Paul Van Eeden Video - July 29 2007

Paul Van Eeden explaining the Liqudity Crisis facing the Markets





If that wasn't gloomy enough, here are some predictions from the Chief Economist for Moody's Economy.com - Mark Zandi.

“The problems in the U.S. subprime mortgage market could spiral out of control into a global financial crisis”, Chief Economist for Moody's Economy.com, Mark Zandi said .

Here are some highlights of his forecast, based on a study using anonymous data collected by consumer credit agency Equifax:

• Home prices will fall 10% from the peak nationally, more in the bubble regions in California, Florida, Nevada, Arizona and Washington, D.C.

• Home sales could bottom later this year, home construction could bottom early next year, and house prices could bottom late next year. It'll be 2010 before the housing market could be termed "normal."

• About 17% of total mortgage debt is at risk, totaling about $2.5 trillion in subprime, Alt-A and jumbo debt. About $1.4 trillion is at serious risk of default. Investors will lose about $113 billion as $460 billion worth of mortgages default.

• About 20% of the subprime loans written in the last half of 2006 will fail, with the peak of the defaults not coming until 2011. A "significant number" of these borrowers never made a single payment.

• More than 2.5 million first mortgages will default this year and next year. Subprime borrowers will experience significant financial distress.

• The U.S. economy will grow less than 3% annualized through the middle of 2009. A healthy job market should prevent a recession, although the jobless rate will likely rise to 5% from 4.5% by the end of the year.

• Consumer spending has already slowed and will slow further.

Exclusive Interview with Mr. Peter Grandich - July 2007

Labeled the Wall Street Whiz Kid, Mr.Grandich gained national notoriety by being among the very few who not only forecasted the 1987 stock market crash just weeks before it happened, but on the very next day he predicted that within a year the market would reach a new all-time high – which it did. Proving his 1987 forecast was no fluke, Mr. Grandich said in January 2000 that the year 2000 will go down as the year the great mega bull market of the 80s and 90s came to an end. Grandich is the founder and managing member of Grandich Publications, LLC. Grandich Publications publishes The Grandich Letter. First published in 1984, it provides commentary on the mining and metals markets. In addition, the company also provides a variety of services to publicly-held corporations on a compensation basis. In addition, Grandich is a member of the National Association of Christian Financial Consultants, and a long-standing member of The New York Society of Security Analysts and The Society of Quantitative Analysts.

Me: I’m sure you probably get hundreds of resource companies that pitch presentations to you, so please give me 3 tools or criteria you utilize to screen out the weeds from the flowers.

Mr. Grandich: The first thing I look at is history of management. No single factor is more important in the junior resource game. Then, it’s the projects themselves. Finally, the share structure, especially paper due to come free trading/warrants etc. are also key factors.

Me: Can you please summarize you’re present views regarding resource stocks and the sector in general?

Mr. Grandich: I remain very bullish towards precious metals but believe base metals are fully valued overall. Gold continues to be the safest bet, albeit it may not go up the most. A declining U.S. Dollar, the inability for a group or groups to continue capping the gold price much longer and geopolitical concerns worldwide are all bullish factors for gold.

Me: If possible can you please highlight one sector among commodities (eg. it can be uranium, nickel copper etc.) that you believe to be overbought and due for a correction and one sector that you believe to be oversold and due for a bounce.

Mr. Grandich: Uranium could pull back to $100 or below but longer term still looks attractive. Silver could surprise by leading gold in the fall.

Me: Lastly, if there was only one stock or asset class you could invest in (has the best risk to reward ratio in your opinion) for the next year which one would it be and why (2 reasons for owning it will do fine)?

Mr. Grandich: I believe, Northern Dynasty Minerals is by far the most undervalued mining stock in the world today. It's by far my largest personal holding and I receive compensation from other companies that share the same management team as NDM.

Market Wrap

Only a week after the S&P 500 and the Dow Jones Industrial Average hit new highs, Wall Street suffered its worst week since 2002. Amidst a flurry of disappointing economic data and company news releases, click happy investors couldn’t avoid the allure of hitting that big, red ‘Panic Sell’ button on their desks. Earlier on in the week, we received news that bankers postponed the sale of $17 billion in debt that would have been used to fund the leveraged buyout of Alliance Boots Plc. and Chrysler Group. Following that juicy tidbit, the markets received news that the orders for non defense capital goods (an indicator of business equipment spending) fell a further 0.7% in June after decreasing 1.5% in May. But, wait a minute, there’s more. Also during the week, investors were greeted with news that new home sales for June fell 22.3% from a year earlier and this news was further worsened when homebuilders D.R. Horton and Beazer Homes reported record third quarter losses and painted a grim outlook for the near future. According to Bloomberg, D.R. Horton Chairman Donald Horton said the housing market remains “challenging'' because of a glut of inventory, higher interest rates and tight lending standards. To add further insult to injury, the Federal Reserve’s latest survey of regional economic conditions informed investor’s that the weakness in the housing market is spreading to adjacent sectors. After this glut of disheartening news, came the GDP Report on Friday, which met consensus at 3.4% during the 2nd quarter but failed to gain any positive attention as investors/traders were busy liquidating positions before the weekend.

What does all this mean in simplified terms?

As credit spreads widen, the share buybacks and embedded premiums in stocks (which were present because investors hoped every company was a private equity takeout) will lessen. Rising inventories of unsold homes, increasing foreclosures, banks demanding more from hedge and private equity funds in the form of collateral to back their loans, tighter lending criteria for mortgages, decreasing cap-ex spending by businesses, rising crude prices and falling consumer confidence all point to a cooling US economy in the near future and an interest rate cut in the fall.

So have we entered a bear market?

Personally, I don’t think so - at least not yet but here are the opinions of some people I consider much smarter -

“I’m struggling to understand why the world is coming to an end,” Mr. Levkovich said. The fact that we’re really wondering about it being the beginning of the bear market suggests that it’s not the beginning of a bear market,” said Tobias Levkovich, the chief equity strategist at Citigroup.

“You don’t tend to go to new highs and then immediately start a bear market,” said Liz Ann Sonders, the chief investment strategist at Charles Schwab. “Markets don’t tend to turn on a dime.”

“I expect growth in H2 to be worse than the already weak average of 2.0% in H1; we are facing a "growth recession" ahead, if not worse.” Economist Nouriel Roubini

2 Questions with Ray Goldie, Mining Analyst at Salman Partners

Nickel

As nickel inventories grew by 4.6% to 13,686 tons this week, the highest since June 21, 2006, prices for the commodity declined for the fifth consecutive session, shaving off 13% this week alone. Nickel prices settled at $30,450 a ton on Friday as demand from steel mills has been declining as a result of mills substituting lower content alloys instead of the higher content ones. Additionally, the increasing use and supply of cheap nickel pig iron has softened the demand for real nickel thereby negatively affecting its prices.




However gloomy and miserable the nickel market may seem at the moment, Ray Goldie, Senior Mining Analyst at Salman Partners urges investors to look at the bigger picture for nickel.

Recently (July 26, 2007) I had the chance to ask Mr. Raymond Goldie, Vice-President & Senior Mining Analyst at Salman Partners and the author of “Inco Comes to Labrador” 2 questions.


Me: I was wondering if you could please summarize in a few sentences, your view of the Nickel market, Nickel stocks and the recent decrease in the price of Nickel futures?

