New Depression?

In the summer of 2005, when I first concluded the U.S. consumer was going to run out of ‘spending gas’, I began seriously studying the U.S. Trade Deficits that began accumulating in 1973 – two years after President Nixon (simplistically said) ‘took the world off the gold standard’ into a world of fiat currencies.  I have written with some frequency in my e-mails about the U.S. trade deficits, and how I see them as a leading indicator of shifts in the balance of economic power among nations (see for example http://goo.gl/fYUwE (March 11, 2010).  For the first time, I recently found an article that also discusses this issue.  Titled ‘Debt-Financed Trade Caused the New Depression‘ – reading time 3 minutes.

The article says that when a ‘gold standard‘ existed trade among nations was ‘de facto’ (my words) balanced, but became unbalanced after 1971.  It also says no country that has ended up in a position of a large trade surplus after 1971 has successfully avoided ‘bubble problems’ in their own economies.

I think this an article you ought to seriously consider reading and thinking about.  If it piques your interest you might also consider linking to my March 11, 2010 e-mail and read what I then said about the U.S. net trade deficits, which most of a year later are further increased quite significantly.

History Produced

A recent article claims ‘History Is Being Produced, Not Made‘ – reading time 2 minutes.  The thesis set out in this article is that there are two “huge processes” occurring right before our very eyes, being the:

·           Arab liberation revolution (read Tunasia and Egypt for starters); and,

·           acceleration of the decline (I assume the authors mean in economic terms) of the West.

While I think this short article is somewhat ‘sensationalist’, I still think it is worth you reading and thinking about.  On one hand if you regularly follow world events as part of your ongoing investment due diligence and strategy I don’t think you are likely to find much new in it.  On the other hand it is represents a quick ‘overview refresher’ opportunity and does put forward some ideas I consider to be somewhat impractical but controversial.

Additions to Stock Research Portal’s Company Universe

Today we added the following Companies to our Company Universe:

Newmac Resources Inc. (TSXV:NER).  We currently categorize Newmac Resources Inc. as a molybdenum explorer (copper, gold, tungston) operating principally in Canada (British Columbia).  Newmac Resources Inc.’s current market capitalization is approximately Cdn$2 million.  Review research data on Newmac Resources Inc.

PCI-1 Capital Corp. (TSXV:CUV).  We currently categorize PCI-1 Capital Corp. as a base metals explorer (copper) operating principally in the United States (Arizona).  PCI-1 Capital Corp.’s current market capitalization is approximately Cdn$180 million.  Review research data on PCI-1 Capital Corp.

Spartan Exploration Ltd. (TSX:SPE).  We currently categorize Spartan Exploration Ltd. as an oil & gas explorer and producer focused on oil operating principally in the Canada (Alberta, Saskatchewan).  Spartan Exploration Ltd.’s current market capitalization is approximately Cdn$217 million.  Review research data on Spartan Exploration Ltd.

Press Release Highlights

The following table summarizes the companies in Stock Research Portal’s Company Universe who last Friday issued Press Releases and whose shares increased in price from the previous day’s close by more than Cdn$0.05, more than 10%, and whose share volumes last Friday exceeded their trailing 3 month average trading volume.  You can research each of these companies by clicking on the company name in the table.

* Yesterday’s data, or latest trading day’s data, as applicable

Insider Trade Highlights

The following table summarizes the companies in Stock Research Portal’s Company Universe for who our system last Friday reported insiders who filed reports indicating they had acquired shares through ‘purchase’ transactions.  You can research each of these companies by clicking on the company name in the table.

Visit Stock Research Portal for free stock market data, analysis, and research on over 1,600 Mining and Oil & Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer

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Gold & Silver

I suggest you read a short article published last month titled Gold and Silver Investors Should Be Following China’s Moves Into U.S. Financials – reading time 2 minutes.  The article discusses the relationship between the U.S. and China as viewed by the author.  The author discusses the China purchasing gold and silver, entering the retail U.S. banking market, his concern of what he sees as the “grave danger of a U.S. dollar collapse into new lows”, his expectation of major (natural resource) deals in 2011, and that at the time he wrote the article (January 26) he viewed “mining stocks and bullion (as) providing interesting opportunities”.

