Bonjour from Geneva

It has become a national pastime to try to figure out where in the stock market cycle we are. This blog post tries a new approach, relying on readers’ collective wisdom by asking them to express their opinion on the direction of the stock market through participating in a quick poll.

Please follow the link below to cast your vote.

http://www.investmentpostcards.com/2008/04/25/poll-of-the-week-stock-markets-%e2%80%93-which-way-jose/

craig- you were right about the market shrugging off the MSFT report...but i think we need a pullback...

selling UYG/USD/ROM into opening strength...

The calm before the storm?

The most significant story on the Asian equity markets this week was the Chinese government’s decision to lower the stamp tax on stock transactions from 0.3% to 0.1% from April 24. The move was designed to shift the psychological mood of a market that had declined over 50% in six months, and it succeeded, as the Shanghai Composite Index responded with a 9.3% jump on Thursday.

http://www.atimes.com/atimes/Global_Economy/JD26Dj04.html

contrarian opinion favors falling POG:

http://tinyurl.com/6e7gv6

Re: Cara China

We would like to assess community interest in developing a working group on the China markets. If any of you are interested in discussing investment opportunities in and/or trading opportunities with China, please email either Bill at billcara[at]gmail.com or me at evadn2[at]yahoo.com. You may also contact me on Skype (username evadn2), or click on the following link to join the Cara China Skype Chat room: http://tinyurl.com/6jxj3y

Note that you may need to be added to the chat, and that hours of operation will necessarily be limited at first. Still looking into whether Skype supports either separate or simultaneous chat sessions in Chinese. It will probably take several weeks to develop enough interest for an operational forum.

Don't let geographic location or a lack of (current) knowledge of China keep you from participating.

TIA

vinod-> scaling into FXP at 63.75...

Cara 100 Update:

Downgrade:

BBD - to Peer Perform @ Bear Stearns

Target Price Raised:

SU - $98 to $107 @ Lehman Bros.

Target Price Lowered:

BMY - $32 to $29 @ Lehman Bros.

BDX setting up.

Chart book page 50!

[Bill Cara note:

From page #50 of the Canadian Mining and Oil Stocks Charts, Issue #201, Independent Survey Company Limited, November 6, 1981:

Coseka Mines (CKS) high in 4Q80 was $28, low within 52-weeks $10.

Coynex Development (CXD) high in 1Q80 was $2.00, low within 52-weeks $0.80.

Craigmont Mines (CRI) high in 4Q80 was $7.25, low within 52-weeks $1.60.

Crescent Mines (CRS) high in 4Q80 was $3.38, low within 52-weeks $0.45.

C.T. Exploranda (CXP) high in 1Q80 was $2.38, low in 1982 was $0.35.

Cube Resources (CUB) high in 1Q81 was $2.00, low within 4 months was $0.55

Cullaton Lake Gold (CUG) high in 1Q81 was $16.80, low within 3 quarters was $8.50

Cultus Pacific (CUL) high in 1Q80 was $2.50, low in 1981 was $0.30

The last four were the page 51 charts.

The next three on page 52 went from $19 to $5, and from over $10 to $2.40 and from $1.80 to $0.20.

How about page 53… from $22 to under $4.40, from $11 to $2.00, and from $6.25 to $0.85.

Is there a message here?

Yes, when volume dries up, and commodity prices come under pressure, the stock promoters realize they cannot raise a bid. While most shareholders hang on with hope, most promoters and strong hands sell in order to preserve their capital to stay in the game.

The pull-back process began in 2007 with the credit market squeeze. I have seen it before.

This is the time to be patient and watch great economic values surface for some of these companies. The one big piece of advice is something covered here before: there is a massive jump between having a most promising resource in the ground, and a well-funded mine plan. Caveat emptor.]

What a crappy week of trading this has been for me! Haven't lost much but the percentage of losers is staggering. I hate this market this week. Didn't have the testicular temerity to short gold stocks a week or 2 ago, and missed out on nice profits. I'm packing it in for the week yo. I need a vacation.

Re: "The Dark Side Of The Looking Glass"

If I understand the video correctly, legislation was written to protect fraudulent trade in naked shorting,(and by extension credit derivatives) or failures to deliver, and that if you should conspire to force naked shorts to cover, then you are considered a terrorist.

Kaimu,

I have to confess I have not really followed your posts here in the group. But something made me read your 9:26AM post today. Those last 2 paragraphs were great and right on the $$$. I agree with you 100%.

Henry David Thoreau said:
"A man is rich in proportion to the number of things he can afford to let alone."

So the (more) you can live without the richer you are. And went on your death bed or that bad news from your doctor, the things you collected in this life or your portfolio means "jack---"!

Good post Kaimu!

[Bill Cara note: I second that, kaimu]

Ooops ! [Correction]

So the MORE you can live without the richer you are.

