moin moin from germany,

gold is really looking good. :-)

here is news from europe

Banca Italease SpA shares dropped as much as 13 percent after the Italian leasing company said its clients have accumulated potential losses of 400 million euros ($537 million) on derivatives contracts.

The negative positions accumulated by Italease's clients widened to 400 million euros from 225 million euros at the end of 2006, the company said. The lender has already put aside 8.3 million euros of provisions.

would be interesting to know who the clients are.... i can smell write downs.....

and with net income of 197 mio € in 2006 this is "not insignificant"

ratings are already at the weakest a rating! looks like they will have higher funding costs in the future.......

Bill,

Did you notice how the solar stocks (FSLR TSL JASO CSUN SOLF etc.) saw a high volume surge around 3pm ET yesterday? I'm sure it was just a coincidence having nothing whatsoever to do with the fact that Morgan Stanley and UBS were pricing the IPO of JDK Solar, and Merrill was pricing a follow-on offering for Trina Solar overnight ;)

Bill, I've just went over the numbers reported by Hovnanian and they're dreadful. Margins are getting compressed, backlog has dropped 35% from last year and new orders are down 23%.

Hovnanian also removed future earnings guidance from its outlook due to ongoing uncertainty in the housing market. They aren't the first to do so.

This puts the lie to the new home sales numbers that came out from the Commerce Dept. last week. U.S. new home sales are down significantly from last year and, to the extent they are improving in certain markets, it is only the result of lowered prices.

Hovnanian is really struggling now. In separate news, Moody's lowered its bond rating from "Baa2" to "Baa3". That's 3 levels below investment grade.

http://tinyurl.com/yqsjqu

I still find it fascinating to watch the institutions invest. It's like watching the charts and seeing lots of minnows, then a whale swims by. Somebody just traded 358000 shares of GS at 230.82 a share. That's just over 82.5 million dollars... in a single trade... Somebody has faith in GS.

for every buyer there is a seller... :-)

re: SLW

RSIs moving up, with confirmations from Stoch and ADX; CMF(10) & ChiOcs crossovers.

Long SLW (as of 10 min ago)

wgi
has Bill or anyone else mentioned the net asset value of Western Goldfields?
thanks

Hi Bill,

Long Crystallex and Peru Copper.

Chris

RE: WGDF - from website (repost of a comment from "dabonenose" on Feb. 28)

Why to invest in WGDF

We believe Western Goldfields is an extremely undervalued gold equity that is yet to be fully appreciated by institutional and retail investors. Those familiar with the Company and its potential talk about ten key reasons to invest in Western Goldfields.

These reasons are:

* Reputation and experience of the management team
* Feasibility Study indicates excellent rate of return at current gold prices
* Proven and Probable Mineral Reserves of 2.36 M ozs
* Measured and Indicated Mineral Resources (exclusive of reserves) of 1.25 M ozs
* Excellent potential to increase Mineral Resources
* Permitted mine, processing facility and reserve base situated in North America
* Proven technology - Run-of-Mine (ROM) Heap Leaching
* Ability to fast Project towards production
* Existing infrastructure facilitates quick resumption of operations
* Increased liquidity once a TSX listing is obtained

Finally, Western Goldfields is a rare opportunity in the mining industry. Our core asset Mesquite will require about $90 million dollars of capital and expense to be brought into full production

Bill - Stelco Halted - http://tinyurl.com/38luy3 - Up for sale - http://tinyurl.com/2naf97

good morning, all.

from Bill's Daily Commentary:

"The Silver Wheaton (SLW) closed at $11.47, up +6.30 pct yesterday. I think it needs a 12 handle before the PM Bull is confirmed."

Bill, anybody:

what is a '12 handle'?

regards,

joey

gold being bid at a faster rate than yesterday, has the rubber band snapped?

A price of $12.00 is a 12 handle.

So from $12 up to $12.99 is a 12 handle.

gold miners rally...I was tempted to increase my holdings yesterday, but in the spirit of discipline held my basket without overweighting one over the other. What a welcome sight this morning. From fear I have been way under invested with a lot of cash on hand. Emotionally it has been very hard. This is the first time in many years I have lagged my benchmark which combines international and domestic mkts. The last time I lagged for as many months was in 1999. Same reason, fear.

some news which echoes what Bill has been telling us...