Mr. Goldie: With no new production this year and only Ravensthorpe coming on next year, supply (the prime determinant of prices in this cycle) is tight. I see the current weakness as seasonal, relating to summer slowdowns in stainless steel producers' demand.

Me: If possible can you please highlight one sector among commodities (eg. it can be uranium, nickel copper etc.) that you believe to be overbought?

Mr. Goldie: I think that copper prices are susceptible to a downturn because the current level of producer plus LME exchange inventories is consistent with a price as low as US$1.50/lb, China is reversing from being a net importer back to being a net exporter of copper, and supply has exceeded demand for the last 2 years.

Marc Faber Commenting on the July 25-26 2007 Market Sell-off

Bloomberg - July 27, 2007



Click Here To Listen To The Commentary

Michael Santoli Opining on the Markets - July 26 2007

Here's a video of Mr. Santoli, Associate editor of Barron's giving his take on the recent pummeling the markets have been taking.

Market Wrap - July 26 2007

A rough day in the markets

Check out Peter Cardillo of Avalon Partners commenting on today's market action

Bill Gross of PIMCO on Private Equity Buyouts - July 24 2007

Bloomberg Video - July 24 2007

Bill Gross of PIMCO hinting that the Private Equity leveraged buyout boom maybe coming to an end.

A quote from Gross’ Investment Outlook for August 2007

"The U.S. economy in turn will not benefit from this tidal shift and increasing cost of financing. The Fed tightens credit by raising short-term rates but rarely, if ever, have they raised yields by 150 basis points in a month and a half’s time as has occurred in the high yield market."

Ray Goldie On Cameco and the Uranium Market - July 23 2007

Commenting on Cameco's Woes and the outlook for Uranium is Raymond Goldie - Vice-President and Senior Mining Analyst at Salman Partners on BNN


Clikc Here For The Video (Approximately 12:45 minute mark)

Interview with Victor Adair - July 23 2007

An Exclusive Interview with a Professional Derivatives Portfolio Manager - Done on July 23 2007



Victor Adair is a Senior Vice President and Derivatives Portfolio Manager for Man Financial Global Canada Co and began trading financial markets over 30 years ago and has held a number of senior positions during his long career as a commodity and stockbroker. He provides daily market commentary on CKNW AM 980 radio in Vancouver and is nationally syndicated on Mike Campbell's weekly Moneytalks radio show. Mr. Adair’s trading focus is primarily on the currency, precious metal, interest rate and stock index markets and his clients are high net worth individuals and corporations.

Me: Do you believe that we are in a commodity super cycle?

Mr. Adair: Let me preface this by saying I cannot predict the future. Regarding the question, my answer is probably so – we probably are in a commodity super cycle. However, I must mention that commodities don’t just include precious metals but also encompass grains, energy, cattle and meat products etc. On the demand side of the equation, a confluence of factors involving rapidly growing economies in emerging markets and with global economic activity in general firing on all cylinders, the demand for commodities is substantially higher than it was 10-12 years ago. On the supply side, for the longest time, commodity production capability from raw material through to finished product has been neglected. So at present, the bull market in commodities has been fuelled by the supply side of the equation not being able to meet the demand side and I think the imbalance will carry on for some time.

Me: Are there any indicators or points of reference that you use, to figure out which futures contract you want to be long or short?

Mr. Adair: I’m rather undisciplined in how I make my decisions. If discipline is defined by having a checklist, I do not have a checklist. I read lots of research that is written by some very smart people but that usually ends up leaving me confused with all the differing opinions. But since I do need to have an opinion before executing a trade, I usually rely on my chart reading skills. I will not enter a trade without looking at the charts because price action represents the sum total of fear, greed, bullishness and bearishness of all participants in the market and who I am I to argue with that. Unlike market strategists who form a thesis and tend to rationalize their thesis even if the market is moving against them, I have no problem exiting a trade if the market moves against me. I consider myself to be a cynical contrarian.

Me: What if any, futures contract has the best risk to reward profile for the next 6-9 months?

Mr. Adair: Once again I’d like to preface this by saying that I cannot predict the future. My guess is that in the near future, interest rates around the world go higher and betting this way would give you a pretty good risk to reward spread. You can think of the risk as X and the reward as X+. I would trade the bond market because the long interest rate markets affect everything and are affected by everything. I would bet that long term (l0 year yield on US Treasury bonds) interest rates, which currently sit at around 5%, would increase to 6% in the next 12 months. If this trade works out, this would mean that the US dollar moves higher and commodities as a group move lower.

Me: So what contract then, has the worst risk to reward profile for the next 6-9 months?


Mr. Adair: Housing prices! Regardless of where you are located in North America the risk to reward of buying a house is skewed towards the riskier side. You can think of reward as X and risk as X+. Rising interest rates worsen the housing situation and I’m not saying that housing prices are going to zero but chances of prices going down are better than the chances of house prices going up.

Me: Thank you so much, Mr. Adair.

Implications of Peak Oil – The Case for Higher Gold Prices

The following is just a scenario I'm outlining, to which I assign a 70% probability of actually materializing.


World consumption of oil today is approximated to be 85 million barrels a day.

The International Energy Agency assumes world production of oil to grow to 111.5 million barrels per day by 2030 in their model where they envision global energy demand to be 342 million barrels per day in 2030.

So where is this growth in production going to come from?

Saudi Arabia?
In late 2005, at a speech in Washington, the Saudi Arabian oil minister, Ali al-Naimi indicated that his country had embarked on a program which would see it raise its oil production to 12.5 million barrels a day by 2009 and higher after that. In 2005, Saudi Arabian oil production capacity was estimated to be a little over 10 million barrels a day, so simple math would indicate that it would take Saudi Arabia over 4 years to increase its production capacity by a little over 2 million barrels. Let’s put that in perspective, in 2002, world oil production was estimated at 79 million barrels a day and in 2006 it was estimated to be 84 million barrels/day. This data indicates demand growth for oil to be 1.25 million barrels a day annually. If Mr. Ali al-Naimi’s prediction comes true, Saudi Arabia (which houses the world’s largest reserves of oil) would only be growing production by a little over 600,000 barrels annually, not quite at par with global demand is it?

Canada?
Can we rely on the Canadian Oil Sands for future oil supplies?
In 2005, Statscan announced that Canada produced 20 million barrels of oil less than in did the year before. In 2006, both Shell and Western Oil Sands almost doubled the estimated costs to expand their Athabasca oil sands operations. I would argue that although Canada may be able to compensate for a portion of the growth in output lost from Saudi Arabia however, it will take quite a few years for all the oil sands projects to be up and running at capacity. Furthermore, as costs relating to the development of the oil sands projects escalate, increasingly higher oil prices will be required to bring these projects on-stream and to maintain their efficiency. So, while Canada may be able to compensate for a portion of Saudi Arabia’s declining oilfields, it can’t compensate for declining oil fields around the world, can it?

Mexico?
According to the Association for the Study of Peak Oil and Gas, output from Mexico’s Cantarell oil field (the world’s third largest oil field) fell 15% in May to 1.58 million barrels a day from 1.86 million barrels/day in May 2006.

Venezuela?
About a third of Venezuela's estimated 2.7 million barrels of oil a day comes from projects that involve foreign companies so when Venezuela announced earlier this year, that they would be nationalizing their oil assets, the news sent shudders down the spines of investors and multinational oil explorers/ producers in the country. If a multinational oil company isn’t contemplating pulling out of Venezuela completely, you can be sure they are dramatically cutting back on their exploration budget allocations towards the country thereby further hindering a continual quest to discover new oil supplies.

