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January 18, 2007

SEC investigation needed, Thurs., Jan. 18, 2007, 3:34 PM

I have not commented as to my true beliefs regarding Cramer's double bashing of Crystallex (KRY) -- in favor of Yamana (NYSE: AUY, TSE: YRI) or about the unusual reporting regarding Crystallex coming from Venezuela. But something happened today at exactly 1:19pm that stinks to high heaven and demands immediate investigation by the SEC of this whole affair.

At precisely the moment that a Dow Jones headline crossed the wires regarding a dubious and unsubstantiated comment about Venezuela "eying nationalization of mining", my real-time ticker stopped for the TSE and AMEX, but not for the NYSE and Nasdaq.

So while I was thinking that KRY was trading relatively strongly today, I was jammed with enquiries as to the dramatic sell-off in KRY shares. I took the following real-time screenshots as soon as I saw on a different monitor that KRY had indeed collapsed.

To the very minute! This is a complete and utter joke.

001e002.gif

001e003.gif




According to the company, "nothing has changed with our position or expectations. DowJones ran a headline and as soon as it hit, the stock sold off:

13:39 *DJ Venezuela Also Eyeing Nationalization Of Mining -Minister


The following story then came out about 15 minutes after the headline:"

RIO DE JANEIRO (Dow Jones)--Venezuela, in addition to planning the nationalization of other key sectors of the economy, eyes the nationalization of the mining industry, the country's foreign minister said Thursday.
"The basic industries of minerals should be in the hands of the national state," Foreign Minister Nicholas Maduro said. He spoke at the sidelines of a summit of leaders of the Common Market of the South, or Mercosur trade block, taking place here Thursday and Friday.
Maduro, however, didn't elaborate on the issue of nationalizing the mining industry.
A number of Canadian, U.S. and Brazilian mining companies are operating in Venezuela.

(MORE TO FOLLOW) Dow Jones Newswires
01-18-07 1353ET
Copyright (c) 2007 Dow Jones & Company, Inc.- - 01 53 PM EST 01-18-07"



It is my understanding that people at CPM, a research firm in NYC, and Wellington West, a Cdn broker-dealer, had mentioned Crystallex to Cramer initially. That's what I've heard.

Although I was barely able to speak, I called a VP at CPM, who I personally know, to see if that Steet info was correct or if they had changed their outlook on Crystallex. I didn't get a call-back.

Something is going on here. If anybody knows what Wellington West or CPM is saying about Crystallex recently, I'd like to hear of it. I also think somebody ought to be analyzing the block trades in this stock for the past couple months to determine which brokers are on the buy/sell.

I don't know what's in Cramer's head, but his double case of histrionics regarding KRY in the past week is over the top. The Dow Jones reportage on this company is also over the top. The coincidental loss of the Comstock real-time data feed at the precise moment the latest DJ story first hit the headlines is so far over the top that it must be explained or else DJ has lost all credibility with me.

There is an explanation here, and shareholders ought to be demanding it.

Cramer happens to like Yamana (NYSE: AUY, TSE: YRI), which I also think is a stand-out Cdn goldminer operating in the Americas. But, on a relative basis, Yamana is no better than say Alamos Gold (TSE: AGI) or Gammon Lake Resources (TSE: GAM, AMEX: GRS), or a few others, in terms of the EPS momentum and size.

And yes MarkM, you do have a point. I only got out of bed to hear what the pinging e-mail alerts were all about. I am in no shape to be following this situation by the minute. Now I'm going back to bed.

ADDENDUM: I did get a call from Adam Crown, VP at CPM Group. He stated that CPM is not in the business of recommending or reporting on individual companies, and played no role with respect to the Cramer discussion re KRY. So my information was incorrect.

Adam did, however, point me to book called Commodities Rising, by Jeffrey Christian, which is available in bookstores, and he said I would be getting a personal invite to their hospitality room at the Prospectors and Developers Show in Toronto in March. I'll have to go because that's where my wife won a silver bar in a biz card raffle last year.

About Wellington West, I see that Catherine Gignac has a "Strong Buy" on KRY. This screenshot came to me this morning from my "country friend". I should have checked first, and made such a remark.

001e004.gif

Barry Allan at Research Capital has a Sell rating. Barry, btw, in my view, is one of the very best mining analysts in Canada. Twenty years ago, I put him at the same level as Pierre Lassonde (ex-Newmont president) and Tony Garson (ex-Canaccord, Haywood, and Dean Witter) who is now an independent analyst and principal in some mining ventures.

