This Video is rated R for realistic. Children under 17 should be prepared to remove all sharp objects from their parents after they watch this. Adults with bad hearts, bad financial advisors and bad portfolios should not watch this without seeing and having a doctor nearby. We can not be responsible for any injuries or death to your financial advisors if they are, or were, members of the “Don’t Worry, Be Happy” crowd.
Then the numbers shown in this excellent article truly tell the story of what’s really happening with our banking system. Like it or not, the U.S. banking system is technically insolvent (Its total capitalization is far less than its liabilities). Honestly, it’s worse than even I thought based on the numbers in this article. The bad bank idea is flawed as it will cost our government trillions to recapitalized these banks. I think what the new administration realizes it must get the economy out of free fall before they come clean or else the 1930s could be an upside target before too long. I’ve been shaken by this but feel secure knowing God is still in control and my model portfolio should more than survive a meltdown.
Please send this to everyone you care for as they’re definitely not going to hear this on TOUT-TV.
There’s no question that CNBC-TV (TOUT-TV) is homebase for the “Don’t Worry, Be Happy” crowd on Wall Street. The vast majority of on-air reporters always spin for the upside. Thankfully, there are a couple of level-headed, intelligent and balance commentators. One is Rick from Chicago. Unfortunately, there is truly a baffoon (sorry to use some language) personality named Dennis who each time I think he’s made a complete jerk of himself, he manages to reach a new low. Watch this exchange and see him deservely get slapped.
Yesterday, the boys and girls on Wall & Broad ran the market up on talk of a “bad bank, good bank” that will magically make all the toxic assets disappear and bring economic nirvana back to America. It only took 24 hours for non-members of the happy group to realize the ability to structure some a move is shall we say, far from a no-brainer. Funny how last Fall the DJIA shot up 500 points when the first T.A.R.P. talk was broken by CNBC-TV. Like yesterday, the happy crowd back then hailed it as the cure all and stock buyers should jump in with both feet. We know since then those who jumped didn’t realize the pool was empty and are in no position to become the newest members of the happy crowd.
If and when DJIA 8,000 and 800 on S&P 500 is broken to the downside by more than 1% on a closing basis, we should see a rather sharp fall of at least 5%. At this point, I may just start to look at some long equity positions both here and abroad. Stay tuned.
Some interesting points today:
The long-end of Treasuries sold off sharply. A treasury auction didn’t go to well but I think the main reason for the sell-off is the bond market realizes the stimulus bill is mostly pork and not “Kosher”.
I noted last night that gold’s profit-taking appeared over and I was looking for a sharp rally. It started today.
Once again the airwaves are full of happy talk on how our government is going to solve our financial problems. Good bank, bad bank is the latest laughing gas being imposed on the American public. With one magical wand, the trillions of toxic assets will dissappear from our fragile banking system and all will be well again. If you believe this, I like to sell this to you:
The “Don’t Worry” Be Happy” crowd on Wall Street have now for the umpteen time announced the worse is now behind us thanks to the latest cure for our ills. You’ve to hand it to them, like a broken clock is right twice a day, one of these days (weeks, months or years) they will be right.
In all seriousness, most of the American public doesn’t understand economics. I truly believe if you asked them what a fiat currency is, they would say it’s a Fiat car with money in it. The shame of this is most typical financial salespeople, oops, sorry, I meant advisers don’t know either. All of these folks can’t comprehend the ramifications of years of mounting debt, deficits and a loss of producing real assets (versus spending to buy or lease them) is not going to be solve by a magical wand, silver bullet or even a good bank, bad bank. Us Americans seek quick fixes to our problems. Too bad we can’t just pop our problems in a microwave or run down to McDonald’s and buy a happy meal and eat away our fiscal mess.
But hey, what could I be thinking, we now have:
U.S Stock Market – After again testing key support at DJIA 8,000, the market has only managed to rally back to what was once major support at 8,400 before it gave way despite all the happy talk back then and is now resistance. Unless volume and breath greatly expand, this should end up another counter-trend rally in a continuing bear market.