:-)

Ford taking a hit today-> profit-euphoria dying down...

sharkie, everyone has losing streaks and it looks like you have done well using sound money management.

I'm on a bit of losing streak myself. When you're out of sync with the markets, pair back your trades and use tighter stops. And stop trading altogether if you hit your monthly drawdown -- a good time to take that vacation. ;)

Oooo my... this market has me rattle I guess.

Another correction: And when on your death bed...

shark_attack ...hold on I'll go with you on vacation..I need one too!
:-)

chris- why don't you join the china group for a change of pace...need a westport connection, and you can learn all about finning sharks...;)

The thing about the market is, the oportunities to make losing trades are somewhat more numerous than the number of opportunities to make profitable trades. And watch what you say about sharks fins:)

You see this guys? Careful out there, anything's possible when this kind of news hits...

US SECURITY FIRES WARNING SHOT AT IRANIAN BOATS IN THE GULF YESTERDAY - WIRE CITES FOX NEWS
- A vessel contracted by the Navy in the Persian Gulf fired warning shots Thursday on two Iranian fast boats, FOX News has learned. The Westward Venture, a ship contracted by the Navy to carry military cargo to Kuwait, fired upon the boats Thursday after attempts to get Iranian boats' attention failed. - Fox News

With Gold rising, trading in IBKR for GFI/SLW.

Bill indicated the Dow may go down to 9000...

It seems the negative sentiment is so strong here. What about the following?

Since the Bear Stearns issue the economy really hasn't gotten worse.

Outside the financials reported earnings are up 11%.

Unemployment has not significantly increased.

The credit crisis is getting better...

Banks have taken mark-to-market losses on anticipation of high foreclosure rates that haven't happened yet and may never happen...

Fed is going to cease interest rates cuts...

Stimulus package is going to be coming out...

Without another major collapse of some kind, I see a slowdown to a flat economy for an extended period, along with a moderate rise in the stock market, anticipating the new uptrend.

Comments?

Vadym, I believe that when it comes from a credible news source.

ok im mildly excited, my first finance-related article posted up at seeking alpha, it started out as a morning ramble on this board.

it needs editing but this is the initial draft,

http://seekingalpha.com/article/73050-if-i-were-a-bear-stearns-speech-writer

Vadym,
I see that an Iranian conflict would surely push oil to 200+.

Do you also think we'll see the same type of rally we say in 2003 if we do go to war with Iran?

Rob.

Has anyone asked where the Iranian 'news' has come from - I'm staggered that a multi trillion dollar business can be moved on gossip and hearsay - its just bonkers - where is the offical report, where is the official story here - how on earth can people be expected to make logical and informed decisions about the their investments when markets can be moved on gossip?

Rob,

just my opinion of course... no, I don't think so. Situation is very different vs what we had back then. War is inflationary, but we already have heavy inflation weghing on our shoulders; oil is already priced higher than economy can handle; previous war already sucked in too mucn money and resourses... to me it sounds like sure way to disaster. Markets can ignore the reality just for so long, and combined weight of all those factors is too much for the market to cheer on.

Again, just IMO.

Opportunities for long side have been everywhere for weeks. Sectors of interest: oil service, oil, drugs bio-tech, china stocks and technology stocks.

Bill has given you the plan, look for strong sectors, than find the strong stocks and buy on pullbacks (Bill's plan is to but deeply over solds), good plan, but my personality prefers buying pullbacks on strong stocks.

What stocks you say: SLB, BHI, RIG, WYE, LLY, MRK, INTC, MSFT, MRVL, PTR, CAF, FXI, ACH

Correction:(Bill's plan is to buy deeply over solds).

I forgot to mention infrastructure stocks, there is a lot more to investing than just gold myopia.

Vadym:
In spite of everything I read in the news, I think that Iran has friends in high places in the US Govt. to protect its interests. Check out Haliburton's history in Wikipedia. I was surprised to find in Wikipedia that Cheney's Haliburton has a subsidiary in Teheran, Iran. Somehow, Haliburton has been able to avoid prosecution for aiding and abetting the enemy. I can't imagine why when our Federal government has no compunction about persecuting a sitting governor for buying prostitutes. But then, the mysteries of US law enforcement are supposed to be mysterious.

Therefore, I think Iran thinks it knows exactly how far it can push the US without suffering war. On the other hand, I think Saddam also believed he understoood his US limits.

Well put, T3d.

Re: Iranian war... not happening. Short any hysteria.

Re: a couple of Hammer's points i could conceivably argue against w/my limited knowledge. most, i've got no answer for.

While the top line aspects of the economy really haven't gotten worse, housing has continued to "Krispy-Kreme." Unemployment moving averages are increasing now. Manufacturing is hanging in there due to the dollar crap-out, but we'll see what happens. Consumer spending slowdowns are everywhere. SBX, UPS, etc... this are all small pieces of the big pie of course.