*DJ Kinross Gold Raised To Buy From Hold At Salman >KGC

--------------------------------------------------------------------------------

Dow Jones Real-Time News for InvestorsSM
09:52 a.m. 05/31/2007

FINANCIALS: Kinross Gold Corp Sees Increase in Key Inflation Measure

--------------------------------------------------------------------------------

M2
05:25 a.m. 06/01/2007


Jun 01, 2007 (M2 PRESSWIRE via COMTEX) --

An increase in a key inflation measure had investors scrambling to buy hard assets and sent precious metals rallying Thursday May 31, 2007 in New York.

Gold contracts expiring in August were rising $4.60 at $663.90 an ounce in recent action. Contracts for July delivery of silver were adding 24 cents at $13.36 an ounce.

Helping the metals was a report from the Commerce Department on the economy. The government said that gross domestic product grew at only a 0.6% annual pace in the first three months of the year, but the chain deflator, which measures prices of goods and services, jumped 4%, more than double the rate in the fourth quarter.

"The Federal Reserve definitely has an inflation problem," says T.J. Marta, a fixed-income strategist at RBC Capital Markets in New York.

Indeed, the minutes of the last Fed meeting, released during the prior session, indicated that policymakers still have the threat of rising prices on their radar. Even though officials are closely monitoring the slowdown in housing, their primary concern appears to remains inflation.

After the data were released, traders wanting a hedge against the wealth-depleting effect of inflation moved to buy bullion, figuring the metals will maintain their real value relative to paper currency.

Other shares on the move in the mining patch included Kinross Gold up 3.6%, and Meridian Gold better by 2.9%.

If people are in fact back to buying gold as a hedge against inflation, then it's good see the metals back in their traditional role...by the time everyone's talking about (and seeing) inflation, loan rates will be closing in on double digits...oil 3 digits...gold 4 digits...and you'll be diggin' it!

Jasper,

I am also lagging my benchmarks for the first time since I actively began managing my own money in late 2000 (ant not by a small amount). Still making money, but this is not a pleasant time, but I am confident it will prove correct in the end.

Also, it looks like Shanghai may be finally starting to crack - a 10% drop earlier this week, followed by a 6% rebound, now a 4% drop from that high. If this starts to go, I think you'll see a general pullback from high risk assets, especially with the 10 year almost giving a 5% return.

Kinross (KGC)

TD Waterhouse has KGC on their list of stocks showing bearish technical signs. They're calling a Diamond Top with an intermediate-term (3-month) target of around $10.

Interesting divergence of technical analysis from analyst opinion, (and current action). Perhaps an example of where technical trends maintain until they don't.

No position.

i don't think you made any mistakes, jasper...fear can be a good thing, and will keep you out of trouble. the harder problem is letting your positions ride when they start playing out. even harder is deciding whether to start overweighting on the way up. lagging a broad benchmark is easy to do if you're holding gold-it's too volatile...but you may also end up beating the benchmark by a wide margin, right?

MICRON (MU)
Does anybody know what's driving the enthusiasm?

Share price gapped up on the opening; and is up 3+% since.

Long Oct 11 calls.

Joey

Bill,

Just wondering if you have any update on CDE (Coeur D'Alene0? You did a write up on it in October 2006 (http://fon.gs/cde2), with a target price of $8, it has unhedged silver and production with pretty good properties. It has greatly underperformed, could this behavior reverse in a summer PM rally? Thanks.

Out of Crystallex, it didn't perform. Still in Peru Copper, and looking to add to it.

This morning, Wal-Mart announced that its board has authorized a new share repurchase program that increases the company's authorization to $15 billion. In addition, Wal-Mart indicated that it will slow the growth of its U.S. supercenters in an effort to boost its return on investment, reduce capital expenditures, and improve same-store sales. The market likes this. I see it as a text book business strategy to address a mature or shrinking market. I have no position in WMT.
Fred

Sold CUP $5.64 but I'm gonna get back in. Not bad, a 12%profit in a day.

Re.
Kinross (KGC)
TD Waterhouse has KGC on their list of stocks showing bearish technical signs.

Anyone,
holding KGC? Selling today?

THANKS MUCH

Morning Bill and Cara Community. What an interesting time we live in. Thanks to Bill and all contributors. I find myself following threads and links from here to many sites. Last night, late as I am on the west coast,I wanted to comment but decided to leave Kaimu's comment as last up.
After following several links I came to an Eric Sprott "May Letter" that I think is worth the read as it dovetails nicely with Bill's stance that all the financial analysts I can hire do not have my best interest in mind. Heck, I'd be happy if they just tried to do their job well. Mainly they are trying to "get theirs". Unfortunately, what they see as a fair share is SOOOOO inflated. That is why I am here, to learn and finally cut the cord with the HB&B I support.
Buying is not my problem, selling is. so...anyone describing their rational for selling is a great benefit. Thanks
peace
Gray

Shark:

RE KRY - the Jan 09 Calls @ 5 might be worth a 1/2 to 1/4 position - .68 Delta...

re: MU

Same old takeover rumors I think.

