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Gold~ Silver~ HUI~ XAU~ US$~ €uro~ Crude
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PoS
HUI
XAU
3day $US:
€uro
Crude
NEM, from last report trying to dump
the hedges.
Newmont results were hard hit, as the company had warned in July they would be, by its decision to eliminate all its hedge contracts as well as its merchant bank branch. The company said those moves had a negative impact of $2.125 billion. Eliminating its merchant bank division amounted to $1.665 billion and unwinding the hedges had an impact of $460 million, the company said.
Richard O'Brien, Newmont's president and CEO, said in a statement that the company expects gold sales of between 5.2 million and 5.6 million equity ounces for the year, with production costs ranging between $375 and $400 per ounce.
Published August 2, 2007 by The Denver Business Journal
Fed.(2) 7day RP + 24.00B [net sm Drain -1.75B]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed.(2) 7day RP + 24.00B [net sm Drain -1.75B]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed.(1) 14day RP + 4.00B [ Drain Sofar -3.00B
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed.(1) 14day RP + 4.00B [ Drain Sofar -3.00B
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Stuff to watch (Fed) it's what they do, not
what they say.
IE fudging the Debt
**Public Debt: with all the draining these #'s should be reducing.
10/2 ~ $9,151,786,966,610.65 T [ WTF]
10/1 ~ $9,062,552,400,356.63 T ~~ Hefty increase
9/27 ~ $8,972,984,124,356.93 T
Limit ~ $8,965,000,000,000.00 T
29.25B Matures today
Thank you Frenchee /
**Fed. 1day RP + 2.25B [ net Drain -3.25B ]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
============================================
**Public Debt:
10/1 ~ $9,062,552,400,356.63 T ~~ Hefty increase
9/27 ~ $8,972,984,124,356.93 T
Limit ~ $8,965,000,000,000.00 T
http://www.treasurydirect.gov/NP/BPDLogin?application=np
**Fed. 1day RP + 2.25B [ net Drain -3.25B ]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
============================================
**Public Debt:
10/1 ~ $9,062,552,400,356.63 T ~~ Hefty increase
9/27 ~ $8,972,984,124,356.93 T
Limit ~ $8,965,000,000,000.00 T
http://www.treasurydirect.gov/NP/BPDLogin?application=np
W@G2 QQQQ 10/03/07 for a 10/05/07 close
52.50 tubberclare
52.01 DrWorm
51.50 Anderl
51.25 bob3
50.63 frenchee
IMCL: 12:50AM Survival data in FDA approval for ERBITUX
supports use as a single agent in patients with advanced colorectal cancer (IMCL) 42.02 : Co and Bristol-Myers Squibb (BMY) announce that the FDA has approved an update to the ERBITUX product labeling to include overall survival data as a single agent in epidermal growth factor inhibitor-expressing metastatic colorectal cancer patients after failure of both irinotecan- and oxaliplatin-based regimens. The approval of the supplemental biologics license application is based on prolonged overall survival from a large, randomized, multicenter, Phase III trial comparing ERBITUX plus best supportive care to BSC alone in 572 EGFR-expressing mCRC patients after failure of irinotecan- and oxaliplatin-based regimens.
sorry, l try harder thurs /
Fed. 1day RP + 5.50B [net Drain -1.75B ]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed. 1day RP + 5.50B [net Drain -1.75B ]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Futures (2) + World Indices
http://www.cme.com/dta/del/globex.html
http://money.cnn.com/data/premarket/
World Indices (2) Mini Charts
Updates every 60sec ~ Watch the dates!!