The credit crisis might appear to be getting better, but the TED spread has been widening as of late. Lenders are getting more fearful. There will be more bond market failures, Still lots of Level III assets... AMBAC / MBIA hanging in there for now...

I'm guessing the stimulus package will be a drop in the bucket, even if it all gets spent.

In the long run, I hope we get out of the next funk by manufacturing green tech & selling it to China / emerging mkts.

just my 0.016 EUR

Vad,
I agree that reality has to enter the markets eventually. Maybe we'll see some today.

Rob.

Re Cara China- based on a few responses received so far, let me clarify:

unnecessary to read/write chinese...
if you know chinese, great-> which dialect does not matter...chat room will initially be english-based, but there's no reason to limit the chat to english if Skype supports other languages...
the direction the group takes is entirely up to the collective interest(s) of the community...

thanks to those who have responded...

pardon, 0.0125 EUR

While I'm on my jag, with respect to performance/returns, whenever you are doing well or when you are doing poorly it usual comes down to one thing: you are either in sync with the market or out of sync with the market.

Our most important job than is to protect our capital when we are out of sync and work to get in sync with the market and what’s working, simple but true.

Just look at the performance of the majority of mutual funds they simply go up and down with the market, because the industry does not reward innovators or independent thinker’s just relative performers to their peers.

Think Jeffrey Vinik of Fidelity’s Magellan who lost his job for going to cash and if memory serves me making a bet on bonds.

Again, my main point is constantly, as traders, work to get your holdings/trades in gear with what’s working in the market. Do this and your results will improve.

Re: Iranian gunboat Incident:

Fox; aren't they the "Fair and Balanced" people?
Must wait for confirmation from independent sources.
Isn't all news market moving?
As per the ship's AIS transponder, the MV Westward Venture was alongside the dock in Shuaiba, Kuwait, as of this AM. (subscription only to aislive dot com)

This stuff probably goes on more than the public knows.

Off topic Personal Note: 25 years ago, that ship 'saved' the cargo ship I was on at the time from heavy ice in Cook Inlet, AK. After getting stuck in the ice for a day, the Westward Venture ran a few circles around us to allow maneveurability. Then got familiar with the Salty Dawg Saloon in Homer for a night!

Controversy develops. On one hand, Reuters confirms conflict citing military official: http://tinyurl.com/3ounze

On another, this just crossed wires: IRAN: NO CONFRONTATION WITH US SHIP IN GULF - WIRE CITES IRAN PRESS WITHOUT SOURCE

Market of course jumps up and down with each new headline like crazy anthelope.

Sentimentrader:

A caution sign comes from traders in the Rydex family of mutual funds. As of yesterday, those folks were almost four times more likely to invest in a "risky" fund as opposed to a "safe" fund as determined by the Rydex Beta Chase Index, the most speculative attitude we've seen in a couple of weeks.

Re: exploration stocks

That day is not really a valid comparison. It marked the end of the bull market. A time when it was obvious what was going to happen with the Federal Reserve ratcheting interest rates way up to the sky. I doubt that those kinds of decline FROM HERE are in store across the board. Perhaps for explorers, but they are always volatile. I would encourage people to go with junior developers - those on the cusp or who have just turned into producers - at least until this current malaise is over.

kp84 - the key word in your post being 'news' as opposed to unqualified gossip. The day news became entertainment was very sad day for us all - no longer do reporters sit behind these desks - today they are celebrities - for god sake don't let the facts destroy a good ratings day.

Hammer -

My humble responses are as follows:

"Unemployment has not significantly increased."

Completely untrue. If you look outside the BS government figures and examine self-employment (which accounts for a large % of employment domestically), it has gone down drastically. Underemployment has spiked up. Another factor masking the true effect are people that now instead of getting by with one job, have taken on two or more, and often at lower pay. The only sector not hemorrhaging is governmental where pay is typically lower anyways. The employment figure is dismal and we're just starting.

Also consider:

http://globaleconomicanalysis.blogspot.com/2008/04/unemployment-soars-jobs-collapse.html

"The credit crisis is getting better..."

Based on what? LIBOR is rising again and the TED spread is nearing its previous 2 peaks during sheer credit calamity.

"Banks have taken mark-to-market losses on anticipation of high foreclosure rates that haven't happened yet and may never happen..."

The banks have taken a fraction of what they need to recognize for true impending losses. GS puts it at $1 trillion, as does Nouriel Roubini. IMF estimates somewhere around $950 billion. The banks haven't crossed the $300 bill mark that I know of. I personally think that there is an underestimation for walk-aways/foreclosures that will come with massive RE deflation. With a society that is leveraged about 100% of GDP, asset devaluation, and credit unavailability, the debt the banks hold is massively overvalued. Look at the chart of Level 2 and Level 3 assets of the biggest banks, and you get about $5.5 trillion of sketchy assets.

http://image.minyanville.com/assets/FCK_Aug2007/Image/Andrew/2008/April/042108/BS4.gif

Not to mention the downside risk of systemic CDS collapse.

