On The Road Again!

Morning Miners!

It is 5:30 AM, grab a cup, sit a spell and then we'll start loading up my truck. The ole Colonel will be on the road again so the next Report you'll see will be bright n' early next Monday, 7/20. It has been a great week so far with extended rallies in precious metals and the broader markets. The readers of this report made $78,189.63 since Friday's close in the Eureka Miner's Grubstake portfolio. Them ain't bad wages for three-days work buckaroos! For new readers, you can check out the Grubstake by clicking on this link:

The Eureka Miner's Million Dollar Grubstake

This is a portfolio of 12 stocks that directly or indirectly benefit Eureka County's future. This is what two of our favorites have done since early July:

Barrick (ABX) up 7.7% to $33.94
General Moly (GMO) up 29.7% to $2.27

I'm glad to see GMO above $2 again but we are still off the lofty highs of this Spring:

Barrick (ABX) down 9.5% from $37.50
General Moly (GMO) down 24.3% from $3.00

The Canadian firm Genuity Capital Markets has recently set a 12-month target for ABX of C$55 so you can see there is a lot of headroom here if things continue to pick up.

Enough counting eggs before the chickens have laid, let's walk the walk:

Oil is down $0.01to $61.53 in early trading (August contract); Gold is down $4.8 to $934.6 (August contract); Silver is up $0.032 to $13.240(September contract); Copper is updown $0.0030 to $2.3890 (September contract); Molybdenum is still sitting fat, dumb and happy at $11.50.

The DOW is up 15.95 points to 8632.16; the S&P 500, down 2.33 points to 922.21. The miners are mixed today:

Barrick (ABX) $33.73 down 0.62%
Newmont (NEM) $40.11 down 0.84%
General Moly (Eureka Moly, LLC) (GMO) $33 up 4.62.64%
Freeport McMoran (FCX) $51.53 up 1.22% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are happy campers(a "tell" for General Moly):

Nucor (NUE) $43.89 up 0.64% - domestic steel manufacturing
ArcelorMittal (MT) $34.13 up 0.80% - global steel producer
POSCO (PKX) $89.49 up 0.27%- South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is up 0.66% to $999,502.

Cheers,

Colonel Possum

KOSPI Smiles, General Moly Is Happy

Morning Miners!

It is 5:33 AM, the coffe is hot and the Diamond Valley greets us with a dusty rose smile. This might prove to be a good day for precious metals, gold and silver spot prices took off to the races early morning London time. That reminds me, my favorite Brit asked me yesterday if there was an easy way to buy silver and the ole Colonel never got around to answering his question. Ian and I are nearly the same age, the Colonel is ahead by just two weeks. We were both teenagers in the 1960s; he grew up across the pond and we both love to tell tall tales about those wild and crazy days. That was it, all those splendid lies got in the way of answering an easy question. I promise to close today with an answer.

By the by, you can check London spot prices for yourself by clicking the InfoMine link in The Miner's corner to your right.


Since I am two weeks Ian's senior, I often joke that I'll tell him what lies ahead. That's what the Report tries to do, look ahead for Eureka County to see what twists and turns may await us on the road to economic recovery. Sometimes I'm right, sometimes wrong; the trick in markets is to be more right than wrong. Quite honestly, this week has me confused.

We started out the week with two of our market's biggest pessimists, Nouriel Roubini and Meredith Whitney, saying relatively positive things about the wind down of the recession and improving conditions for our financial system. You can review their thoughts in this Monday and Tuesday's reports. For the past several years, they have both predicted our present crisis with nearly 100% accuracy so the Colonel takes notice when they speak.

Markets have also rallied this week, 35 out of the 36 international stock markets that the Report monitors were in the green yesterday (real time global index data can be found at the bottom of this blog). Italy's MIB Tel was down for reasons unknown to me, but everyone else soared with South Korea's KOSPI leading the pack jumping 2.6% skyward.

Why should we care about the KOSPI? POSCO, the South Korean integrated steel producer, has a 20% investment in our Mt. Hope Project; what is good for POSCO, is good for General Moly (GMO). POSCO helped the KOSPI with a 3.5% gain in their share price; GMO followed breaking 2-bucks with a 5.3% pop for the day. Molybdenum prices are also up 44% from their April lows. That's a Colonel Yee-ha!