The following quotes highlight the dire need for replenishing oil reserves:

According to Andrew Gould, the CEO Schlumberger “...the [oil] industry is dealing with a phenomenon that is exaggerated by the lack of investment over the past 18 years. This phenomenon is the decline rate for the older reservoirs that form the backbone of the world’s oil production, both in and out of OPEC. An accurate average decline rate is hard to estimate, but an overall figure of 8% is not an unreasonable assumption. The maintenance required to slow the rate of decline, and increase the overall recovery, is a key element of the supply picture going forward.”

"Our fields are depleting by between 300,000 and 400,000 barrels a day each year" [implies between 7.1% and 9.5% annual decline based on the output of 4.2 million barrels per day]
Bijan Namdar Zanganeh, Iranian Oil Minister, Bloomberg, July 27, 2005

Demand Scenario

China
China is already considered the third largest automobile market after the U.S. and Japan with 31 million cars but that figure is expected to triple by 2013 to 100 million. For 2006 alone, EIA data forecasts that China’s increase in oil demand will represent 38 percent of the world total increase in demand. Can you imagine what China’s demand for oil will be in 2013 with 3 times the number of cars on the road as 2006?

India
Future oil consumption in India is expected to show growth to 3.1 million barrels a day by 2010, from 2.5 million barrels a day in 2005. While the Indian economy may not be growing as quickly as Chinese economy, it is definitely growing faster than the economies of most developed nations. So, in time India’s consumption/demand of oil is also likely to rise dramatically as increasing numbers of people are able to afford cars and take to the streets.

I've only included China and India in this demand equation because i beleive they probably share the greatest chunk of future crude demand among any other countries in the world.

So what will happen if oil suddenly went to $150 a barrel?



When oil happens to go to $150/barrel, it would more than double the price of gasoline thereby increasing the price of all goods and services that in any way use gasoline in their input costs. As input costs rise rapidly, businesses are unable to forecast future values for their investments and therefore tend to cut back on growth. When businesses cut back on growth, employment prospects dry up, leading to an environment where a number of people have no jobs but still have to pay higher than usual prices for goods and services because the rapidly rising cost of gas has to be passed on to consumers, for business to make money. As economic growth slows, so does the flow of investments into countries that are net importers of oil. This leads to inflation, as taxes revenues fall thereby contributing to an increase in the budget deficit, which will then prompt the U.S. Federal Reserve to cut interest rates in order to stimulate growth in the economy. Historically speaking, this is bullish for gold. During this period of interest rate cuts, as the real interest rate (normal nominal interest rates minus inflation) declines and moves towards zero and then into negative territory (as it did in the 1970s), people will turn to gold and gold stocks for safety. Also, when oil does go to $150/ barrel and higher, the gold seems to track the price gain in oil.



How did gold stocks and bullion fare in the 1970s when oil went from $3 a barrel to over $35 a barrel?
On average, in the 1970's gold stocks had an annual real return of 20.6% and a total real return of 550.8%. Therefore, if you had invested $10,000 in gold stocks in 1970 and held on till 1980 you would have made yourself $65,080. Gold bullion on the other hand, had an average annual real return of 25.7% and a total real return of 884.8%. So, if you had invested $10,000 in gold bullion in 1970 and held on till 1980 you would have made yourself $98,480.

Sprott Fund Holdings As Of June 29 2007

These slides are taken from a conference call presentation on July 19 2007 hosted by Eric Sprott.






UPDATE - Sprott Growth Fund Holdings

Wolf Stone - Identity Revealed !!

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So all you frequent visitors to this blog, if you really want to know the person behind this Wolf Stone moniker, head on over to the, Globe and Mail website or the Report on Business website to catch a glimpse. The article is entitled "How to let the gurus do your grunt work" and is about 'Piggy Back/ Coattail Investing.' Piggy Back/ Coattail Investing is an investment method where a person looks for stock picks among the picks of mutual/hedge funds by scanning through SEC/SEDAR filings or press releases. If you want to learn more about this type of investing, check out this article Don’t Steal My Ideas - Where I find stock ideas and how I evaluate them?

I first want to extend my utmost appreciation to Mr. Heinzl who wrote the article and was kind enough to include me and my thoughts in a national newspaper. Secondly, my appreciation extends out to Ms. Laura Leyshon, the very sweet and patient lady who took my picture. Lastly, I want to thank all of you, my readers for frequenting my blog and giving me the inspiration to keep blogging. That's all for now, Have a Great Weekend Folks!

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Sprott Files Prospectus For Small Cap Equity Fund

According to SEDAR filings, Sprott Asset Management filed a preliminary prospectus for a small cap equity fund on July 18 2007. I guess Mr. Sprott isin't wasting too much time before putting Allan Jacobs, the $41 million dollar man to work.



Here are some excerpts from the filing:

The Fund offers three series of units (each a “Series”). Series A units are available to all investors. Series F units are designed for investors who participate in fee-based programs. Series I units are special purpose units generally available only to institutional investors or as determined by the Manager on a case-by-case basis. Generally, an investor in Series I units negotiates a separate fee that may be paid directly to the Manager by the investor or by the Fund. Series A units: Available to all investors. Series F units: Available to investors who participate in fee-based programs through their dealer and whose dealer
has signed a Series F agreement with us, investors for whom we do not incur distribution costs, or individual investors approved by us. Series I units: Available to institutional investors at the discretion of the Manager.


Purchases of Series A Units
The minimum initial investment in Sprott Small Cap Equity Fund is $5,000 ($500,000 if purchased directly from Sprott Asset Management Inc.). The minimum subsequent investment in the Fund is $500. These minimum investment amounts may be adjusted or waived in the absolute discretion of Sprott Asset Management Inc. Investors pay no fees at the time of purchase if purchased through Sprott Asset Management Inc., but may pay a fee if purchased through another dealer.

Management Fees
The Fund pays the Manager an annual management fee of up to 2.5%, subject to GST, to cover management expenses. The management fee is calculated and accrued daily and is paid on the last day of each month based on the average daily net asset value of the Fund. This fee differs among the Series of units. The management fee for Series I units is negotiated by the investor and may be paid by the Fund or directly by the investor.

Incentive Fee
The Fund will pay its Portfolio Adviser annually an incentive fee, subject to GST, equal to a percentage of the average net asset value of the applicable Series of the Fund.

Investment Objectives
The objective of the Sprott Small Cap Equity Fund is to achieve long-term capital growth by investing primarily in small capitalization equity and equity-related securities listed in Canada, with some exposure to global small capitalization equities.

Josef Schachter On Energy Stocks - July 20, 2007

BNN Market Call - July 20, 2007

Click Here For The Video

His Top Picks:
1) Sterling Resources (SLG:TSXV)
2) Oilexco (OIL:TSX)
3) Solana Resources (SOR:TSXV)

Canadian Zinc (CZN:TSX) – Sprott Asset Management’s Latest Investment July 18 2007

Sprott Asset Management Purchases 9% of Canadian Zinc Corporation

The following is an excerpt from a July 18 2007 press release:

TORONTO, ONTARIO--(Marketwire - July 18, 2007) - Canadian Zinc Corporation (TSX:CZN)(OTCBB:CZICF) is pleased to announce it has agreed to a private placement financing, subject to regulatory approval, with Sprott Asset Management Inc. on behalf of accounts managed by Sprott for $10,000,250 in Units, at a price of $0.85 per Unit, for 11,765,000 Units with each Unit consisting of one common share and one half share purchase warrant, each full warrant exercisable at a price of $1.20 per share for two years.Upon completion of the financing, accounts managed by Sprott Asset Management Inc. will hold approximately 9% of the Company shares.

