Oil Catastrophe Looms.

Weekend Update – May 1, 2010

Baltic Dry Index. 3354 -05

LIR Gold Target by 2019: $3,000.

Tomorrow, the euro-zone finance ministers meet to finalise the hardship terms for tax and work shy Greeks, in return for their getting 120 billion euros of loans. In return, the hapless Greeks must use it to pay off Germany, France, Spain and Italy’s banks who largely hold their debt, plus a Swiss listed bank that’s just decamped to Luxembourg, presumably to ensure it isn’t left out of the bailout. In reality, the terms are all German, since it’s Germany putting up the largest part of the money, and the German press has taken an intense dislike to the Greeks. I am sceptical that the Greeks will do more than implement phase one of the hardship deal, before realising that national suicide won’t work and Greece exiting the Euro early next year. More next week on Greece mangled in a German wringer.

Today we update what is still just short of an ecological catastrophe in the Gulf of Mexico. By Monday morning’s opening it may be. I suspect that it will soon be a catastrophe for BP and its hapless owners, no matter what happens next. What happens next is a matter of some dispute, since there now seem to be far too many chiefs and bureaucrats involved, rather than oil engineering experts. With lawsuits already filed and the US tort bar from Los Angeles to Boston preparing more, what happens next will all too likely now be driven by a need to keep the bureaucrats and lawyers happy.

We open with a report that the well if not capped soon could go on to become a massive environmental disaster. Below that, roughly the state of things this Saturday morning.

Leaked report: Government fears Deepwater Horizon well could become unchecked gusher

By Ben Raines April 30, 2010, 2:18PM
A confidential government report on the unfolding spill disaster in the Gulf makes clear the Coast Guard now fears the well could become an unchecked gusher shooting millions of gallons of oil per day into the Gulf. "The following is not public," reads the National Oceanic and Atmospheric Administration's Emergency Response document dated April 28. "Two additional release points were found today in the tangled riser. If the riser pipe deteriorates further, the flow could become unchecked resulting in a release volume an order of magnitude higher than previously thought."

Asked Friday to comment on the document, NOAA spokesman Scott Smullen said that the additional leaks described were reported to the public late Wednesday night. Regarding the possibility of the spill becoming an order of magnitude larger, Smullen said, "I'm letting the document you have speak for itself."In scientific circles, an order of magnitude means something is 10 times larger.

In this case, an order of magnitude higher would mean the volume of oil coming from the well could be 10 times higher than the 5,000 barrels a day coming out now. That would mean 50,000 barrels a day, or 2.1 million gallons a day. It appears the new leaks mentioned in the Wednesday release are the leaks reported to the public late Wednesday night. "There is no official change in the volume released but the USCG is no longer stating that the release rate is 1,000 barrels a day," continues the document, referred to as report No. 12.

"Instead they are saying that they are preparing for a worst-case release and bringing all assets to bear."The emergency document also states that the spill has grown in size so quickly that only 1 to 2 percent of it has been sprayed with dispersants.
http://blog.al.com/live/2010/04/deepwater_horizon_secret_memo.html

May 1, 2010
Five-year clean-up fear as huge slick comes ashore
Rising winds and 10ft-high seas threatened last night to overwhelm a desperate effort by the US military and thousands of commercial fishermen to contain the giant oil slick creeping hour by hour into some of the world’s most sensitive wetlands.

As BP accepted full responsibility for the Gulf Coast disaster for the first time, President Obama kept open the option of increased offshore drilling. Locals in the Mississippi delta said that federal help had come too late and wildlife officials forecast a clean-up that could take up to five years after the explosion on the Deepwater Horizon oil rig.

The first filmy layers of oil, floating on the sea’s surface, reached the coast on Thursday night near the Pass a l’Outre, the northernmost of three major outlets for the Mississippi on the east side of the delta. Heavier oil is expected to start pushing up the creeks and canals over the weekend, driven by a stiff onshore wind that yesterday was creating 5ft swells even in partially protected waters.

Hundreds of oil workers recruited by BP and the US Government gathered in Venice, the delta’s major oil town, ready to deploy. Further east, the US Air Force mobilised Hercules transport planes equipped with chemical spraying systems. The navy sent inflatable skimming equipment and 66,000ft of booms to its main staging point in Gulfport, Mississippi.

----Sea-bed gushers left by the explosion are pumping 210,000 barrels of crude into the Gulf a day. If the leaks are not capped — and BP was still unsure yesterday what had caused them — the scale of the disaster will eclipse the Exxon Valdez tragedy within weeks. The slick is already 600 miles (965km) in circumference, posing a $2.5 billion threat this year alone to the Louisiana fishing industry and the risk of $3 billion (£1.9 billion) in lost revenues for the state’s tourist sector.

