Friday, November 16, 2012
IAMGOLD Corp. (IAG), Quicksilver Resources Inc. (KWK), Cheniere Energy Partners LP (CQP), Delphi Energy Corp. (DEE), Alliant Energy (LNT), The Mosaic Company (MOS), National-Oilwell Varco, Inc. (NOV), Seadrill Ltd (SDRL), China Petroleum and Chemical (SNP) and Targa Resources Investments Inc. (TRGP) were upgraded by analysts.
Barclays Capital upgraded Cheniere Energy Partners L P (CQP) from an "Equal Weight" rating to an "Overweight" rating. They have a price target of $25.00 on the company.
Canaccord Genuity upgraded Delphi Energy Corp. (DEE) from a "Sell" rating to a "Speculative Buy" rating.
BMO Capital Markets upgraded IAMGOLD Corp. (IAG) from a "Market Perform" rating to an "Outperform" rating.
Macquarie upgraded Quicksilver Resources (KWK) from an "Underperform" rating to a "Neutral" rating. They have a price target of $2.50 on the company.
Ladenburg Thalmann upgraded Alliant Energy (LNT) from a "Neutral" rating to a "Buy" rating.
Standpoint Research upgraded The Mosaic Company (MOS) from a "Hold" rating to a "Buy" rating.
Standpoint Research upgraded National-Oilwell Varco, Inc. (NOV) from a "Hold" rating to a "Buy" rating. They have a price target of $82.00 on the company.
Credit Suisse upgraded Seadrill Ltd (SDRL) from a "Neutral" rating to an "Outperform" rating. They have a price target of $48.00 on the company.
Citigroup (NYSE: C) upgraded China Petroleum and Chemical (SNP) from a "Neutral" rating to a "Buy" rating.
UBS AG upgraded STMicroelectronics (STM) from a "Sell" rating to a "Neutral" rating.
Tudor Pickering upgraded Targa Resources Investments Inc. (TRGP) from a "Hold" rating to a "Buy" rating.
Tuesday, November 13, 2012
In a recent article by Peter Schiff, he makes the case for the fiscal cliff not being a problem we face, but rather a part of the solution to the economic crisis facing America.
According to Schiff, politicians need to design a cliff that " ...is actually large enough to restore fiscal balance before a real disaster occurs."
He sees the probable disaster being enormous, saying, "That disaster will take the form of a dollar and/or sovereign debt crisis that will make this fiscal cliff look like an ant hill."
Schiff blasts Obama for his disingenuous plan for dealing with the fiscal cliff, which will do nothing to mend the economy.
All Obama can do is do the politically correct and acceptable raising of taxes on those Americans making over $250,000 a year. He claims that no one making under that amount will pay more in taxes.
What's wrong with this, other than the huge percentage of taxes already paid by the upper 2 percent of earners, which as of 2008 was 43.6 percent of all taxes paid? It would only bring about $30 to $40 billion annually into government coffers.
That's like someone giving someone that needs to pay $800 in rent, but can't, a couple of bucks to handle the situation. It's all smoke and mirrors to make it look like Obama is actually doing something. He isn't.
Schiff points out that even if the government were to tax them twice as much, it would only cut about a third of the deficit. That also assumes there would be no slowdown in the economy as a result of the taxes. Again, this is a political move, not a real attempt to deal with the economic crisis America faces, which must deal with slashing spending in a meaningful manner.
In other words, we need to go through some pain because the promises made by the government are unsustainable. As Schiff says, if it isn't dealt with now, kicking the can down the road will only make the cliff higher and deeper, which will result in extraordinary circumstances that are in general predictable, but as to the depth of the forced cuts in spending, will hammer those who have become dependent on government instead of taking care of their own wants and needs.
Schiff also points out that the fiscal cliff, in and of itself, is a good thing. The government would be forced to spend less while taxes would pay more for its operations. That, after all, is what must and will be done, whether it's intentionally done or forced upon them by reality.