About Canadian Zinc Corporation

Canadian Zinc's 100% owned Prairie Creek (zinc/silver/lead) Project, located in the Northwest Territories, includes a partially developed underground mine with an existing 1,000 ton per day mill and related infrastructure and equipment. The Prairie Creek Property hosts a major mineral deposit containing a historically estimated resource of 3.6 million tonnes (measured and indicated) grading 11.8% zinc; 9.7% lead; 0.3% copper and 141.5 grams silver per tonne and 8.3 million tonnes (inferred) grading 12.8% zinc; 10.5% lead and 0.5% copper and 169.2 grams silver per tonne, with significant exploration potential. The deposit contains an estimated, in situ 3 billion pounds of zinc, 2.2 billion pounds of lead and approximately 70 million ounces of silver. At June 30, 2007 the Company held cash of approximately $25 million and has 108,442,950 common shares outstanding which trade on the Toronto Stock Exchange under the symbol "CZN".
The proceeds from the private placement will be added to the Company's working capital and used for the ongoing exploration and development of the Prairie Creek Mine Project where the Company is currently driving a new exploration decline alongside the main vein that is advancing to the north and where 42 holes of underground drilling totaling 8,217 metres on seven 50 metre sections took place in Phase One over the past six months. The high-grade results, encountered in the drilling of these sections may be reviewed in previous news releases issued over the past six months and filed on SEDAR. (See press releases dated January 9, March 5, March 22, April 24, June 43 and July 5, 2007). The following are selected highlights:
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Hole #22 - 4.92 metres @ 15.44% Pb; 19.75% Zn and 282 Ag/t
Hole #32 - 4.89 metres @ 25.83% Pb; 9.13% Zn and 561 Ag/t
Hole #40 - 5.17 metres @ 24.35% Pb; 7.72% Zn and 242 Ag/t
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This drilling will increase confidence in tonnage and grade, and will enable a NI 43-101 report to be generated that will include a new resource estimate. Minefill Services Inc. has been commissioned to prepare the report.During Phase Two of the 2007 underground exploration programme, which will commence shortly, the decline tunnel will be extended within the hanging wall of the vein a further 250 metres to establish an additional five drill stations. In preparation for this decline extension underground ventilation, electrical, ground support and equipment are now being upgraded and mining of the decline extension will recommence in mid July 2007, with underground drilling of the next five sections expected to recommence about September 2007.

Natural Gas Prices

The following excerpt (even though it might be a little self fulfilling) provides further proof that natural gas prices have to move markedly higher so producers and explorers are able to maintain/grow their existing production. Consider this an addendum to my article "Why I'm Bullish On Natural Gas Prices"



"Jim Screaton (chairman of the Small Explorers and Producers Association of Canada (SEPAC) thinks Western Canada likely passed its peak natural gas production last year. "From now on, it will be a struggle to maintain our current output levels and I doubt we'll ever surpass 2006," he predicts. The Camton co-founder says the average producer cannot make money on new drilling for natural gas in Western Canada, while oil targets typically make financial sense only if the crude is light. "Roughly speaking, the cost of finding, developing and bringing to market new gas was about $8 per mcf last year," he says. "Companies couldn't sell gas for $8 so many of them lost money - they're not going to drill again until circumstances improve." Screaton acknowledges many exceptions exist. In particular, producers who are adding wells in districts where they've already installed processing facilities and pipelines can develop additional output at significantly lower cost but those drilling inventories will diminish quickly with each passing year." Click here for the rest of the interview

Aurelian Resources and Banro Corporation - Haywood Inititates Coverage

Haywood Initiates Coverage on Two World-Class Gold Explorers

Aurelian Resources (ARU: TSX)
Sector Outperform; Target: $10.00; Risk: Speculative

Summary of Investment Thesis:
Many analysts consider Aurelian’s Ecuadorian Fruta Del Norte project to contain in excess of 10 million ounces of gold. However, the analysts at Haywood suggest the potential for the deposit to be in excess of 16 million ounces and eventually ramping up production to an average of 480,000 ounces of gold annually at cash costs of $193 per ounce for the first five years of a 20 year mine. Haywood analysts also believe Aurelian to be an acquisition target by either a senior or mid tier gold company (which are under leveraged and cash rich). Finally, Aurelian is considered to be trading at a 57% discount to the average of recent acquisitions in the gold sector.

Click here for a Webcast Video Summary by Eric Zaunscherb discussing Aurelian

Banro Corporation (BAA:TSX)
Sector Outperform; Target: $19.50; Risk: Speculative

Summary of Investment Thesis:
Haywood analysts believe Banro to be exploring in one of the last remaining, highly prospective, undeveloped gold belts in Africa -the Twangiza-Namoya belt in the Democratic Republic of the Congo. After visiting the Banro’s projects, Haywood projects production to ramp up from 164,000 ounces annually in 2011 to over 500,000 ounces by 2014. Banro’s international management team and $48 million cash kitty is another factor that brings the team at Haywood to smile kindly at this explorer. Lastly, regarding Banro’s valuation, Haywood analysts believe that it is trading at a 54% discount relative to peer enterprise value per resource ounce and a 74% discount to takeout EV/oz metrics.

Click here for a Webcast Video Summary by Eric Zaunscherb discussing Banro

Jim Rogers, Marc Faber, Ken Fisher, Robert Schiller commenting on the Sub-Prime Crisis in America

A significant reason for the "Sub Prime Dilemma" in the United States can be attributed to the larger than usual number of home buyers failing to pay their mortgages. The following map (Courtesy the Wall Street Journal) indicates the states where foreclosures have increased the most.



For some perspective on how the turmoil apparent in the sub prime sector is affecting the American economy and some investment opportunites to take advantage of amidst this fallout -

Click here to watch a special on Bloomberg TV that aired on July 18 2007 entitled "Sub Prime Shakedown The video includes commentary from Robert Shiller, chief economist at MacroMarkets LLC, Freddie Mac Chief Executive Officer Richard Syron, Orange County treasurer Chriss Street, and Pacific Investment Management Co.'s Paul McCulley. Other guests include James Lockhart, director of the Office of Federal Housing Enterprise Oversight, Marc Faber, managing director of Marc Faber Ltd., Jim Rogers, chairman of Beeland Interests Inc., Kenneth Fisher, chairman of Fisher Investments Inc., and James Chanos, president of Kynikos Associates Ltd. Bloomberg's Margaret Popper and Rebecca McLaughlin-Duane report on the scope of subprime-related losses.

Canadian Dollar Vs. U.S. Dollar

Ashraf Laidi, Chief FX Analyst at CMC Markets US saying "The Canadian Dollar is hot, the US Dollar is not" in a BNN Interview on July 17 2007



Click here for the Video (Approximately 17:40 minute mark )

$665/Oz Target For Gold

Jon Nadler, Senior Metals Market Analyst at Kitco Bullion Dealers projecting a $665/oz target for Gold on July 17, 2007

Jean Francois Tardif - BNN Interview July 16 2007

Jean-Francois Tardif, Senior Portfolio Manager at Sprott Asset Management discussing mostly small to mid-cap stocks on BNN's Market Call July 16, 2007



His Top Picks

1) Strategic Resource Acquisition (SRZ:TSX)
2) Lakeview Hotel REIT (LHR.UN:TSX)
3) Cash

Ron Paul Google Interview Video

Republican Congressman Ron Paul is a Presidential candidate running out of Texas and my suggestion is that you shouldn’t be counting him out.