What's going on here? Just recently GMO, and everyone else was sliding down hill for what the Report has predicted to be a rough and tumble summer/fall. This sudden well of global optimism is a pleasant surprise, will it last? We'll watch this one closely buckaroos, stay tuned.

Now I'd better answer Ian's question. The simplest way to buy and sell silver (or gold, stocks and bonds) for the individual investor is through an online brokerage house. There are a bunch, I use Ameritrade and Fidelity but E-Trade and others are fine. Signup takes a few minutes to start an account, send them some money and you are good to go. The type of account is important depending on your long or short term plans. You might consider an IRA rollover if you're an old timer, but they have simple nontax-deffered accounts as well. Most of these institutions have very good customer support to guide you on your choices.

The Colonel uses Exchange Traded Funds(ETF)to buy and sell precious metals. Here are two:

iShares Silver Trust (SLV)
SPDR Gold Trust (GLD)

There is a short CNBC video (4/2009) on GLD at the bottom of this blog. Interestingly, GLD now holds more gold (some 1,100 metric tons) than Switzerland to place it in number six in global gold reserves. Ian will be happy to know that all that gold in GLD is tucked safely away in a London Bank!

Enough tall tales about the Sixties, let's walk the walk:

Oil is up $1.21 to $60.73 in early trading (August contract); Gold is up $15.6 to $938.4 (August contract); Silver is up $0.370 to $13.225(September contract); Copper is up $0.0930 to $2.3920 (September contract); Molybdenum is still sitting happily at $11.50.

The DOW is up 157.06 points to 8517.06; the S&P 500, up 16.37 points to 922.21. The miners are rocking the clock today:

Barrick (ABX) $34.0 up 3.53%
Newmont (NEM) $40.28 2.99%
General Moly (Eureka Moly, LLC) (GMO) $2.14 up 4.63%
Freeport McMoran (FCX) $50.23 up 4.25% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are happy campers(a "tell" for General Moly):

Nucor (NUE) $43,60 up 1.99% - domestic steel manufacturing
ArcelorMittal (MT) $33.24 up 6.74% - global steel producer
POSCO (PKX) $88.09 up 1.98%- South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is up a startling 3.23% to $981,242.60.

Cheers,

Colonel Possum

Looking for Change in Familiar Places

Morning Miners!

It is 5:29AM, grab a cup and let's take a quick eye test. The ole Colonel will use the headline photo to illustarte a fact about perception. A good tracker will tell you that he doesn't look for something in a scene, he looks for what has changed. Animals process visual information much the same way, especially predators. The change in that case is movement. My Loquita can find her ball in the tall grass as long as it is bouncing, she has a heck of a time finding it when it comes to rest. Market watching is no different. Some mornings there is a news item you didn't expect or unusual movement in a price. Last week it was a quick drop in London's spot silver that caught my eye(Silver Stumbles on the Precious Metal Trail). Fortunately, this wiggle didn't presage a broad decline in precious metals, but it could have.


This week it is not so much much motion as unexpected events. Yesterday Nouriel Roubini saw a ray of light in the economic recovery tunnel (Dr. Doom Speaks, End of Recession in Sight). Last night the Wall Street Journal reported that Meredith Whitney, I call her Ms. Doom, is feeling a bit bullish:

"The financial sector was especially helped by a 5.2% gain in Goldman Sachs Group, which kicks off the wave of bank reports on Tuesday. The bank's shares were upgraded by Meredith Whitney Advisory Group to 'buy' from 'neutral.'

'It's a major positive event' for Ms. Whitney to put a buy rating on any bank, said Kent Engelke, managing director at Capitol Securities Management in Glen Allen, Va., noting that she has a reputation as a bear after being one of the earliest analysts to predict major pain for Wall Street from soured credit bets." (WSJ, 7/13/2009)

Now that's what a I call a change in the scenery; back-to-back positive commentary from two of our biggest gloom-and-doomers in the marketplace. Of course both have had the reputation for being right on the money for the past several years:

"Whitney's extremely bearish view on banks landed her on the cover of the August 18, 2008 issue of Fortune Magazine. Even before the problems in September that befell Merrill Lynch and Lehman Brothers, she is quoted as saying, 'It feels like I'm at the epicenter of the biggest financial crisis in history.'" (Wikipedia)


She is also married to WWE professional wrestler John "Bradshaw" Layfield. Hey, the Colonel ain't going to pick a fight with this soothsayer! That completes our eye test for the morning.

