full-time investing; total portfolio up over 130% in 2009; but 2010 sucks!
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... and since TRGD holds only 80% of TARM stock, TRGD shareholders lose 20% of the value that Picacho represents.
hmmm ... suggest TRGD shareholders pour honey on the Biscuit, and feed him to the fire ants.
'peeker
Only the Shadow of Dick Biscuit knows ...
Uh huh, like I been sayin' (a snake is a snake is a snake).
IHMH, he's trying to transfer his interests in TRGD to TARM equity. It's now clear where the value lies, but we know Dick Biscuit lies. In time (2wks of Madoff time), we shall see ...
Techs taking mkt up ahead of GOOG and IBM after the close.
I bought some SSO.
'peeker
PS> I wish I were more used to trading ETFs in this environment. Big techs like IBM and GOOG will impact mkt, and so will BAC and other banks in the next week. Expect lots of financial-led volatility next wk, but GOOG and IBM may boost the mkt futures after the close today.
UMPQ price action indicates something other than everything's OK. Popped on news and slidddddd right on down. Must have been some issues about inadequate loan loss reserves or something.
Meanwhile BAC pre-earnings surge may be the catalyst leading financials higher. We'll see if the FAS or FAZ does better between now and a week from Friday when all those banks have hung their laundry for all to see.
Regards,
'peeker
Market Turning Down??? Bank earnings and credit deterioriation:
13:47 Bank of America is set to report earnings before the market opens with most expecting it to post similar results to JP Morgan (JPM). Investment Banking, and capital markets activity in particular, will drive results but the steady headwind of rising credit costs and delinquencies in housing and credit cards will continue to weigh in on the stock. BAC will be the third big bank of the week reporting (Citigroup also reports tomorrow morning) and so far Goldman Sachs (GS) and JP Morgan (JPM) have delivered strong quarters. The problem is GS and JPM are the best in class in banking and their results have set a high bar for the rest of the group. BAC will need to post a blow out top and bottom line or face some stiff selling pressures going forward.
First we should discuss a number of one time items that is likely to make this a confusing report (Note: First Call consensus is $0.28; est includes CCB gains, FDIC, and DVA losses). When the stress test results were released the government said that BAC needed to raise $33 bln more in capital to meet the worst case scenario in their model. This led to a number of actions by BAC that will result in one-time charges. They included: 1) the sale of 1.25 bln shares of common stock for ~$13 bln; 2) $1.3 bln in reduced dividend; 3) the sale of CCB stock which resulted in a gain of $4.8 bln; 4) $2 bln benefit from dispositions; 5) exchanged $14.8 bln of preferred into common; 6) Special FDIC assessment fee. On top of those items, this will mark only the second quarter that Merrill and Countrywide results will be included in which is likely to cause havoc with analyst models. All these items are likely to cause confusion in a comparable bottom line figure, so while the headline number is likely to move the stock, look for some whippy action as analysts break down the figures and attempt to find a comparable to consensus.
The three key areas investors will be watching for are the housing, credit cards, and commercial real estate. These areas are likely to continue to rise in net charge offs as the unemployment rate continues to march higher. Managed consumer credit card losses increased to 8.62% in Q1. The co has said the loss could reach in excess of 100 bps of the projected unemployment number and with that figure moving up to 9.5% in Q2 this is certainly an area of concern for investors. Credit Card 30-day delinquencies were 7.85% in Q1 compared to JPM's 6.86%. This figure actually fell for JPM so investors will be looking for a retreat in this area. Q1 Global Card Services reported a net loss of $1.8 bln and provision expense jumped to $8.2 bln. BAC's managed card book sits at $173 bln (CA and FL 24%). Home Loans unit posted revenues of $5.2 bln in Q1 while it raised provisions to $3.37 bln. In it's shareholders meeting BAC guided for home equity loss of 4.0% in 2009. Residential NCOs hit 1.20% in Q1 while Home Equity Balance NCOs popped to 4.3% from 2.9%. BAC's home equity book is $157 bln. Commercial Real Estate will continue to be a drag. BAC noted in its recent Treasury lending report that new loan demand for CRE is down due to the lack of new construction activity and the overall condition of the real estate market. Small business loans stand at $18 bln for BAC. For Q1 CRE had an NCO of 2.56%, NPL of 6.04%, and Allowance for Loan Losses of 2.26%.