Long MU and QI

re: MU's move today....

Bob Faulkner on RealMoney.com says that the "absolutely huge numbers" given in Omnivision's forward guidance last night are a positive for MU and their image sensor business.

Re Kinross, the stock is up +3.5 pct today. I like it best of the majors based on estimated rates of growth of production, cash flow and earnings.

Bill,

Thank you much.
Hope your guy bring you back some El Dorado Gold rum !!!!

Bill....Anything holding back GFI? Not performing like other major mines. Bill is it related to news below? Started with a basket of majors and juniors, but thinking of reallocating gfi to kgc. Rally mode for miners today but one swallow does not make a summer.

JOHANNESBURG, May 30, 2007 (Canada NewsWire via COMTEX) -- Gold Fields Limited (Gold Fields) (GFI) said today that Craig Nelsen, its Executive Vice President and Head of Exploration would be leaving the Group to establish a new business venture in Denver, Colorado of which he will be CEO.

re: MU

Reuters: DRUM prices up 5% in asia.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070601:MTFH69525_2007-06-01_08-11-58_SEO87249&type=comktNews&rpc=44

ALOHA !!

Photogray ... SELLING ... It depends on my risk. I have different portfolios. One portfolio holds long term "bread and butter" dividend paying stocks like XOM and CVX and one holds high risk junior miners like ECU and GIX and others I have mentioned here before. Obviously I hold XOM for vastly different reasons to ECU.

With my junior mining portfolio I "automatically" sell once a stock gets to 100% profit. I will at least sell one third of shares held or what I put into it so that the shares left are essentially "risk free", meaning if the stock tanked to $0.01 I would not have lost a dime. I rarely sell out 100%! Naturally there are times when I sell prior to getting a 100% profit but those times depend on fundamentals with the company, such as problems with a mine or country risk or funding or management issues.

Then there are "personal" reasons to sell, such as I need cash to expand my business or pay off DEBT! Paying off debt is a retirement investment like a 401k, since you cannot actually retire with debt. No matter what I never take my profits and just go on a spending "spree"! I always put some percentage of my profits into another investment which may be bullion or real estate or other stocks, depending on timing.

Bill - any news on WGDF (WGI)? big spike, middle of the day, no news i can find...any ideas?
thanks so much.

Kamiu. Your stratgey is quite similar to mine. I hold a significant amount of gold bullion as my pot at the end of the rainbow. My stock portfolio drives my cash flow and I usually take profits at 100% which I put into real estate. 50% of all real estate net income goes back into gold purchases with the other 50% for life style and charitable work.

rob d,

I've noticed WGI bouncing like a ping pong ball in a range roughly defined as 2.08 to 2.22 during the past week on low volume.

Fred

wgdf.ob

http://finance.yahoo.com/q?s=wgdf.ob

that's no pingpong ball, its a rocket...on 4x normal volume.

typo 3x normal vol

rob d,

No argument from me. It is bigger today. But, I still define $400,000 in trading as small volume. I'm long WGI.

Fred

no argument here either fred:) not saying it's alot, just alot more than normal (3month avg). now it's dropping off again...someone wanted in, i guess?

Kaimu,
What's the skinny with gold coin taxation, ie: eagles?
Is it viewed as currency or as collectable?

I'm curious how that works.

Gold prices were moving up Friday after the European Central Bank said it would curtail its bullion sales program, a decision that should reduce downward selling pressure on the metal.

http://tinyurl.com/2y4brl

Kaimu,

thanks for sharing your strategy for selling, it is something I have often wondered as you have stated that you got into many of your juniors at such an early stage. I plan to model my asset allocation in a similar manner, i.e "one portfolio holds long term "bread and butter" dividend paying stocks like XOM and CVX and one holds high risk junior miners like ECU and GIX"

cheers

Based on the dearth of comments here re the various government reports published today, it appears that more than a few of you are very tired of/innured to the cotton candy contained within and spun around them. Todays employment figures, personal income and pending home sales reports and, especially the reportage surrounding them, appear to be so contradictory to basic logic and common sense that we are stunned into silence.

Different than expressing our outrage at the capital market abuses, when it comes to the Diogenes-like search for credible government reporting, we seem to have turned off our torch.