http://www.wwfn.com/commentary/oscharts.html
http://www.allstocks.com/markets/World_Charts/Asian_Stock_Markets/asian_stock_markets.html
EGO, ABX, AEM, AU, and GG charts/Portfolio
the miners are doing very well, indeed
Fed. 1day RP + 7.25B [net drain sofar -4.50B]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed. 1day RP + 7.25B [net drain sofar -4.50B]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
WorldWater & Solar Technologies Corp. to Build 2 Megawatt Solar System at Denver International Airport
Monday October 1, 7:33 am ET
Solar Project for Nation's Fifth Busiest Airport to Start Immediately -- Scheduled Completion in 2008
PENNINGTON, N.J.--(BUSINESS WIRE)--WorldWater & Solar Technologies Corp. (OTCBB:WWAT.OB - News), developer and marketer of proprietary high-power solar systems, today announced it will engineer and construct a 2 Megawatt solar system at Denver International Airport (DIA). MMA Renewable Ventures LLC, a subsidiary of Municipal Mortgage & Equity (NYSE:MMA - News) will finance the installation through a Power Purchase Agreement (PPA). WorldWater will begin construction of the project immediately for completion in 2008. MMA Renewable Ventures will own and operate the system under a long-term PPA
http://biz.yahoo.com/bw/071001/20071001005333.html?.v=1
W@G1 QQQQ 10/01/07 for a 10/03/07 close
51.50 bob3
51.00 rayrohn
50.63 frenchee
Mauldin: The Return of Muddle Through
by John Mauldin
September 28, 2007
The dollar reaches new lows. The housing market shows no sign of a bottom. Oil almost touches $84 before backing off. Interest rates go up after the Fed cuts. So naturally the stock market keeps climbing. But then, consumer spending came in strong, employment looks like it may be ok, inflation (at least by one measure) came in below 2%. This week we look at the question of whether you could have a continued bull market and a recession. (Maybe.) We look at the bigger picture for the dollar and interest rates and examine the ugly data from the housing sector. Inflation or deflation?
But before we get started into what should be an interesting letter, let me thank those who completed my reader survey last week. Over a thousand of you gave specific comments and I looked at every one. If you didn't take the anonymous survey yet, but would like to, just click this link. All I really know about 99.9% of my readers is an email address. The survey is just a few questions which gives me an idea of the audience I am writing to and some feedback on how I'm doing. And feel free to make comments at the end in the space provided.
As my gift to you for taking the time, when you finish the survey you will be given a link to the audio of a speech by Dr. Mike Roizen, the author of You, The Owner's Manual and a dozen other blockbuster best-sellers. He spoke at my Strategic Investment Conference this spring (co-hosted by Altegris Investments) on "How to Stay Young - Getting Your Body to Give You a Do-over." (If you can't listen when you finish the survey, save the link.) Thanks.
Inflation is Not a Problem - Until It Is
The Fed cut its fund rate by 50 basis points and the stock market has rejoiced. But the bond vigilantes came out in full force. The last three times the Fed initiated a new easing cycle, ten year bond yields typically dropped 20 basis points or more in the next five days. This time they rose by 20 basis points. Since mortgages rates are typically geared of the yield of the ten year bond, this is a cut that has not helped the consumer as of yet.
Clearly, the bond market is worried about inflation, or worse - stagflation. It's that 70 show all over again. The market should start worrying about something else. Inflation is not a problem in a recession, and certainly one caused by the bursting of the largest housing bubble in US history. Be definition, those are deflationary events.
If we have a simple slowdown I think rates drop to 4% or less. If we see a recession, short term rates will drop below 3%. Van Hoisington, manager of the best performing long term bond fund over the past five years (and frequent Outside the Box contributor), said today that he thinks that yields on 30 year bonds will drop below 4%, from the 4.84% they are positioned at today.
Hoisington thinks that GDP is "going to be very slow in the fourth or first quarter, close to zero in one of the two." The head of Freddie Mac now estimates that there is a 40-45% chance of a recession. And the core PCE (Personal Consumption Expenditures), the Fed's preferred measure of inflation, dropped below 2% for the first time in a long time, down to 1.8%. The Dallas Fed uses sits own version of the PCE, called the trimmed PCE (which includes food and energy), which shows inflation is now edging down below 2%.
That will give the Fed room to cut rates in the last two meetings of the year. And the data that came out on housing suggests they will need to.
The House of Pain
Let's slice and dice the latest housing data and see just how bad it is if you are trying to sell a home. (Most of the data is from data-maven Greg Weldon at www.weldononline.com. I highly recommend his letter. It is one of my favorite sources.)