Analysts will look for BAC to curtail it's reserve build following the $6.4 bln jump in Q1. This would provide an uplift to the bottom line results. The prior reserve build reflected a weakening consumer portfolio as the LLR increased 51 bps to 3.00%. Provisions for credit losses hit $13.4 bln in Q4 and the co's allowance for Loans and Lease Losses are at $29 bln. The rise was to offset Nonperforming Loans which jumped to $25.7 bln from $18.2 bln in Q1. Expectations are this figure can move to $30 bln in tomorrows report. Firm wide net charge offs (NCO) reached 2.85% in Q1 compared to 2.84%in Q4.
13:32 BBT is due out with Q2 earnings tomorrow morning, representing the major regional bank to report Q2 results. The co's conference call is set for 11:00 am ET.
BBT has the potential to move the regional bank sector, which has been drifting sideways/lower over the past several months after seeing significant gains off the March lows and following better than feared Q1 earnings season. While Q1 demonstrated continued deterioration in credit trends, mgmt from several banks offered the first glimpse of cautiously optimistic commentary that they were seeing budding signs of stabilization and better times were likely ahead. BBT played an influential part in this theme, as it reported a blowout Q1 EPS number that came in $0.17 ahead of the $0.31 consensus, despite continued deterioration in credit. BBT's CEO also made encouraging comments that led to a rally in BBT shares and lifted the entire sector. Along with the rest of the regional banks, BBT has since pulled back from its early May highs and is currently trading around the same levels it was when the co reported Q1 results. Following today's JPM results, which showed continued credit deterioration and cautious comments about commercial real estate (specifically calling out potential problems for regional banks), BBT's results and commentary will be of heightened interest as it provides the first read on the regionals.
Looking back, BBT came through the financial crisis in a stronger position than most other regional banks, as its focus on the mideast/southeast sheltered it from some of the bigger problem geographies (62% of its deposits are located in the states of North Carolina (26%), Virginia (25%) and Georgia (11%)). However, concerns that the broader negative trends will catch up with BBT remain. Current concerns center around further deterioration in the real estate portfolio (specifically with regard to commercial real estate), as well as concerns about the valuation of the OREO (Other Real Estate Owned) portfolio, which holds properties acquired as a result of bad loans. The co's loan book is split pretty evenly between consumer and commercial loans, so the performance of either category could have a significant impact.
The current consensus calls for Q1 EPS of $0.21 on revs of $2.0 bln, which includes the negative impact of paying back the TARP. Last quarter, the co reported nonperforming loans of 1.7% of total loans, and reserves of 1.94% of total loans. The co also had strong capital levels with 7.0% tier-1 common equity. A final area of interest would be any plans for returning the dividend to higher levels now that TARP has been repaid.
While BBT is the first to report, several other large regional banks are due out next week: 7/20: MTB, ZION; 7/21: RF, CMA; 7/22: KEY, STI, TCB; 7/23: FITB, HBAN
AGM: Co announces that it currently holds no CIT securities in its investment portfolio. The company reported that, on July 10, it sold its entire position of $35 mln principal amount of CIT Group (CIT) bonds to mitigate its risk of loss on those securities. Farmer Mac further reported that on July 10 it also sold its Fannie Mae Preferred stock holdings realizing a book gain on this transaction, thereby partially off-setting Farmer Mac's loss on its former CIT bond holdings. The net loss realized by Farmer Mac on the two transactions will be included in its third quarter 2009 results and was approximately $1 mln.
TBUS: Picked up a chunk today at $1.70 and will probably hold for the earnings play. Any idea when they will announce? Not sure if they have the ability to execute on the orders, but we'll find out.