In the end, if the fiscal cliff were to go forward, the federal budget deficit would be slashed by almost half of the current $1.1 trillion spent in 2012 to about $641 billion.
As usual, politicians and the clueless financial and business media thinks somehow this is a negative outcome. No it isn't. It's exactly what's needed ... and more.
Schiff concludes with this:
It is amazing that members of Congress can keep a straight face as they claim to want to address our long-term deficit problem while simultaneously working to avoid any substantive action. No doubt an agreement will be reached that will replace the looming fiscal cliff with another one farther down the road (which they can easily dismantle before we actually reach the precipice). Will the rating agencies buy this bill of goods a second time? If we lack the political courage to go over this fiscal cliff, why should anyone think we will be able to stomach going over the next one? Especially since each time we delay going over the cliff, we simply increase its future size, making it that much harder to actually go over it.
And this doesn't even begin to deal with the over $220 trillion in unfunded liabilities the nation faces.
As for the idea the weak politicians now in power have an ounce of political courage is laughable. They will bring the country down around all of our heads because they place their own jobs ahead of the health and economic survival of America.
One way or the other a day or reckoning will come. A ponzi scheme like that built by the alliance between the Federal Reserve and the U.S. government will end badly for most people. Anyone affected by this needs to build a strategy based upon this being the end-game of the process we're in the midst of going through. It will happen.
Marc Faber reiterated his position on stocks in 2013 in an interview with CNBC on its Squawk Box show, saying he expects equities to lose 20 percent of their value next year.
He added that the so-called fiscal cliff issue isn't even part of his consideration and reason for making his assertion.
"I don't think markets are going down because of Greece, I don't think markets are going down because of the "fiscal cliff" - because there won't be a 'fiscal cliff,'" Faber said.
Instead, Faber gives this as the reason stocks will get hammered:
"The market is going down because corporate profits will begin to disappoint, the global economy will hardly grow next year or even contract, and that is the reason why stocks, from the highs of September of 1,470 on the S&P, will drop at least 20 percent, in my view."
Faber rightly notes that what America and the world has needed to do is go through a period of pain in order for the economic system to correct.
He said, "There will be pain and there will be very substantial pain. The question is do we take less pain now through austerity or risk a complete collapse of society in five to ten years' time?"
"In a democracy, they're not going to take the pain, they're going to kick down the problems and they're going to get bigger and bigger."
That's the problem of course. Selfish politician only looking to retain their jobs won't touch the cutting back of spending because it immediately sets a special interest group against them.
Of course politicians created these groups of zombies in order to buy votes. Now they're stuck with them, self-forced to wait until an economic collapse forces real spending cuts and smaller government.
As Faber says, waiting until this happens will be more devastating to people, and it would have been better for some short-term pain in order to clean the system out.
I think the whole global financial system will have to be reset and it won't be reset by central bankers but by imploding markets....
Faber is correct. There is nobody in the world that really knows how long it'll take to play out. The pieces are in motion, and with no political will to solve the problem, they will reach their inevitable end.
Our investments and lives need to be ordered accordingly.
Friday, November 9, 2012
Aurizon Mines Ltd.(USA) (AZK), Concho Resources Inc. (CXO), Longview Oil Corp. (LNV), Marathon Petroleum (MPC), Nevsun Resources (NSU), Nuvista Energy (NVA), Phillips 66 (PSX), Talvivaara Mining Co. (TALV), Thompson Creek Metals (TC) and Trilogy Energy (TET) were downgraded by analysts.
Desjardins downgraded Aurizon Mines Ltd.(USA) (AZK) from a "Buy" rating to a "Hold" rating.
Iberia Capital downgraded Concho Resources Inc. (CXO) from a "Sector Perform" rating to an "Underperform" rating. They have a price target of $71.00 on the company.
