| From: sense | 9/10/2024 2:08:04 AM | | | | | | What is Everyone Missing ?
Jeff Snyder has addressed warnings signs, but largely done that piecemeal.
We've noted currencies becoming an issue again... the carry trade unwinding...
Yen Carry Trade: Japan Just Flipped, The Rest Of The World Is Next...
And...
Contagion Spreading: The Rapid Repricing of Global Risk Assets (everything you need to know)
Looking for things to worry about in the "issues" and "problems" apparent in the global economy... isn't exactly a snipe hunt: recession, excessive debt... the insolvency of the banking systems... "supply chains" and trade wars... hot wars... worse coming... with currencies on the ropes... "financialization" and "globalization" too often used as euphemism for "centralized control" and "mercantilism" supplanting free market functions...
But... there's history to consider as a possible guide to how things may begin to come unwound... IF history is useful as a guide... as seems likely, still, even given our problems today are clearly larger / more intractable than those "minor wrinkles" that have derailed markets in the past...
China... it is being pointed out this week... is seeing markets resuming declines and the economy is accelerating to the downside... Some say: It's already in a depression... and the trend in acceleration is worrisome...
"Globally synchronized" is often used to highlight purposefully crafted interconnectedness now... giving us an expectation that "globally synchronized recession" is not just "in the cards"... but a deliberate plan. We know the sovereign (and market based) debt risks... and the real estate bubble risks still somehow avoiding being unwound in spite of reality obviously requiring "can't get there from here"... without risks being realized ?
Currency wars... now a deliberate hacking at the roots of the global economic system... Only some few aware of BIS planning... and the implementation of plans... for re-monetizing gold... or Biden's efforts coordinating with others in things that work to undermine the reserve status of the dollar...
"Contagion" is making a comeback... on steroids... is what that really says ? But, unlike prior instances... this time, it appears... "they" are doing all "they" can... not to prevent it happening... but to induce it ?
"Contagion" has a history... so, the Asian Contagion or the 1997 Asian financial crisis... worth some study ?
From the Asian Development Bank:
"Contagion: How The Asian Crisis Spread"
As the U.S. is set to lower rates... many are expecting resulting "capital outflows" will quickly drag the U.S. into the same economic mire as is already afflicting China and Germany... "and so it begins"... ?
Jeff Snyder: "truth is finally starting to leak out"...
China's Collapse Has Entered a Dangerous New Stage
Steven van Metre:
WTF is going on ? China Is PLUNGING – And It’s Spreading to the Rest of the World!
"We're going to see deflation in every major economy"...
"deflation, delinquency, default... financial crisis... one right after another"
"Y'all still not quite ready for that "reset" yet ? OK. Let's get 'ya ready !!!"
Helicopters carrying cash reported inbound... ? |
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| From: sense | 9/12/2024 4:27:46 PM | | | | | | Silver Miners RRG...
Metals and miners moving with markets... some more than others...
Anticipation of rate cuts is a rational explanation for metals and miners higher... anticipating the near term future of re-inflation... but... reality... the stocks, at least, are more likely moving because "markets" on a vector higher with a slope well above neutral...
Miners recently don't track the market higher... unless and until X value in the slope fosters "spillover"... as it did yesterday in a big way...
As I watched the trade yesterday closely (playing zero day options on QQQ)... it was all about $ flow... a huge flow of $ coming in from "somewhere" later in the day...
Movers in the market are less about specifics in fundamentals changing [the most amazing potentials often being both almost unknown... and among the worst performers]... and more about "more" in linear relation to pre-disposition in the existing spread of capital... the "best" beaten down issues bouncing hard... the most over-looked issues continuing drift... in spite of any trends in "value" development. And, those with a bigger spend on (or management skills in) promotion... will tend to sustain market interest... moving more.
A rational argument re "producers" vs "explorers" given reality in timelines... the price of silver mattering in the near term... to producers like SILV, HL (up $1 in two days), PAAS (up $2 in two days), etc. That persists until the trend shift in the new bull is acknowledged as a long term issue... in a market willing to look ahead long term... ? A massive find... starting from proof, at least still 8 years away from production... or maybe 12 years, or 20, given "permitting" and "politics" ? What does today's price have to with anything ?
They'll begin to move when the producers begin raking it in faster than they know what to do with... and are forced to go shopping...