For the region’s wildlife, the timing could hardly be worse. It has come at spawning time for the Atlantic blue-fin tuna, and migration time for Gulf sea turtles. It is feared that hundreds of turtles may already be trapped in the slick.

----In a separate incident yesterday, a mobile rig turned over in a Louisiana canal as it was being taken to a scrapyard. It was not reported to be leaking oil.
http://www.timesonline.co.uk/tol/news/environment/article7113267.ece

Gulf of Mexico oil spill could involve heavier grade of oil, making cleanup more difficult
By From the Times-Picayune April 30, 2010, 3:31PM
The potential environmental damage from the Gulf of Mexico oil spill as it washes into Louisiana coastal estuaries increased Friday with the news that the petroleum involved might not be the light, easily treated Louisiana Sweet Crude, but a thicker, more viscous type that will be harder to remove from the marsh.

"When we analyzed the sample we got, it turned out to be stuff that was much heavier than typical south Louisiana crude," said Ed Overton, an LSU professor and one of the state's experts on oil spills. "It looks like it could be something heavier.

"South Louisiana crude is the easier type to clean up and contain. This other stuff would be a whole different ball game. A much tougher ball game."

Overton cautioned that his lab analysis was based on a single sample, and he has urgently been trying to get others. "We need to know, because this could change how we go about attacking this thing.

"I've been telling people all week that since this is Louisiana sweet crude, treating it won't be a big problem. But now we need to confirm this heavier stuff as soon as possible."
Louisiana "sweet" crude is prized by refiners because it contains a high percentage of the volatile compounds that are used for making gasoline, and a small fraction of asphaltenes, heavier, non-combustible compounds that are most commonly used for roads and roofs.

While the volatile compounds have high toxicity and can pose serious health risks to plants, fish, wildlife and humans including cancers and death, they evaporate quickly once exposed to oxygen and sunlight and are easy to treat during spills, Overton and other clean-up experts said.
http://blog.al.com/live/2010/04/gulf_of_mexico_oil_spill_could.html

Below more on errant blowout defaulter. Failure is nothing new it seems. Which rather begs the question why was the regulatory regime so lax, and why no standby plan B, required at all times?

Device to halt blowout faulted
117 preventer failures were cited in 1999 report
By LES BLUMENTHAL MCCLATCHY NEWSPAPERS April 30, 2010, 11:59PM

WASHINGTON — A 1999 report commissioned by the federal agency that oversees offshore drilling suggests failures of underwater blowout preventers designed to stop oil spills like the massive one threatening the Gulf Coast were far from unknown, the chairwoman of a key Senate panel said Friday.

Citing a Minerals Management Service report, Sen. Maria Cantwell, D-Wash., said there were 117 failures of blowout preventers during a two-year period in the late 1990s on the outer continental shelf of the United States.

“To find out the ultimate fail-safe weapon doesn't work is surprising,” said Cantwell, who as chairwoman of the Senate Commerce Committee's oceans, atmosphere, fisheries and Coast Guard subcommittee will play a role in any congressional investigation of the Gulf oil spill and the drilling rig explosion.

The unclassified version of the 1999 report said the failures involved 83 wells drilled by 26 rigs in depths from 1,300 feet to 6,560 feet.

A similar report released by the agency in 1997 found that between 1992 and 1996 there were 138 failures of blowout preventers on underwater wells being drilled off Brazil, Norway, Italy and Albania.

Both reports are highly technical. Classified versions of the reports included proprietary information that was redacted before the reports were released publicly.

Cantwell's office said there were no newer studies, but a 2007 paper from the Minerals Management Service said between 1992 and 2006 there were 39 actual blowouts.

Blowout preventers, which can weigh up to 500,000 pounds and stand 50 feet tall, are bolted on the top of a wellhead on the seafloor and in an emergency can cut off the flow of oil to prevent a gusher. The blowout preventers can be activated by throwing a switch on the drilling rig. They also sare upposed to activate automatically in the event of a major problem or, in some cases, can be activated by acoustic sound waves produced from a ship.
http://www.chron.com/disp/story.mpl/business/deepwaterhorizon/6984731.html

We end with trouble escalating for error prone BP. Well at least as far as their North American operations seem to be involved. This might be a good time to be short BP. This might be a good time to be short the industry.