'peeker
PS> Also played FAS (flipped) a couple of times on financials momentum today. Good leverage when the trend is your friend, but I sold too quickly as I couldn't believe the momentum would stay so strong all day long.
S&P "head&shoulders" was really just a "headfake"
from Briefing.com FloorTalk:
From a sentiment perspective, Intel's blow-out quarter provided a huge boost for the bulls and provided the catalyst for this morning's surge higher in the equity markets. Just a week into earnings season, we've now seen two bellwethers, GS and INTC, report much better than expected earnings, but in one respect INTC's surprise beat is much more significant than Goldman's.
Goldman's report yesterday was of course stellar: reported EPS of $4.93 crushed the consensus estimate of $3.65, aided by record-high trading and stock underwriting revenues and healthy fixed income. But everyone expected GS to blow away estimates, just as they did in their April quarter when they reported EPS of $3.39 vs the $1.60 consensus. Given these already-high expectations, and the general belief that published estimates for the Financials almost always dramatically understate real expectations, a blow-out quarter from GS was actually solidly in-line with Street expectations. Essentially, Goldman's report was a company-specific event that delivered exactly what the Street wanted.
INTC on the other hand was a true earnings surprise, as the company hasn't surprised the Street like this in years. While Technology, and more specifically semiconductor, stocks have provided leadership during the rally off the March lows (which was validated by a string of positive preannouncements by semi companies in June), INTC has been a conspicuous underperformer during this time period. This underperformance wasn't an aberration, since INTC has been dead money (at best) for almost nine years now, and even INTC's positive reports over the past few years have always contained some "fly in the ointment" that would temper even a good quarter.
In this context, INTC's big beat was a very welcome surprise to the market, but more importantly the company's much better than expected outlook for Q3 suggests that the recovery in the leading Technology stocks was due to more than just a one-time inventory restocking, giving hope that earnings (and share prices) will continue to recover into the remainder of the year.
One final point worth making is that the July 7 breakdown in the S&P 500 from the widely-watched "head & shoulders" formation now looks like a massive head-fake. What this means is that those institutions that thought they would have ample time to buy their favored stocks at lower prices as the major averages corrected, now have to abruptly switch gears and may feel compelled to chase this market higher. On the other side of the coin, trapped shorts are now being forced to cover, and the environment that we saw in March-April where a strong underlying bid continually forced shorts to cover at successively higher prices could become a real possibility if the July 1 high and especially the June 11 high are breached.
We're only one week into earnings season, so it's too early to draw any conclusions just yet. But in just the past 3 sessions we've switched from the bearishness accompanying the July breakdown in the major averages, to a more neutral/bullish stance as we surge back up into the May-June trading range. The key sector to watch remains Technology, and the key near-term question is whether this market-leading group can build on its recent breakouts, or whether these breakouts to new highs fizzle out and the market concludes that all the good news has already been "priced in". In other words, how Technology stocks act in the coming days and weeks should give us a solid clue as to whether a bullish new leg higher lies before us, or whether we remain broadly range-bound for the rest of the summer.
INTC trade: I bought some QQQQs premkt, but is there a QQQQ triple long index for better leverage?
Also like SYNA which is company for touchscreens on iPhone (and maybe PALM, too?)
OT: Cool Hand Luke "No Man Can Eat 50 Eggs" Scene
AGT: Bobwins, "what we have here is a failure to communicate" (credit: Cool Hand Luke)
While I agree with what you said, my permit question had to do with Canadian timeframes for permitting Grey Fox for open pit mining. The analogy would be GORO and their now-famous permitting issues.
In particular I realize Gray Fox will take some time to delineate, and I am assuming that design and permitting for a tailings pond and pit mine would take considerable time, meaning it would probably be 2011 or beyond before shareholders could expect any gold from Gray Fox to hit AGT revenues.
Regards,
'peeker
AGT: It's up today like we just got our Mojo back (credit: Austin Powers).
Black Fox is in production and AGT price trend will depend on efficiency of operations (particularly mill volume and gold poured per mo).