The "sweet spot"... still, always, in the unknowns that are "near" producers not quite there yet, or smaller past producers, or failed producers, those perpetually losing money... as metals prices rising suddenlt, unexpectedly, drag them kicking and flailing from deep in the red to barely in the green... prices shifting in a few months from "liquidation value" assuming BK imminent... to having a respectable multiple when money gets made, again, after a long hiatus...
The long running bear has been bad enough... that today that probably defines "most" miners... ? Hecla, PAAS, are still losing $ ? They may have bounced nicely off long term lows... but... future prices versus past prices adjusted for inflation suggest... what in the future ?
FNLPF is a particular case. Huge producer... profitable, P/E 21... but buried in debt. Higher prices will have them dig out faster... and then... with debt paid down... ??? Laggards... may need a push to shift market momentum in perception... ? Still trading nearer the lows of 2015, 2019, than the highs of 2016, 2020 ?
DSVSF fell below where it was in mid February... and in 3 days is now back to where it was mid-March...
"Soft landing" ahead... according to markets today. Chatter on MSNBC today says: strength of the move higher indicates a new uptrend starting... tech is back... "clues of bottoming" in chip stocks... ??? LOL!!!
"Pent up demand for mortgages"... means Fed next week will "open the floodgates" to a real estate boom ?
I expect a shorter term move... that may end tomorrow... or next week with the Fed... or soon after with black swans landing... or some event re-focusing market participants on reality... as "strong performances" being spun... still deliver "less than expectation" in earnings... as recession "baked in" now accelerates.
And I think miners moving with the markets now... likely means moving lower with the market again, too...
Good trades happening... trade well... take profits... grow the stash of dry powder...
RRG's: suggest we're at/near trends turning...
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| To: sense who wrote (5059) | 9/13/2024 5:11:16 AM | | From: sense | | | | Jervois lives on... at least, until October/December... deferrals etc., extended to EOM October... the debt maturing EOM December...
And, they have new headroom to borrow up to $7.5M more from existing lenders... who seem to prefer having JRVMF succeed, somehow, over just foreclosing and taking over ownership and control of it themselves...
In addition, to support Jervois’ continuing work with its debt and equity capital providers, and third parties, on potential transactions to strengthen its balance sheet, the Lender has agreed to provide an additional US$7.5 million delayed draw term loan (“Term Loan”) for general corporate and working capital purposes.
But, there is a cost in continual increases in the depth of collateral... the obligations in Idaho slowly swallowing more and more of the company in other places... as shares of other operations in Finland and Brazil are pledged against Idaho and its debt...
They have $10.5M in cash... Debt now rises to $144.1M drawn with $7.5 available... on which they're obligated at 12% per annum... which is not exactly the sort of government subsidized or low cost government loans in the sweetheart deals others are getting... ?
It seems they're working on a "recapitalization event"... which I've not seen them describe anywhere... and it is that which fosters lenders cooperation... including in deferring the interest:
Additional and complementary amendments to the JFO Facility include an increase in available drawdown headroom to Jervois, continuation of waivers to the financial covenants and collection accounts required balances in the JFO Facility until the later of 15 October 2024, or as extended at the Lender’s discretion, or such other date contemplated by a transaction support agreement in relation to a proposed recapitalisation, in circumstances where the Company and Lender enter into such an agreement (the “Outside Date”).
That anticipates "a proposed recapitalization" not otherwise defined... their approval of which enables the lenders in agreeing to enable it through a "transaction support agreement"... so, presumingly keeping it alive until a deal is able to be done... |
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| From: sense | 9/13/2024 3:27:18 PM | | | | | | NMREF, RMETF... "market" price in thinly traded issues...
NMREF charts talk first...
From 1 June the trading dynamic has changed significantly...the price spiked to $0.039 on June 1 on a big red candle... suggesting it being being shorted. Bollies widened out... and the center bolly in the down trend since 1 June moved lower from $0.033 down to $0.025 before today. The RRG was stable while wandering aimlessly between 96 and 102 before... but suddenly became more dynamic, swinging predictably between 90 to 92 at the low end and up to 106. Trading dried up with volumes falling off significantly... the last three months probably 1/3 the volume of the prior three months. The "big" trade was on July 18... ~330K in a flat tick... not even making a candle. From July to September it probably traded around another 330K in a mixed trade roughly balanced with a slight bias on the sell side... bottoming at ~$0.022 on September 4th...