U.S. Treasuries – The 10 and 30 year continue to slip. The bubble continues to deflate.
U.S. Dollar – Say good night Gracie.
Gold – Profit-taking has run its course and I’m looking for us to break above resistance at $908.
Oil – Again we saw bad news on the weekly supply inventory numbers and again oil rallied. More and more oil looks like it has bottomed so I’m going to raise my suggested buying level to $43.
I’m going to go through recent blog posts of mine and try to answer questions from readers.
I wish the NFL was all year long but it isn’t so lets make the biggest game of the season another reason to have a contest. The first 200 posts will count for the contest and all guests must be posted by 5PM EST January 31, 2009.
Here’s how it will go.
First you post who’s going to win and the final score.
If more than one person correctly guess the right score, the next qualifying guess must be who scored first. Then who scored last. The other guess you must post after all this is was the first score a safety, field goal or touchdown? The same applies to the last score. The final guess must be who won the MVP
If as we go down the line, everyone who is left doesn’t correctly guess the next level, we moved to the next and so on.
So, here’s what you need to post:
The final score
Who scored first
Who scored last
Was the first score a safety, field goal or touchdown
Was the last score of the game a safety, field goal or touchdown
Who was chosen as the game MVP
The winning prize is an autograph football and picture of David Tyree (the miracle catch last year) and Reggie Torbor. Second and third prize will be assorted autograph pictures.
David Tyree, PG and Reggie Torbor at Grandich office.
In a junior market full of disappointment, distress and companies disappearing regularly, the latest news from Donner Metals is truly a refreshing breeze. From almost the first days of the project, Donner has had one great success after another. I truly believe if this was past junior markets of the 90s and the first five years of this decade, these results would generate tremendous interest and share appreciation. Yes, that was then and this is now but the metals don’t know what year it is.
The impressive NI 43-101 Resource Calculation was just announced by Donner for their Matagami Project in Quebec. The Bracemac-McLeod indicated resources are currently calculated at 3,648,000 tonnes grading 11.09% zinc, 1.55% copper, 31.34 g/t silver and 0.48 g/t gold. In addition, inferred resources of 528,000 tonnes grading 1.39% zinc and 1.73% copper, x g/t silver, and X g/t gold has been calculated separately for the less well-defined McLeod West Zone and Copper Zone. It’s also quite interesting that several drill holes on the horizon, that had excellent results, were not included in this calculation.
What do all these numbers mean? To put this resource in context, a year or so ago their joint venture partner Xstrata Zinc invested in the refurbishment of their 2,600 tonne/day Matagami Lake Mill, and the development of their Perseverence deposit. Because of this, the hurdle for success of the Bracemac-McLeod deposits is even lower than Xstrata’s Perseverence deposit since the capital has already been spent upgrading the mill. It’s already in place. Before Perseverence is mined out, Xstrata should be looking for mill feed, and where better to start than the discoveries made 6 kilometres from the mill? The Matagami Mining Camp has consistently been a low-cost producer of zinc, copper, silver and gold since the first production began in the 60’s, and a low capital cost with a short time frame to production is more important now than ever.
So what’s next? Xstrata’s engineering and mine team should continue the scoping study and should advance the Matagami Project through prefeasibility, feasibility, and the development stages. Of course they can be expected to keep extending the exploration around the Bracemac-McLeod areas, and recalculate the resource base with any additional discoveries. Keep in mind that this area had decades of production before these discoveries were made, and the Donner-Xstrata team have a list of high priority drill/exploration targets for 2009 elsewhere on the Matagami property. If they apply their new exploration techniques and concepts to other areas on the property, it looks like they could discover more of the same zinc-copper deposits.
From the Prospector of the Year Award for Quebec in November 2007, to the Mining Journal’s Outstanding Exploration Award in December 2008, it is clear that industry leaders recognize this team’s high rate of success. I hope they will keep it up, and I’m eager to see what they can accomplish in 2009.
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