While people unfamiliar with the internet may not know Dr. Paul’s name as well as Barack Obama or Hillary Clinton, all you web 2.0 aficionados have probably heard of Ron Paul’s name in one way of another. While he may not receive the same amount of mainstream media coverage as some of the other presidential candidates, Dr. Paul is consistently among the top searched for terms in Technorati and if internet surveys have any predictive power at all, he just might end up being the next President of the United States of America. So what’s behind the popularity of this burgeoning internet celebrity? Well, I would say it’s the way his campaign has taken off, Paul has managed to leverage the power of social networking online to grow his online support and fan base. Paul’s site is very Web 2.0 friendly and is utilized as a portal to engage the visitor to discuss blog content on Digg, StumbleUpon, Facebook, MySpace etc., view recent video appearances on Youtube and pictures on Flickr and find out Congressman Paul’s schedule on Eventful.

Check out the following video to see what the HooHa is about -

Sprott Asset Management and Scandinavian Minerals (SGL:TSX)

Sprott Asset Management Increases Exposure to Nickel Market through Scandinavian Minerals





Excerpted from a press release today:

TORONTO, ONTARIO--(CCNMatthews - July 16, 2007) - Scandinavian Minerals Limited (TSX:SGL)(FRANKFURT:W3M) announces that Sprott Asset Management Inc. ("Sprott") has on July 10, 2007 filed a Report under the Securities Act (Ontario) disclosing that as at June 30, 2007, Sprott exercise control or direction, on behalf of accounts fully managed by it, over 3,651,400 common shares, representing 16.7% of the issued and outstanding shares of Scandinavian Minerals, a net increase of 1,767,800 shares, or 6.1% from the previously announced security holdings on April 12, 2007. Sprott's managed accounts holding the shares include: Sprott Canadian Equity Fund; Sprott Bull/Bear RSP Fund; Sprott Hedge Fund L.P.; Sprott Hedge Fund L.P. II; Sprott Opportunities Hedge Fund L.P.; Sprott Opportunities Master Fund; Sprott Master Fund, Ltd., and the Sprott Managed Accounts.

A little bit about Scandinavian Minerals

Scandinavian Minerals ‘current focus is the development of its 100%-owned Kevitsa nickel-copper-PGE project in northern Finland. One of the largest mineral discoveries in Finland's history, the development-stage Kevitsa property hosts a measured and indicated resource of 287 million tons at a 0.1% nickel cutoff, together with a further 544 million ton inferred resource. Kevitsa is one of the world’s major undeveloped nickel sulphide deposits and is situated in an area of excellent infrastructure. The Company holds cash of approximately $47 million and has 21.9 million outstanding common shares which trade on the Toronto Stock Exchange under the symbol SGL. Additionally, the company also trades on the Frankfurt Freiverkehr market under the symbol W3M.

Click here to watch a ROBTV interview with Peter Walker, President & CEO of Scandinavian Minerals (SGL:TSX) done in September 26, 2006 (Around 51:30 minute mark - ROBTV)

This recent bet by Sprott in Scandinavian Minerals falls squarely inline with their long term bullish view on commodities. However, at least in the short term, nickel might not be the best commodity to be invested in. The reason being, LME stocks of nickel have been rising steadily over the last few months as demand for nickel from steel companies especially in Asia continues to dwindle (just today, POSCO , the third largest steelmaker in Asia announced that it would reduce stainless-steel production by a total 50,000 tons this month and next). The price of nickel peaked at $24.59 a pound on May 16 (2007) and closed today at $14.47/lb on the LME.

Don Coxe Basic Points July 2007

Basic Points: Amazing Graces; Debt Demons

PDF Version - Click Here to Download the July 2007 Edition of Don Coxe's Basic Points

Click Here to Listen to Don Coxe's Latest Conference Call for July 13 2007

Do You Want to Win $25 ??

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The Cyber Street Report is a website where all you have to do is answer a few questions (6 actually) to have the chance to win $25, a review of your blog/website (250 word minimum, pictures, direct links) and a link under their favorite links sidebar for 1 month. The questions are very simple and do not require any financial acumen, (even though I know most of you have quite a bit more knowledge than is required for this survey) . For example, the questions for next week are:

1) What price do you think Apple (AAPL) will close at on 7/20? The most accurate subscriber will be rewarded.

2) Tie breaker. What do you think the S&P 500 will close at on 7/20? Symbol SPX

3) Do you think Google will rise or fall after their earnings release on 7/19? Symbol Goog

4) What username do you want for the survey? It must contain both letters and numbers and no longer than 7 characters.

5) Briefly, if you are a new subscriber, how did you hear about Cyberstreetreport.com? If you are not a new subscriber, answer NA.

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However, you do have to subscribe the website’s feed for a chance to enter and since there aren’t too many people subscribed (22) to it you have a fairly good chance of winning. Once you’ve done that you just email the answers to the above questions to submit@cyberstreetreport.com BEFORE Sunday night to be eligible to enter.

A sample of answers being submitted:
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Paul Van Eeden Video Interview From June 17 2007

Video Interview at the World Gold and PGM Conference held in Vancouver on June 17 & 17 2007



Paul Van Eeden discusses base metal supply and demand and hedge fund involvement in the commodity markets.

LME Stocks of Aluminium Hit 3 Year Highs

Yesterday (July 12 2007) LME stocks of Aluminium hit 3 year highs at the London Metal Exchange due to increased arrivals at Singapore, Pusan and Johor. However, does anyone care?? I dont think so, with Alcan (AL:NYSE) recently being offered a friendly takeover bid from Rio Tinto at a 60% premium from where it was trading in May and Alcoa (AA:NYSE) now being rumoured to be the next takeover candidate, aluminium shares are on absolute fire.


(Data Courtesy Metals Insider)

List of Awesome Canadian Personal Finance Blogs

My Ode to some Canadian Finance Blogs I Enjoy Reading

-->Go check out how to predict the future values of your retirement income and retirement expenses at Four Pillars

-->Having multiple streams of income is a great way to diversify your monthly cash flow, see what the FrugalTrader’s income streams are Million Dollar Journey

-->Learn how to pick good Business trusts if yield is what you’re looking for at Financial Jungle

-->Join the Money Diva on her journey through the world of investing The Money Diva

-->Since 90% of my investments are in what most people consider extrewmely volatile stocks, learn the value of ‘Low Volatility’ at Investoid

-->Learn Dave’s thought processes as he balances his RRSP portfolio online Investing Intelligently

-->Check out what’s going on at perhaps the most famous Canadian Personal Finance Blog Canadian Capitalist

Want to know if its time to Buy CIBC Bank or not, then check out Thicken My Wallet

Is Bank of Nova Scotia a buy here, to find out visit The Money Gardener

I’m sorry if I left out any of you!

Earnings Outlook for Second (2nd) Quarter 2007

July 10 2007 - Video of Sam Stovall (Chief Investment Strategist at Standard & Poors)




Sam Stovall saying we may not see as many positive earnings surprises in the second quarter (Bloomberg)

What's next for the Canadian dollar?