Oh, you ask, "What IS that thing in the headline photo?" I understand that is Ichthys (or "Ickie" or ἰχθύς), Eureka's HWY 50 paleozoic fish. Since much of our basin is an old Devonian seabed, I guess it is fitting for Ichthys to return to visit after a 350 million year hiatus.

Enough fish stories, let's walk the walk:

Oil is up $1.39 to $61.08 in early trading (August contract); Gold is up $2.0 to $924.50 (August contract); Silver is up $0.105 to $12.548905 (September contract); Copper is up $0.0520 to $2.2750 (September contract); Molybdenum is still sitting happily at $11.50.

The DOW is down 11.34 points to 8320.34; the S&P 500, down 0.61 points to 8320.34. The miners are rocking today:

Barrick (ABX) $32.65 up 2.06%
Newmont (NEM) $39.04 1.53%
General Moly (Eureka Moly, LLC) (GMO) $1.95 up 1.03%
Freeport McMoran (FCX) $49.51 up 3.34% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are happy(a "tell" for General Moly):

Nucor (NUE) $42.93 up 0.82% - domestic steel manufacturing
ArcelorMittal (MT) $31.28 up 1.26% - global steel producer
POSCO (PKX) $82.10 up 2.51%- South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is up 1.02% to $946,249.35.

Cheers,

Colonel Possum

Dr. Doom Speaks, End of Recession in Sight

Morning Miners!

It is 5:38 AM and our Monday pot of coffee is beeping ready! The Diamond Valley has haze in her sleepy eyes but should wake soon to another beautifil day in the Great Basin. Truth is often something we don't care to hear especially when it carries painful outcomes. The ole Colonel is as guilty of this as anyone and always believes the road is a little straighter and the sun a little brighter in the next valley over. When you find yourself at the business end of a handyman changing a truck tire in the pouring rain, that belief system can be shaken. While Truth sits laughing in your warm dry cab you may wonder if things will ever get better.

Nouriel Roubini has proved to be a prophet of economic truth. A Professor of Economics at the Stern School of Business and sometimes called "Dr. Doom", Roubini has nearly a perfect batting average for the predicting our present financial mess. Check this out:

"In 2005 Roubini said home prices were riding a speculative wave that would soon sink the economy. Back then the professor was called a Cassandra. Now he's a sage." ("Eight Who Saw it Coming" Fortune Magazine, Aug. 2008)

In September, 2006, he warned a skeptical IMF that "the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession." ("Dr. Doom"; Mihm, Stephen, August 15, 2008, New York Times)

He also saw,

"..homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt." The New York Times labeled him "Dr. Doom." In hindsight, IMF economist Prakash Loungani has called him "a prophet." (same New York Times article)

OK...OK Nouriel! So you were right now what? His RGE Global Monitor offers a peak at its new U.S. forecast.

"..The general consensus is that this recession will end sometime in the second half of 2009…. We also expect the pace of contraction of economic activity to slow significantly. We forecast negative real GDP growth in Q2 2009 and Q3 2009, and for real GDP to remain flat in Q4. After the sharp contraction in economic activity in 2009, growth will reenter positive territory only in 2010, and then at a very sluggish rate, well below potential."

And a little more hopefully:

"Improvements in real economic activity are present and visible in the reduction of the pace of job losses, in the improvement in indicators of manufacturing activity, in the stabilization of housing starts and in the improvement of financial conditions."

You can read Roubini's entire report here: RGE Monitor

If Dr. Doom is just a little happier, the Colonel is A LOT happier!

By the by, Barrick has an organizational announcement out today. Check their homepage out with the link in the Miner's Corner to your right.

Enough prognostication, let's walk the walk:

Oil is down $0.82 to $59.07 in early trading (August contract); Gold is down $1.7 to $910.8 (August contract); Silver is down $0.10 to $12.545 (September contract); Copper is up $0.0095 to $2.221 (September contract); Molybdenum is sitting happily at $11.50.