Another BP offshore operation scrutinized
19 members of Congress asking if corners were cut on Atlantis platform
By LISE OLSEN Copyright 2010 Houston Chronicle April 29, 2010, 7:59PM
BP faces an ongoing federal probe over concerns that the oil giant illegally cut safety corners in rushing completion of its massive Atlantis offshore production platform, described by BP as the deepest oil production platform in the world.

The allegations have been raised by 19 members of Congress, a Houston-based safety expert, a whistle-blowing contractor and a Washington, D.C., nonprofit organization.

BP, which calls itself the leader in deep-water offshore oil development in the Gulf of Mexico, began operations at the Atlantis platform in October 2007 at a site about 124 miles offshore in 7,000 feet of water and expanded production last year, according to government records and BP's annual report.

The allegations suggest the company rushed into production by skipping or skimping required engineering inspections, putting profits ahead of the need to protect workers from accidents and the environment from potentially catastrophic oil spills, according to allegations sent to regulators.

----Daren Beaudo, a BP spokesman, insists the company designed and built the platform to meet “global industry engineering standards, including review and approval of pro-ject design and construction procedures by professional engineers.” BP has “found no evidence to substantiate the organization's claims with respect to Atlantis project documentation,” he added.

“The engineering documents for Atlantis have the appropriate approvals, and platform personnel have access to the information they need for the safe operation of the facility,” he said in a written statement.

-----The allegations stem from a whistle-blower who worked as a contractor for BP and later provided BP documents to a Washington nonprofit called Food and Water Watch.

A local safety expert and engineering consultant, Mike Sawyer, said he prepared an independent evaluation of BP's Atlantis subsea database at the request of Food and Water Watch. Sawyer said he voluntarily reviewed the database listing of more than 7,000 design documents, reports and drawings from Atlantis and found they were “incomplete or unapproved” by engineers even after Atlantis began production.

-----The mineral service, which shares responsibility for investigating offshore platforms and drilling rigs with the Coast Guard, is conducting the current probe of BP Atlantis, according to a letter to congressional members from the service's director, Elizabeth Birnbaum.
Beaudo of BP said the company would “cooperate fully” with the investigation of Atlantis.
http://www.chron.com/disp/story.mpl/business/deepwaterhorizon/6982554.html

Transocean and deep sea rigs.

http://www.deepwater.com/fw/main/List-by-Water-Depth-77.html

First it was Icelandic ash shutting down Europe’s airspace. Now we have BP’s oil shutting down the Gulf recreation and hospitality industries, I wonder what our third calamity is going to turn out to be. For the sake of the planet, I can only hope that it’s not Gordon Brown being re-elected next week!

"Reading out the figures in a shrill, rapid voice, Gordon Brown proved to them in detail that they had more oats, more hay, more turnips than they had had in Blair’s day, that they worked shorter hours, that their drinking water was of better quality, that they lived longer, that a larger proportion of their young ones survived infancy, and that they had more straw in their stalls and suffered less from fleas."

With Apologies to George Orwell and Animal Farm.

UK General Election polls. The hung Parliament Approaches.
http://www.ukpollingreport.co.uk/blog/

Odds Checker. UK General Election Betting Odds.
http://www.oddschecker.com/specials/politics-and-election/next-uk-general-election/most-seats

More on Monday. Have a great May Day weekend, or was that Mayday!

GI.

More On God's Work

Baltic Dry Index. 2981 -10

LIR Gold Target by 2019: $3,000.

“There is no example of a nation become rich by paying its debts. There are dozens of examples of nations becoming rich by defaulting or renegotiating.”

John Ralston Saul. A Doubters Companion: A Dictionary of Aggressive Common Sense.

We open today with the rise of the just default camp, in the world of sovereign debt. Since much of the debt was accumulated corruptly, between brain dead or venal politicians on the take, and great vampire squids aiding and abetting a crime on the public, just default, and let the great vampire squids take the heat and most of the loss. Kings and countries have been doing it since time immemorial, this time it’s not different after all. Why pay off the money lenders 100 pennies on the Pound, and at 6-7% interest in the case of the tax and work shy Greeks. It’s not real money after all, just meaningless fiat money pyramided off the currency of the world’s largest debtor that also can’t repay its debts. The great vampire squids will be back, begging to work out some sort of deal to return a restructured debt to the performing ledger.

The IMF Flag reads: ECONOMIC SLAVERY
By Nikos Katzilaki

“The IMF will not have a restricted role” in the recently decided support plan for Greece, because “it wants to insure the control of valuable Greek infrastructures”, alleges economic analyst Max Keiser on international television networks such as the BBC, Al Jazeera and Russia Today.