I'd respect Barry Allan's judgment in most mining matters. KRY, however, is a different type of situation. It's for speculative money, pending the outcome of final permitting. I think Barry would take a very different view if Crystallex held that permit in hand.

Tony Garson agrees with me about the prospects of Las Cristinas, because it was he and I who interviewed Todd Bruce, the first time I met Todd. Tony was going to do a report for me, but without the permit in hand, he decided that other matters were more pressing. A lot of people feel that way.


Posted by Posted by Bill Cara on January 18, 2007 03:34:26 PM | Category: Cara Today in the Market

Discourse

How Do I Reach the SEC?
There are several ways to file a complaint:

Complaints - Use one of our online forms to file your complaint electronically. (http://tinyurl.com/36dgb)

Tips - Report a potential violation of the securities laws directly to enforcement@sec.gov. Please do not use this email box for general comments or questions.

Posted by: NYUgrad [TypeKey Profile Page] at January 18, 2007 4:00 PM [link]

Hi Bill,

I just spoke with CMP and encouraged them to contact you regarding KRY and Cramer. They claim they only look at production data for KRY and have not issued any other opinion.

Regards....

Posted by: noodle [TypeKey Profile Page] at January 18, 2007 4:06 PM [link]

Catherine Gignac of Wellington West(i think) did have something good to say about KRY in the last couple of weeks. I will try track it down.

Posted by: BritNick [TypeKey Profile Page] at January 18, 2007 4:24 PM [link]

i just re-read the text of the DJ news. its pretty sneaky!

SPIN: Venezuela, in addition to planning the nationalization of other key sectors of the economy, eyes the nationalization of the mining industry, the country's foreign minister said Thursday.

QUOTE: "The basic industries of minerals should be in the hands of the national state," Foreign Minister Nicholas Maduro said. (thats like the weather man saying the sun will rise and set as normal)

ALIBI: He spoke at the sidelines of a summit of leaders of the Common Market of the South, or Mercosur trade block, taking place here Thursday and Friday. Maduro, however, didn't elaborate on the issue of nationalizing the mining industry.

Posted by: NYUgrad [TypeKey Profile Page] at January 18, 2007 4:25 PM [link]

Hi Bill,

I noticed the freeze on my real time of the AMEX also. This smells to high heaven.

I don't know if anyone caught Cramers stop trading segment today but he had a few words to say about KRY that I could not hear put together.
Regards,

Joe

Posted by: Bullhunter [TypeKey Profile Page] at January 18, 2007 4:55 PM [link]

Cramer as I have said before is only being a good US citizen. Bash anything that has a slight smell of socialism or communism. It's a mini cold war with the Devil vs US. Hugo is not a fool and is doing everything to get under the skin of Bush. Unfortunalely Canadian businesses in VN are being dragged along. Today he announced the possible building of a 1M per day refinery in India with the crude coming from VN.

Posted by: puddy [TypeKey Profile Page] at January 18, 2007 4:56 PM [link]

House positions for Jan 18th
http://tinyurl.com/36e3mx

Wellington is on there. Orion is also related to Crystallex; Robert Fung is on the board at both Orion and Crystallex.

Posted by: NYUgrad [TypeKey Profile Page] at January 18, 2007 5:13 PM [link]

The AMEX has been in the past, and remains a place where "unconventional trading" takes place.

I can't even begin to mention how in different instances where the bid/ask at the time I entered an order wasn't anywhere close to where I got settled. And I'm not talking during the course of a market meltdown; I'm talking about a steady market during the normal course of business.

I basically try to avoid trading AMEX stocks; although if you're playing the junior energy/commodity area, it's hard to avoid doing so.

Those folks don't play fair, so be aware.

Posted by: Todd [TypeKey Profile Page] at January 18, 2007 5:17 PM [link]

Tomorrow will be an interesting day in the market. IBM is being taken to the woodshed in AH. $93.58 as I write from a 99.45 close.

I've been systematically accumulating MZZ--not that being short this market in 2006 was a successful strategy for me. But I'm feeling like the peaches are the tree have ripened a bit--at least for a short term snap down. But...I've been wrong before, as my expiring WFC puts remind me. I'll be glad to see those &^%$^$&& things go away this week.