First time TypeKey has let me post in a very long time!

On another note, Bill you mentioned this mornings paper as 'a sign of the times'.
I was thinking.... (I believe it is an original thought, hard to tell anymore these days with all the information I am going through). In the 60's and 70's, although there were problems, wars going on, unrest, etc. at least the people were trying to enjoy life, living by the 'love peace happiness' mantra.
What are the people enjoying and seeking/supporting today? Look at the latest issue of Sports Illustrated. The people are entranced by things like UFC (Ultimate Fighting Championship). If you don't know, it's basically two guys beating the hell out of each other until one gets knocked out or the ref stops the fight before the other guy dies. It's been around for ages (there are other organizations worldwide i.e. Pride Fighting), but before was confined to the dedicated fight lovers. Now it is a huge event, held almost monthly in Las Vegas, and is getting press coverage, major media attention, the love of the people. We want violence. sounds sort of similar to Roman times when people went nuts over fighting to the death in the Colisseum.
I'll let everyone draw their own parallel and not refer to the 'downfall of society' theme that we have been asked to steer clear of, but I just wanted to get it out there. Then again, it may have been said already, I'm almost certain it must have been.

Horation - Are YOU the one who's buying all that gold the european central banks are selling ? --

Eric (and others interested in 'epochal musings'),

Re 'sign of the times': I highly recommend "The Fourth Turning", by William Strauss and Neil Howe [Broadway Publishers, ISBN-13: 978-0767900461]. This book (and their previous effort "Generations: The History of America's Future, 1584 to 2069") expounds a generational socio-political theory drawn and synthesized from several earlier theoretical constructs and their own research. What caught my imagination when I read their "Generations" is that it seems to have anticipated [in a work published in 1992!] the 'abysmal path' option of the current US national government. Their predictive synopsis [written in 1991] was a theoretical projecting forward in time the 'rhythms' perceived at work among our ancestral centuries. (In some respects their theory is reminiscent of Eliott Wave Theory.)

A reviewer in "Library Journal" wrote of "The Fourth Turning",
"After researching historical patterns, the authors (Generations: The History of America's Future, Morrow, 1991) conclude that America is on the verge of crisis. They substantiate their hypothesis by identifying and tracing a repetitive, four-stage historical cycle that, throughout recorded time, started on a high note and ended in hardship. Narrator Michael Tilford's polished, convincing voice and steady pacing lend an air of legitimacy to the authors' assertions. A brief question-and-answer session between the narrator and the authors at program's end provides an interactive quality that enhances the sometimes methodical drone of the historical analysis."

The gold buying will hopefully slow down...spikes just invite selling, whereas a stealth move will allow prices to climb that wall of worry and draw buyers in slowly...it should break 700 again in the least expected way and at the worst possible time (for shorts)...at which time traders get to unload and then reload for the next climb...it's looking good so far...

Hi

Here is another great post by Donald Luskin!

http://www.smartmoney.com/aheadofthecurve/index.cfm?story=20070601&pgnum=1

Probably is best ever in Smart Money's web site.
We shouldn' t follow broken clocks...

Jock/Craig:

My local coin dealer is buying some of the gold and if I pay him in cash for it (printed paper from the FED), NO TAX! Eagles, Indians, bars junk coins included... ;)

C.Note --

Which state are you in where there is no sales tax on gold? Illinois?

johojo, Kaimu,ALL,

I was in the Netherlands a few weeks ago and
In the town of Leiden (or Leyden) in Holland there is a church you can visit where the Pilgrims who came on the Mayflower worshipped. They show a film and proudly proclaim that
BUSH #1 is a decendant of same.

I was awestruck and my only thought was the idea of "full circle". They came and built it and now their boy is hell bent on the seige that will tear it down.

But it ain't over till it's over. I do believe there are good women who will prevail.

Thanks C.Note. That makes a big difference.....

Jock:

My coin dealer will not charge tax if paid in good ole' Federal Notes. Now if a debit card or check is presented, that's a different story ;)

To those in the know:
Does anyone know of a brokerage company that is located in the US and does trades in South America without huge commissions?
Also can someone explain to me what Bill means when he says "Unleaded gas appear to be side tracked here." Is he drawing a parrell connection with the price of crude oil which he expects to?go down? Thanks for any help to a novice.
Rodney

Sweet fancy Moses! The loonie's at 94.2! My MU purchase from a few months back is up a respectable 10%, but that gain is mostly negated by the time I convert it back to Canadian dollars. Thank God the miners are all listed on the TSX.

Any Canucks out there know an effective way of hedging currency in an RRSP?