Find out what the Chief Currency Strategist at CMC Markets has to say ---



Ashraf Laidi, Chief Currency Strategist at CMC Markets answering ‘What's next for the Canadian dollar’? (Begins at approximately 20.10 minute mark - BNN July 11 7007)

Peter Hodson and First Majestic Silver on BNN July 12 2007

Small Caps Show on BNN - July 12 2007




Click Here For The Video Keith Neumeyer, President of First Majestic Silver Corporation (FR:TSXV) and Peter Hodson, Senior Portfolio Manager, Sprott Asset Management discussing Small Cap stocks (Begins at approximately 30.30 minute mark)

Peter's Top Stock Picks

1) Call Genie (GNE:TSXV)
2) Hudbay Minerals (HBM:TSX)
3) Antrim Energy (AEN:TSX)

Since we're on the topic of Silver, Alex Roslin might have the answer on his blog by looking into the latest Commitment of Traders data.
To find out if its finally time for Silver to resume its uptrend - Click here

U.S. Real Estate Meltdown – Is There A Silver Lining?

I beg to differ!! If the U.S. consumer has been using his home as a bank machine and been taking out loans against it to fuel this liquidity boom everyone keeps talking about, wouldn’t a decline in house prices cause a crimp in that very same consumer’s spending habits? If the consumer is not willing to go and spend money at Sears or Home Depot what makes the guy in the above video think that consumers should go out and spend money to rebuild their homes? Instead I would argue that consumers in the United States are cutting back on their spending across the board – maybe that’s why demand for contractors is declining??

Economic Calendar From July 9 - July 13 2007

United States - Market Look-Ahead For The Week



Canada - Economic Calendar For the Week

Royal Bank of Scotland Buys Into Commodities Unit for $1.35 Billion

Why I’m Bullish on Natural Gas Prices

Residential Costs of Using Natural Gar Compared to Other Energy Sources



Natural gas is used for heating/cooling buildings and water, drying clothes, cooking, lighting, generating electricity, waste treatment and incineration, metals preheating (particularly for iron and steel), drying and dehumidification, glass melting, food processing, and fueling industrial boilers among other things. So as you can see, the uses of natural gas and plentiful and since it costs far less than many other energy sources, we are not going to stop using natural gas very soon.
However, there is a problem brewing in Canada that if left unattended would drive natural gas prices substantially higher from today’s levels. The problem is that due to higher extraction, operating, labor and drilling costs, the costs of bringing a new well on-stream has risen substantially but since natural gas closed Friday at $6.56 US per million British thermal units in New York, many industry watchers and analysts predict a dramatic slowdown in drilling activity which in turn will negatively affect production growth.

Have costs really risen?

According to the Conference Board of Canada, the total costs for extracting natural gas last year (2006) increased by 10.1% and costs to drill and bring on a new gas well averaged about $5.05 per thousand cubic feet last year compared to $1.90 in 1995. Additionally, operating costs are expected to rise an average of 4.1% per year between 2007 and 2011. The result, according to the Conference Board of Canada, is that industry profits fell to $9.5 billion in 2006, about 25% lower than 2005's $12.7 billion. The board also expects natural gas production to increase by only 0.2% this year. Production and gas exports will then decline in the coming years, as conventional gas production in Alberta steadily declines.

Impact on Drilling Activity?

Industry groups such as the Canadian Association of Oilwell Drilling Contractors and the Petroleum Services Association of Canada are expecting a 20 per cent drop in the number of wells drilled this year -- the first year fewer than 20,000 wells will be drilled in more than half a decade. Evidence of this drop is already being seen in rig utilization rates in Western Canada as data released last week showed a mere 231 rigs working, less than half last year's 473. Even multinational companies like Nabors (NBR:NYSE), which operates 81 drilling rigs and 180 service rigs in Canada are feeling the price pinch, as evidenced by the following comment made by Nabors CEO Gene Isenberg in a conference in February: “Our lower 48 and Canadian results have been adversely affected by the gas prices.”

So why is a drop in drilling activity so important when levels of natural gas in storage are nearing 5 year highs?

Storage Levels of Natural Gas


The reason is because Canada is not replenishing its natural gas supplies at a quick enough pace to meet existing and future demand. According to the Canadian Association of Petroleum Producers, Canada is the world's third-largest natural gas producer and the number one supplier of gas imports to the U.S. Canada produces about 6.2 trillion cubic feet annually, and exports more than half of it to our neighbors south of the border. Total gas exports fell nominally in 2006, by about three per cent, however Martin King, a commodities analyst at FirstEnergy Capital Corp., expects that figure to accelerate to about 12 per cent, or more than a billion cubic feet a day, by the end of the year. King believes the numbers are a manifestation of lower drilling activity as big producers like EnCana Corp. (ECA:TSX) and Canadian Natural Resources Ltd. (CNQ:TSX) have pulled back on capital spending. Additionally, according to Bill Gwozd, Vice-President of gas services with Ziff Energy Group, Alberta's oil sands use 600,000 cubic feet a day to generate steam and power needed to separate oil from the tar-soaked sands. That figure is expected to rise to two billion cubic feet per day by 2015, a four-fold jump due almost entirely to the proliferation of new in-situ oil sands projects. In addition to growing demand for oil sands, the province of Ontario is increasing its own natural gas demand as it retires aging coal-fired power plants to reduce carbon emissions. At the same time as demand is increasing, he says Canadian production is expected to fall to about 17 bcf per day from about 18 bcf at present. Furthermore, Gwozd added that by 2015, Canadian production will be down by at least three bcf per day while demand will be up by three bcf per day. Ziff's analysis includes several key assumptions, most significant that the Mackenzie Valley pipeline comes into service by 2014 followed by Alaska in 2018. Any additional delays would exacerbate an already gloomy supply picture, Gwozd said.

So how high must Natural Gas prices go before drilling activity can resume at its required rate?

Expert firms such as Ziff Energy and FirstEnergy Capital Corp. estimate the natural gas industry now requires natural-gas prices of $8.50 to $9 per thousand cubic feet to recover costs and generate a 15 per cent return, a big difference from natural gas prices in Canada today, which hover around $6.56.

Natural Gas Price from a Technical Standpoint



After failing to breakout from around the $8.50 price level natural gas has now broken below both its 50 and 200 day moving averages. Although the MACD indicator seems pretty bearish for natural gas at the moment, both the RSI and slow Stochastics are showing sings of a bottom. So I think natural gas might drift between a $5.75 and $6.50 which has been its historic trading range, for the rest of the summer season.

Fundamental Outlook

With natural gas in storage at sufficiently high levels, there exists no immediate impetus for prices to head higher. However, if a major hurricane does happen to strike that could send natural gas prices upward by about $2 or more. In the absence of a major hurricane, however, natural gas will continue to drift sideways and remain in a trading range (between $5.75 and $6.50). Additionally, with the Canadian dollar hitting 30 year highs against the U.S. dollar, producers exporting to the U.S. are also feeling the pinch currency wise. So all in all, the near term picture for natural gas isn’t looking too good and hence the future call for higher natural gas prices on my part because current natural gas prices don’t support a reasonable environment for natural gas producers and explorers to continue searching for and replenishing their diminishing supplies. With little investment going into searching for new supplies and demand remaining stable, the supply demand picture gets skewed and eventually prices will go up to reflect that imbalance.