First the inventory of existing homes rose yet again to 4,581,000, which is an increase of more than 1,000,000 since March alone. It is more than double the supply since the beginning of 2005. In January there was a 6.6 months supply of homes for sale. Now it is 10 months. Over 500,000 homes are in the process of foreclosure and will soon come onto the market. I think that means in the near future we will see a 12 month supply of existing homes for sale.
Remember, that is an average. In some markets, that means there may be a two year supply and a three month supply in areas of higher demand. It is going to become a buyer's market in the middle of next year as sellers...
Want to buy a condo? Existing condos for sale have risen by 35% since January to 661,000. That is almost 12 months of supply, and there are a lot of new condos coming onto the market as there are a lot of construction projects that are just now nearing completion.
New home sales in August saw the largest decline in three decades, down 8.3%. Mean new home prices are down 11% in the last five months. The inventory of new homes for sale is up to 8.2 months and rising.
Greg also spotted something which I suspected and hinted about in previous letters. The number of homes above $750,000 which are selling is down by over 35% from last year. Sales of home from $500,000 to $749,000 is down by 25%. Jumbo mortgages are just hard to find at rates that make sense. I think it is likely that Congress will allow Fannie and Freddie to take larger loans onto their books. I would not be shocked to see the number at $600,000, at least temporarily. Right now they are limited to taking $417,000 loans. With a 20% down payment that means about $525,000 for the sales price of the home.
All this means that the fall-out from the housing recession is still in our future. I expect to be able to take out the e-letters I wrote on the problems of deflation back in 2002 and update them sometime next year. Again, recessions and the bursting of bubbles are profoundly deflationary.
The Return of Muddle Through
It is going to take some time for the economy to work itself through the current credit crisis and the collapse of the housing bubble. I suspect the US economy will grow below trend for at least another year. We will work through it, as we always do. But it is the return of the Muddle Through Economy.
How long it takes to work back to a 3% GDP depends on how fast the credit markets can figure out how to create a structured security and a collateralized debt obligation market. Without those structures, all sorts of consumer loans and mortgages will be more expensive and difficult to get.
In the Financial Times today, Jan Krahnen suggested that a new type of mortgage back security be created that kept the first risk of loss with the initial lending institution. In the past, a securitized loan was divided into five different segments called tranches. The lowest rated tranche was called the equity tranche because it took the first losses in the pool of loans.
What Krahnen suggested that instead of letting a mortgage bank sell of 100% of the loan, they have to keep the equity tranche. That way, they suffer the loss if the borrowers don't pay. They are first in line for the moral hazard of losses. That would tend to focus the management of the bank in the direction of making good loans rather than merely taking fees. Investors could have more confidence in the loan making process.
That makes immanent sense to me. Of course, it would mean that larger institutions or more capitalization would be needed on the part of mortgage lenders, but it would get the market going again.
A Bull Market and a Recession?
Changing pace, as most readers know, it has been my contention for almost a year that the bursting of the housing bubble would result in a mild recession or at the least a serious slowdown. And a recession has always meant a full blown bear market in the stock market (an average drop of over 40%). But even if there is a recession, there may be reason to argue that the large cap market indexes will not see as severe a drop as has been the case in the past. Why not?
I ran across an interesting thought by Michael Albert on his blog at www.leadlag.com. We corresponded and he made the following charts for me. Notice that certain sectors of the S&P 500 are on a tear since the first of the year, like energy, material and technology.
The sectors that are outperforming are all large multi-nationals that get as much as 50% of their earnings from outside the US, and the global economy is doing well. Those that are not doing well are tied to US domestic consumer spending and the financials.
Now let's look at the weightings of the various sectors in the S&P 500. Notice that almost 60% of the cap weighting is to industries that get a good portion of their earnings from overseas, or are largely insulated from a slowdown in overall consumer demand (like healthcare which you buy when you need it, not generally as a discretionary item). Utilities should do well in a falling interest rate environment.