Scotia Capital downgraded Longview Oil Corp. (LNV) from an "Outperform" rating to a "Sector Perform" rating. They have a price target of $8.50 on the company.
Deutsche Bank downgraded Marathon Petroleum (MPC) from a "Buy" rating to a "Hold" rating.
GMP Securities downgraded Nevsun Resources (NSU) from a "Buy" rating to a "Hold" rating.
TD Securities downgraded Nuvista Energy (NVA) from a "Buy" rating to a "Hold" rating. They have a price target of $6.00 on the company.
Deutsche Bank downgraded Phillips 66 (PSX) from a "Buy" rating to a "Hold" rating.
Nordea Equity Research downgraded Talvivaara Mining Co (TALV) to a "Sell" rating. They have a price target of $1.91 on the company.
UBS AG downgraded Thompson Creek Metals Co Inc (TC) from a "Buy" rating to a "Neutral" rating.
Scotia Capital downgraded Trilogy Energy (TET) from an "Outperform" rating to a "Sector Perform" rating. They have a price target of $33.00 on the company.
Kinross Gold Corp (KGC), Callon Petroleum Company (CPE), Concho Resources Inc. (CXO), Energy Transfer (ETP), HollyFrontier Corp (HFC) and Marathon Oil Co. (MRO) were upgraded by analysts.
SunTrust upgraded Callon Petroleum Company (CPE) from a "Neutral" rating to a "Buy" rating.
Goldman Sachs upgraded Concho Resources Inc. (CXO) from a "Neutral" rating to a "Buy" rating. They have a price target of $111.00 on the company.
Morgan Stanley upgraded Energy Transfer (ETP) from an "Underweight" rating to an "Equal Weight" rating. They have a price target of $50.00 on the company.
Barclays Capital upgraded HollyFrontier Corp (HFC) from an "Equal Weight" rating to an "Overweight" rating. They have a price target of $65.00 on the company.
Macquarie upgraded Kinross Gold Corp (KGC) from a "Neutral" rating to an "Outperform" rating.
JPMorgan Chase upgraded Marathon Oil Co. (MRO) from a "Neutral" rating to an "Overweight" rating. They have a price target of $35.00 on the company.
In the short term the market knew that if Mitt Romney had been elected president the price of gold and silver would probably have went through a temporary drop, based on the actions of what a President Romney would have done.
On the other hand, the market also factored in a win by Barack Obama would be good for gold and silver, with expectations being Obama would continue to implement the same failed policies he did the first four years of his Presidency.
That has born out well so far, as the price of gold continues to rise immediately after the election, although there are other factors coming in to play.
The most significant is the safe haven play, which has grown as the presidential race played out.
No matter what is done going forward, there is little desire in Washington for politicians to take the needed steps to deal with the economic disaster and the policies that have been behind the cause of it, including an unfettered Federal Reserve that sees only printing more money as the answer to economic weakness.
This is happening in light of a stronger U.S. dollar, which suggests investors understand it's a faux strength, and not one that is inherent to the currency. The only reason it still is perceived by some as a safe place to park their money is that other major economies also have had their central banks throw money at the problem as well, resulting in the currencies moving down in value together, giving the impression of things going on as usual.
But the move in gold price confirms that a growing number of investors know that this is the case, and gold will continue to rise in response to that reality over time.
Continually in the background is also the ongoing sovereign debt crisis and Europe and the march of the region into recession; which is ensured now.
All of this would be enough to push gold and silver prices up, but we haven't even seen significant, official inflation yet, and once that kicks in, all bets are off as to how high the price of gold and silver will go. It's only a matter of when, not if that happens.
Finally, China and other Asian countries appear to be buying up a lot of gold, offering price support to the precious metal, and over time, if China is bolstering its gold supply for the purposes of acquiring other commodities in the future, this will add even more strength to gold, driving up the price even further.