Summary

As a long term investor I’m convinced we’re going to have higher natural gas prices. As the uses of natural gas will continue to remain, demand will also remain robust however, due the points I have outlined above supply will eventually become constrained due to lack of drilling. For drilling to resume natural gas prices have to average $8.50 to $9 per thousand cubic feet for prolonged periods of time in order to inspire and cause existing producing companies to increase their cap ex budgets. So, as natural gas prices continue to move sideways and drift lower during the summer, it makes sense to chip away and accumulate positions in low cost producers.

Kerry Smith and Peter Jones (Hudbay Minerals) on Base Metals Investing

Commodities Report July 6 2007 on BNN





Base Metal Investing with Peter Jones, President and CEO of Hudbay Minerals (HBM:TSX) and Kerry Smith, Senior Mining Analyst at Haywood Securities (Around 31 minute mark – BNN)

Paul Van Eeden Video Interview on July 6 2007

BNN Market Call July 6, 2007

Paul Van Eeden of Cranberry Capital commenting on junior resource stocks and commodity markets.

His Top Picks

Altius Minerals (ALS:TSX)
Wildrose Resources (WRS:TSXV)
Miranda Gold (MAD:TSXV)

Other recent video interviews with Paul Van Eeden (President of Cranberry Capital) that highlight his bearish view on base metals and his bullish view on gold.

June 25 2007

Paul Van Eeden, President of Cranberry Capital explaining why he’s bearish on base metals and uranium and bullish on Gold (Approximately 18:16 minute mark - BNN)

June 13 2007

Paul Van Eeden ,President of Cranberry Capital on BNN's Small Caps show. His Top Picks on the show were: Wildrose Resources, Mirasol Resources, Nevada Geothermal.

Video - Peter Hodson of Sprott Asset Management July 5 2007

BNN Market Call July 5 2007

Peter Hodson from Sprott Asset Management commenting on small caps.

His Top Picks

Timminco (TIM:TSX)
Thompson Creek Metals (TCM:TSX)
Wi-Lan Inc. (WIN:TSX)

Allan Jacobs Joins Sprott Asset Management

The Tale of the 41 Million Dollar Man

Toronto, Ontario--(CCNMatthews - June 22, 2007) - Sceptre Investment Counsel (TSX:SZ) announced today that Allan Jacobs, small cap Canadian Equity fund manager, will be leaving the firm. His portfolio management duties will be re-assigned to Sceptre's Canadian equity team.



Who is Allan Jacobs?

Jacobs managed the $844-million Sceptre Equity Growth Fund, along with the $484-million Sceptre Small Capitalization Canadian Equity Pooled Fund. The Sceptre Equity Growth Fund was recently awarded the Best Canadian Small Cap Fund over one, three, five and ten year periods at the 2007 Canadian Lipper Fund Awards. Furthermore, Allan was chosen as the 2006 Fund Manager of the Year at the Canadian Investment Awards, an outstanding career achievement. The Small Capitalization Canadian Equity Pooled Fund, also managed by Allan, was awarded Canadian Small Cap Pooled Fund of the Year. Furthermore, the Sceptre Equity Growth Fund was a finalist for the 2006 Small Capitalization Equity Fund of the Year and was chosen Canadian Equity Fund of the Year in 2005. So you can see why Mr. Jacobs was such a valuable asset…worth almost $41.8 million to Sceptre. (For the exact dollar value I deducted the market cap of Sceptre before the June 22 2007 announcement which was $185.36 million from the market cap of Sceptre after the June 22 2007 announcement which was $143.53 million)

So where did this $41 million dollar man go?

[Hint: I have talked about this fund family more than any other and they were probably the first Canadian fund family to bet heavily on a Commodities Bull run]



If you guessed Sprott Asset Management, then you are correct.

Here’s a press release from July 4 2007 from Sprott Asset Management

“Eric Sprott, Chief Executive Officer of Sprott Asset Management Inc., is pleased to announce that Allan Jacobs and Peter Imhof, most recently at Sceptre Investment Counsel Ltd., will be joining Sprott Asset Management Inc. effective August 1, 2007.”

The addition of Allan Jacobs will be an excellent fit for the existing team at Sprott. Since Sprott already specializes in micro and small cap stocks, hiring a veteran small cap manager is a very smart move. Sprott is quickly growing to be the home for the best money managers in Canada and I can see a Sprott IPO in the works within the next few years.

X-Ore Resources (XOR) And Sprott Asset Management July 5 2007

July 5 2007



X-Ore Resources (XOR:TSXV) announced that it has closed a C$400,000 private placement financing with Sprott Asset Management. Sprott Asset Management has purchased 2.67 million Units at $0.15 per Unit for a total of CA $400,000. Closing is effective today with the issuance of 2.67 million common shares and the same number of half-warrants exercisable at $0.25 for 18 months.

X-Ore's Projects

In Mexico, X-Ore Resources' wholly-owned subsidiary, Minerales X-Ore S.A. de C.V., owns 3 mining properties plus the El Jabali property for which award of title is still under review by Department of Mines of Mexico.In Canada, X-Ore Resources Inc. holds 13 mineral properties, several of which are now available for option, purchase or Joint Venture. While the majority are prospective gold properties, some are former base metal producers. Most of the properties are located in the Val-d'Or gold camp of the Abitibi greenstone belt, in northwestern Quebec. The remaining properties are located in Ontario. Regarding Croinor( on eof thier Canadian projects), the Company has optioned up to 50% of the property to First Gold Exploration in a $2.4 million work program and 5.45 million share deal. The objectives of the work program is to expand the resources at depth and laterally. (http://www.x-ore.com/)

Dr. Marc Faber --Video Interview July 3 2007

Bloomberg Interview with Portfolio Manager and Editor of the "Gloom Boom and Doom" Newsletter - July 3 2007




Marc Faber sees a Fed rate cut this year and ‘asset’ bubbles everywhere.

**NewsFlash** Chinese Equities Drop 5.25% on July 5 2007

Following a 2.14% drop on Wednesday July 4 2007, the Shanghai Composite Index (SCI) plunged another 5.25% finishing the day at 3,615.87. Meanwhile, the Shenzhen Composite Index fell a similar 5.8% finishing the day at 11,783.58 points. Among the culprits for this plunge include: advise from the China's Monetary Policy Commission to the People's Bank of China on July 3 2007 to tighten money supply "moderately" to keep the economy stable, "the Ministry of Finance's upcoming issue of RMB 1.55 trillion ($204.22 billion) in special treasury bonds, the updated QDII (qualified domestic institutional investor) program, and possible cancellation of personal bank savings interest tax or an interest hike." (Interfax China) The weakest sectors included energy and media stocks.



Is this another one of those corrections that we have witnessed in the Chinese markets in the past 6 months or is the "Bubble (as Jim Rogers calls it)" finally bursting? As newly-opened A-share accounts on the Shanghai and Shenzhen bourses dropped below 100,000 on Monday, the lowest figure since the eight percent market drop on Feb. 27 it seems investor sentiment is finally dampening. However, if the Shanghai and Shenzhen staged another comeback soon I would'nt count out a rebound in the share account openings which would reinforce positive market sentiment among Chinese people. However, my wish is for a cooling and sideways moving Chinese stock market for the next few months.

Bill Belovay Video Interview on Commodities July 3 2007

Bill Belovay, Portfolio Manager, Jones Heward on BNN’s Market Call July 3 2007



Click Here for the Video

His Top 3 Picks were:
1) Teck Cominco (TCK.B:TSX)
2) Platmin Ltd. (PPN:TSX)
3) Aurelian Resources (ARU:TSX)

Dennis Gartman Audio Interview on Volatility in the Markets July 2007

Dennis Gartman Interview on CBC Radio On July 2 2007

Audio (Requires Realplayer) - Dennis Gartman – Editor of the Gartman Letter
commenting on volatilty in the markets and saying that we may reached a market top.