"Fed is going to cease interest rates cuts..."

So what? Have loan rates dropped dramatically? I believe they're rising again. Will banks loan to each other? No. It could be argued that the auctions and lending facilities have done something (I would say little), but the rate cuts have done more harm than good. The reason they're forced to discontinue is not because of positive effects, but rather the massive debasement of the dollar.

"Stimulus package is going to be coming out..."

And studies show that over 60% of Americans will use the money to pay down debts. The rest will likely buy necessities that they would have anyways. The stimulating, "trickle-down" effect will be none.

"Without another major collapse of some kind, I see a slowdown to a flat economy for an extended period, along with a moderate rise in the stock market, anticipating the new uptrend."

Respectfully disagree. I see this market rise as a typical counter-trend rally that will give the market makers an opportunity to trap bulls and take profits.

Without earnings, consumer spending, soon-to-be-weakening exports, employment, etc., how is there a recipe for even a level economic picture?

and look on the bright side - with all this 'news' about the wicked Iranians we've clean forgotten that the consumer confidence figures are at near 30 yr lows.

Shots over the bow at Iran sure would get us talking about something besides banks, jobs, Democrats, etc.

And it sure would boost (yet another) a war-mongers chance of getting elected.

Regarding Fransix post

"Re: "The Dark Side Of The Looking Glass"

If I understand the video correctly, legislation was written to protect fraudulent trade in naked shorting,(and by extension credit derivatives) or failures to deliver, and that if you should conspire to force naked shorts to cover, then you are considered a terrorist."

Exactly. This is the evidence that goes against Kaimu's post about the effectiveness of activism. Really, all that ever happens, with a few radical exceptions, is a continuation of the mean (Doctrine of the mean) structure. Power/Money is well organized to insure it's survival. Look at the news yesterday about that "rogue" trader who was forced to repay, what, $170k? If you look throughout the power structure, and the example of sugar in the presentation was only one of myriad examples, it happens all the time.

Not necessarily disagreeing with Bill, but I'm not sure we owners of capital have power. I think the power comes from the ability to manipulate, and as the presentation showed, it can be manipulated by those who don't own our capital. So, since this is basically the system that has always been in place, does one wage a potentially quixotic struggle, or understand the system, adapt ourselves, and do the best we can for ourselves and those about whom we care. Unfortunately, social equity is noble, but the law of the jungle is larger. It would seem humanity has always attempted to fight against the principle, but looking at the financial system, there is really no such thing as fair. (Oooops, to much of my philosophical training coming through.)

jacksoo-
I agree. And somewhere in between news and gossip is spin.

we free thinking individuals must spend lots of energy deconstructing the spin.

China Cara-> apologies to those who have emailed about being unable to join the chat...i am unable to access skype during business hours, but should have the session activated by 4pm PDT...plan to leave the chat open 24/7 if that is possible...

Question for Kaimu and Aussieontop:

Geologix will soon have to pay a hefty price to Silver Standard based on some drill/resourcing results. Do you know the estimate for this payment and how it will affect cashflow? TIA.

AlanM,

Thanks for the response.

I think the effect of global growth is significantly underestimated as to how it can hold up the world markets. In the meantime, the credit crisis will eventually abade and the overall economy will turn around.

I must say, though, your response definitely has me rethinking my position.

Thanks again.

Professor Lance Lewis does not issue an article too often on gold but when he does he usually makes a few good points...

"Disinflationary Shangri-La isn't going to appear because the Fed pauses next week. A quick glance at oil still hugging $116 should make that more than clear to any 10-year old.

It’s been six straight days of selling in gold based on the fear that a Fed pause next week will mark the low in the dollar, collapse inflation, heal the economy and supercharge the financial markets (and apparently in that order too). If one believes that, then gold should be sold early and often (as I’m sure many shorts have already done).

If on the other hand, one believes (as I do) that stagflation remains, and inflation will continue to accelerate regardless of whether the Fed pauses or what the dollar does over the next month, then gold and its stocks are a buy with both hands at these levels.

Regarding the dollar: Remember, the dollar index bottomed in 1978. It was only after that bottom that inflation really exploded and gold quadrupled over the next 14 months in that stagflationary mess. I for one don’t actually believe the dollar index has bottomed yet because I’m not sure Europeans are ready to accept more of the inflationary burden, which they would have to do by cutting rates if the dollar index was to have recently made its bear market low.

But the point is that whether the dollar has bottomed or not is irrelevant as far as gold is concerned, because inflation will continue to accelerate while the Fed is forced to leave interest rates well below the rate of inflation regardless of what the dollar does."

http://tinyurl.com/45noss

Hammer,

I agree that everything has to include a macro analysis and that intl growth has been powerful. However, the de-coupling theory has basically been proven dead at this point.

