Oldtent Archives 2007 - 2008

http://tinyurl.com/ywu25f

Hi Bill,
The trading in ECU was troubling today. Volume HUGE; stock drops nearly 10%–but great news is pending! Can you shed any light on this?..
Gene

Dear Sir/Madam (from an email sent to the company),

I live in Cyprus, an island nation in the eastern Mediterranean Sea.

By way of background info, I am a long term investor in ECU, having initially purchased 100,000 shares in 1999 and have held that core position since that time (including that period when ECU`s share price went into the toilet, down to $ 0.01. My shareholdings increased up to 200,000 during 2005 and 2006, but I still retain my core holding of 100,000 shares.

It seems to me that an entity dumps over two million shares plus approx every quarter (mid May, mid Aug and yesterday)…

James S Gibson
Cyprus

As we know, except for a few stellar exceptions, the junior/exploration sector has suffered from benign neglect for more than a year. This lack of interest parallels the continued dismal Café Sentiment Indicator, which has brief spurts up, but then quickly flops back down as soon as gold and silver set back.

With such a dearth of interest, many of these stocks can get belted for no particular reason at any given time. That is one what happened to ECU Silver on Friday. I thought it would be helpful to explain in a little detail, as it will represent an example of what continues to occur over the entire sector.

ECU was trading around $2.23 on Friday and quiet. With only a little more than a half hour to go, Goldman Sachs called and said they were going to sell around 2.1 million shares before the close and were looking for a buyer. (Now this info is from sources not related to the company and the Goldman Sachs selling has nothing to do with my getting on their sordid case all the time).

Somehow the trade got done at $2.05 and last minute small buying lifted the price to $2.10. This selling on very heavy volume seemed to spook other investors who began bombing the share price again today. It fell once more … this time to $2.02 per share.

The natural inclination is for investors to think somebody knows something and that something is very wrong, especially since an independent auditing firm is expected to issue a new update on ECU Silver’s official number of silver equivalent resources within the next two weeks. The whisper number is that it will come in around 200 million ounces, which means their resource number will double. To put this in perspective, the largest silver mine in the world is in Australia (Carrington at 750 to 780 million ounces).

So what did this price bashing mean? Nothing but short term aggravation in my book. Did Goldman sell because it was month end, etc. and was feeling some fund redemption pressure, or do they know something we don’t? Got me. All I can say is I bought more ECU today and am looking forward to learning what ECU has in the ground (from a highly regarded independent source). If they have what I think they have, I will be one happy camper … and SOON.

Another one of my must read authors.

www.financialsense.com/Market/wrapup.htm

Putin is printing money to buy gold. What a deal.

the equities and energy trusts with which we have been involved in the past couple of years is the main thing that is throwing me off (and maybe out of, by choice) these difficult resource equity markets.  After these bad experiences since early spring 2006, I have not learned any new approaches to head off the downside risks with silver/gold/copper equities.  And that is the main reason I now think the safest approach for new buying is to simply accumulate physical silver and gold, and to simply sit on it - and I am prepared to accept that that may be a much longer wait and a much slower haul than Mr. Sinclair repeatedly suggests.

Have not posted for awhile and am going out of town tomorrow morning.   Figured if I posted I was going to watch my college football team in advance..it would be a little hypocritical to not follow-up if they lost!

I went to San Antonio (I live near Phoenix) to watch Missouri get their butt kicked by Oklahoma.  I went to the game and kind of remembered why I was not a huge sports fan…waiting for the tv commercials to finish on every score, punt, injury, timeout, etc took forever.  I swear when I used to go games 25 years ago they never took this long!

I went with three friends…we were essentially verbally assaulted and insulted from the time we sat down.  The crowd was 75% Oklahoma..and we were in an Oklahoma section (I got my tickets from an Oklahoma alum who is a friend of mine…he had a great choice of tickets but could not attend).  My buddies and I were pretty mellow…all in our Mid-40’s.  The abuse started as we were walking to our seats.  All of my friends are big guys…all over 6′ 2″…we had women, college students, 350 lb guys in overalls…every Oklahoma fan abusing us. 