Gray Fox impact on AGT price depends on delineation of the ONE drillsite that had blowout gold content.
Gray Fox Question:
If this is an open pit opportunity, are permits already in place for Gray Fox or, if not, how long will the permitting process take?
'peeker
TRGD vs. AGT: 3 more days like today, and TRGD stockprice will exceed that of AGT. Gooooo Figurrrrre.
???????????WTF???????????
'peeker
AGT: Although I would not expect flawless operations during June (first full mo of operation), has anyone spoken to anyone in CO or CA about how things are going at our beloved Black Fox?
Also, has anyone heard whether AGT has determined to drill more holes near-term at Grey Fox around the very high gold drillsite to determine extent of that particular trend?
Any news would be helpful. Based on no early July PR about June production rates and the slow drift downward over the last few days, in prices of both gold and AGT, I assume there could be some negatives associated with Black Fox operations which would indicate June production was not optimized (flawless first full month of ops would be very cool but not realistic).
'peeker
12:40 Color on potash stock weakness (Briefing.com):
POT, IPI, MOS, AGU have seen a sharp reversal from their morning highs, down between 5-9%. Weakness is being attributed to expectations of the pricing of an indian potash contract. We note RBC says FMB, a fertilizer trade publication, reports that a potash contract has been reached between India and Russian-based Silvinit. The firm says the price could be below expectations. One of their industry sources indicated that the price is $460/tonne delivered, which would be ~$40 lower than their current pricing assumptions and below current spot levels of $750/tonne. Firm says they are awaiting official confirmation on the price.
PRIM 8K shows potential negative effect due to CA court order to halt construction on Chevron refinery. Stock is down today.
Here's an Excerpt:
Primoris Services Corporation Provides Status Update On Richmond Refinery
Lake Forest, Calif., July 9, 2009 (GlobeNewswire via COMTEX News Network) - Primoris Services Corporation (NASDAQ: PRIM) (NASDAQ: PRIMU) (NASDAQ: PRIMW) ("Primoris" or "Company"), one of the largest specialty contractors and engineering companies in the United States, today announced that it has been made aware that a California state judge has granted an order that may halt construction on a new hydrogen facility at Chevron Corp's Richmond Refinery located in Contra Costa, California. The Company also understands that Chevron intends to appeal the judge's decision.
Primoris' wholly-owned subsidiary, ARB, Inc., was hired by Praxair, Inc. (which contracted with Chevron to build the project) to build the hydrogen facility. ARB has been performing this work at the Richmond site since September, 2008. Primoris is awaiting additional information from Praxair, Inc. regarding the status of this project, however, as of this date, Company personnel remain on the project. The possibility exists that the court ruling could cause the project to be delayed or cancelled, which could negatively impact Primoris' financial results for the second half of 2009 and the first quarter of 2010. At June 30, 2009, Primoris estimates that the backlog associated with the Richmond contract was approximately $50-60 million. The Company will continue to keep investors apprised of material developments related to this matter.
AGM downward action is probably due to unknowns associated with quarterly derivative adjustments to earnings. Wouldn't ya think?
Do your have any feel at all for whether derivatives adjustments will reduce vs. increase earnings for the recently completed qtr?
I know you like to value AGM based on operational earnings, but others less familiar with AGM will be very sensitive to the NET quarterly earnings numbers.
'peeker
What if TRGD spins TARM off and then the CEO appropriates funds to his own best benefit and shuts TRGD down? Couldn't TARM then file financials on their own and get uplisted in a hurry while TRGD quietly rots in our memories (and remaining funds disappear from TRGD bank accts)?
Just curious, but that may be what Dick Biscuit has on the menu afterall, since he's shown total disregard for completing TRGD financials as promised, that is, over the last 2 weeks.
As you can probably tell, I'm totally jaded on TRGD and PO'ed at the CEO at this point due to all the lies and misrepresentations over the last 2+yrs.
'peeker
My guess: They bought PRIM cuz they dunno PRIMW's there.