I believe something like 50% of exporting from China goes to the Eurozone (I may be off but I think I remember it that way). Europe is now facing a fate worse than the US as Spain is in a housing/economic catasrophe, Germany is facing financial system meltdown, France and Italy have high inflation and economic woes that have prompted some to speculate that they'll secede from the EU, etc., etc. China's domestic consumption is still not very high. And we know what to expect here in the US. Essentially, I expect consumption all over the world to decrease dramatically. If you look at the Eurozone's consumer debt as a % of GDP, you'll quickly see why many of those countries are going to hurt. Bad.

I would carefully evaluate and project your global growth projections based on realistic assumptions before betting your money on it. Especially when the IMF and every foreign bank seems to cut forecasts every chance they get.

Here is an excellent resource I've found:

http://benbittrolff.blogspot.com/

Also, for a mainstream view from PIMCO:

http://www.financialarmageddon.com/2008/04/why-this-crisis.html

Best of luck.

Hammer1:

Unemployemt rate:
Hours worked are falling, as people get their hours cut. That fails to show up in the unemployment nyumbers.

Percentage of men 25-54 not working is at or near multi-decade highs.

Earnings:
11% earnings gains are not as nice when you take into account that real inflation is around 8% (I think that's where shadow stats has it - I might be off a little there.)

Foreclosures:
I dont understand why you think foreclosures have not happened. Foreclosures have skyrocketed and are still spreading.

I have a Google News Alert for 'foreclosures' It helps me get a feel for what's happening as news stories pour in all day.

Here's the headlines from the last google news alert:

Pain of Foreclosures Spreads to Affluent
(NY Times)
Despite Govt, Non-Profit Efforts, Foreclosures Multiply
(Seeking Alpha)
Local Foreclosures Jump Again
(New Bedford, MA paper)
Oconee foreclosures up 72 percent over last year
(Daily Journal - Seneca, CA)
Home foreclosures subprime race rise
(Metro.us - NYC)
US Home Foreclosures Lower Prices
(PRESS TV - Teheran, Iran)
Foreclosures Hit New Peak In March
(Patriot Ledge, Quincy, MA)
Blackshear Looks To Slow Foreclosures
(Charlotte Business Journal) (Blackshear is some local politician - good luck!)
Countrywide Inks Partnership to Sell Foreclosures
BusinessWeek

The scariest thing is that this is not a self-selecting news agent - that is, it's not biased towards the negative. If there were stories about foreclosures slowing, they would show up, too.

That is extremely rare.

US Inflation

For all of our American friends this was a line or two in Barron's 'Up & Down Wall Street: Jack Out Of The Box' on the weekend:
Despite fly-away gas prices and soaring food costs, there seems an increasing disposition on the part of some quite savvy folks that the real
menace is no longer inflation, but deflation, the prime agent of which is the economic decline here in the U.S. and soon to be featured in other prime
locations as well.
As we've hazarded, that's a possibility, but not imminently. For the foreseeable future, in our book inflation looms quite large and scary. And, if anything, it's already a heck of a lot bigger than the official readings let on.
All due thanks for that latter insight to John Williams, of Shadow Government Statistics, who does a crackerjack job of trying to provide an
accurate and honest translation of those smiley data that Uncle Sam's minions churn out. We've noted John's efforts in this space before and, you may recall, his approach is to present the figures cleansed of all manner of fudging and figuring designed to put as happy a face as possible on them by the government's numbers crunchers.
In calculating the real consumer price index, for example, John goes back to pre-1980 data, before the noxious numerical fiddling began.
By his antiseptic reckoning, the official CPI reading for March of 4% was actually 11.6% or, if you're in a particularly lenient mood and base the
measure on a somewhat less stringent methodology, the rate would be a still formidable 7.3%.
Which proves again that necessity is the mother of invention.

exiting FXP- craig/vinod, can't tell it that was it for the pull-back->playing it safe and getting out...

ESLR- your wife's ex-boss needs to do something about the decline in the stock price...see what you can do this weekend...;)

last post was meant for vinod...;)

I went to Scotia Mocatta today... picked up a couple gold & silver coins & bars. I'm not confident that we're heading down much farther just yet... and even if we are it should come back to where we were a couple months ago afterwards.

A decrease in the price of oil should positively impact the POG as they seem to have diverged too much in my opinion. All this talk about higher gas prices leads me to believe in lower gas prices.

The lady at the front desk told me there is a worldwide silver shortage, which seems to explain why SLV is diverging from GLD. If that auto catalyst story is true, then there could be some major demand in the near future.

However, an indicator for GLD P&F chart looking at weekly prices with close only shows a High Pole Warning...