Often also called an activist, Mr. Keiser created quite a stir a few days ago when, on an Al Jazeera program, he claimed that Greece, for the past decade, has fallen victim to the “economic terrorists” of the Wall Street banking systems and the IMF. In the interview which followed, he claimed “if the Greeks want to be protected from the IMF, then they should nationalize their banks thus establishing government owned institutions so as to revive the banking system”, while at the same time “ceasing to pay back the loans which were issued illegally” via “cooking the books” of the Greek economy by Goldman Sachs. He proposed the expulsion from the country of American banks as well as the IMF. The consequence will be “two or three years of heavy recession”, during which time Greece will be able “to rebuild its economy”, ensuring its economic independence.

Mr. Keiser, what is your opinion concerning the EU decision to support Greece while also including the IMF?

“It is problematic solution, because the IMF isn’t a desirable institution of control for your finances as it will bring with it budget austerity measures which serve the interests of the Wall Street and not the Greek population. Greece has fallen victim to the Wall Street bankers since 2000. The first thing that needs to done is an assessment of the relationships between the Wall Street banks, Greek banks and the Greek government. If the Greeks want to be protected from the IMF, they should immediately nationalize all the banks thereby reviving the banking system and exempting themselves from the unfair austerity measures which are being imposed on them . The people are not the cause of the problem. Why is the Greek population being forced to pay for the actions of corrupt bankers and politicians? This is absurd”.More.
http://maxkeiser.com/2010/04/05/the-imf-flag-reads-economic-slavery/

I suspect that we will see far more of this sort of argument as the decade advances, possibly as early as next year if the west’s leading economies drop into a double dip recession. At some point ahead, the USA’s unfunded entitlements and trillion dollar a year new debts, make it a virtual certainty that the US must default or hyper-inflate away its 50 to 100 trillion dollar problem. For now, as with the banks operating on mark to the fantasy model accounting, we all go about pretending that solvency still exists. Just to set the record above straight, “The [Greek] people are not the cause of the problem” is not entirely true. While their politicians dodged and conned their way into fraud and massive debt, the tax and work shy Greeks got the free ride they were only too happy to take. Unlike the Icelanders who got unwittingly mugged by their own corrupt gambling banksters, the Greeks knowingly expected others to pick up the bill. That said, I suspect that the just default camp will grow and grow in the months ahead, the more so the deeper the austerity misery hits.

Below, the WSJ reports more bad news in commercial real estate, specifically in the retail sector. Despite the bad news, “The International Council of Shopping Centers trade group forecasts a 5.1% increase in retail sales in the first quarter over the same period a year earlier.” Perhaps, but I have my doubts it is a help. Unemployment and under-employment is stubbornly high, credit still contracting or nonexistent, home values are still falling, and the average hourly wage is stagnant or falling. Taxes are set to rise. Crude oil is back at $87 again, with many import prices likely to rise. Any increase in retail sales is likely founded on hapless Americans stuck with paying higher prices for gasoline and imported goods. The wrong sort of retail sales increase, I suspect.

APRIL 7, 2010
Shopping-Center Malaise
Vacancies Rise as Lease Rates Fall Again; Is Bottom Near?
Retail landlords continued to lower lease rates to attract tenants during the first quarter, revealing that optimism about a recovery in retail sales has yet to translate into gains for shopping-center owners.

Average lease rates at shopping malls during the first quarter were $38.79 a square foot annually, down 3% from a year earlier, according to real-estate research company Reis Inc. That was the sixth consecutive quarterly decline.

Lease rates at shopping centers, which are smaller than malls, declined to $16.62 in the first quarter, down 1% from the prior quarter and down 3.4% from a year earlier. It marked the seventh consecutive quarter in which shopping-center lease rates have declined.

Vacancy rates, meanwhile, continued to rise. Vacancy rates at malls in the top 77 U.S. markets rose to 8.9% in the January-to-March period, up one tenth of a percent from the previous quarter, according to Reis.

Still, the first-quarter increase was slight in comparison to earlier increases, suggesting that a bottom could be near.

"The stress might be lessening and rent declines might be moderating," said Reis director of research Victor Calanog. "But we don't see positive rent growth resuming until the middle of next year at the earliest, just because of the typical lag."

One reason why rising vacancies have started to slow is because discount stores are rapidly expanding, including Dollar General, as well as electronics chains like Hhgregg Inc. and apparel stores like Forever 21 Inc. That is offsetting some of the vacancies left by the failure of big-box retailers such as Linen N' Things and Circuit City.

Still, analysts believe it will be a couple of years before landlords can raise rents.