Video - Jay Taylor On Commodities Report - June 2007

Jay Taylor, Editor of Jay Taylor’s Gold and Technology Stocks commenting on Commodities and mining stocks

Click Here for the Video (Around the 31:00 minute mark - June 29, 2007 – BNN)

**News Flash** Spot Uranium Falls To $135/lb

Tradetech, a Uranium consulting and spot price publisher confirms a drawdown of $3 from its previous benchmark price of $138/lb to $135/lb. This is the first pullback in the Uranium spot price in 4 years. I can't say that this price decline is totally unexpected, one only has to look at the price action of Uranium stocks for the last couple of months to decipher this pullback in spot prices. Over the last 3-4 months uranium stocks have lagged the market indicating declining investor sentiment in the sector. Have investors and speculators finally run out of steam or is this simply a minor correction?
Here's some insight from a Hedge Fund Manager regarding Uranium Stocks and the Uranium Sector


Video - Brendan Kyne On BNN's Market Call June 25 2007

BCE Buyout Largest In Canadian History

BCE Sells Itself for $34.8-billion To Consortium of Ontario Teachers Pension Plan, Providence Equity Partners and Madison Dearborn Partners




The deal also includes an additional $15.9 billion in debt, preferred equity and minority interests, for a total value of $48.5 billion representing the largest takeover in Canadian history. The purchase price in stock price equivalency equals approximately C$42.750 a share. BCE announced that the Ontario Teachers Pension Plan will control about 52% of the stock, Providence Equity Partners will control about 32% of the stock and Madison Dearborn Partners will control slightly less than 10%. The rest will be controlled by unnamed Canadian investors.
According to the Wall Street journal, “The deal puts leverage of about six times BCE's cash flow on the company, a relatively low figure by today's buyout standards, but still an aggressive number for a business with stagnant revenue and profits. A group of banks including Citigroup Inc., Deutsche Bank AG, Royal Bank of Scotland Group PLC and TD Securities are arranging the debt financing. A person familiar with the matter said that only about $500 million of the debt would come via bridge loans by the banks, a relatively low number by current deal standards. Such loans, which are short-term until other financing can be arranged, have been a source of worry amid troubles in the debt markets.
However, this saga may not have ended. According to a Report on Business article written on July 1 2007: Vancouver-based Telus's chief executive officer Darren Entwistle, who had hoped to create a carrier that dominated land-line phone and wireless markets across Canada, won't rule out taking a run at BCE. "It's been a hallmark of our company that we do not close doors," Mr. Entwistle said in a phone interview Sunday evening, though he wouldn't say which way he was leaning. "We keep our options open and this is no exception." The source close to Cerberus added: "It's not over until we say it's over."
Additionally, the deal still requires regulatory approval from the relevant bodies and BCE shareholders.

Commodities with Jim Rogers - July 2 2007

Jim Rogers July 2 2007 Bloomberg Video Interview

Jim Rogers saying he likes agricultural commodities, water treatment and water transport companies. He also thinks industrial commodities continue to be in a bull market and that gold is overbought at these levels as evidenced by futures contracts. Rogers also says that he has sold all his emerging market holdings except China but will have to sell China if their stock market doubles again this year.

Why the surge in demand for Nuclear Energy?

With the world population forecasted to rise from 6 billion to 8 billion in the next 25 years so is our forecasted demand for energy which is expected to double by 2050. Combine this with a growing global movement to save the planet from ‘Global warming’ and companies/ governments around the world are striving to utilize and look for alternative sources of energy. The movement towards alternative energy supplies is driven by a need to reduce carbon dioxide emissions into the atmosphere, reduce our dependence on fossil fuels and curb our soaring energy costs. However, even alternative energy supplies, be it for a company or for a country need to have certain attributes: reliability, economic feasibility and environmentally safe. So does nuclear energy fit this bill?


1) Since nuclear reactors are not affected by unstable weather conditions, supply (uranium) cost fluctuations and frequent shutdowns they have been very effective and reliable as producers of the required level of electricity for electric grids to operate. Also, nuclear reactors can run continuously for between 600 to 800 days without refueling, which on average took around 40 days in 2006 but has come down from 100+ days in 1990. Lastly, a tally of the world’s uranium resources shows that 50% of the world’s supply is found among 4 countries with relatively low geopolitical risks: Australia, Kazakhstan, Canada and the United States. So to sum up, nuclear reactors supply prolonged stable nuclear power with increasingly minimal refueling time and little geopolitical risk to uranium supplies.


2) If a country/government/company does not have direct access to low cost fossil fuels, nuclear energy provides a very competitive alternative. According to the World Nuclear Association, the cost per kilowatt hour for nuclear energy is $1.68 cents, for coal fired plants it is $1.90 cents, for oil it is $5.39 cents and for Gas it is 5.87 cents. Although the initial startup costs to build nuclear reactors are quite high the costs to fuel the reactor are minimal. According to the World Nuclear Association, typically, the total fuel costs of a nuclear reactor are about one third of those for a coal-fired plant and between a quarter and a fifth of those for a gas combined-cycle plant. As technology and efficiency is further refined, the fuel costs for nuclear reactors will continue to decline. Nuclear energy is also very efficient due to its concentrated source of energy, for example one uranium fuel pellet is the equivalent of 17,000 cubic feet of natural gas, 1,780 pounds of coal, or 149 gallons of oil. This is why a typical 1000 megawatt reactor can provide enough electricity for a modern city of up to one million people. Thus, while capital costs for building nuclear reactors are much higher than competing energy sources the fuel costs are much lower so as long as reactors function above a certain threshold (above 70%) nuclear energy remains one of the cheapest energy sources.


3) Nuclear reactors do not burn anything so they do not produce any harmful byproducts. Nuclear energy also generates electricity without releasing any harmful greenhouse gases or carbon dioxide into the atmosphere. According to the Nuclear Energy Institute, in 2005, U.S. nuclear power plants reduced emissions of nitrogen oxides and sulfur dioxide—pollutants controlled under the Clean Air Act—by 1.1 million short tons and 3.3 million short tons, respectively. Also in 2005, U.S. nuclear plants prevented the discharge of 682 million metric tons of carbon dioxide into the atmosphere. Currently nuclear energy saves the emission of 2.5 billion tonnes of carbon dioxide relative to coal and doubling the world's nuclear output would reduce CO2 emissions from power generation by about one quarter. There exist several methods to manage and safely store radioactive wastes from nuclear reactors and one of them happen to be the ‘multiple barrier’ method which immobilizes the radioactive elements and isolates them from the environment. The method involves, concealing the radioactive waste in an insoluble matrix such as borosilicate glass or synthetic rock and then sealing it inside a corrosion-resistant container. This is then followed by placing the container in a deep underground in a stable rock structure and surrounding it with containers with an impermeable backfill such as bentonite clay. The reason that this is an effective method is because after 40-50 years radioactivity levels fall one thousandth of the level at removal.


So I hope by now I have managed to highlight to at least a few of you why in 2006, world nuclear generation increased by 1.4% with nuclear power plants generating 2,808 terawatt hours of electricity, the highest nuclear electricity generation ever. In short, its because nuclear energy is reliable, economically feasible and environmentally safe.