If we saw a 30% drop in the 40% domestically impacted sectors (with healthcare and utilities basically flat) and a 10% rise in the rest, that would be an overall drop of only about 7%, which is not much of a bear market in the total index, although there would be sectors that are ugly.
That also argues that large cap multinational stocks will outperform smaller firms. The Dow will beat the Russell 2000, as an example. This may be one reason that legendary fund manager Bill Miller of Legg-Mason, who beat the Standard & Poor's 500 Index for 15 straight years until 2006, is rotating out of mid-caps and into very large caps, to insulate himself from a potential slowdown or recession.
King Dollar and the Guillotine
In February of 2002 I turned bullish on gold in this letter (after having been a bear for at least 15 years) and in early March of that year I wrote a letter called "King Dollar and the Guillotine" where I outlined the reasons that the dollar was getting ready for a rather long slide. The euro was at $.88 and I suggested that we could see dollar parity by the end of the year, which we did.
In May of the next year, with the euro around $1.07, I suggested that $1.40 was possible. In later letters I suggested that $1.50 is possible, although I admit that when France and the Netherlands rejected the constitution I lowered my "target" back to $1.40, with the euro around $1.20 at the time.
The dollar closed at $1.42 this afternoon. Now $1.50 doesn't seem all that far, just another 5% move. Let's look at a chart of the euro since it was introduced and then I will make some comments.
The euro was introduced January 1, 1999 and had a value of $1.19. It promptly started falling and reached a low of around $.82 shortly before the end of 1999. There were a number of reasons for the drop, but the euro clearly became seriously undervalued.
It has risen over 70% since that low and over 60% since I wrote about it in 2002. That is a very large movement. But if you view it from the introduction in 1999, that is only about a 20% move in almost nine years. It is also only up 10% since the end of 2003, again not all that large a move for almost 4 years. But that is because the euro rose too fast and then went sideways for two years, before once again renewing a very defined upward trend for the last two years.
A little rest for the euro would be in order. It would not surprise me to see the euro drop a little from here before resuming its upward journey. I read that 90% of currency traders are dollar bearish versus the euro. When everyone is on the same side of a trade that is usually when the trend is getting ready to reverse, at least for awhile.
Before we leave the euro, I should note that I expect the euro to go back to parity over a long period of time, maybe a decade or more. But that's a story for another letter.
The Canadian dollar went to parity this week, which I first suggested was possible four years ago. That used to get laughs in Canada, as the audience waited for the punch line. It could easily get stronger.
But where we should be paying attention is Asia and in particular the Chinese yuan. It also made new highs against the dollar. It has risen almost 10% in a little over two years, bouncing off its 50 day moving average with regularity. And I think it is being set up to rise at a faster pace. A $6 yuan is certainly in the realm of possibility, and not too far into the next decade.
The Chinese have a problem. Everyone "knows" that the Chinese yuan is going to rise, probably by another 20% at least. So, what do you do? You invest in China, typically in real estate or manufacturing centers, and watch your investment rise 20% just from currency appreciation. That has created a bubble in certain types of businesses and real estate markets, and threatens to destabilize their economy if it were to continue. The Chinese government is actively trying to discourage property speculation, but an under-valued yuan makes that difficult.
Further, if you allowed the yuan to float, but kept a lock on Chinese business and investors from investing outside of the country, it would put even more serious pressure on the yuan to rise, and it could do so rapidly and destabilize the economy. The Chinese government does not want anything to destabilize the economy.
A controlled currency is also creating inflationary pressures. Plus, the US and other western nations are not happy with the low value of the yuan. Not that the Chinese care all that much about what we think, but a trade war does no one any good.
You may not have read about it yet, but there is a tsunami of money getting ready to come from China into the world. And I am not talking about the large government balances or their new sovereign wealth fund.
This week, the Chinese announced they are going to let one of their larger mutual funds invest outside of China. Local Chinese investors will be able to start to diversify and businesses will start to be able to take their capital and employ it abroad. This is just the start of the process. I expect that in just a few years Chinese will be able to buy a wide range of funds and investments.