"Retailers have all the leverage in the lease negotiation, which makes it very hard for landlords to command higher rents," said Jim Sullivan, an analyst at Green Street Advisors. He added that landlords are signing new tenants at rents 25% to 40% below the rents paid by previous tenants.
Despite the pain for landlords, economists and others expect a recovery for retail sales beginning this year. The International Council of Shopping Centers trade group forecasts a 5.1% increase in retail sales in the first quarter over the same period a year earlier.
http://online.wsj.com/article/SB10001424052702304172404575168252332715066.html

Below, more sign of a spent out US consumer, or simply a wiser consumer awaiting for iPad II with all the bells and whistles and all the kinks worked out? I have no idea, and I’d bet that Apple doesn’t either. Still after all the months of hype and reviews, I suspect that if truth were known, Apple is pretty shocked at the relatively poor opening day response. Though I am very much in a small minority, I’m still not convinced that the iPad isn’t going to turn into an Edsel.

APRIL 6, 2010
First-Day Sales of Apple's iPad Fall Short of Sky-High Hopes

Apple Inc. said it sold more than 300,000 iPads in the U.S. on the first day the device went on sale Saturday, tempering Wall Street's highflying expectations for the much-hyped multimedia tablet computer.

While Apple didn't provide any iPad forecasts, expectations had been building steadily for blowout sales since Chief Executive Steve Jobs unveiled the product in late January. Last month, people familiar with the matter said Apple was seeing strong preorders of the iPad that even exceeded initial sales of the company's previous big hit, the iPhone.

Analysts on average had expected first-day iPad sales of 400,000 to 500,000 units. Some analysts, such as Piper Jaffray analyst Gene Munster, had even higher sales projections of 600,000 to 700,000 units. Estimates for global iPad sales this year ranged from 2.5 million by financial-services firm Kaufman Bros. to as high as 7.1 million by research firm iSuppli Corp.
But though buyers flocked to Apple stores on Saturday in the first hours after the device went on sale, the long lines petered out at many stores by midafternoon. On Monday, some Apple stores reported robust activity. An Apple store in San Francisco said it sold out of its first shipment of iPads on Monday morning, and a small line formed to buy the second shipment that had just arrived.

Some consumers such as Hans Van Der Weive, a property developer from the Netherlands, bought the iPad, which starts at $499, on impulse. "I just arrived here on holiday, I saw the shop and decided to buy one," said Mr. Van Der Weive, adding that he planned to use the device mainly for reading digital books.

How well the iPad will sell in the long term will likely stay unclear for at least another few quarters. Some of Apple's biggest products have previously had relatively slow starts. The iPhone, which has sold a total of more than 42.5 million units, sold 270,000 units in the first 30 hours of sales when it was launched three years ago. That was almost half of analysts' expectations at the time.

-----Apple also said on Monday that it would hold a special event on Thursday for "a sneak peak" of the next-generation iPhone operating system, which runs on the iPhone, iPod touch and iPad. Apple watchers expect the new operating system to offer new features and more closely integrate iPad functions.
http://online.wsj.com/article/SB10001424052702304017404575165621713345324.html?mod=WSJ_hp_mostpop_read

We end for today, with the great vampire squid giving its side of doing “God’s work” on earth. God, apparently wanted them to bankrupt Greece and put millions of Americans out of work and in upside down homes until the eviction posse shows up. “God made me do it” makes an interesting change from “the devil made me do it,” I suppose. Even for a shameless Wall Street cowed by nothing, taking on God seems a little rash even for Goldman.

“Goldman countered by announcing that it was giving $500 million away to 10,000 small businesses while a number of Congressmen called for Geithner’s resignation.

The response was again not positive. Mark Gilbert, the London bureau chief for Bloomberg, wrote:

“Here’s another way of looking at this sudden burst of supposed generosity. Goldman has $16.7 billion stashed in its bonus pot from the record profit earned in the first nine months of the year, which works out at $527,192 per staffer.”

“That means those 10,000 small businesses the securities firm says it wants to help are worth the equivalent of about 1,000 Goldman employees. Alternatively, a Goldmanite’s average contribution to society is pitched at the equivalent of 10 small enterprises, based on that bonus-versus-charity calculation.”

“Even at the Stakhanovite work rates the firm legendarily squeezes out of its staff, that’s quite a stretch. The idea that one banker is worth 10 businesses is the kind of math that got us into this mess, with finance falsely elevated until it became an end in itself, rather than a means to providing services to the real economy.”
http://solari.com/blog/?p=5143

APRIL 6, 2010
Goldman Tells Its Side of '09

Shareholder Letter—Firm's Longest—Defends Client Commitment, AIG Dealings
The year 2009 was one that some Goldman Sachs Group Inc. executives would like to forget. Yet the firm is reliving some of its biggest controversies in its longest-ever annual letter to shareholders.