"The high pole warning is given when a chart rises above a previous high by at least 3 boxes but then reverses to give back at least 50 percent of the rise. The reversal implies that the demand that was making the prices rise has given way to supply pressure. The pattern is a warning that lower prices could be seen in the future."

So I could be doubling down at $780 pretty soon.

At least GE is turning out ok so far. RSI is still nice and low, and it looks ready to retrace back to my $34.20 target any day now. :)

Apparently bikes are a good investment these days too.

Hello all, I've been really busy lately with a new project, and I haven't read todays comments, or any from recent days.(Just in case this was pointed out elsewhere)

I am starting to think that Citibank and Merrill Lynch are currently doing two things in their favor by the same single action. Bloomberg has this story: "Citigroup, Merrill Lynch Lead $43.3 Billion of Bond Sales in Record Week". In my opinion doesn't this demonstrate that not only are these two firms increasing their capital, but they are also in a position to greatly profit from the ToG. Short selling bonds. And Citibank is already changing how it works with gold.

If DJ-30 and SP-500 can hold these levels here into the close we are opening up to SMA200 for both, that's a lot more upside :)

good trading,
ralph
http://successfulonlinetrading.com/blogs

a little more trouble for SP-500 with sma500, the upper bollinger band and ema200 just above, this could hold it next week, DJ-30 looks ready to run if we can close here

ALOHA !!

SiO2 ... You can read for yourself the SSR Option Plan details at the GIX website by clicking on the CORP PRESENTATION and going to pages 11 and 20. The SSR resource is not due until April-May 2008, so I have not seen the FINAL resource which the payment is based on. The final payment is not due until Feb 2009, but the pre-feasability will begin this Summer. In my past experience junior explorers funds for such a project will be paid either by dilution and/or debt financing.

When the first SSR Option Plan was unveiled I did not like it and I believe AussiOnTop and I had a different view about GIX, but since the revised SSR Option Plan has NO "back-in rights" or other prior restrictions I have revised my view of the San Agustin property. Then the drill results since then have been nothing but accreditive in terms of value.

Worst case scenario as outlined in the CORP PRESENTATION of $27mil would mean 18mil shares at current price levels. If you add to current dilution of 58mil, would be 76mil shares outstanding.

I see it as not a problem in the context of the property potential when you look at page 18 and current and past drill results ...

Thx Kaimu. It seemed that the better the estimates the more GIX would have to pay or be diluted. If the estimates are not good, the smaller the dilution is, but that does not seem good either. If I understand correctly, if the resources are massive and the dilution is capped, then that may be the best outcome.

AlanM,

Excellent response!...came late to the board today and was compelled to respond to Hammers first post until I read yours...couldnt agree anymore well worded...

Now Jamie Dimon is a hero, Statesman, and everyone's favorite Uncle.

This article is such a puff piece it makes me want to puke. Nowhere in it does it mention how the only way he would do the deal was with our money. And how he knew the FED was going to open the window to everyone right after Bear signed the papers shows just how honest and benevolent he is.

Unless the FED makes all these swaps of garbage paper for treasuries permanent, he and all his buddies won't be looking too pretty when they have to reabsorb them.

Speaking of banks the P/E ratios must be skyrocketing in reality if we deduct all the interest they have to pay and dilution from their capital raising.

Isn't it amazing too that with the FED swapping with them for over 300 Billion, they still have to go out and raise more money at 8+%? And that's supposed to show that the financial system is healthy and we're nearing an end to the credit crisis? I'm not buying it. Every rally and cheer lately has not reduced my skepticism one bit.

Rob.

Sorry,
Here's the article I was talking about.

http://tinyurl.com/58e5tj

Rob.

Hi,

This rally may surprise many of us because it may be fast and furious, but I see no reason to join the party.

I remember Bill saying about a year ago: "there is nothing wrong with skipping the last dance" Of course this was said in a different context, but still I think that it applies now.

I am not buying it

Enjoy your weekend!

Hammer et al,
One word: microcredit.

Not only the developing world, but see also big article in Time a few months ago about internet based one-on-one lending in the USA.

George

Re: "Despite fly-away gas prices"

That's the advantage living in Germany. The largest part of our gas prices are taxes, therefore we do not recognize the price increase in crude oil as heavily as you in the US. The disadvantage is that we already pay $8.8 per gallon (regular). ;-)

Conflicting reports of small ships firing shots in the Persian Gulf. Oil goes up some in price, then retreats. No change in PMs. Hopefully a minor skirmish that is contained.

Associated Press:
US contracted ship fires warning shots
By SEBASTIAN ABBOT – 1 hour ago
CAIRO, Egypt (AP) — A civilian ship contracted by the U.S. military fired warning shots at two small boats that approached it in the Persian Gulf, the U.S. Navy said Friday, the latest in a string of similar incidents to trigger concern in Washington
http://tinyurl.com/5xrm4m

Reuters:
TEHRAN, April 25 (Reuters) - Iran on Friday denied there had been any confrontation between its forces and a U.S. ship in the Gulf, Iranian media reported, after a U.S. official said a ship contracted by the U.S Military Sealift Command fired on an Iranian vessel.
"Even if there was a shooting ... American forces have likely shot at a non-military or fishing boat, and even then one cannot be certain that it was Iranian," Iran's Mehr News Agency reported.