I guess I have lived on the west coast too long…a little friendly back and forth is ok…but personal insults for over 3 hours were a little much.  I guess I had forgotten that things like a football game are considered a life or death situation for some folks!

Apologies in advance to redneckoakie…sure Oklahoma has alot of classy, normal fans…we were in the front row on the club level and one guy sitting next to me was a good guy…big Oklahoma fan..but most of those around us were basically either trying to a) provoke us into a fight or b) get us to leave. We did neither.   I lived in Los Angeles when the Raiders played there…I went once and cheered for the Chiefs….almost 20 years ago…and this experience was 10x worse than that one!

Enough football….I told my friends before the game..hey..if they lose…I can get back to my normal life and not have to fly to a silly game like this on a perfectly fine weekend…I guess that is kind of a bad attitude!  I can now crawl back into my sports hole for the next 20 years!

I am going to meet with some private equity firms and investment bankers this week….the topic of discussion will be “deals gone bad” and to see if they want me and a couple of other guys assist them in working their way out of the deals and maximizing their recovery.   Will report back over the weekend on what I learned…if anything.

One thing I do know….I have some packages on “debt for sale” by investment banks and banks.  I usually call their advisor and say: “how big of a haircut will the owner take?”   I am not exactly in this business…but I seem to get packages sent to me anyway because it appears they are blanketing the earth with packages desperately trying to find a buyer.  I tell them this is not the business I am in and am not a buyer of debt…but not until I ask what kind of discount is being offered.  They always say…5 - 10% discount is all.  I think this stuff should sell for 20 - 30 cents on the dollar…so I feel fairly certain alot of debtholders are not exactly clear on the value of their assets.  This is all corporate or commercial real estate debt…for the record.  Virtually everyone has poor results - unless you are in a business related to something like oil services or production.  My 2 cents. 

The Russians buy more gold … from Neal Ryan:

updated IMF stats today show that the Russians added another 310k ounces to their reserves in Oct.

that’s after a 310k ounce addition in Sept. and over 1.5 million ounce addition in the last year.
interesting stuff.

***

I fully share your frustration.  It seems the control of the “paper” game extends from the currency and extends to the stock exchanges…that’s not new news, but it appears the advent of the “hedge” funds … exempt from the old rules…allowing illegal shorting (made legal) has destroyed the last remnants of a balanced market system.  Sinclair says it is a temporary hindrance…I hope to hell he is right.  If stock ownership no longer represents the factual direction of the company’s future…what is the use in persuing one’s tail?

Interbank loan collapse worse in Britain than U.S.

Submitted by cpowell on 08:26PM ET Sunday, December 2, 2007. Section: Daily Dispatches

Pleas for Rate Cut
as Interbank Loans Dive

By Ambrose Evans-Pritchard
The Telegraph, London
Monday, December 3, 2007

The sterling interbank market has collapsed at the fastest rate in modern history, prompting pleas for immediate rate cuts from a chorus of top British economists.

Office for National Statistics data sourced to the Bank of England shows the volume of market loans in the banking system plunged from L640 billion at the onset of the credit crunch in August to L249 billion by the end of September, suggesting British lenders have been hit even harder than US banks in relative terms. Total sterling assets dropped from L3,244 billion to L2,876 billion.

“This is one hell of a shock to the financial system,” said Professor Tim Congdon, a leading monetarist at the London School of Economics.

“A market that has taken 30 years to build has completely imploded in a matter of months. Lenders have been squeezed savagely. We’ve moved into a different era,” he said…

www.telegraph.co.uk/money/main.
jhtml;jsessionid=20HPPQFO1501TQFIQMGCFFOAVCBQUIV0?xml=/
money/2007/12/03/cnrates103.xml

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Jesse noted this weekend:

I don’t know if this is a correction in a new bear market, or a resumption of the reflationary rally. But, sharp multiday rallies of 2+% are a hallmark of bear market declines.

What has me off a bit is that the Fed did something new this week. They showed a panic, they did a 180 based on some information they received, that we have not seen. They pushed the button, and started executing a pre-planned program designed to avert a looming financial crisis.

I doubt what spooked them was macroeconomic data. I really doubt it was anything like GDP, or unemployment, or even Christmas sales which are not going well.