The eight-page note, released Wednesday, presents Goldman's point of view directly to shareholders ahead of the firm's May 7 annual meeting. For example, criticized for putting the bank's own interests ahead of customers, Goldman Chairman and Chief Executive Lloyd Blankfein and President Gary Cohn say in the letter that clients are at the top of the pecking order.

The two executives used the words "client" or "clients" a total of 56 times, up from 17 in their 2008 shareholder letter.

"The firm's focus on staying close to our clients and helping them to navigate uncertainty and achieve their objectives is largely responsible for what proved to be a year of resiliency across our businesses, and by extension, a strong performance for Goldman Sachs," the executives wrote.

Goldman reiterated that it didn't "bet against" clients using short positions it took on before the residential real-estate market crashed. Goldman was one of the first Wall Street firms to reduce its real-estate exposure, even as some clients were sticking with their bullish bets. The short positions "served to offset our long positions," Messrs. Blankfein and Cohn wrote in the letter.

"Our goal was, and is, to be in a position to make markets for our clients while managing our risk within prescribed limits."

"We thought it was important to discuss our business, the opportunities we see through our work with our clients and various issues that merit broader discussion and a presentation of the facts, particularly in the last year," said Goldman spokesman Samuel Robinson.

Few shareholder letters get much attention, other than Warren Buffett's yearly note to Berkshire Hathaway Inc. investors. But as this year's annual-meeting season approaches, some analysts and investors are paying close attention to shareholder letters. Some financial-company CEOs are using the letters to clear the air about controversies that erupted during the financial crisis, from compensation to their responsibilities in return for receiving government aid.
Earlier this month, J.P. Morgan Chase & Co. Chairman and CEO James Dimon wrote a 36-page letter to shareholders of the New York bank, blasting the "demonization" of big firms. Mr. Dimon added that "some businesses require size in order to make necessary investments, take extraordinary risks and provide vital support globally." J.P. Morgan's letter last year was 28 pages long; Goldman's 2008 letter was just four pages.

Goldman's letter includes explanations of its payouts to employees and trading relationship with insurer American International Group Inc. More than one page is devoted to AIG. Goldman is under the public microscope for receiving nearly $13 billion from AIG after the insurance giant was bailed out by the government in 2008. In the case of the $13 billion, Goldman says it didn't retain much of the money, using it instead to meet various AIG-related obligations
Messrs. Blankfein and Cohn wrote that the firm's "direct economic exposure" to AIG was minimal, though Goldman and other companies benefited from the rescue because a failure of AIG would have been "extremely disruptive to the world's already turbulent financial markets."
http://online.wsj.com/article/SB10001424052702304172404575168382387679158.html

“As all businessman know, contracts are to be respected whenever possible. When not possible, regulations exist to aid default or renegotiation. Businessmen regularly do both and happily walk away.”

John Ralston Saul. A Doubters Companion: A Dictionary of Aggressive Common Sense.

At the Comex silver depositories Tuesday, final figures were: Registered 53.78 Moz, Eligible 62.67 Moz, Total 116.45 Moz.


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Crooks & Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

Today it’s the odds on the crooks and scoundrels running for the UK’s House of Crooks. Below, the UK’s serfs get put in their proper place by the Kingdom of Fife’s, Stalin MacBroon.

‘I want to renew the contract between the people and those THEY are sworn to serve’?

Prime Minister Gordon Brown. April 6, 2010.

General Election 2010: Bookmakers expect record £25m of election bets
Bookmakers are expecting a record £25m of bets on the tightest election for a generation – though that will still only be one tenth of the sum gambled on Saturday's Grand National.
By Alistair Osborne, Business Editor (Leisure) Published: 6:00AM BST 07 Apr 2010

As the tapes rose on Tuesday on the race to Number 10, bookies unveiled a wide field of wagers ranging from most seats and winners of all 649 constituencies to the next chancellor and the date for Gordon Brown's resignation.

Much betting interest so far has focused on a hung Parliament – though the odds have lengthened in recent days on both betting exchange Betfair and with traditional bookies, such as William Hill and Ladbrokes. Betfair has no overall majority at 2-1 and Ladbrokes at 15/8, though Hills is only 6/4.

William Hill spokesman Graham Sharpe said the bookie's biggest election bet so far was a £9,000 wager, but added: "Like in football, the high-rollers don't usually come in until a minute before kick-off. If you're betting in six figures, you want to make sure no-one says anything really stupid on a televised debate."

