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B4 The Bell Tuezelday July 27


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Correction...........GOOGLE......offering only 10% of stock to the public

 

valueing itself @ 36 BILLION..........over100 times earnings.

 

i think disaster awaits this IPO

 

a sucker is born every minute....but.....you can't fool all the people, all

the time.

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Hey Brian, you said the other day you were still holding IVAN. So am I, and I remember Doc saying (a long time ago) that the downside CMAP was 1.54, or something close to that. At the time it was still 4 or so. Anyhow, it blew right through that. Where do you see the bottem? I still believe and want some more, I'd just like to find the sweet spot. Looks like as low as $1 to me.

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Good Morning Crew- We are at an inflection point. My stop is at 1088-if the market can climb over 1087 and then 1092 a short term bottom will probably be in. Should we break 1080 then we BEARS can party on. So ratchet your stops down, don't let $ get away. The Pig flies alone at the open. ;)

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A question about the unwinding of the carry trade. Leaving charts aside for a moment, I've been wondering whether institutional exiting of those positions wouldn't wind up in rising short rates but declining long rates as those players cover their positions. My understanding had been that institutions were borrowing short and lending long, so unwinding would reverse that. I'm sure I'm misunderstanding this.

Carry trade requires investing short-term money long-term to capture the spread. Since the Fed has pegged the short end the increase demand did not cause short rates to rise despite rising demand.

 

Unwinding this trade will create supply in the long end causing rates to rise. Less demand in the short end would, everything being equal, cause short rates to drop. Since the fed pegged these rates to begin with short rates should remain where they are.

 

Where it gets interesting is in the economic effects of unwinding. If commodity prices and economic ouput fall due to contraction in speculative activity then one would expect the rate curve to flatten. Hence the fed can keep the banks liquid by alllowing them to make a spread between o/n and short rate, but the rest of us are screwed as the remainder of the curve flattens. A substantial economic slowdown will cause the yield curve to invert (upside down nike swoosh)

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Guest yobob1

This illustrates what I have been saying about the gold miners for a while now. The low prices a few years back forced them to run their higher grade ores in order to appease the investors. Now as prices have risen they are running lower grade ores which leads to lower production and higher costs per ounce.

 

IMO, overall global gold production is destined to gradually fall. A lot of the high grade ore has been consumed, so they must process increasing amounts of ore to obtain the same amount of gold. There are no new big fields left to discover while simultaneously the older fields are playing out. A lot like the situation with oil. While it is somewhat negative for the miners, I can't see anything but positive implications for the metal itself.

 

But the third quarter is expected to be the weakest quarter due to expected mine sequencing changes at Pierina, mining of lower ore grades including both gold and silver content at Eskay Creek, and higher costs at its Goldstrike underground operation in Nevada.

 

Barrick earnings

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