This week its traded maybe 140K shares, most on the buy side... pushing it from $0.022 up to $0.036... ? If it was a single short working a trade... it seems like a lot of work to make "maybe" less than $1200... before paying the ridiculous borrowing costs... on a short trade... that contains massive risks ? <rolls eyes>
But "that's a thing" now ? Interactive Brokers lets you short stocks... helps locate a borrow... but, for a price. And, strangely, a lot of junior miners are being shorted hard right now... even with huge costs on the borrow side... ranging from 250 up to 500% in borrowing costs ? Lend them your shares and they'll split the borrowing cost 50:50 with you. Of course, that's not just an insanely expensive trade, its also an insanely risky trade... IB provides lists of borrows available... and their costs. I haven't looked at it for NMREF... but the trade I see makes little sense as anything else... The small volume makes it "not likely" its shorting to enable (someone in) accumulation "on the cheap" ?
It's not the only mindless trade of that sort I see right now... Saw a post on CEO.CA with a holder noting he was lending out his RMETF shares at 250%...
I've covered the RMETF issues here... as Victoria Gold failed, first, and then Rackla whiffed on a single prospect they'd built up market expectations about... But, (as forecast) the Yukon risks have abated, already... exploration has resumed... and now we know the "pause" wasn't about a dramatic shifting in regional support, but about personnel limits resulting when everyone had to focus on the emergent risks being realized at Victoria... see charts below...
And, he noted something else I have: As U.S. trading volumes have dried up... the illiquidity has imposed some huge disconnects between the price of shares in the U.S. trade, on near zero volume, and the price of the same company as trading in Canada remains robust enough, where liquidity is not evaporating...
Along with the thinly traded market... its also obvious that Yahoo (and many brokerages) are struggling. As a part of that... they're not reporting prices correctly... not even close. They may not update them for days... and then misreport both the price, the change, and the trend. For the brokerages... they're likely still shorting junior miners "per usual"... or, putting markers in your account for shares they didn't actually buy in for your "holding"... leaving them at risk if your stock moves... making it in their interest to fail to report prices if/when they do move... while hoping depressing their reported prices encourages you to bail out of holdings at lows they report wrongly...
As a general matter... be aware that tough times in the market... mean you can't trust your broker... and shouldn't rely on "most of them" (IB an exception... depending on your data buy) for accurate reporting...
FWIW... I use IB with quality data... but also use StockCharts... multiple sources being good... along with "tools" you don't get in one place...
And, "the usual" risks in illiquid issues... require knowing that you don't expect to trade them in markets like this... but cherry pick issues that will benefit "more" when market interest is restored... or as they (NMREF, TMQ, AWLRF, etc. ) finally succeed in ongoing projects not able to be held at market risk due to solid funding that is not tied to share prices...
Anyway... in RMETF... which is it ? Misreporting of prices... or markets bifurcating badly generating "shares on sale" in the U.S. market relative to others ? In the case of RMETF its both... along with a short trade... someone apparently betting that Rackla will fail and go to zero... because "Yukon" and a single whiff ? That's stupid. But not as stupid as borrowing at 250% to place the bet ? Look at Yahoo and they report it as trading at $0.03 today, down $0.02, or down 40%... but their charting shows it UP from prior charted trades... up from $0.02 to $0.03 ? It IS being shorted in the U.S. in a way its not in Canada... where its trading at $0.080 by $0.085 today on 19K shares vs the average 111K ? The $0.08 in Canada... translates to $0.06 in the U.S. ? Apparently... the brokers are broke, or broken... and don't want to bother with managing the arbitrage ? Last time I saw this... was in 2020... as junior oil shares cratered with the (obviously temporary) issues in negative oil prices... I bought a few of them and held for a double in two or three months.... most of which was illiquidity reflected in U.S prices finally returning to balance and parity with prices in the parent trades in Canada or London...
But... gold up... explorers making nice finds of high grade in wide open new fields... down ?
NMREF down... for no obvious reason... as market risks in REE grow and the project makes progress "on pace" ? I missed the news from NMREF recently... that isn't a "game changer"... but contains more than...
Namibia Critical Metals Signs MOU with Copenhagen Atomics for Thorium Offtake at Lofdal
Along with the news on thorium... which is interesting enough... as a disposal problem becomes a profit center [potentially... as fully dependent on CA and its tech succeeding on the planned timeline]...
The thorium news... seems it provides, for the first time I've seen... a projection of timelines on which they apparently expect the project to advance from where it is now... to have established production and sales...