China Stocks

Two recent articles titled ‘Uncovering the Real Problem With Chinese Reverse Takeovers‘ and ‘15 Due Diligence Red Flags for U.S.-Listed China Stocks‘ – total reading time for both 10 minutes – discuss so-called ‘reverse mergers’ by Chinese companies as a venue to ‘go public’ in the U.S.  Simply put, a reverse merger is a transaction pursuant to which a private company completes a takeover of a non-operating public company ‘shell’ as a way to facilitate the private company becoming a public company in an expediently.  The author of these two articles is not altogether negative on this process, or on some of the public companies that have done this and currently trade.  He does quote one New York based group as saying “China-based companies with VIE (variable interest entity) structures are the single biggest ‘time bombs’ in the U.S. Markets”.

As I read the articles, the first is really background for the second.  The second article sets out what its title says it does – 15 Due Diligence Read Flags – as well as some what it refers to as “interesting facts”, many of which go directly to risk assessment.  I commented on the second article at the time it was published as follows:

In my opinion this is a good due diligence list that ought to be reviewed and considered by all investors who participate in the equity markets – irrespective of whether they are investing in Chinese based companies, American based companies, or companies based in any other country. Good and thoughtful work.

I suggest you at least read the second article, if for no reason other than to review the author’s due diligence check list – much of which can be applied to investing and trading in resource stocks.

Additions to Stock Research Portal’s Company Universe

Today we added the following Companies to our Company Universe:

Cap-Ex Ventures Ltd. (TSXV:CEV).  We currently categorize Cap-Ex Ventures Ltd. as a gold explorer operating principally in Canada (Yukon). Cap-Ex Ventures Ltd.’s current market capitalization is approximately Cdn$19 million.  Review research data on Cap-Ex Ventures Ltd.

Metalline Mining Co. (TSX:MMZ).  We currently categorize Metalline Mining Co. as a base metals explorer (copper, gold, lead, silver, zinc) operating principally in Mexico (Africa – Gabon).  Metalline Mining Co.’s current market capitalization is approximately Cdn$116 million.  Review research data on Metalline Mining Co.

Stream Oil & Gas Ltd. (TSXV:SKO).  We currently categorize Stream Oil & Gas Ltd. as an oil & gas explorer and producer operating principally in the Europe (Albania).  Stream Oil & Gas Ltd.’s current market capitalization is approximately Cdn$174 million.  Review research data on Stream Oil & Gas Ltd.

Press Release Highlights

The following table summarizes the companies in Stock Research Portal’s Company Universe who last Friday issued Press Releases and whose shares increased in price from the previous day’s close by more than Cdn$0.05, more than 10%, and whose share volumes last Friday exceeded their trailing 3 month average trading volume.  You can research each of these companies by clicking on the company name in the table.

* Yesterday’s data, or latest trading day’s data, as applicable

Insider Trade Highlights

The following table summarizes the companies in Stock Research Portal’s Company Universe for who our system last Friday reported insiders who filed reports indicating they had acquired shares through ‘purchase’ transactions.  You can research each of these companies by clicking on the company name in the table.

Visit Stock Research Portal for free stock market data, analysis, and research on over 1,600 Mining and Oil & Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer

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• After Spain, is Italy Next?
• Spain and Spanish Bank Dilemma!

Global Earnings & Book Ratios

A recent article shows Global PE and Price to Book Ratios – reading time 5 minutes – in an interactive map readers can click on and see comparative Price/Book, Price/Earnings, Price/Sales, 5 Year Revenue Growth and aggregated Market Capitalization for about 20 countries, and that same information in a chart for an additional 10 countries.  While these are from my perspective ‘very high level’ investment and valuation ratios, I found them none-the-less interesting and informative from a ‘country-comparison’ point of view.  To some degree the differences between countries might be thought to be one very high-level indicator of comparative country risk – see following commentary – although I personally wouldn’t ‘take that to the bank’.