Ciaran O'Brien, Ladbrokes' spokesman, said "the betting is as volatile as the opinion polls" boosted this time by being "a genuine contest".

There could yet be a re-run too. Hills offers 3/1 on two elections this year – though you can get twice those odds on Betfair.
http://www.telegraph.co.uk/news/election-2010/7560832/General-Election-2010-Bookmakers-expect-record-25m-of-election-bets.html

Odds Checker. UK General Election Betting.
http://www.oddschecker.com/specials/politics-and-election/next-uk-general-election/most-seats

General Election 2010: Markets nervous after opening political shots
Britain's business leaders have warned of a month of market volatility ahead of the General Election unless the political parties offer more coherent plans on cutting the £167bn deficit.
By Louise Armitstead, Chief City Correspondent Published: 9:55PM BST 06 Apr 2010

The pound fell against the dollar and the euro on Tuesday as the opening election moves failed to convince traders that there will be a clear winner. Analysts also warned that sterling could come under further pressure over the next month unless the polls start to discount the possibility of a hung Parliament.

The pound, which has fallen 10pc against the dollar so far this year, was down 0.71 cents to $1.5201. Despite fears over the Greek debt crisis, the euro rose 0.2pc against the pound to 88.35p.

-----One trader said: "It's been a phoney war for months and the markets are all over the place. We just need some details to work from, not just this wish-list stuff, or it's just going to get worse over the next few weeks."

Ratings agencies have already warned that the UK's prized top AAA credit rating is under threat unless a credible fiscal plan is put forward soon after the election.

-----Meanwhile, the Bank of England seemed alone in being inconvenienced by the election date. The Monetary Policy Committee said it would postpone its May 6 interest rate decision to May 10.
http://www.telegraph.co.uk/news/election-2010/7561085/General-Election-2010-Markets-nervous-after-opening-political-shots.html

National debts are treated today as if they were unforgiving gods with the power to control, alter and if necessary destroy a country. This financial trap is usually presented as if it were peculiar to our time, as well as being a profound comment on the profligate [adj 1 shamelessly immoral 2 recklessly extravagant] habits of the population. The reality may be less disturbing.

1. The building up of unsustainable debt loads is a commonplace in history. There are several standard means of resolving he problem: execute the lenders, exile them, default outright or simply renegotiate to achieve partial default and low interest rates.

John Ralston Saul. A Doubters Companion: A Dictionary of Aggressive Common Sense.


The monthly Coppock Indicators finished March:

DJIA: +168 UP. NASDAQ: +370 UP. SP500: +196 UP. The great Bull market goes on with the all three continuing higher in positive numbers.

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Help the LIR fight Banksterism, the EU, and for sound money.
If you can, help the LIR stay around and make a difference. Please make a donation at the PayPal link on the website or better still become a sponsor for what looks like an exciting 2010. Capitalism not banksterism.

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Sunspots – A 22 year colder world? (From 2004?)

Spotless Days April 06
Current Stretch: 0 days
2010 total: 6 days (6%)
2009 total: 260 days (71%)
Since 2004: 776 daysTypical Solar Min: 485 days
http://www.spaceweather.com/

The long minimum seems to have ended.

New Solar Cycle Prediction
http://science.nasa.gov/headlines/y2009/29may_noaaprediction.htm

Is the Sun Missing Its Spots?
http://www.nytimes.com/2009/07/21/science/space/21sunspot.html?8dpc

Are Sunspots Different During This Solar Minimum?

-----But something is unusual about the current sunspot cycle. The current solar minimum has been unusually long, and with more than 670 days without sunspots through June 2009, the number of spotless days has not been equaled since 1933.

----During the period from 1645 to 1715, the Sun entered a period of low activity now known as the Maunder Minimum, when through several 11- year periods the Sun displayed few if any sunspots. Models of the Sun's irradiance suggest that the solar energy input to the Earth decreased during that time and that this change in solar activity could explain the low temperatures recorded in Europe during the Little Ice Age.

