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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (54834)	2/27/2006 6:24:28 PM
From: ild	Respond to of 110194

Global: Open Macro, Closed Politics Stephen Roach (New York) China: Time to Change Andy Xie (from Shanghai) morganstanley.com

To: ild who wrote (54834)	2/27/2006 8:40:32 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

did you do anything with your short PTEN 25 poots? i bought mine back at .85 on 2/1/06, originally sold for 2.25 on 10/18/05. now they are bidding 2.60 again... i have edged up my energy exposure just a little bit (to 25%, essentially my only longs).

To: ild who wrote (54834)	2/27/2006 11:01:54 PM
From: basserdan	Read Replies (1) \| Respond to of 110194

>>>I've been selling ABX poots.<<< Hi ild, In that case, I thought you might enjoy this timely 'snippet' from GATA Bill Murphy's "James Joyce Table" column at his LeMetropole Cafe site.... We have yet another example of how the gold market is the worst reported on in history by the mainstream gold world and Planet Wall Street. Barrick Gold is a favorite of the establishment because of their political connections, relationship with the bullion banks and their size. No matter how they foul up they receive a pass from the gold analysts … some of it seems incomprehensible for its lack of due diligence. In addition, as all veteran Café members know, Barrick has been an ally of The Gold Cartel the past 10 years with their hedging practices. So much so that they were forced to renounce any increase in their hedging positions as a result of the Blanchard & Co. lawsuit. Last week Barrick reported its quarterly results. It seemed to me that for the second quarter in a row their hedging losses were greater than their quarterly income. However, this was barely mentioned and not covered by the analysts. For two quarters in a row, because the price of gold WENT UP, Barrick lost more money than it made, yet the headlines were about the millions they were making. James Turk, in his very insightful FREEMARKET Gold & Money Report (ww.fgmr.com) wasted no time in taking Barrick to task. Some comments from his latest report: "In 2002 Barrick’s cash costs were $177 per ounce of production. In 2005 its cash costs had zoomed to $227, a 28% increase in three years. At this rate of increase, by mid-2007 Barrick’s cash costs will exceed the gold price it is committed to deliver under its hedge book. And remember, cash costs exclude depreciation and other non-cash expenses." "As of December 31st, the marked-to-market value on the gold (and silver too) in its hedge book was negative $2.8 billion, compared to negative $2.4 billion as of September 30th. Thus, the value of its metals hedge book worsened by $400 million in the quarter, a staggering number that is more than twice as large as Barrick’s reported net income." In other words, as James goes on to say, Barrick got it ALL WRONG. They hedged the wrong thing. Can these guys be that dumb? How is it that companies like Barrick and AngloGold, supposedly run by the best and brightest, could be so out of it? How could GATA get it so right for five years and these guys get it so wrong? As James gets into in his article, hedging is supposed to reduce risks, not increase risk. The reason is simple. Barrick had an entirely different agenda than they let on to their shareholders, and that was to aid and abet a Gold Cartel committed to keeping the price of gold as low as possible. It is either that or they really are that dumb. IMO this company is another Enron. The difference being their accounting deceit is all out in the open for the analysts to judge. What will this company look like in a couple of years with gold hundreds of dollars per ounce higher? What IF there is an oil nightmare and the price soars towards $80 to $100 per barrel. All gold producers will have to pay sharply higher energy costs, but the unhedged ones will have the benefit of an even higher gold price. Barrick, on the other hand, will get squeezed from both ends. If there ever was a company in the world that deserved to go down, it is these bums. lemetropolecafe.com