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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (51214)	5/9/2002 8:28:32 PM
From: t2	Read Replies (1) \| Respond to of 65232

JW, RE: Interesting--Dollar/Yen/Euro. I don't recall posting this here. I found the comment below found in the article very interesting. While the Japanese government has been trying to talk down their currency, look what a ex-finance minister in Japan had to say. It is obvious who would be inclined to tell it like it is since there is no political pressure on him. The longer term outlook was for a weaker dollar, according to former Japanese Finance Minister Eisuke Sakakibara. He told a gathering in Hong Kong on Wednesday that a move of the yen to 120-125 yen to the dollar was more likely than a move to 130-135 and forecast parity in the euro-dollar rate in the next 12 months. kitco.com

To: Jim Willie CB who wrote (51214)	5/9/2002 8:29:58 PM
From: t2	Read Replies (1) \| Respond to of 65232

Alabamians must wait on tax refunds: State's broke Message 17448748

To: Jim Willie CB who wrote (51214)	5/9/2002 10:00:47 PM
From: stockman_scott	Respond to of 65232

Flap over gold derivative "firings" By: Tim Wood Posted: 2002/05/08 Wed 16:00 \| © Miningweb 1997-2002 PRINCETON, New Jersey -- Gold bug extraordinaire Bill Murphy reported in a circular to readers of the LeMetropole Web site that JP Morgan Chase's derivatives operations are in chaos. The bank flatly denies the claims and Miningweb has verified that at least one of the executives said to have been "fired" is still on staff. Murphy's note reads: "…my source received the following from a futures and options broker in London who works for one of the Gold Cartel bullion banks: * The gold derivative department of J.P. Morgan Chase is being investigated. * The man who ran the department has been fired. * This was discussed on CNBC Europe, but was called "still a rumor" by the program host. * It appears the "conspiracy guys" were right all along." Murphy also says a South African source with links to JPMC claims it has: "lost control of the gold market and that the gold derivative department was a mess." Donald Eckert, global bullion risk manager at JPMC New York, was contemptuous of the claims and says nobody has been fired in the derivatives or bullion trading departments. He also denied Murphy's report that JPMC managing director of global commodities, Dinsa Mehta, was axed "two weeks ago". Eckert says Mehta volunteered for retirement after the global forex options, forex and gold trading desks were rationalized into a single department. "He was not fired at all, he chose to resign." As Muphy notes, corporate resignations and retirements are often sublimely obtuse with highly charged executives suddenly in the mood for family time and more golf. Enron Another wrinkle is Mehta's involvement in the Enron fiasco. The House Committee on Energy and Commerce in March called on JPMC to provide copies of any correspondence involving Mehta and Enron's Mahonia subsidiary. Mahonia was a Jersey (British Channel Islands) energy trading business established by JPMC in the early 90s which did most of its business with Enron. Initially it focused on year-end transactions apparently designed to shift tax losses between reporting periods but also served as a capital raising vehicle. When Enron collapsed, Mahonia owed JPMC billions of dollars, which insurers are now refusing to cover because they say the energy transactions were fraudulent. Mehta's precise role in Mahonia is unclear, but he is said to have boasted to colleagues about the fees the transactions generated for JPMC, and which presumably translated into handsome bonuses. The structure of the energy trades was nearly identical to gold hedging with which Mehta would have been especially familiar. Hedging Indeed, Mehta is well known as an arch proponent of hedging and says routinely that gold has been "stripped of its monetary attribute by the globalisation of the international financial system" and that gold has lost its "crisis currency" role. He was not wholly negative, noting at the 2000 Australian gold conference: "Freed of central bank supply, underlying fundamentals are building an impressively positive case: low investment in new supply, net reserve exhaustion, and a solid demand base, that should allow cycle ranges to eventually trend higher perhaps sharply higher toward the end of the central bank supply pipeline." While he relentlessly promoted gold hedging, Mehta was never an all-or-nothing player. He urged companies to do nothing more than manage their revenues better according to the price cycle and has credible evidence to show that it worked in gold's trough. "A gold mining company can today position itself anywhere along a wide risk spectrum. The derivatives market simply enables that choice," he said. The problem now is that the hedgers have been caught on the hop in failing to call the cycle turn more precisely – they came to believe their own thesis that gold is irredeemably a commodity. In the context of the current uptrend in gold prices, Metha's retirement probably might rightly be taken as another bullish sign.

To: Jim Willie CB who wrote (51214)	5/9/2002 10:03:43 PM
From: stockman_scott	Respond to of 65232

Canada Base-Metals Companies Ripe For Consolidation, DBRS Says Thursday May 9, 5:19 pm Eastern Time VANCOUVER -(Dow Jones)- Canadian base-metals mining companies are increasingly having trouble earning reasonable returns, an industry review by Toronto -based Dominion Bond Rating Service concludes. As mid-sized players, Canadian companies could be in the next wave of a " massive rationalization" underway in the base-metals sector, which has already caused many companies to disappear, DBRS analysts David Smith and Esther M. Mui wrote. Canada has largely escaped the takeover trend but mid-sized Canadian companies such as Inco Ltd. (NYSE: N - news) (N), Noranda Inc. (NRD), Falconbridge Ltd. (T.FL) and Teck Cominco Ltd. (CLT - news) (TEK.B) "may be vulnerable to an ownership change," they wrote in the review, titled "The Emergence of the Big 4 Mining Companies and The Decline of Canadian Mining." The big four of the title are Rio Tinto PLC (U.RTZ), Anglo American PLC ( U.AGL), BHP Billiton Ltd. (BHP) and Alcoa Inc. (NYSE: AA - news) (AA). If the Canadian base-metal mining companies were to merge, their combined 2001 sales of $7.4 billion would still be smaller than any one of the big four global players, DBRS noted. "This shows how relatively small they are today individually, relative to what is happening in mining," the DBRS report states. The credit analysts said the Canadian firms are too concentrated in relatively few metals, and thus their earnings are highly volatile; they're too concentrated in relatively few countries; and although they have cost- competitive mines with long lives, the Canadian companies didn't benefit from the "massive" currency devaluation in South Africa , and to a lesser extent Australia , that helped the bigger international companies. Canadian base-metals companies could merge with each other or with other mid- tier producers, or they could be bought by one of the big four, DBRS predicted. "Australia has already faced this issue, and there are few mid-sized Australian mining companies left," DBRS said. "Canada could be the next focus of consolidation, possibly starting with Noranda/Falconbridge," the bond-rating service said. Noranda owns 57% of Falconbridge and has been slowly increasing its stake in recent years. The conclusion about consolidation doesn't pertain to Alcan Inc. (AL), because the Montreal -based aluminum company has the size and global presence to remain number two in that business behind Alcoa, according to DBRS. Canada is losing its market clout in mining to Australia , Chile and Peru , the authors also said. Canada can't compete with the low-cost copper mines of Chile and Peru , while in nickel, both Falconbridge and Inco are proceeding with new nickel projects in New Caledonia , they pointed out. Large Canadian mines, such as Sullivan or Polaris (both owned by Teck Cominco), are closed or near the end of their lives, the review noted. The Sullivan zinc-lead mine in British Columbia closed last year and the Polaris mine in Nunavut is scheduled to close later this year. "While there are a few exceptions in the diamond area, the long-term trend in Canadian mining has been downward," the review said. -Lynne Olver, Dow Jones Newswires; 604-669-1595; lynne.olver@dowjones.com biz.yahoo.com