Great call on BBD Bill. Have a super weekend all!

Jim Grant in FT wrote yesterday about Kuwait's de-linking from the US$. Jim Jubak wrote about it today on MSN, although it happened on 5/10.

http://tinyurl.com/27y67b

(Since it's a free article on MSN, I don't imagine they'll sue us all!)

Jubak is usually cogent and persuasive, looking beneath the surface of what he covers.

His main conclusion: Kuwait is first small key country to tie its currency to a basket of currencies. Defending a dollar-linked dinar had become too expensive and had caused inflation to double to 4%.

Jubak forsees other countries gradually following suit, and the global monetary system becoming ever more an ad hoc arrangement, wherein countries try to "bend the rules" to match their interests.

Yesterday, Grant had noted that several gulf countries (including Saudi) had pegged to the dollar as a first step towards a common currency -- which goal now seems farther away.

Sorry, de-linking of Kuwaiti dinar from US$ was 5/20 -- still 11 days before it got any editorial content that I could see!

hedging in rrsp - tough to do directly
- overwieght canadian listed stocks
- INVESTIGATE - australian dollar etf - FXA
-

End of the week and I'm breathing a little easier. Action put me closer to break even with my benchmark and I still have a lot of cash. I kinda think that other gold miner holders are feeling the same. I did sell GFI and allocated proceeds to KGC and EZA.

Uranium lovers - here is a public chartlist I happened upon at stockcharts.com which has charts on 84 uranium producers, seemingly updated at close.

http://tinyurl.com/2hrtym

BTW, they have a couple of hundred such "public lists" some with extensive annotations. One could happily waste HOURS browsing there ... lol

ECB Announcement: Ok what's the story behind the story on their intent to curtail Gold sales for a while?
Do they want to wait until the price is up a bit or is it something more sinister like trying to set expectations that the price will be up when it probably well knows that other agencies will likely be taking it down.

Got Gold?

End of the week rally in PM shares has been appreciated, but the lack of volume (with some exception WGDF...) gives me pause.
Is this a big head fake?
I am betting that it is not. Big uptick in domestic inflation reality finally, somewhat, admitted, ECB saying they are suspending bullion sales until 9/27 (a date to put in your... date book), Chinese investors maybe thinking it is time to hedge a little of their stock market exposure, technically: a nice bounce off of the critical 660 support, many charts looking very bullish and over sold (too bullish?), this may well be Bill's summer rally.
Or is all of this too obvious?
Ah, the struggle.
I have increased my PM exposure today wondering if I am not, once again, too early.
Would be great to see some volume in PMs on Monday from all those momentum punters that read Barrons and IBD over the weekend and see which has been the "hottest" sector this week.
Peace to all.

Time will tell.

For some of you Valgold Resources followers...i don't know if you guys noticed or read the news that Pinetree Capital purchased shares in the company today. If Pinetree excercises all their warrants their holdings would represent approximately 14.6% off the total issued and outstanding common shares of ValGold.
I would expect a bounce in the stock in the coming days...as that is usually what happens when Pinetree buys into a company.

Wolf,

I hope you're wrong for now. I received the Pinetree alert from CNNMatthews earlier today and was pleasantly surprised when the stock didn't bounce. I just sold my VAL a couple of days ago for a nice gain at .59. I bought a couple of weeks ago at .42 and it was trading up and down in a range between .50 and .58 for a week. I believe in the long-term story but couldn't pass up the fast return. I'm hoping to get back in at .50.

Fred

Hi Fred,
I've been noticing recently that the bounces after the 'Pinetree Purchase Announcement' are occurring a few days after the announcement. I do not know why that is...i guess it could be because Mid-Large Cap. companies are offering better returns everyday due to M&A speculation, hence people arent paying too much attention to the small and micro caps...??

Wolf,
Thanks for the notice. I've resorted to playing ranges lately on quite a few micro caps with low volume trying to eake out modest gains in a tough gold market. I'm well under water in the big and mid caps. I hope that Bill is right about the turn in sentiment. I'd much prefer to buy and hold.

Fred

Wolf,
Also, I don't short and I am afraid of options. Hopefully, I'll learn enough in this community to venture into calls. It's not in my nature to short however.

Fred

Troubled fitness chain Bally Total Fitness Holding Corp. announced Thursday it will enter into Chapter 11 bankruptcy protection with a restructuring agreement that allows the company to raise $77.5 million in new cash. (from WSJ)
Some of us reviewed this company last year and gave it a failing grade, shows the power of the team.