Some financial giant is spewing smoke from the cracks in its financial calculations, and the wobbling had the Fed heads staring into the abyss, shitting their pants.

jessescrossroadscafe.blogspot.com/

-END-

E*Trade firesale seen hurting Wall St portfolios
By Tim McLaughlin

NEW YORK, Nov 30 (Reuters) - E*Trade Financial Corp’s firesale of mortgage-backed securities has conjured up a new worst-case scenario for Wall Street’s portfolio of subprime assets by knocking their value even lower.

Financial analysts on Friday said E*Trade got anywhere from 11 cents to 27 cents on the dollar for its $3.1 billion portfolio of asset-backed securities. The portfolio sale was part of a $2.5 billion capital infusion from a group led by hedge fund Citadel investment Group.

“The portfolio sale, one of the few observable trades of such assets, has very clear, generally negative, implications for the valuation of like assets on brokers’ balance sheets,” Credit Suisse analyst Susan Roth Katzke said.

The portfolios are hard to value because demand has dried up for them and the brokerages sometimes use their own models to put a value on the assets. Any rare actual transaction could have an effect on other brokerages’ valuations.

Using what she called a simplistic analysis, Katzke estimated Merrill Lynch & Co Inc could take a $9 billion after-tax hit to the valuation of assets underpinned by subprime mortgages. That estimate assumes the Merrill assets would be marked down to 26 cents on the dollar.

Katzke’s write-downs reflect amounts that are incremental to charges taken in the third quarter. She estimated that Citigroup’s after-tax write-down could be $26 billion, if the assets were marked down to 26 cents on the dollar.

“Our analysis is far from perfect,” Katzke said. “That said, it’s our best take on a worst case scenario for valuation of like securities. … Not all brokers are equal.”

Merrill declined to comment. Before the E*Trade deal, analysts had already forecast huge write-downs at Merrill, with some estimates topping $13 billion. Katzke estimates Citigroup will take a write-down of up to $12 billion in the fourth quarter.

Merrill already recorded an $8.4 billion write-down in the third quarter, mostly because it reduced the value of subprime-related assets. Goldman Sachs analysts said they were surprised by the size of the discount on the E*Trade portfolio because 73 percent of the assets were backed by prime mortgages, or loans to people with solid credit.

In contrast, Wall Street brokerages have taken billions of dollars of write-downs on assets underpinned by subprime mortgages. Escalating defaults on these loans to people with weak credit have roiled credit markets worldwide.

Citigroup investment bank analyst Prashant Bhatia said E*Trade actually received 11 cents on the dollar for its portfolio, if you factor in that the brokerage received $800 million in cash minus 85 million shares it issued. He said that implies Citadel’s received stock compensation worth about $450 million, leaving E*Trade with only $350 million for its $3.1 billion portfolio.

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I simply cannot fathom why or how Citigroup, with the  current state of its own financial affairs, can assume that it has  the credentials to pass judgement on another corporation like Novagold, even referring to credibility of management as a criterion that they, Citigroup, consider when judging others.  This is a sick corporate world that we discuss here on Goldtent, and I am ready to flee from the entire corporate circus that we witness, except to keep accumulating physical silver and gold.  Good luck all equity investors.

http://tinyurl.com/yufs65

I agree with the comments about your plug at the end.

Concerning the speed: If it is done in “Flash” instead of html, the reader can step thru the pages at his own pace by clicking thru them.  not sure if html will allow that.  Some pros and cons to using flash, but just an idea to consider.

On the atchison topeka and the santa fe

www.youtube.com/watch?v=-ijUCMm7a8g

www.youtube.com/watch?v=z25Z_XScoic

I did not read that. Thanks for bringing that up. I also was not watching the charts very much….another bad thing.

Again, I apologise for any misunderstanding if I caused any and speaking when I probably should not have…..at least publicly. Maybe going “PM” or “chat” is what I should have done in the first place….I realize that now….

This is a wonderful and great place, and it is because of the people here.

Arch

since the drill results for UXG on Oct 4, the stock has gone from $6 to about $3.  Therefore, my guess is that shareholders have decided that it will be another year before there is any good news, so why wait around.  That is just my guess.