"CA expects to have their first operational reactor in 2027 and start commercial deployment in 2029"... and NMREF is willing to commit to supplying them with the thorium to enable meeting that timeline ?
I think the drivers in REE markets are likely to force JOGMEC to move faster than that... but... its the first actual expression of a timeline I've seen...
Rackla chart... as RAK.V... showing June 24 (Victoria failure) August 8-12 (exploration "whiff") and the moves (prior to) August 28 and September 10 as 1. Yukon risks faded and 2. news of initial "high grade" finds at Grad, and 3. subsequent sampling results drove new ground being staked...
Rackla chart... as RMETF... for the same period as the RAK.V chart... plotted with a comparison to gold. Obviously, the magnitude of events in Yukon, in the field as exploration proceeds, and in the market... are each more relevant to the shares than the price of gold... It still leaving open questions about "liquidity"... U.S. market disconnects from Canadian... and the disconnects between gold and "explorers" generally...
RMETF - RAK.V comparison plotted on the same chart...
NMREF chart plotted in comparison with gold and REMX... an REE focused ETF...
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| From: sense | 9/13/2024 6:10:42 PM | | | | | | SEA CHANGE
I commented on it a while back when gold first got a "mention"... in popular media.
Fast Money on CNBC just now.. has been talking gold for the last 5 + minutes...
Has outperformed the S&P since 1997... better returns with vastly lower volatility and risk...
Both up ~641% in that time... versus the gold stocks... which are unchanged (up only 55%) in that time... ?
They're now saying "buy gold stocks"... but, still can't say "why" they've under-performed the metal so much ?
One suggested... inflation... also suggesting (as is true) the change in the S&P is mostly inflation, not gain.
But, (without the nod to Rick Rule that is due) they're also saying the problem is the companies are inefficient... which, of course, must be true when the combination of excessive regulation and restrictions in capital allocation force them to be inefficient.
No company can, by itself, somehow make discovery and development "efficient"... making it take a year instead of a dozen years... while spending $ more efficiently... and while putting the $ saved into funding greater operational efficiency ? Reality is... you pay to keep them alive for a decade... while the government obstructs them... and then... only a small fraction will proceed past that set of hurdles... as there's not enough money to fund more...
And, of course, what is true of producers... is true in spades of explorers...
They will, as always, lag... until the market figures it out... and chases them...
Proven producers generating profits... when other industries are not... comes first.
The moves we've seen thus far... are the same old "mining investors" trading the trends... not the trend we will see in miners becoming... the hottest trade in the market... the talking heads all suddenly becoming mining experts, etc...
But... while that's a cyclic issue... it shows "the cycle" has been stretched a decade beyond "the bottom" following the prior cycle... while gold has been suppressed by central bank manipulation... as miners have traded lower, and lower... We're now at the point of imposing "can't get there from here" in limits... that are not just limiting the pace in future growth... but ensuring shortages in materials requiring that we can't sustain the economy we have...
That means... massive inflation is coming as production bottlenecks in materials ensure fewer goods are able to be produced...
Stag... and flation... worse than the 1970's... thoroughly baked into the policy we have.
Big moves today... still trending WITH the market... driven by the Brrrrrrrr...
When stocks fall... and gold and miners move higher against market trend... that's "the beginning"...
Where we are now... is the beginning of the end for markets and the currencies...
Ugliness yet to come... in the miners as they're trading with the markets |
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| From: sense | 9/24/2024 1:53:33 PM | | | | | | NEVDF Assets sold for $128 million... leaving me skeptical...
Winner was the stalking horse bidder from the deal arranged in August. Many others kicked the tires, they say, but none were willing buyers. That's fascinating... because there's no lack of value in the assets... so the sticking point must be in the nature of the "deal" on offer... which will not be the sale of a fully functional copper mine... fully staffed and ready to begin operation... for "$128 million... free and clear".
The "price" being reported... set at at $128 million... appears it wins the buyer something other than a free and clear purchase of NEVDF's unencumbered assets. The deal includes assumption and "cure" of existing contract obligations and assumption of some other... unstated... liabilities.
Sept 9: Nevada Copper Provides Update on Sale Process; Kinterra Designated Successful Bidder
So, if you want to know what the deal really is... you'll have to dig into the BK to find out which liabilities are being preserved... and what sorts of penalties for failure are being allocated to the lenders versus wiping out the shareholders. And, probably, need to sort out the nature of the relationships that exist, or have been enabled, between Kinterra and the lenders.... |
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