The VIX, which measures the fear factor, has also been rising recently, confirming there is more fear in the market than there has been, providing more incentive to place capital in gold.
The price of silver has plunged from $49.82 an ounce in the early part of 2011 to just over $32 an ounce today. That price weakness makes it a very good time to enter the silver market, as indicators point to a robust rally in the precious metal.
According to Morris Hubbartt of 321gold, he sees the market as oversold at this time.
Hubbartt says the CCI and RSI indicators are pointing to strong buy signals for silver, and the Aroon indicator is positioned to confirm a new upward silver price trend is about to break out.
Add to this the macroeconomic factor of money printing from the Federal Reserve and other central banks in major economies around the world, and you have almost a perfect storm for silver and gold at this time.
Hubbartt believes the price of silver will soar to about $44 an ounce by as early as January, 2013. If that's the case, now is definitely the time to invest before it becomes a game of running after the price.
Thursday, November 8, 2012
In a press released Wednesday, November 7, Jim Rogers and Beeland Interests, Inc. announced it was making a couple of adjustments to the Rogers International Commodity Index (RICI).
The press released said this:
The RICI Committee has decided to replace ICE Coffee (2.0% Index Weight) with NYSE Liffe Coffee. In addition, ICE Cocoa (1.0% Index Weight) will be replaced by NYSE Liffe Cocoa. The addition of NYSE Liffe Cocoa, traded in GBP, will add that currency to the Index. These changes will be implemented during the January 2013 roll period, occurring at the end of January 2013.
According to the press release, RICI, which was created in 1997-1998, has jumped by 266 percent since in inception of the Index, and as of the end of October 2012.
Rogers is one of the foremost and most well-known commodity investors in the world.
The recent announcements by a number of corporations participating in the EU concerning slashing tens of thousands of jobs, underscores the reality that the private sector continues to struggle, even as governments had hoped they would help turn the region around.
Among those recently announcing jobs being slashed are UBS (UBS), which said it'll be be getting rid of a massive 10,000 jobs - which has already begun. Other major employers cutting thousands of jobs (aggregately) are ING (ING), Kloeckner, Ericsson (ERIC) and Bombardier.
A growing number of economists believe the next couple of years in Europe will see jobless rates jump to even worse levels than they stand at now. We probably won't know until around the summer months because these current layoffs won't affect data until about six to nine months after the layoffs are implemented.
The major problem in Europe is that governments have finally started to shrink a little, causing bloated staffs to be laid off, but at a rate that the private sector can't keep up with.
Of course it was never a reality that outrageous government debt and spending could be compensated for by the private sector after years of abuse, fraud, and unsustainable promises and practices.
People in some countries don't even think in terms of the private sector as a legitimate work environment because they've been brainwashed into believing government is the great healer of nations. Most are finding out too late that that is a fallacy, and since the private sectors of nations were weakened by these outlooks and effects, it's impossible in a short period of time to rectify all the mistakes that have been made, even if they wanted to.
It has taken far too long for governments in the EU to shrink, and they're no paying for that ongoing irresponsible mindset, as austerity is forced upon the nations of Europe, with a private sector not robust enough to absorb the people being released from work.
The good news is over time this will be positive for the private sector as workers and the rest of the people realize that governments can't provide for them in the ways that were promised. It's productivity that results in prosperity, not artificially created government jobs that provide ridiculous benefits the productive are asked to shoulder. Those days are thankfully coming to an end, as are outrageous union demands.
Because Europe has played far too long with countries that long ago should have decreased the size of government, now the forced austerity is pressuring private companies who must operate under actual market conditions, and not the illusory markets created by governments throwing debt-induced money around while being enabled by central banks and failing Keynesian policies.
Yet some foolish economists continue to say things like there must be growth in the "public" or private sector if some of the nations in the EU are to stay in it. What about limited government and downsizing don't these quacks understand? It's inevitable. These governments and their debt coming from endless spending and programs are through. In a relatively short period of time what they were before the sovereign debt crisis will no longer exist.