Head and Shoulder chart detail from Briefing Trader:
12:58 Tech view from Briefing.com (Head & Shoulder Top)
It was a lower opening on Tuesday which put the selling pressure on the broad market throughout the session. Dow -161, SPX -17, Nasdaq -41, Russell -9. The price action has the Dow Jones breaking below its Neckline support of its 2-month Head & Shoulders Top pattern as it takes out the 8200 level. This suggests the next target for Dow is around 7523, based upon taking the difference between the Head which is the June peak of 8877 and the Neckline of 8200, then subtracting the result (677) from the "neckline" (8200).
Yep, China VMCs are down again today. Bought FEED today at $4.19 after it fell 25+% in about a week. Also added CSGH today at $.65/sh.
Oils continue down, particularly energy trusts like PGH, which I bought yesterday at 7.70, only to watch it fall to 6.50 now.
Also got whacked again on my little WEMU, so to speak . . . Y O W C H !!!
Good luck to all with your "investments".
'peeker
XOMA: RBC says they could double with high value partnership.
Positive data on July 14 could boost XOMA shares (0.78)
RBC notes XOMA will release U.S. Phase I results for XOMA 052 in patients with type 2 diabetes after market close on July 14. They expect the results to be positive and will focus on three aspects of the data: 1) XOMA 052's ability to be delivered subcutaneously and potentially monthly; 2) HbA1c reduction vs. placebo; and 3) dose response. In spite of small patient numbers (n=12), they would expect multiple doses to result in a higher and more sustained level of HbA1c reduction. Demonstration of an effective subcutaneous dose, pharmacokinetic data that supports less frequent dosing, and a more robust reduction in HbA1c would all be positives that could drive a high value partnership, potentially by year-end 2009; they maintain their Outperform rating with a $1.50 tgt.
Somebody's dumping AGM in last few minutes ... yowch!!!
Hurt so bad I self-medicated (added more at $4.35).
CHID doing well today on above avg volume after favorable mention in Street.com article.
http://www.thestreet.com/_yahoo/story/10535682/1/china-investing-like-a-kid-in-a-toy-store.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
What it said about CHID:
China Digital Communication Group (CHID Quote) is irresistibly cheap, not to mention it just captured a veteran electronics CEO who founded a 3C electronic products manufacturing firm and grew it to hundreds of millions of dollars in revenue. China Digital, however, is trading at less than $10 million. Maybe I'm crazy, or maybe I just love electronics right now after the sector got crushed in price this last Christmas season.
CHID doing well today on above avg volume after favorable mention in Street.com article.
http://www.thestreet.com/_yahoo/story/10535682/1/china-investing-like-a-kid-in-a-toy-store.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
What it said about CHID:
China Digital Communication Group (CHID Quote) is irresistibly cheap, not to mention it just captured a veteran electronics CEO who founded a 3C electronic products manufacturing firm and grew it to hundreds of millions of dollars in revenue. China Digital, however, is trading at less than $10 million. Maybe I'm crazy, or maybe I just love electronics right now after the sector got crushed in price this last Christmas season.
China’s Copper Imports May Plunge 64% in Second Half (Update1)
By Bloomberg News
04:14am July 7 (Bloomberg) -- Copper imports by China may plunge 64 percent in the second half after record shipments this year led to excess stocks, UBS AG said.
China, the world’s largest consumer of the metal, may cut refined copper imports to around 100,000 metric tons a month in July to December, from an average of 280,000 tons in the first five months, UBS analysts led by Peter Hickson said in an e- mailed report dated July 6.
There are “clear indications that China is now overstocked” as the Strategic Reserve Bureau is offering up to 100,000 tons of copper to the market and traders are preparing for exports of the metal, the UBS report said.
Chinese imports “couldn’t decrease so sharply in the second half,” Yang Gang, a trader at LG International Corp., said from Shanghai today. Many long-term contracts have been booked and importing copper as a way to obtain finance is very active too, he said, referring to the credit terms traders can obtain from banks.
