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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?


To: RealMuLan who wrote (20121)1/1/2005 4:40:17 PM
From: mishedlo  Read Replies (1) | Respond to of 116555
 
Miners set for 'obscene profits' in 2005 - Merrill
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Prices of commodities that China needs to fuel its rapidly expanding economy will probably increase sharply in 2005 as demand outstrips supply for another year, Merrill Lynch fund manager Evy Hambro said on Wednesday.

Noting the strong performance of commodities in 2004, particularly base metals such as nickel and copper, Hambro told reporters at a briefing in Hong Kong that he expected continued strong demand from China to support prices.

"The key thing though... is what is happening in the mining industry. Supply remains constrained," said Hambro, fund manager for Merrill Lynch International Investment Funds's (MLIIF) World Mining Fund, and its World Gold Fund.

"The mining industry is unable to grow its supply fast enough in order to be able to match demand, and as a result the deficits that are in place today will remain in place in 2005 and we're going to have a very strong environment for commodity prices going forward."

Hambro said that producers of bulk commodities such as iron ore and coking coal -- used for steel production -- and coal for power plants were on course for bumper profits in 2005.

"Things like iron ore, coal, industrial minerals, they're all having a very very strong pricing environment at the moment," said Hambro. "We're going to see some exceptional price increases for most of these commodiites during the annual price negotiations that take place at the beginning of each year." Citing coking coal as an example, Hambro said that while prices had settled at $58 per tonne last year, the price had soared above $100 a tonne in recent weeks, with one cargo for a Brazilian customer reportedly priced at $137 per tonne.

"We're talking about dramatic price increases for this commodity," said Hambro.

"The companies that produce these materials will make obscene amounts of money next year, obscene profits and obscene cashflow." Key holdings in MLIIF's World Mining Fund, which has nearly $1.7 billion under management, include the world's largest diversified miner, BHP Billiton, Brazil's CVRD and global miner Rio Tinto Ltd.

Hambro said Merrill was confident that despite recent volatility in metal prices, mining companies would see record profits in the year ahead.

"The record results that have been released by the major mining companies in the first half of 2004 will undoubtedly be surpassed in the second half of the year. Looking forward, we believe that the sector is set to break earnings and cash flow records again in 2005," said Hambro.

"Investors who believe, as we do, in the long term positive outlook should look through the short term shifts in sentiment and take advantage of share price weakness to build positions." Gold prices, which have soared in 2004 to more than $450 an ounce from a price of about $400 12 months ago, are also expected to provide strong support as investors buy the yellow metal as a hedge against the falling U.S. dollar and as a diversification play.

Hambro said the bull market in gold should continue because of shortages among miners and central bank gold sales. Gold prices have increased more than 50 percent since 1999.

"We've actually got a gold market now that's in deficit," said Hambro.

"Gold mine supply continues to decline, central bank sales are dramatically lower this year versus last year and central bankers are making hints that they might try to increase some of their gold holdings." If those factors alone weren't enough to drive gold prices higher, Hambro said, China's demand for gold is expected to increase three-fold over the next three years, to 600 tonnes per year from 200 tonnes.

"That 400 tonnes of additional supply is about the same amount of gold as South Africa produces," said Hambro.

South Africa is the world's largest gold producer.

miningweekly.co.za



To: RealMuLan who wrote (20121)1/1/2005 5:17:02 PM
From: mishedlo  Read Replies (2) | Respond to of 116555
 
Evictions Increasing in Denver Area

Evictions in several metro-area counties are at a five-year high, as thousands of people in low-wage jobs struggle to earn enough money to make their rent and support their families each month.

The increase in the number of people being kicked out of their homes far outpaces the 7.7 percent population growth rate the seven-county metro area experienced from 2000 to 2003, the most recent year for which census figures are available.

In Denver, eviction orders are up 55 percent this year over 2000, rising from 3,549 to 5,517, while Jefferson and Adams counties have seen 58 percent and 38 percent increases, respectively, in eviction orders during the same period.