Buying Overseas Stocks

A recent article titled ‘The number one danger when buying overseas stocks‘ – reading time 4 minutes – focuses on the risks faced by mining (and other sector) companies who operate in ‘overseas’ jurisdictions.  Written in general terms, this article emphasizes the point that when investing or trading in the shares of mining or oil & gas companies it is critically important (in my view the #1 risk assessment issue) to make an assessment of the current and prospective political and economic climates of the countries within which they operate.  As discussed (at a high level) in this article, it takes several years from initial exploration permitting to exploit a resource – and over that period of time governments, government policies, country specific economic drivers, and government revenue requirements all can change.  Sometimes, of course, such changes can be positive.  However, where they are negative such changes clearly impact risk in a negative way and influence investment or trading returns.  Just a few days ago in an e-mail I noted concerns I had with Mexico in the context of its declining oil revenues.  This is, of course, only one example.

The article raises the issues of changes to tax laws, change in or cancellation of contracts if governments change, corruption, and government possible interest in  ‘sharing the spoils’ going up in proportion to the success of a project.  The article does not mention changes in laws related to Corporate Social Responsibility issues, including safety standard enhancements, aboriginal rights issues, and environmental law changes – all of which can burden companies with unexpected costs through their development, extraction, and processing cycles.

The author notes the website of Transparency International, which ranks countries in order of ‘fair play’, and Kroll Associates, a company that specializes in the assessment of risk relating to politics and security.  Transparency International is a non-government organization that monitors and publicizes corporate and political corruption.  Based in Berlin, Germany, it publishes and annual ‘Corruption Perceptions Index’.  The author also suggest he finds no consistency on the part of analysts (I assume he means among analysts, as contrasted to being critical of individual analysts) in their assessments of country-specific risk.

In any event, if you invest or trade in mining and oil & gas equities I suggest you read this article, and think about it carefully.  We are about to make the country-specific risk data found in Stock Research Portal more obvious for each company in our data base, but for the time being you can find information on about 65 countries by visiting our website and clicking on Country Specific Economic and Political Commentary found under the Economic Research tab in the Main Site Navigation.  Alternately, you can click here and visit that page.

U.S. Municipal Defaults

Reggie Middleton (BoomBustBlog.com) recently wrote an article titled ‘Here Come Those Municipal Defaults That Everyone Said Couldn`t Happen‘ – reading time 7 minutes.  The article is quite detailed, claims to have predicted U.S. municipal defaults as early as 3 years ago, and suggests they indeed are coming, being largely related to declined house prices and foreclosures.  As this topic is often in the media of late, I suggest you read this article and consider the consequences of such events if they should occur in the contexts of what I see as the ongoing U.S. economic malaise and your investment strategy.

Additions to Stock Research Portal’s Company Universe

Press Release Highlights

The following table summarizes the companies in Stock Research Portal’s Company Universe who yesterday issued Press Releases and whose shares increased in price from the previous day’s close by more than Cdn$0.05, more than 10%, and whose share volumes yesterday exceeded their trailing 3 month average trading volume.  You can research each of these companies by clicking on the company name in the table.

* Yesterday’s data, or latest trading day’s data, as applicable

Insider Trade Highlights

The following table summarizes the companies in Stock Research Portal’s Company Universe for who our system yesterday reported insiders who filed reports indicating they had acquired shares through ‘purchase’ transactions.  You can research each of these companies by clicking on the company name in the table.