This will take off a lot of the market pressure for a stronger yuan, as the Chinese will need to buy dollars and euros and other currencies in order to make those investments. Further, those who have invested in China at some point are going to want to take their profits back home.
I think we will see the Chinese government open up the potential to invest and spend abroad before they float their currency. This will allow them to let them get closer to allowing the yuan to float. It is in their best interest to do so over the next few years.
http://www.safehaven.com/article-8513.htm
Fed Ops: 38.75B Matures this week.
Mon:
(1)4.75B 3day
(2)7.00B 4day
Thu:
(1) 7.00B 14day
(2) 20.00B 7day
Float: 44.75B
===================================================
Temp Ops:
Perm Ops:
=========================================================
Public Debt:
9/27 ~ $8,972,984,124,356.93 T
Limit ~ $8,965,000,000,000.00 T
http://www.treasurydirect.gov/NP/BPDLogin?application=np
==========================================================
Fed Ops: 38.75B Matures this week.
Mon:
(1)4.75B 3day
(2)7.00B 4day
Thu:
(1) 7.00B 14day
(2) 20.00B 7day
Float: 44.75B
===================================================
Temp Ops:
Perm Ops:
=========================================================
Public Debt:
9/27 ~ $8,972,984,124,356.93 T
Limit ~ $8,965,000,000,000.00 T
http://www.treasurydirect.gov/NP/BPDLogin?application=np
==========================================================
Chichi GSS
my hesitation was just a gut feeling, after all the charts showed uptick on decent volume with management buying & PMs making new highs...could find no reason we couln't make a bit
on those cheap calls on US based company.
kept looking for negatives untill the Burma news. ah oh!
GSS mines: Each with some degree of unrest.
Ghana: Western Africa, bordering the Gulf of Guinea, between Cote d'Ivoire and Togo
Cote d'Ivoire: Western Africa, bordering the North Atlantic Ocean, between Ghana and Liberia
Democratic Republic of the Congo: Central Africa, northeast of Angola
Sierra Leone: Western Africa, bordering the North Atlantic Ocean, between Guinea and Liberia
Suriname: Northern South America, bordering the North Atlantic Ocean, between French Guiana and Guyana
French Guiana: Northern South America, bordering the North Atlantic Ocean, between Brazil and Suriname
Ray a reminder..U Won
lol, still can't understand gss seems
locked in place.
Fed. 3day RP + 4.75B [net Drain -0.25B]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Fed. 3day RP + 4.75B [net Drain -0.25B]
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
Coeur Announces Additional High-Grade Drill Results at Cerro Bayo Mine
Friday September 28, 8:30 am ET
COEUR D'ALENE, Idaho--(BUSINESS WIRE)--Coeur d'Alene Mines Corporation (NYSE:CDE - News; TSX:CDM - News) today announced updated exploration results at its Cerro Bayo Mine in Chile, where the accelerated drilling program on the company's large land holdings has continued to return consistently high-grade silver and gold intercepts close to the mine's processing facilities.
http://biz.yahoo.com/bw/070928/20070928005151.html?.v=1
Congress boosts debt ceiling
By William L. Watts, MarketWatch
Last Update: 11:36 PM ET Sep 27, 2007
WASHINGTON (MarketWatch) -- The federal government's credit card remains intact.
The Senate voted 53-42 on Thursday to raise the federal debt limit by $850 billion, putting the ceiling at $9.815 trillion.
Without an increase, the federal government would eventually be unable to borrow more money or to pay obligations on existing debt. The federal government has never defaulted on a debt payment.
Treasury Secretary Henry Paulson had warned last week that the government would run out of room to maneuver by Oct. 1 unless Congress hiked the limit.
The House approved the debt-limit increase earlier this year when it passed its annual budget resolution.
The move marks the fifth increase in the debt limit since President Bush took office. Measures to raise the limit have often sparked sharp political debate.
Democrats charge that the Bush administration's tax cuts have been skewed toward wealthy Americans while boosting the deficit and running up debt.
