114,022 Common Shares and 2,222,222 warrants
(“Warrants”) of the Issuer. Each whole Warrant entitles the holder to purchase one
additional Common Share at an exercise price of $0.75 per Common Share until
January 16, 2013.
As a result of the Acquisition, Salida, on behalf of the Funds, held and exercised control
and direction over an aggregate of 5,436,222 Common Shares and 2,222,222 Warrants,
representing approximately 12.98% of the outstanding Common Shares of the Issuer,
calculated on a partially diluted basis based on the number of outstanding Common Shares
as reported by the Issuer in the MD&A.
and so on and so on..
Re: Torex Gold
Sure,
I have been looking into buying some gold stocks recently as gold continues to soar, an opportunity I have missed too many times before. I managed to stumble upon Torex gold and here is what I have discovered.
Torex Gold Resources Inc. is a well funded, growth oriented Canadian mining company engaged in the exploration and development of precious metal resources with a focus on gold. It owns 100% of the Morelos Gold Project in Mexico. President and CEO Fred Stanford comments on this mine saying, "We own a rich gold deposit that we intend to expand from three million gold ounces (M&I) to five million gold ounces (M&I) in the new resource estimate expected by the end of Q1/2012, which will be followed by a bankable feasibility study. We also have the long-term exploration upside to add new deposits as we start in November a 33,000 m drilling program in areas adjacent to the existing resource."
http://www.stockhouse.com/Community-News/2011/Oct/...
Looks to me like a long-term stock to invest.
I am thrilled to see the mining is done in Mexico as it is fairl stable. As of July 2011, they had $46 million in cash. I think thats fair as most of their dues have been paid (lisences and machinery.)
Re: Cara 100 Update
For goldbug58:
FST - numbers boosted at Credit Suisse. Shares of FST now seen reaching $21. Estimates also upped, given solid production growth across the board. Outperform rating.
Thanks for posting again. It looks like $21 might easily be possible. FST filled the gap from 3 October yesterday, with almost 4X average volume and up some 16%; I think that is a very bullish sign, although it is now pushing up against 50-DMA. Stock was way oversold on 3 and 4 October.
RE: putting the MF in Manulife Financial....
MFC up 4.5% today
Greece Govt Bond 1Year Yield
went up to 250% before easing to 231% http://www.bloomberg.com/apps/quote?ticker=GGGB1YR...
Likewise 10 year Italian bonds eased to "only" 6.2% from 6.5% levels http://www.bloomberg.com/apps/quote?ticker=GBTPGR1...
Re: Greece Govt Bond 1Year Yield
They have defaulted.
if any new austerity is passed, the people of the country will revolt. the debts wont be repaid. it is clear as the air we breath.
the debt holders have two options:
1. write down the debt
2. send in tanks and military to confiscate assets
Re: Need help with my dilemma
Here is another troubling piece of evidence. While TED spread is not bad (but steadily increasing), the Euribor spread is as high as late 2007: http://www.bloomberg.com/apps/quote?ticker=.EOIS:IND
The risk is clearly palpable and the new financial crisis is here already. I went short stocks before the close to hedge my core miners positions.
S&P
Geoff,
The S&P closed over the 1255 level you mentioned this morning. Maybe there will be a Christmas after all, Thanksgiving day came early this year. I sure hope Mr. Market doesn't take it back.
Re: Need help with my dilemma
Jack,
I couldn't even spell Euribor spread until you posted it. Apparently it is "the interest rate at which a selection of European banks lend one another funds denominated in euros"
I pulled up the 6-month Euribor rates at this site http://tinyurl.com/4sgqpz
The site includes a 1999 -2011 chart and the Euribor rate for 2011 is far below the rate in 2007. On the chart at the attached link the rate went from about 2 to 5 at the end of 2008. I don't see this indicator as providing anything to be overly concerned about. Perhaps you have a different source for your long term chart of this indicator.
Re: Need help with my dilemma
I was talking about Euribor/OIS spread and a chart (up to 5 years) is in the link provided.
Re: Need help with my dilemma
Got it. I see what you mean.
Something to keep an eye on, especially if it breaks above 1.0
Re: Need help with my dilemma
This short interview with a knowledgeable source explains the meaning of the increasing spreads: http://www.institutionalinvestor.com/Popups/PrintA...
Why the EU will never absorb Zorba the Greek
Expanding on Yaba's link, from "The Slog". this about sums it up. Modern life has gotten too serious.
http://hat4uk.wordpress.com/2011/11/03/why-the-eu-...
this blogger is a keeper:
"In the Total Politics awards 2011, John Ward was voted 5th most popular unaligned blog author in the UK. My ambition is to be the most unpopular blogger in Downing Street…regardless of tenants."