The DOW is down 3.71 points to 8142.8; the S&P 500, down 3.14 points to 875.49. The miners are mixed today:

Barrick (ABX) $31.02 down 1.96%
Newmont (NEM) $37.30 down 0.59%
General Moly (Eureka Moly, LLC) (GMO) $1.85 up 0.54%
Freeport McMoran (FCX) $45.50 down 2.44% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are mixed(a "tell" for General Moly):

Nucor (NUE) $41.12 down 0.19% - domestic steel manufacturing
ArcelorMittal (MT) $29.99 up 0.98% - global steel producer
POSCO (PKX) $82.46 down 1.72%- South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is down 0.69% to $908,469.58

Cheers,

Colonel Possum

Silver Stumbles on the Precious Metal Trail

Morning Miners!

It is 6:08 AM and I've been spending some time this morning watching silver on the London Spot Market. That's the great thing about markets, somebody is always trading something no matter the time of day. The ole Colonel looks for "funnies" and we might have one shaping up between gold and silver. In normal times, silver follows gold down the wiggly trail of precious metal prices. Silver is called a "high beta" metal with respect to its lustrous cousin gold. That means that when gold goes up the stairs, silver takes the fast elevator (beta greater than one). Of course, the opposite is true; when gold slides, silver falls down the elevator shaft. For number geeks, the silver beta has been about 1.6 this year although I haven't run the numbers since vacation.

Silver is "thinly traded" with respect to gold because there are many more folks and countries invested in the yeller stuff and for many more reasons (currency backstop etc.). Following this argument, when silver does something on its own it's a good time to take notice. The massive hedge fund liquidation of silver last November was a good example and silver courted $9...oooh weee! By contrast, the 20-day moving average of gold stayed within plus or minus 10% through the worst carnage of last year's economic crisis. The lesson? Gold is a fairly stable precious metal; its whacky cousin can somtimes behave like a screaming nut case.

There is nothing that dramatic going on in London but silver did drop 2.6% suddenly to $12.56 while gold only dropped 0.8% to $908. Using this beta stuff, one would expect silver to follow gold down 1.3% (i.e. 1.6 X 0.8), so 2.6% is something to watch. More importantly, silver the follower dropped first. To round things out, platinum spot fell 1.8% to $1091 but only after silver stumbled.

Have I given you a headache with all this blasted number crunching? Let me leave you with a bottom line; if silver falls below $12, the Colonel is buying a chunk. Today might be a big nothing but if it signals further weakness in precious metals the Colonel is buying a tad more gold below $883, yee-ha!

Let's toss out the calculator and walk the walk:

Oil is down $1.14 to $59.27 in early trading (August contract); Gold is down $6.2 to $910.0 (August contract); Silver is down $0.35 to $12.585 (September contract); Copper is down $0.0215 to $2.216 (September contract); Molybdenum is still sitting at $11.50 which ain't too bad buckaroos!

The DOW is down 28.1 points to 8155.06; the S&P 500, down 1.62 points to 881.06. The miners are mixed today:

Barrick (ABX) $31.47 down 0.82%
Newmont (NEM) $37.70 down 0.89%
General Moly (Eureka Moly, LLC) (GMO) $1.82 down 2.67%
Freeport McMoran (FCX) $46.82 up 0.28% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are mixed(a "tell" for General Moly):

Nucor (NUE) $40.77 down 1.62% - domestic steel manufacturing
ArcelorMittal (MT) $29.49 down 1.27% - global steel producer
POSCO (PKX) $85.25 up 2.32%- South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is down 0.79% to $912,230.61.

Cheers,

Colonel Possum

The Colonel Returns

Morning Miners!

It is 5:43 AM, the coffee pot is smiling and the Diamond Valley holds a pretty rose. Loquita and I enjoyed the time off and we're are up and at'em. The headline photo is something we saw on HWY 50 that gives the ole Colonel goose bumps. Is there anything more more fun than watching Miss Pete haul a haul truck with three state troopers scattering traffic like Mormon crickets? A durn sight more fun than watching the markets lately.

When I left, Have a Happy Fourth Eureka!, we talked about a rough summer/fall but a good chance for a rally at the year's end. Whoa! The Colonel didn't think we'd get moving quite this quickly: General Moly is below 2-bucks, gold has been heading for 800 country and oil might see a 5-handle before the end of the month. There is resurgent conern about the economy and some investors are moving back to safe havens. We may very well see a repeat of 2008 but with much less severity; remember that markets had a good run and now there's some summer road repair on the recovery highway.

