Saturday, March 29, 2014

Corporate books are better than Governments

The new normal has finally set in. Government books are in shambles world wide and investors are looking at company's senior notes. Is any one surprised? You shouldn't be. You voted these turkeys in.

If you read Forbes you see PIMCO lagging others because they didn't quite offer the tools for investing in senior bonds of companies. This is the single most telling trend for 2014 and 2015. Watch as financials weaken and more people seek safe haven in companies. This will make companies are new rulers. Corporate Imperialism anyone? It's bad enough that they already own the governments but now the governments face failure en mass.

"I think we are going to see a series of bankruptcies. I think the rise in interest rates is the fatal sign which is going to ignite a derivatives crisis. This is going to bring down the derivatives system (and the financial system).
There are (over) one quadrillion dollars of derivatives and most of them are related to interest rates. The spiking of interest rates in the United States may set that off. What is going to happen in the world is eventually we are going to come to a moment where there is going to be massive bankruptcies around the globe."

Folks just don't realize the staggering size of the derivatives market. All it takes to implode this imaginary "Greater Fools" poker game is for interest rates to climb a bit. It will only take one large fund to start dumping bonds and the jig is up. Interest rates would climb and a chain reaction would be set off.

UK interest rates ‘to rise in 2015′ Bank figure says
UK interest rates are likely to rise for the first time since the financial crisis in the spring of 2015, one Bank of England policy maker has said.
Martin Weale, a member of the Bank’s rate-setting Monetary Policy Committee, said a spring 2015 rise was “the most likely path” in a Sky News interview.
But he said a rates rise could come sooner if wages rise faster than expected.
Interest rates have been held at a record low of 0.5% since 2008.
Mr Weale’s comments follow last week’s Bank of England inflation report, when Bank governor Mark Carney said interest rates were unlikely to rise even if the unemployment rate fell below 7%, as is now expected in the coming months.
Mr Carney had previously suggested the 7% unemployment rate as a threshold for considering an interest rates rise.
“I think it is very helpful that we try and explain the most likely path for interest rates is that the first rise will come perhaps in the spring of next year, and then the path is likely to be relatively gradual,” Mr Weale told Sky News.
But he added that he could “not rule out” an earlier increase, if average earnings increased quicker than expected.
Although unemployment has fallen faster than many analysts expected in recent months, wages have not risen as quickly.
“You don’t get much more specific forward guidance than what Martin Weale said,” said Howard Archer, chief UK economist at IHS Global Insight.
“It really does tie in with what Mark Carney implied when presenting the inflation report and in the inflation forecasts contained in the report.”
And to cap it off for you...

I too expect April 2015 as the date where real trouble begins. Previously I wrote about gold becoming paper. What lunatic Alchemist sought to turn gold into paper? What Antichrist convinced the people to believe the paper was real! Wowzers.

So there you have it—again: a big pool of money chasing market-beating returns and ultimately inflating asset-price bubbles that burst with awful consequences, from bank failures to sovereign-debt crises.

Um, I don't buy the idea of these money horders being so stupid. I'm pretty sure they know what they are doing. The people who don't know what they are doing are called the public. They don't have a website and no real spokespeople. They think they do but the all live in an illusion. They think paper is gold, their public voice has force behind it, there elected leaders represent them, companies are not evil, their banks are honest, there is an invisible hand of the market, fairness is the general rule, they have freedom, they can speak freely in most countries, their elected leaders are not spying on them, their leaders are spying but for their own good... (The actual list for the illusion would fill many pages.)

The bottom line is we are all slaves.
We are under the absolute control of less than 500 people.
We own nothing.
We are powerless to change this.
We do not desire to change it.

Wednesday, March 19, 2014

Interesting news from CUU and a bounce for HPY

Looks like Teck and Copper Fox Metals reached a decision for the year's program. Last year was not fully completed compounding the issue of how to make best headway. Now we see a re-examination of the very expensive Report CUU paid for. They want to refine the findings! Hey, we all were pretty sure the deposit extended beyond the pit design so the proof came as no surprise.

I snicker to myself because it sure looks like the deposit goes under the mountain too. Two years ago there were encouraging findings suggesting the deposit goes right through the mountain. If this turns out to be the case then Teck has an interesting problem. How to get at it?

A couple of year back CUU had a 3d drawing showing what appeared to be a root for the main deposit. So it may turn out that Teck has to explore deeper. They could find a deposit on a deposit. When they do find this it will result in one gigantic hole. That would give them a place to put the mountain material 30 years from now. That's a major cost savings despite being so far off that you can't really calculate it. However, it would be a very good incentive to go ahead with a mine.

Happy Creek.
Told you so! Yes, an insider freed up some shares. Just keep an eye on the bid ask spread. No one lets them go too cheap. When someone needs cash they impact the price but it rebounds. The small retails just don't sell. Go try by some today and see what happens. So if you missed the boat at 10 cents give yourself a kick. This isn't a trading stock. They have diddly squat for shares out there.

Someone asked if the rebound was due to some impending news. Ah, nooo, just some tax shuffling that dropped the price. Will news come? Ah, yesss. I can't see this sitting on the shelf beyond 2015. By then the sp should be up around 80 cents and climbing. Of course, a deal could derail my projections. If that happens some of us will be seriously laughing. All the way to the bank.

In the last few years I've fully reviewed a very large score of projects. The list of valid Jrs is strikingly small. Surprisingly, many of the other companies are still able to attract money. They problem with them is they don't have the geology. That means there are still investors who are playing poker. Well, I prefer chess. I don't like betting on people. I do like betting on geology, location and economics.