Copper, used in construction and power grids, has dropped 9 percent from the year’s high of $5,388 a ton on the London Metal Exchange on concern that China may slow purchases. The country’s record shipments lifted prices 60 percent this year, closing the gap between London and Shanghai rates and making it unprofitable to import the metal into China.
Stockpile Estimates
UBS estimated that China may have stockpiled 500,000 to 700,000 tons of copper in excess of its industrial needs in the first quarter, 300,000 tons of which “is apparently destined for the Strategic Reserve Bureau.”
This compares with Macquarie estimates of as much as 400,000 tons of total stockpiles, including a 50,000-ton increase in Reserve Bureau stock. Caijing magazine reported in June that China has bought 235,000 tons of copper for strategic reserves this year, citing Yu Dongming, a Chinese government official.
The copper market will “remain relatively tightly balanced in the foreseeable future,” with China’s re-stocking having “prevented the accumulation of a sizeable surplus in reported inventories,” the UBS report said. Copper inventories monitored by the LME dropped 22 percent this year.
--Li Xiaowei. Editors: Matthew Oakley, Tan Hwee Ann.
AGT: I'm beginning to think that, given the downtrend in gold, there could just be too many shares outstanding (230+million) for this stock to move up very far very fast on any good news, regardless of their now being in production.
'peeker
8am today: APG.to/AGT Apollo Gold Announces Release of NI43-101 Report on Exploration at the Huizopa Project in Mexico
http://finance.yahoo.com/news/Apollo-Gold-Announces-Release-bw-3014410544.html?x=0&.v=1
Excerpt: Senior Vice President of Exploration and Development, Richard (Dick) F. Nanna, stated that, “Based on our work so far we believe the Huizopa project has excellent potential to contain an economic gold-silver deposit. Our first drilling program was very successful in detecting significant gold and silver mineralization over a fairly large area.”
FEED: Has drifted lower for a few days now. Still looks like a great growth story (though last qtr's profits were a little soft). Anyone have reason to sell it here (around $5.35/sh) vs. buying more and holding til it breaks eight again? I currently own none but am thinking pork is a better bet than gold right now.
'peeker
ps> BTW, all gold stocks beat up again today ... and not likely to turn up til gold turns up again. Too many G8 gov'ts (China, Germany, Russia) coming out in favor of $US as continued primary world currency has pushed down gold prices again today.
08:47 China begins pilot program to settle trade in Renminbi - NY Times
NY Times reports China has officially opened a pilot program to allow companies to settle imports and exports in renminbi in selected regions, marking a major step toward eventually internationalizing the Chinese currency. Three pairs of Shanghai companies with their Hong Kong and Indonesian counterparts signed contracts on Monday to be the first to settle business deals in the Chinese currency. Executives said the move would save costs and avoid exchange rate risks. Bank of China and Bank of Communications were the first lenders to clear transactions in renminbi, considered a lucrative business given China's expanding economy and huge presence in international trade. Hong Kong also kicked off the long-awaited yuan settlement program on Monday. HSBC said it completed its first renminbi trade settlement with Shanghai and its first cross-border credit transaction.
08:30 FRPT awarded $70million contract:
Co announces that it has received contracts for both Phase 1 and Phase 2 installation of specifically redesigned TAK-4 independent suspension kits for 1,317 Cougar MRAPs. The Phase 1 award under modification to Contract M67854-07-D-5031 from the United States Marine Corps Systems Command was made on June 16, 2009 for $21.4 million and the Phase 2 was awarded on Friday, July 2, 2009 for an additional $48.9 million.
Didn't like the ad hoc 15min extension to trading. It must have been to benefit the GS, MS, JPMs or the world, not the guy on the street.
For instance, Scottrade canceled my day order on a NYSE-traded stock PGH at 4pm sharp... so automated systems dropped the orders while floor traders and the big houses were probably able to find some convenient entries and exits.
Also noticed that AGM and Dow continued down between 4 and 4:15, indicating further selloff without a totally balanced market (due to some orders being canceled at 4pm).