We are just entering "Earnings Season" when corporations report their second quarter performance and provide forecasts for things to come. This is bound to increase volatility so tighten your seatbelts a notch and enjoy the ride. The first to report was Alcoa which may be typical of others in the commodity-sensitive names; a lousy last quarter but perhaps a straighter highway ahead:

"Alcoa Inc., the first blue chip to report earnings this season, lost $454 million in its recent quarter, hammered by a sharp drop in sales in nearly all of its businesses. But Klaus Kleinfeld, the aluminum maker's chief executive, said that there are signs the market is strengthening as aluminum prices rise and some markets, including the automotive sector, are starting to show some resurgence." (WSJ, 7/9/09)

Enough talk, let's walk the walk:

Oil is up $0.51 to $60.65 in early trading (August contract); Gold is up $4.9 to $914.2 (August contract); Silver is up 0.023 to $12.875 (September contract); Copper is up $0.0610 to $2.220 (September contract); Molybdenum is sitting at $11.50 which ain't too bad buckaroos!

The DOW is down 1.06 points to 8177.35; the S&P 500, up 1.54 points to 902.87. The miners are a little happier today:

Barrick (ABX) $31.96 up 1.52%
Newmont (NEM) $38.47 up 1.37%
General Moly (Eureka Moly, LLC) (GMO) $1.84 up 5.14%
Freeport McMoran (FCX) $46.31 up 2.68% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are ripping(a "tell" for General Moly):

Nucor (NUE) $41.08 up 1.68% - domestic steel manufacturing
ArcelorMittal (MT) $30.64 up 4.57% - global steel producer
POSCO (PKX) $83.96 up 4.00%- South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is up 1.66% to $916,322.48.

Cheers,

Colonel Possum

Have a Happy Fourth Eureka!

Morning Miners!

It is 6:00 AM sharp. The ole Colonel will be on the road soon as many of you. Drive safely and The Report should be on the air later next week. Let me leave you with some good thoughts for the upcoming Independence Day holiday.

Last month we looked down the recovery highway with an article, Positive Signposts for Eureka County. For a week we dug around in the sage and found the following:

Commodity reflation
Stabilizing credit and equity markets
Low inflation for the next 6-12 months
Positive trend for gold and molybdenum prices
Solid reports from Barrick and General Moly

The Colonel has said that this summer/fall could be rough. There is a lot of glum news out there, today's jobs report is a good example. Nonfarm payrolls declined 467,000 in June, a much greater decline than the 350,000 economists expected. No one said the economic recovery would be easy but we are off the peaks at start of the year where we saw losses of 700,0000. Don't tell the poor soul that just lost his job that labor reports are a rear view mirror look at the economy, but they are.

In the next several months I expect the stock market, commodities and gold to all see downward corrections. Remember a "stable" market is one that goes down as well as up. We've had one heck of a run in metal and stock prices since March and it is time to see some downward movement. Stocks might correct 10% or maybe even 15% but I doubt we're headed back to the Devil's Triple Six (S&P 500 March intraday low, 666.79). Gold may drop in the mineshaft a bit and see the 800s again but don't despair, the trend is still up and positive for the year. I've made some predictions, I'm sticking to them and they say by the end of the year we should have the flat changed and be rolling down the highway again. You can revisit my predictions for gold and the S&P 500 in the Colonel's Beer Derby on the bottom right of this blog.

So don't worry, be happy and have a great Fourth of July. We've got a lot to be thankful for, let's walk the walk:

Oil is down $2.50 to $66.81 in early trading (August contract); Gold is down $10.7 to $930.6 (August contract); Silver is down 0.38 to $13.380 (September contract); Copper is down $0.0585 to $2.2720 (September contract); Molybdenum is down a thin flat washer to $10.57 from last week's $10.58.

The DOW is down on the jobs report 177.83 points to 8326.23; the S&P 500, down 20.46 points to 902.87. The miners are sad puppies today:

Barrick (ABX) $33.74 down 3.601%
Newmont (NEM) $41.15 down 2.44%
General Moly (Eureka Moly, LLC) (GMO) $2.15 down 4.87%
Freeport McMoran (FCX) $49.14 down 2.83% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are feeling the blues too (a "tell" for General Moly):

Nucor (NUE) $42.51 down 2.19% - domestic steel manufacturing
ArcelorMittal (MT) $31.80 down 4.10% - global steel producer
POSCO (PKX) $83.50 up 2.27%- South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is down 3.04% to $965,660.79.

Cheers,

Colonel Possum