Posted by: Leisa [TypeKey Profile Page] at January 18, 2007 5:19 PM [link]

Catherine Gignac's strong bug on Crystallex is detailed here:

http://www.thebullandbear.com/digest/0107-digest/0107-pmetals.html

Posted by: moab [TypeKey Profile Page] at January 18, 2007 5:27 PM [link]

Leisa - I hear you about puts. I tried puts way back in August 2006 and was stopped out pretty fast, so I switched to calls and they worked like a charm. So I just stopped analyzing anything and started buying calls everytime they got cheap and never looked back until beginning January when someone slammed the market to trap shorts (including myself) successfully. I then switched to calls and they started working again. But starting last week I got the impression the calls were taking longer to work, so I switched to puts and voila. I just try to follow what the thieves are doing, including CNBC, and it seems to work. You can't beat those bastages, so you might as well join them i.e. remotely join them :)

Posted by: lauriston [TypeKey Profile Page] at January 18, 2007 9:01 PM [link]

Bill,
Long time and no post. I sure you you feel better. It seems that it has been a rough year for you, and yet you keep this site plugging along.
I just wanted to say, Thank-you, Thank-you, for your voice in the Crystallex saga. I do have a question for you and the board though, because it seems that I have lost my mind.
First: Who is MIBAM and the CVG?
Second: According to Todd Bruce who owns Las Cristinas and it's Assets?
Third: How many times can the Nationalization scam work?

I actually only need answers for one and two, because it seems that we have reverted back to Sept 1995.

Dlmetzer

Posted by: dlmetzer [TypeKey Profile Page] at January 18, 2007 9:03 PM [link]

If anyone can help? What are some of the top junior uranium stocks traded in the US? I can find tons in Canada but not US. Thanks for your help

Posted by: commoditytrader [TypeKey Profile Page] at January 18, 2007 9:07 PM [link]

Bill and the Board,
I should really proof read my posts. First, I 'Hope' you feel better.

Second, it feels as if we have reverted back to Sept '2005'.

Sorry, it's been a very draining, but exciting day.

Posted by: dlmetzer [TypeKey Profile Page] at January 18, 2007 9:10 PM [link]

Todd Bruce interviewed again today, while the stock was tanking. Sounds like he was in Toronto and very composed.

I am stealing this from "britnik" who posted this elsewhere.

Todd Bruce actually addresses Cramer's airing yest to sell, detailed meeting notes and opinion on Chavez, and how his company can not only mine las cristinas, but also help Chavez politically while helping the community there.

http://web.onetel.com/~vheadlinenews/009-vhnh.mp3

Posted by: NYUgrad [TypeKey Profile Page] at January 18, 2007 9:34 PM [link]

Last note for tonight....

1. How does a "reporter" conclude this, "Venezuela Mulls Mining Nationalization."

from this?
"The basic mining industries should be in the hands of the national state," Foreign Minister Nicolas Maduro said on the sidelines of a two-day summit of the Mercosur trade bloc.

"Key, basic elements of the economy should be in the hands of a national, democratic and strong state, which guarantees the distribution of riches," Maduro said. He did not give more details.

2. AP News repeat was just resent out with a time stamp of Thursday January 18, 8:11 pm ET so its content been repeated three times today!

3. Politically VZ is USA's foe. chavez was in nyc recently and called bush "el diablo." People in harlem ny cheered him at a church where he was an honored guest. i highly doubt you will EVER see ANY positive press about VZ or Chavez from USA based media outlets.

4. Chavez was given "Rule by decree" for 18 months today! so expect the U.S and its media outlets to bombard anything VZ. http://news.bbc.co.uk/2/hi/americas/6277379.stm

Posted by: NYUgrad [TypeKey Profile Page] at January 18, 2007 10:02 PM [link]

One of the paid subscriptions that get is George Dagnino's at peterdag.com. (And I'll subscribe to Bill's service once he gets it up and running).I value so much George's perspective. Like Bill, he pulls things together in a way that we mere mortals can understand. I consider Bill and George two important antidotes for the poison that gets dispensed regularly. George's site is peterdag.com, but he recently started a blog, that I just learned about: http://peterdag.blogspot.com/

Take a visit to both his regular site and his blog. Honest commentators (Bill (of course!), Gary Kaultbaum, George Dagnino, Barry Ritholtz, Tim Knight, Jeffrey Saut, John Hussman, and many others), sincerely committed to making you a better investor are worth your time--and like picking spouses and friends--they are important to your well being, AND you need to find people who mesh with your style.

Sometimes the hardest thing is finding out who to listen to. At the very least, listen to people who don't mind saying that they've made mistakes, and that none of this is a certain business.

I hope that this does not come off as a shameless plug, for it is not--just sharing a resource I find valuable.

Posted by: Leisa [TypeKey Profile Page] at January 18, 2007 10:09 PM [link]

I was watching the tape on KRY via Interactive Brokers platform which did not have any outage during trading.