What about you, Nsomniak, did you notice anything in particular?
15.55 NYSE to extend trading until 4:15pm ET today, citing connectivity problems - Bloomberg
12:49 More on strength in Potash companies:
As mentioned earlier, the potash stocks are showing notable strength today following reports that Russian potash producer Uralkali is boosting prices by 20% for domestic chemical producers (see 10:18 comment). In addition to today's Russian news, popular industry website, agriculture.com, made positive comments about the International Fertilizer Association's (IFA) 2009-2013 fertilizer outlook that was released earlier this week. The site reported that "The recently released results of a study from a global fertilizer industry organization show that even though a demand downturn has led to lower prices in the last few months, demand is seen rebounding, sending prices back to levels that were familiar just a year ago." The site also said "IFA's reports show market conditions could be improving steadily for 2009-10 because of the stable growth trends that have been experienced so far in the agricultural sector. But, a gradual rebound might be felt as early as in the next six months. IFA officials anticipate a 3.6% growth for 2009-10, representing 165.4 Mt of nutrients."... Today's positive newsflow contrasts with the recent production cuts from German potash producer K+S, which weighed on the potash producers in the third week of June. K+S reduced production by 17-20% to 40-50 million metric tons and potash pricing by ~22% to $600/US ton... Currently, potash prices are ~18-32% lower year/year in major global markets including the U.S. Midwest, Brazil, Southeast Asia and Vancouver Canada, so upside price potential is notable. In the immediate-term, the largest catalyst to move potash prices will be the finalized annual potash price contracts with India and China though Canpotex (the world's largest exporter of potash). The timing of negotiations this year remains uncertain, but last year, both countries settled in April. When these contracts settle, potash-related names, Potash (POT), Mosaic (MOS) and Agrium (AGU)) will be the most affected. The move may be even more notable because Canpotex is wholly owned by POT, MOS and AGU. India is likely to settle first because it has much less inventory levels of potash compared to China. In 2008, India was paying ~$625/ton for potash, while China was paying $575 with Southeast prices up at $1,000/ton. Clearly, if negotiations are settled below these prices, potash stocks are likely to take a hit.
GORO cc was outstanding. If you own it and haven't listened yet, you definitely should. Great Q and A session.
Appears that if final permit is issued within 2 months, they should be operating mill and pit mining and proceeding with additional exploration drilling within less than 3 months.
10:18 Select potash names are showing relative strength in early trade (POT +4.1%, MOS +3.7%, AGU +1.4%) with Bloomberg.com reporting OAO Uralkali and OAO Silvinit, Russia's largest potash miners, want to raise prices to domestic fertilizer producers. Uralkali plans to charge Russian customers 20% more. Silvinit will also ask higher prices from customers whose supply contracts expire in the next two months. KCL.to also up 3% even though Don Coxe was misquoted in that article the other day. Cartonet was right about that.
10:17 Sector Watch: Ag/Chem -MOO- continues to work higher
Noted the relative strength in the sector this morning and while the market averages did slip to minor new lows this sector has continued to rebound (POT +4.8, IPI +4.6%, MOS +4.4%, TRA +3.1%, AGU +1.7%, CF +1.1%, MOO -0.9%).
GORO dropped hard yesterday (probably due rumor about the PP) and recovered totally today on the news about PP completion and CC tomorrow. Interesting dynamics, and makes me wish I'd loaded up yesterday. Unfortunately, the CC notice did NOT say the final permit was issued, so timing is still up in the air.
I would expect to hear a start date by CEO tomorrow based on construction progress, pending final permit issuance. If he doesn't give estimated start date for mill and open pit mining, I'd fully expect the stock to fall again tomorrow.
'peeker
09:35 Education stocks displaying relative weakness out of the gate -- ESI, APOL, CECO, COCO, STRA, CPLA, EDU, APEI
CEUA, too? Yep, down 3% to start the day.
Robert Prechter expects deflation, down mkt, down commodities ...
http://longcrisis.com/robert-prechter-expects-disastrous-long-term-deflation.php