A U.S. defence official earlier said a ship contracted by the U.S Military Sealift Command had fired at least one shot toward an Iranian boat.

Many Iranian and other small craft ply the waters between Iran and Gulf Arab states, many of them smuggling goods into the Islamic Republic. (Writing by Edmund Blair; editing by Sami Aboudi)
http://tinyurl.com/4cd3a6

Question: what's the best way to play a possible big oil spike to $175 sometime this year? I don't have a futures acct but I was wondering about any ultra ETFs or something. I've been thinking for many months the administration will find a way to start a war with Iran before Bush is done, because they want to. I suspect the US is taunting the Iranians covertly looking for an excuse. The rest of the oil cartel will love it, the military industrial complex will love it, and with any luck and careful timing it may divert voters attention in November away from the economy and convince them to vote Republican for security, as sick as that all sounds. BUt how best to play it in a low risk, high reward way? Any thoughts?

2nd
http://thebuylist.com/default.aspx?Stock=eslr

http://ronsen.blogspot.com/2008/04/word-means-what-i-say-it-means.html

Sorry for the long link. Worth reading the click-through though.

Dig is Ultra Oil&Gas.

I can't even imagine the rationale for expanding our war-zone in the Middle East unless the Administration knows more about Peak oil than we do.

Protecting our access to resources is the only reasoning that makes sense. Terrorism fears really don't sway me too much when you look at our cozy relationship with the Saudi's(where most of the 9-11 terrorists originated from).

That's another reason no one has suggested we stop subsidizing ethanol, even though it's causing food shortages and massive price increases, because they know the World's Oil is running out. Why else do they keep adding to the Strategic Petroleum Reserve at these prices?? They know something we don't!!

Rob.

Rob.

Vinod,
Thanks for that link. It seems like Jan 09 or Jan 10 calls on ESLR may be a really good trade with that kind of accumulation happening.

Rob.

vinod- thanks, appreciate the link...

Good evening board.

I don't post much here but had to throw out a few comments.

Can we agree to disagree?

It is almost amusing to read what propaganda is out there. In the past six months I have read and listened two all sides of the coin. The most interesting aspect of my observations is that there is no partial mean or medium in the debates.

We tend to listen to either extreme to the fullest, it must be human nature to have the pendulum swing to far. It could be we are so passionate to follow those beliefs.

There are a bunch of smart people out there and they can crunch their numbers and charts and make very good points. The fact of the matter is that the whole system is flawed and corrupt. Nothing will change that. The system is corrupt so those who control the money will WIN! Think about that for a moment. . . There will always be a band aid put one cut and that cut will eventually or barely heal until the next cut comes along and we need to band aid that... eventually those cuts heal and become scars. Who is to say that they open up again?

The world has not decoupled from the USA. that is obvious. Worldwide "equity" markets have gotten pummeled compared to the US indexes since the start of the year. China did make a 16% rally this week however it is still down over 40% from the top.
US markets are considerable undervalued compared to the likes of worldwide markets on an earnings multiple. Going forward they will never trade as high as their counterparts.

USA unemployment isn't at fearful numbers. We are just hovering over 5%? that is nothing, nothing compared to what it was in 1994 when it was just under 8% or 1983 when it was just under 10%.

How bad will it get? Who knows but the sky hasn't fallen yet. I would say there are a quite a few dark clouds on the horizon but will they rain? The sun might pop out.

http://tinyurl.com/4b68or

One more thing lets remember what the definition of unemployment is...
from the BLS
Survey measures the unemployment rate based on the ILO definition.[23]The data is also used to calculate 5 other unemployment rates as a percentage of the labor force based on different definitions noted as U1 through U6:[24]
U1: Percentage of labor force unemployed 15 weeks or longer.
U2: Percentage of labor force who lost jobs or completed temporary work.
U3: Official unemployment rate per ILO definition.
U4: U3 + "discouraged workers", or those who have stopped looking for work because current economic conditions makes them believe that no work is available for them.
U5: U4 + other "marginally attached workers", or those who "would like" and are able to work, but have not looked for work recently.
U6: U5 + Part time workers who want to work full time, but can not due to economic reasons.

SO if you are working part time you are included if you want to have full time work. The statement is very... how do you say skittish but nevertheless it is how it is measure and the measurement hasn't' changed in decades.

There are a lot of banks that are in trouble and there are others who are in not that bad of trouble.
They are building their Tier one capital. The BIS, basel accord requires that banks have a minimum of 4% T1 capital. Most of the "good investment banks have 1.5 times that amount and they are getting that liquidity pumped into their balance sheets. Obviously in the midst of all this negative news, someone see an opportunity.