The White House and Republican leaders contend that the nine-month 2001 recession and the aftermath of the Sept. 11, 2001, terror attacks played a major role in persistent deficits, and contend that subsequent tax cuts helped minimize economic weakness.
Congress boosts debt ceiling
By William L. Watts, MarketWatch
Last Update: 11:36 PM ET Sep 27, 2007
WASHINGTON (MarketWatch) -- The federal government's credit card remains intact.
The Senate voted 53-42 on Thursday to raise the federal debt limit by $850 billion, putting the ceiling at $9.815 trillion.
Without an increase, the federal government would eventually be unable to borrow more money or to pay obligations on existing debt. The federal government has never defaulted on a debt payment.
Treasury Secretary Henry Paulson had warned last week that the government would run out of room to maneuver by Oct. 1 unless Congress hiked the limit.
The House approved the debt-limit increase earlier this year when it passed its annual budget resolution.
The move marks the fifth increase in the debt limit since President Bush took office. Measures to raise the limit have often sparked sharp political debate.
Democrats charge that the Bush administration's tax cuts have been skewed toward wealthy Americans while boosting the deficit and running up debt.
The White House and Republican leaders contend that the nine-month 2001 recession and the aftermath of the Sept. 11, 2001, terror attacks played a major role in persistent deficits, and contend that subsequent tax cuts helped minimize economic weakness.
Treasury 5-year auction results strong; awarded at 4.250%
1:33 PM ET, Sep 27, 2007 - By Lisa Twaronite - 30 minutes ago
SAN FRANCISCO (MarketWatch) -- The Treasury Department awarded $13 billion of five-year notes in its Thursday auction at 4.250%, slightly above last month's 4.248% but down from 4.640% in July. The auction "was well-received, reportedly helped by ongoing demand...amid credit concerns, with some additional help from quarter-end window dressing," according to Action Economics analysts. The bid-to-cover -- which measures bids received to bids tendered -- was 2.86, up from 2.74 last month and 2.15 in July. The indirect bid, a carefully watched category that includes foreign buyers, rose sharply to 45.2% from 22.8% last month.
Treasury 5-year auction results strong; awarded at 4.250%
1:33 PM ET, Sep 27, 2007 - By Lisa Twaronite - 30 minutes ago
SAN FRANCISCO (MarketWatch) -- The Treasury Department awarded $13 billion of five-year notes in its Thursday auction at 4.250%, slightly above last month's 4.248% but down from 4.640% in July. The auction "was well-received, reportedly helped by ongoing demand...amid credit concerns, with some additional help from quarter-end window dressing," according to Action Economics analysts. The bid-to-cover -- which measures bids received to bids tendered -- was 2.86, up from 2.74 last month and 2.15 in July. The indirect bid, a carefully watched category that includes foreign buyers, rose sharply to 45.2% from 22.8% last month.
Tarn, did this before making lotsa action
but still a drain & keeping the overdrawn amount within reason till pass new bill. <34.00B>
***Fed.(2) 7day RP + 20.00B [Net Drain -11.00B]
Fed.(3) 4day RP + 7.00B
Fed.(4) 1day RP + 5.00B
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
**Thu: 49.00B Matures ~ EOM lot of paint!!
(1) 5.00B 14day
(2) 19.00B 7day
(3) 9.75B 2day
(4) 15.25B 1day
***Fed.(2) 7day RP + 20.00B [Net Drain -11.00B]
Fed.(3) 4day RP + 7.00B
Fed.(4) 1day RP + 5.00B
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
**Thu: 49.00B Matures ~ EOM lot of paint!!
(1) 5.00B 14day
(2) 19.00B 7day
(3) 9.75B 2day
(4) 15.25B 1day
Fed.(1) 14day RP + 6.00B [ SoFar
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
See reply to for total matures.
Fed.(1) 14day RP + 6.00B [ SoFar
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
See reply to for total matures.
Australian Senator Discusses Oil Spill
This might sound dumb but its a hilarious video! An Australian Senator is interviewed regarding an oil spill that resulted in 20,000 tons of oil being dumped into the ocean.
http://www.break.com/index/the-front-fell-off.html