USD and Gold
Robin Griffiths, Her Majesty Queen Elizabeth II's stockbroker, thinks gold will run with a USD rally. From KWN:
"When asked if a dollar rally would have negative implications for gold, Griffiths replied, 'Not necessarily, when you are worried you buy a bit of both don’t you? Most people think of the price of gold as priced in dollars. One of the reasons why I don’t think gold is going to runaway at the moment is because I am quite positive on the dollar as well. So they will rise together is what I think.'"
Read his astute logic here:
http://kingworldnews.com/kingworldnews/KWN_DailyWe...
Jolly good, man. Jolly good.
NAK
Hi All - Couldn't resist going back in this one today - its done well for me in the past with the preeminent undeveloped copper, gold & moly deposit in the U.S./world. Hope the Interior Department under the uber progressive Salazar doesn't come after my investment. A similar investment thesis would be the Bakken/Three Forks here and analogs in Canada, along with Canadian U3O8 explorers & developers. Happy Trading
http://www.kitco.com/pr/1738/article_1103201114264...
Re: Need help with my dilemma
Thanks for the article Jack. I'm populating a file with shortcuts to all of these indicators, so I can click through them easily to see the story. I feel that Europe will print, the U.S. will print and they will continue to sacrifice their paper currencies and their own citizens savings and future well-being to keep the global monetary debt-based system from collapsing. You have shown me additional tools, to fight complacency. As Kaimu used to say, "It all works until it doesn't".
Note: (Click on 5Y for the 5 year charts I'm looking at.)
The TED http://tinyurl.com/43v28on spread today is in the range of December 2006 and June 2010.
The VIX http://tinyurl.com/3eueo73 topped out above May 2010 and has been declining, let's hope it continues falling.
The CDX http://tinyurl.com/3mx3df7 is much higher than 2007 and is rising as Steve Rosenbush mentioned in the article you linked to.
The EURIBOROIS http://tinyurl.com/3hgv7un is up to 2007 levels as you mentioned.
All: I am sure there are other indicators of this type we should be watching. Please post them if you have a favorite.
The last line in the Rosenbush interview, could make a magazine cover.
"I hope — I hope to God — they figure this out."
Re: Need help with my dilemma
Thanks for posting those.
My interpretation:
TED-not sure, somewhere 2006-2007
VIX-Oct 2007
CDX-no clue how to interpret
Euribor/OIS-Nov 2007
Additional indicator:
Libor/OIS-Aug 2007
http://www.bloomberg.com/apps/quote?ticker=.LOIS3:IND
Another thing to consider is italian 10 bond yield (over 6%) is now higher than greek one back in 2008/2009 (over 5%). Italy is BTW the third biggest economy in Europe and it's aging very fast.
Re: Need help with my dilemma
Sovereign Credit-Default Swaps
Found this link at CNBC http://tinyurl.com/3nj6tjg but it never finished loading. Perhaps the market must be open. Data may come from 'markit' http://tinyurl.com/3of6c2y, which appears to be a paid service.
Thanks for Libor/OIS
CNBC data loaded, I see it comes from CMA Datavision.
Re: Why the EU will never absorb Zorba the Greek
Yes Westcoaster , Zorba The Greek was beautiful " What we have in 2011 is an EU in denial about cultural diversity - and incompatibility. The loopy eurocrats suffer from the same fantasies as the UK's multiculturalists. Do we want an EU where Greek retailers and fishermen pretend to be British accountants? Or do we prefer a Europe where there is a place for everyone from the Irish musician and the French viniculteur to the German car designer and the Italian farmer?
I don't know about you, but I know where my heart lies. Is my heart naive? Bollocks it is: the heart informs the head, and stops it from swelling too much. " Thanks Bob .
Re: Torex Gold
I have a small position ACB approx 1.6 Scotia research provides a one year target of 3
Asia
All green: Hang Seng +3%,
US futures -27 perhaps they will be green in the morning as well.
Re: Need help with my dilemma
Interesting find. Italian CDS higher than Egipt. French higher than China. Interesting times. Greece over 6,000 and rising.
Re: Asia
Asia was sharply red today, they closed before the referendum news and are simply catching up.
Smart money
There seems to be a bit of a run on the some of the PIIGS bank deposits. Look at the M1 declines over the past few months. Astounding!
Many of the homefolk are withdrawing Euros in the hopes?---of converting into cheap Drachmas, Lira Pesetas etc. in the near future...No wonder the Swiss put up a skull and crossbones at their borders...
I propose a northern Germanic protest-ant work ethic Euro split off from a southern (including Ireland) Catholic/Orthodox (God will provide) Euro.
This tact will allow the Vatican's one WORLD bank to finance and fleece their own flock by selling assignant bonds secured with heretofore untaxed church property. They can then retire those bonds by selling progressive rate indulgences.