Visit Stock Research Portal for free stock market data, analysis, and research on over 1,600 Mining and Oil & Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer

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Read Carefully

An article from The Opinion Pages of The New York Times written by Jeffry A. Frieden (a ‘professor of government’ – a title I am not familiar with) titled ‘Was the Financial Crisis Avoidable‘ – reading time 3 minutes – begins by saying “Many things contributed to the Great Recession of 2007 – 2010“.  I think that first sentence to a casual reader might produce a ‘warm feeling‘ that all is well with the U.S. and world economies and one might reasonably assume we all are now on a program that will lead us back to where we were pre-2008.  If you read my e-mails you know I believe there are many potholes in the road from here, and that to say America is no longer in recession is a statement based on a theoretical ‘economist definition’ of ‘recession’ and ‘recovery’ when I think that would be a very hard sell to Main Street Americans.

I am not sure reading the article will tell you anything you don’t know if you have been reading my e-mails regularly.  The point of this comment is to point out once again that from my perspective readers of anything – obviously including these e-mails – ought to take in what they read, digest it, filter out the extraneous and overblown statements that often are made, and think about whether what they are reading makes sense.  I think many reporters and commentators are generalists.  I further think generalists tend to make general – often not always complete or correct – statements. I suggest you read what you read with care and thought.

Molybdenum

U.S. Housing Armageddon?

I suggest you read a short article titled ‘Housing Armageddon: 12 Facts Which Show That We Are In The Midst Of The Worst Housing Collapse In U.S. History‘ – reading time 4 minutes.  The article lists a number of statistics which, if accurate (I have not independently verified them), are eye-opening in my view.  These include

1. that approximately 11% of all U.S. homes are currently empty,
2. homes actually repossessed reached 1 million in 2010,
3. at least 8 million Americans are one month behind in their mortgage payments, and of these 5 million are at least two months behind, and
4. almost half of U.S. mortgages could have negative equity by the end of 2011.

I have talked about U.S. housing and the difficulties it faces in a number of previous e-mails.  The U.S. residential housing sector has historically been a major U.S. employer, so this impacts the U.S. ‘recovery’ in two major ways

1. reduced jobs that are not coming back to any degree as yet, and likely won’t come back for many years, and
2. retail sales and related government revenues given that Main Street America is out of ‘spending gas’ in circumstances where its housing is a psychological drag on spending.

Those are my views.  I suggest you read the article and determine whether it, along with other data you are aware of, leads you to the same or different conclusion than I reach.

Additions to Stock Research Portal’s Company Universe

Today we added the following Companies to our Company Universe:

Batero Gold Corp. (TSXV:BAT).  We currently categorize Batero Gold Corp. as a gold explorer (copper) operating principally in South America (Colombia).  Batero Gold Corp.’s current market capitalization is approximately Cdn$128million.  Review research data on Batero Gold Corp.

Crazy Horse Resources Inc. (TSXV:CZH).  We currently categorize Crazy Horse Resources Inc. as a base metals explorer (copper, gold) operating principally in Asia (Philippines).  Crazy Horse Resources Inc.’s current market capitalization is approximately Cdn$59 million.  Review research data on Crazy Horse Resources Inc.

Palliser Oil & Gas Corporation (TSXV:PXL).  We currently categorize Palliser Oil & Gas Corporation as an oil & gas explorer and producer focused on oil operating principally in the Canada (Alberta, Saskatchewan). Palliser Oil & Gas Corporation’s current market capitalization is approximately Cdn$76 million.  Review research data on Palliser Oil & Gas Corporation.

Press Release Highlights

The following table summarizes the companies in Stock Research Portal’s Company Universe who yesterday issued Press Releases and whose shares increased in price from the previous day’s close by more than Cdn$0.05, more than 10%, and whose share volumes yesterday exceeded their trailing 3 month average trading volume.  You can research each of these companies by clicking on the company name in the table.

* Yesterday’s data, or latest trading day’s data, as applicable

Visit Stock Research Portal for free stock market data, analysis, and research on over 1,600 Mining and Oil & Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer

Possibly Related Posts:

• Greek Eurozone Exit Consequences?
• Q1 2012 Europe and Eurozone GDP!
• An Accident Waiting to Happen, or ‘Ever Closer To The Cliff’!
• After Spain, is Italy Next?
• Spain and Spanish Bank Dilemma!