The decline of the dollar?? Good or bad.. This statement can be debated ten different ways with all ideas making sense.

Tired of paying for expensive food? Talk to your congressman and lets have the farmers compete on the free markets with no government intervention but wait a couple years ago they were throwing away tons of surplus food and farmers were really hurting. Talk to your congressman and they will bail them out. Now the people are helping the few farmers and corporations who bought out the old time farmers. Now those few farmers are growing the wrong crops because of the incentives at the tax payers expense. While we are at it, lets have DOCTORS compete an eliminate medicaid reimbursement schedules. Free markets.

Oil going to 175 - 200? Can't say it won't happen but highly doubt it will happen anytime soon. The commodity was trading in the 30s no less than 4 years ago. The majority of the demand is in the USA or countries that are trading partners to contribute to our GDP. If we go slow the rest of the world will get slower.
Oh and OPEC only controls 45% of worldwide output.

Deflation? maybe or maybe not. Bad thing yes, maybe it could be a good thing. If worldwide money supply goes down (seriously) then the DEMAND (MONEY) DRIVEN COMMODITY BUBBLE WILL collapse. Is really a worldwide shortage of commodities? Has the worldwide population TRIPLE IN TEH LAST 4 YEARS??
On a different note, is your checking account PAYING 14% in annual interest?
I can't buy it. These markets are leveraged and the money is driving up the prices, the train has left the station and either get on or don't ride. The derivatives are out there and those savvy investment banks are pulling a fast one at CHINA's expense. They have to build and build quick to impress the world and will do it at any expense.

I could go on forever and contribute more "real value" but I just had to vent.

This world does revolve around money. They money goes from one market to another.
As information and money can move much faster this day an age the good old days are behind us. Eventually there will be a balance. It will just seem unfair to some when the money leaves.

In ignorance I will say this... As long as the USA holds ever strategic choke point on the globe, the USA dollar will always be the currency of world. Like it or not, agree or disagree.

The euro is gaining strength however they will feel more pain then us, there will be a time when they need to PRINT money. There are always cycles, highs and lows.

Read as much as you can and don't believe anyone to heart because no one really knows what is going to happen except this. Money makes the world go around and the show of true force will be directed by those who control the money.

vinod - useful link, thank you.
I noticed a few PM miners in the 10 list on the lower left, mostly single trades so 100% of one is not too interesting. However AUY has quite a few trades, and there we see a quite a few non-PM funds buying. Perhaps we'll see the miners outperform the metals during this pullback.

vinod,
how are your servers today? mine were not so good and i'm still working on them at nearly 11 PM.

fixing other's configuration mistakes, and the problems they've caused....

re: oil at 175. Perhaps, like gold, a good way to play it is long-dated OTM futures options spreads. I'm going to price them both this weekend.

However, I think with oil at 175, there will be many other problems worldwide that can be 'played.' I don't think a 175 oil world would look the same as it does now, in many ways.

Norm:

good insight/comments. Yes we should agree to disagree. Seems like sometimes peoples opinions seem to be dug in but in fact they are invested one way or the other and just hoping their own "logic" will hold if enough other people agree with them. I think there is some part of human nature involved. If I think gold is going to the moon, and I have already dug into bullion and PM's, and the world is getting scarier by the minute, then it is somehow comforting to post my theories and premises and see how many other "smart" people agree with me.

1 thing about your post: "BLS methodology hasn't changed in decades". Just this week I saw an article that BLS was downsizing and no longer reporting some data. That leads me to think the numbers are going to get fudged, probably moreso. I believe U6 like I believe M3 ..

norm- "Money makes the world go around and the show of true force will be directed by those who control the money."

no disagreement here...intervention at the highest levels (when possible) is almost guaranteed...posting a chat segment from cara china for the benefit of those not on skype..."veteranwang" has worked as a hedge fund trader and has traded in the shanghai markets:

[4/25/2008 8:34:58 PM] veteranwang says: a lot of restrictions 1) no day trading, can only sell next day 2) no margin 3) no shorting 4) 10% limit up/down rule, basically the game is stacked against the little guy
[4:33:08 AM] 2nd_ave says: can only imagine what the volatility would be like without the restrictions...
no daytrading? assume this means the average investor in china is not having a good year-> IMO, the odds of further government intervention is high...honestly think the SSEC has to be headed up (from here), at least through the summer...the olympics platform is not going to be mishandled-> beijing will do everything in its power to ensure a smile on the "face of china-" how? let's just say, if i were in charge, my thought would be "nothing quells dissent and unrest faster than prosperity-" i would try to orchestrate a slow drive uphill through july, then hit the accelerator coming out of the last turn into august...LOL

http://tiny.cc/WEp3C

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