Said in the same vein as "A Modest Proposal."
Greece Hold’em – Calling Papandreou’s Bluff
Interesting analogy and yes, Papandreou's bluff was called. The following is worthy of note:
Argentina left the dollar peg last decade to devalue their currency. It helped their economy and they didn’t have to implement huge austerity plans because they didn’t accept any bailouts from the IMF (they did in the 90s and didn’t like the results). What is the difference between Greece (now) and Argentina (2001-2002 crisis), and why it would not benefit Greece to leave euro? In one answer: exports.
Greece can’t export tourism and services, a major driver in their economy, but Argentina could export agriculture. In fact, Greece has negative net exports with €12.1 billion in imports and only €9.1 billion in exports according to March, 2011 GPD data. Because Greece imports more than they export, devaluing their currency would cause inflation which would hurt their import economy.
read more... http://www.financialsense.com/contributors/ryan-pu...
so I'm noting several things from this Greek affair.
1. Bill and the likes of Marc Faber will likely nail the probable move that must be made by the Euro authorities - print. Pushing Greece off the cliff of insolvency changes nothing and makes it harder for France and Greece to repeat this spectacle when more money is needed in future - their own finances are being dangerously stretched as it is.
2. It appears that Greece gains nothing by leaving the Euro - the Drachma would send them back to a very insular and unstable economy, especially vulnerable if rich Germans don't feel secure enough to bring their Euros down for summer holidays - which appears likely the case if social security and pensions collapse following devaluation.
3. If Greece gains nothing by leaving and France and Germany are already stretching their finances beyond what the big three rating agencies see as AAA, that leaves the ECB as the only medium with which the Euro crisis can be pushed off for another date - which is clearly what Sarko and Merkel seek.
As is exemplified by Greece's economy, Europe has structural issues that must be remedied and will likely be addressed only after collapse of the present system forces change upon people and politicians alike.
Stick with the fundamentals
Post Close
days like yesterday one is left watching the dollar and hopefully - with future wisdom (I think of myself here) - the discipline to leave the market well alone.
Popped after hours, returning to below 70 and giving the impression of a breakdown coming before returning to further consolidation. What is one to do but watch?
Jesse had this to say of precious metals yesterday: I do not care for their synchronicity with stocks. So many assets are now correlated to a global reflationary event, and the markets are overly sensitive to headlines. That makes these markets highly dangerous.
All chips are stacked on black & the ECB's printer - a dangerous leaning to one side of the boat. Can central banks and Euro elites pull off anything else but printing?
In any case, risk on returned as precious metals, the miners and semi's all turned north. Yet one can only speculate if ECB action will be enabled in the near future or will traders be once again left disappointed.
GDX is a case in point. So many times have I heard gurus, CEO's and traders all suggest that a monetary event will be priced into the miners at some point, leading them to outperform the metals.
Fair enough, but as GDX returns to previous resistance - see attached 4 day chart - will that market pricing occur going into the EoY or is this €1T confidence trick enough to buy French and German banks another quarter or two of deleveraging and new financing, leaving holders of the miners out in the cold once again?
I don't have the answers. I'm just wondering if Merkel has bought time for me to put together another $10k in December, reopen a cash account with IB and buy into Bill's proposed mining fund before miners break through the resistance illustrated in the attached chart.
The answer to this is determined by events unfolding in Europe.
$ in the 4 hour chart looks like it wants to roll over, but this is a news driven market and I have no faith in trying to guess where currencies will be next week.
It's 5am and risk off again. $ testing 77 resistance
Slowpoke Traders Seek to Gain on Speedsters
http://online.wsj.com/article/SB100014240529702046...
Sovereignty matters...
"Police arrested at least 16 people, including journalist Chris Hedges and performance artist Reverend Billy Talen, during a rally Thursday outside the headquarters of Goldman Sachs Group Inc. in lower Manhattan."
http://blogs.wsj.com/metropolis/2011/11/03/16-arre...
No WSJ reference to the way police elsewhere, faithful to the Constitution of The United States, handled the issue of a protester exercising free speech in front of two banks;
http://www.dailykos.com/story/2011/11/02/1032624/-...
Perhaps Mayor Bloomberg would prefer that people apply for Freedom;
http://www.cityoflondon.gov.uk/Corporation/LGNL_Se...
However, even the island frogs seem to be noticing the pot is getting rather warm;
http://www.guardian.co.uk/commentisfree/2011/oct/3...
If only some great power could rule us all with conscience and benevolence;
The "new world dynamics," it said, call for a "gradual, balanced transfer of a part of each nation's powers to a world authority and to regional authorities."
http://www.catholicnews.com/data/stories/cns/11041...
Are we really going down this rabbit hole?
pulse