Meanwhile, the number of evictions in Douglas County climbed more than 400 percent, from 141 in 2000 to nearly 600 this year.

The data are kept by sheriff's offices in each county, some of which track the number of evictions, while others report the number of eviction orders they receive from the courts. Fifty to 60 percent of eviction orders are typically resolved before an eviction is carried out, counties reported.

Doug Wayland, of the Colorado Coalition for the Homeless, said a lagging economy is behind many of the evictions. Some working families don't make enough to afford rent, a category of people often referred to as the working poor.

"It goes back to the people who are in that lower-income sector," Wayland said.

He pointed to figures from a report released this month by the National Low Income Housing Coalition that says that the so-called housing wage for 2004 is "out of reach" for those in the lower-income bracket.

That means that those in the metro area making 30 percent of the median annual household income of $69,500 can afford a maximum rent of $521 a month, according to the coalition.

The average rent in the seven-county metro area was $821 in the third quarter of 2004, said Gordon Von Stroh, a professor at the Daniels School of Business at the University of Denver and frequent surveyor of the state's rental-housing sector.

For many people who lose their homes, transitional housing services and homeless shelters become necessary sources of assistance.

Increasingly, those showing up are homeless for the first time.

The Rev. John Lager, director of the Samaritan House homeless shelter in Denver, said 40 percent of the families he sees have never been homeless before.

"Oftentimes, it happens because of evictions, loss of jobs, and people can't manage payments," Lager said.

The challenge of paying for housing isn't limited to the metro area.

A recent report says United Way's "211" emergency services number received almost 20,000 calls from people across the state seeking assistance in paying their rent between October 2003 and September of this year.

It also says that there were more than 5,400 calls from people asking for help with shelter or some type of transitional housing.

But Sam Maxwell, executive director of Community Housing Services Inc., a nonprofit housing provider and referral service for metro-area residents, said tenants would be in an even tougher spot if the rental market was as tight as it was a few years ago.

Von Stroh said that renters are actually receiving breaks that weren't available a few years ago, as property companies battle one another and attempt to lure customers with a month of free rent or other incentives.

But for those families who still can't pay the landlord and end up on the street, eviction is a hard thing to bounce back from, said Greta Ritchey, spokeswoman for Denver Rescue Mission.

"The biggest problem with an eviction is that it is like having bankruptcy on your record," she said.

For Cathie Ehrenfeldt, a single 43-year-old mother of two teenagers who lost her job at Home Depot in September, just dealing with a looming eviction from her Littleton home has been a demoralizing experience.

While she has managed to put a small deposit down to reserve a new apartment, she still owes her current landlord more than $2,000 in back rent that she will need to pay, once she is evicted from her Littleton home Sunday.

"Dealing with all of this is really draining," said Ehrenfeldt, who barely has had time to find a new job.

INFOBOX

County data on evictions

Sheriff's offices are not consistent in the way they report data on evictions. Some provide the number of evictions actually performed, while others provide the number of eviction orders they receive from the courts. A few provide both.

2000 2001 2002 2003 2004

ADAMS Ordered

2,211 2,309 2,465 2,807 3,043*

ARAPAHOE Ordered

2,803 2,895 3,440 4,210 2,786*

Performed 1,360 1,484 1,823 2,079 1,521*

BOULDER Ordered

N/A N/A N/A 548 610

BROOMFIELD Performed

N/A N/A 56 70 49**

DENVER Ordered

3,549 3,944 4,139 4,981 5,517

DOUGLAS Performed

141 253 461 474 589**

JEFFERSON Ordered

1,371 1,650 1,932 1,946 2,172**

Performed 641 717 835 815 924**

Through November ** Through Dec. 22 Source: County Sheriff'S Offices
aguilarj@RockyMountainNews.com or 303-892-2550;
SEE END OF TEXT FOR INFOBOX

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