The headline was fairly ominous and the shorts piled on , as usual, and if they were not too greedy made a nice score at the expense of the mechanical stops and the panicked. Same game they ran the last time KRY tanked. Not very creative , but it works for them.

Now, you want SEC inquiry? KRY was nothing compared to XMSR. An hour or so before an off the cuff remark by an FCC guy hits the wire, this thing flushes 50 cents to 15 on volume, on no news I could find.

Lifts to 16.70 after the comments. How sad for the flushed, the shaken , how glad for those brave (psychic) souls that bought the shake.

Posted by: procol [TypeKey Profile Page] at January 19, 2007 12:12 AM [link]

At 10:47AM, and while gold was flat on the day I wrote: "And speaking of gold, it is now due for a rest". As you know, spot prices sold off over $5 at that point in time. I do try.

After that I should have kept my mouth shut.

Instead, I let "my Irish" out of the box when I took a reader to task later in the day for pressing Bill for updates on a certain spec stock when the reader admittedly knew our host was bedridden with pneumonia. I have received some personal entreaties that the woodshedding was "a bit overzealous" to paraphrase one. If so I apologize to Bill and the regular readership here.

As a result I am sending myself to the penalty box for the infraction, return date to be decided. I am also accepting an additional and permanent ban --also self-imposed--regarding comments about that stock "K-R-", uh, uh, you know. I have turned into the porch-sitting grumpy old neighbor shouting at the kids crossing his lawn on that one.

I think that's enough for my transgression.

Best and good trading to all.

P.S. Leisa, have look at this chart as to why your puts may now be working:

http://stockcharts.com/h-sc/ui?s=$NYA50R&p=W&b=5&g=0&id=p55732949459

I do try.

M

Posted by: MarkM [TypeKey Profile Page] at January 19, 2007 12:26 AM [link]

MarkM...sincere apologies are always the the antidote for overly strident words and actions. Your contributions to the space have been many, and I always look forward to your posts. I hope that you reconsider your banishment. Your contrition absolves you from any more self-flagellation (unless you enjoy that sort of thing!)

Lauriston...In late April I bought DEC SPY and DIA puts. And, they performed very nicely. I had a 100% gain on one set in one account and sold them. I held onto to the others--at the July trough they were up 155%. You know what? I was still waiting for the BIG drop. So my 155% gain became a 100% loss. Stupid. Greedy. Lesson learned. Oh the sin of self confidence.

MarkM...I'll meet you in the woodshed. We can smoke, drink and cuss and shout at passing traffic--I never shout at kids except my own.

Posted by: Leisa [TypeKey Profile Page] at January 19, 2007 6:46 AM [link]

Bill - Thank you for looking out for us, but as others have mentioned, your long-term health is definitely paramount. For you and your readers.

MarkM - I second Leisa's sentiments. Updates from your rainy day crystal ball are very valuable to many of us - especially when Bill is not at 100%. I sincerely hope you continue to post.

Posted by: rusticuf [TypeKey Profile Page] at January 19, 2007 7:03 AM [link]

Ditto, Mark. And Leisa, it happens to all of us.
EJ

Posted by: EJStockman [TypeKey Profile Page] at January 19, 2007 7:23 AM [link]

Hey MarkM, if I had a quarter for every time I acted or spoke out of turn I wouldn't need to bother with the stock market. Here's hoping your self-imposed exile is brief.

Speaking of which, in addition to the conspicuous absence of tradesman, I also haven't seen Oratier on these boards for awhile. I hope that they are both well and we will hear from them again soon.

Posted by: number2son [TypeKey Profile Page] at January 19, 2007 10:46 AM [link]

I would hope that smart commentary from the community here will tempt MarkM out of the shed.

Posted by: NYUgrad [TypeKey Profile Page] at January 19, 2007 11:26 AM [link]

Leisa

Regarding those expiring WFC puts, the proper term is !@$!&#!

I know the feeling and I know the strategy.

Posted by: tom sheepngoats [TypeKey Profile Page] at January 19, 2007 1:53 PM [link]

Tom:

I agree, but this is a PG blog which is why I used the other terminology!

Posted by: Leisa [TypeKey Profile Page] at January 19, 2007 3:34 PM [link]

Going back to August when such august fellows were touring the middle kingdom to now, we see no progress has been made within the Crystal palace. So at a loss of words I turn to a much greater word smith than I:

>Now gather up sea shells,
>And write down brave words
>Your prayers are unanswered,
>Your idols absurd...

Posted by: ableape [TypeKey Profile Page] at January 21, 2007 3:25 AM [link]

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