There will be governments still in place of course, but the bloated monstrosities they have become will gradually be shrunk down in size to the benefit of everyone but the parasites that used them to their advantage.
In the months ahead we'll see growing pressure in Greece, and probably Spain and others in the eurozone to start thinking in terms of abandoning the euro for their own currencies. That would result in some short-term pain, but over the long haul it would be the best for all countries in the region, as well as the rest of the world.
But if nations continuing to use their central banks as a rich uncle not willing to rein in a spoiled kid's spending don't change, this will extend across the globe, as the United States is hanging on by a thread, and with over $220 trillion in unfunded liabilities facing the nation, and China having taken up some bad Keynesian money creation habits, it may be only time before pressure rises on all of them.
In what would be an extraordinary event if it happens, Stephen Leeb said he believes China is working towards implementing a gold standard to back up the renminbi or yuan.
Leeb said this in an interview with King World News, "China wants gold so they can continue with their plans. They want their currency backed up in gold and they are going to continue to buy it. So gold may weaken, but if it does people should buy it. Once gold starts taking out the all-important $1,800 level, you are not going to have a chance to get into the market. It will not let you in."
As to whether or not China goes on a gold standard or not really won't have an impact on the price of gold, as it'll go up whether China does or not, as the country will continue to buy as part of its economic and financial strategy.
I don't mean by that a gold standard wouldn't boost the price of gold, just that China will buy up gold with or without a gold standard, and that's one element concerning the price of gold that a lot of investors and the media aren't talking a lot about.
Most are focusing on how the money created out of thin air by major central banks around the world will impact gold prices, and silver as well; which is of course of major importance too.
According to Leeb, China has boosted its acquisition of gold by three-fold over the last year, and it doesn't appear to have had any effect on the market at this time. Sometime it will, as news gets out about the demand factor of gold in that regard.
Assumptions are China is bolstering its gold reserves in order to use it to acquire much needed commodities over the years ahead.
Some wrongly believe that China has reached some type of peak concerning building the infrastructure of the country, but it's really only taking a breather, and most likely we'll see them reallocate assets to building out its infrastructure rather than creating cities with few people residing in them.
Leeb gave this advice concerning investing in gold: “My advice is if we get a dip in gold, I would buy that dip. Gold has a lot of support. I think long-term and that’s a bet that I’m always willing to make. I haven’t sold a single ounce of gold or a single share of a gold stock. That is because I am positioning and I am thinking about the long-term."
Interestingly, we haven't really seen much in the way of "official" inflation at this time. Once that kicks in, along with stimulus and Asian demand, gold will rise to unprecedented levels.
Silver is one of the few assets he sees will come close to rivaling gold going forward. He didn't mention much about demand and it being an alternative to many investors who are being priced out of the gold market, as he commented on the possibility of governments stepping in and not allowing people to buy it any more.
“Having said all of this, if there is one investment that can possibly rival gold, it’s silver. People don’t realize this, but at some point governments may say to their people, ‘We need the silver and you have to stop buying it.’ When that point comes, silver is likely to be at $150 to $200. So there is still a lot of room in the silver market.”
Other than China and other Asian markets acquiring gold, the reasons gold will go up are the same reasons silver will, and silver has a much larger demand from the industrial sector versus gold, but is considered secondary as a form or protection and an alternative currency than gold is.
A number of commodity investors see silver outperforming gold over the next decade, but I think that will depend largely upon how much demand Asia has.
Tuesday, November 6, 2012
Rio Tinto (NYSE: RIO) and partner Turquoise Hill Resources (NYSE: TRQ) had good news to announce Monday as the challenge of obtaining the required power to run the mine was successfully navigated. The partners are now set to begin production on the mine in the early part of 2013.
The agreement put in place is a $6 billion deal with Inner Mongolia Power Corp. The deal was held up by differences between Mongolia and China, where much of the power will be provided from.
In as early as six weeks the first ore from Oyu Tolgoi will be processed by Turquoise Hill Resources. The company confirmed its projections of commercial production beginning sometime in early part of next year.
Goals for Turquoise Hill are to have the Oyu Tolgoi mine in full production by 2018. Estimates are it'll cost from $3 billion to $4 billion for the company to accomplish the task.
Underground mining is expected to start in 2016, after a feasibility study is released by Turquoise Hill in 2013.
Annual production estimates for the mine are for 1.2 billion pounds of copper, 650,000 ounces of gold and 3 million ounces of silver.
Turquoise Hill Resources, which owns the mine with the Mongolian government and Rio Tinto, hold a 66 percent stake in Oyu Tolgoi. Rio is running the operations.
Rio and Turqoise still face some uncertainties as the government has asked for Turquoise Hill to renegotiate the contract in place, something the company at this time has refused to do. Until that is solved, a cloud will of uncertainty will hang over the deal.
Once the uncertainty is removed and commercial production begins, Turquoise Hill Resources, especially, should take off in a major way on its share price. It could be one of the biggest mining success stories for many years, bringing shareholders some major success.
Monday, November 5, 2012
According to Bill Haynes, president of CMI Gold & Silver, there has been some major acquisitions of gold and silver by new money over the last month, with much of that coming from the fall in price on Friday, November 2.
From now on, for the most part, any pull back will be considered a buying opportunity for gold and silver, as it won't matter what type of short-term economic data brings to the table, such as the slightly positive news on unemployment Friday that temporarily drove down gold and silver prices.
The good news is even though many of the recent investors are new at the game, they have enough knowledge to know to wait for dips to buy. If it were the general population buying, it would be more disconcerting, as it would suggest we would have to start looking for some bubble conditions going forward. We're not near that level yet, and the price of silver have some way to go before the average investor starts to throw their money at the asset class, which by the time they get in will be far above today's prices.
The reason why it doesn't matter concerning the anemic economic news that is being spun as positive movement forward, is it's all about the sovereign debt problems the major economic nations face, and the refusal of government to put meaningful and honest austerity measures in place to combat the out of control spending of governments.
That means of course that stimulus spending will continue to rise exponentially, and the price of silver and gold will move up with it, as people and institutions look for safe places to put their money and to battle rising inflation.
While silver should outproduce gold over the next decade, one major situation in Asia could cause gold to jump higher than expected in the short term, which is a reference to the low gold reserves held in the general region.
Friday, November 2, 2012
Barrick Gold Corp (ABX), ALLANA POTASH CORP (AAA), Alumina Limited (AWC), Oil States International, Inc. (OIS), Energy Partners, Ltd. (EPL), First Solar, Inc. (FSLR) and ArcelorMittal ADR (MT) had ratings on them adjusted by analysts.
Raymond James upgraded ALLANA POTASH CORP (AAA) from a "Market Perform" rating to an "Outperform" rating. They have a price target of $1.25 on the company.
Bank of America (BAC) upgraded Alumina Limited (AWC) from a "Neutral" rating to a "Buy" rating.
Raymond James upgraded Oil States International, Inc. (OIS) from a "Market Perform" rating to an "Outperform" rating. They have a price target of $85.00 on the company.
BMO Capital Markets downgraded Barrick Gold Corp. (ABX) from an "Outperform" rating to a "Market Perform" rating. They have a price target of $46.00 on the company.
Global Hunter Securities downgraded Energy Partners, Ltd. (EPL) from a "Buy" rating to an "Accumulate" rating. They have a price target of $25.00 on the company.
Cantor Fitzgerald downgraded First Solar, Inc. (FSLR) from a "Buy" rating to a "Hold" rating.
Natixis downgraded ArcelorMittal ADR (MT) from a "Buy" rating to a "Neutral" rating.