----The same data were later published [Penn and Livingston, 2006], and the observations showed that the magnetic field strength in sunspots were decreasing with time, independent of the sunspot cycle. A simple linear extrapolation of those data suggested that sunspots might completely vanish by 2015.These observations caused researchers to wonder whether the characteristics of sunspots are different now than in other solar cycles.http://www.leif.org/EOS/2009EO300001.pdf

Big freeze could signal global warming 'pause'
The Arctic conditions which have brought Britain to a standstill over the past week could be the start of a "pause" in global warming, some scientists believe.
Published: 9:20AM GMT 11 Jan 2010
http://www.telegraph.co.uk/earth/environment/globalwarming/6965342/Big-freeze-could-signal-global-warming-pause.html


Sunspot cycle 24: Together with sunspot cycle 25, the next two global cooling cycles. The new “Dalton Minimum?” Twenty Nine months now with low sunspots numbers, and counting. March was the 29th month of yet another low number of 15.4 http://en.wikipedia.org/wiki/Dalton_Minimum

Smoothed sunspot numbers (SSN). 2007, Oct. 0.9. The end of cycle 23.

Sunspot cycle 24: Nov 1.7. Dec 10.1. Jan 3.4. Feb 2.2. Mar 9.3 April 2.9. May: 2.9. June 3.1. July 0.5. August 0.5. Sep 1.1 Oct. 2.9. Nov. 4.1 Dec 0.8. Jan 1.5. Feb 1.4. Mar 0.7. Apr 1.2. May 2.9. June 2.6. July 3.5. Aug. 0.0. Sep 4.2. Oct 4.6. Nov 4.2. Dec 10.6 Jan 13.1 Feb 18.6 Mar 15.4.

Sunspots. http://solarscience.msfc.nasa.gov/SunspotCycle.shtml

The count. http://sidc.oma.be/products/ri_hemispheric/

Why a New Minimum. http://sesfoundation.org/dalton_minimum.pdf

The “Carrington Event,” September 1, 1859.
http://science.nasa.gov/headlines/y2008/06may_carringtonflare.htm

Current Space Weather.
http://www.swpc.noaa.gov/

What happened to global warming?
http://news.bbc.co.uk/1/hi/sci/tech/8299079.st

++++
This week’s featured links: Silver & Gold Miners + Rare Metals.

With US trillion dollar deficits stretching as far as the eye can see, and voodoo economics the order of the day at the central banks, I think it is now time to begin selectively scaling into precious metals companies that mostly meet the following criteria:
Adequate cash reserves. Good management. Strong in-ground reserves or prospects. NAFTA based, or else located in countries with strong rule of law.

Endeavour Silver Corp. TSX: EDR. http://www.edrsilver.com/s/Home.asp

Semafo TSX: SMF http://www.semafo.com/home_company_intro.php

ATW Gold Corp. TSX.V: ATW. http://www.atwgold.com/

US Silver Corp. TSX.V: USA. http://www.us-silver.com/s/Home.asp

Excellon Resources Inc. TSX: EXN. http://www.excellonresources.com/

First Majestic Silver Corp. TSX: FR http://www.firstmajestic.com/s/Home.asp

New Jersey Mining Company. OTCBB: NJMC
http://www.newjerseymining.com/index.html

Atna Resources Ltd. TSX: ATN. http://www.atna.com/s/Home.asp

Barkerville Gold Mines TSX.V: BGM. Formerly International Wayside Gold Mines Ltd.
http://www.barkervillegold.com/s/Home.asp

Shoreham Resources Ltd. TSX-V: SMH
http://www.shoreham.ca/
ATAC Resources Ltd, TSX.V: ATC. http://www.atacresources.com/s/home.asp
Evolving Gold Corp. TSX.V: EVG http://www.evolvinggold.com/

Lydian International Ltd. TSX: LYD. Note: LYD operates in Armenia, a region carrying higher risk than our usual safer picks in NAFTA lands. http://www.lydianinternational.co.uk/

The story of rare earths and metals is mostly one of China producing and exporting, Japan, America and everyone else importing. Vital to our new technologies, and lifestyle, and critical to hybrid and electric cars, Rare Earth Elements and Heavy Rare Earths, are a strategic choke point held in China’s hands. Lately China has been squeezing that choke point. I think that AVL at Thor Lake Canada, has a property of global importance. A property with the ability to offer NAFTA access to REEs and HREs for the decades ahead. As America and the west move to reduce over dependence on oil from unstable regions, we will see demand for rare metals take off.

Avalon Rare Metals Inc. TSX: AVL. http://www.avalonraremetals.com/

We will be adding more REEs as appropriate.

Warning.

Sadly we are all in unexplored territory. The world has never before suffered a severe recession/depression while operating on fiat currency. As is widely apparent, the central banks haven’t a clue and are making up the rules as the flounder along. They never saw it coming they claim, although it was obvious to many fine writers though not unfortunately in the mainstream media, that a giant financialised derivatives gambling economy would always end badly. There are no experts now, for the simple reason that we have never before faced such a sudden synchronised and deep collapse in the global economies.

The unfortunate fact that we are operating on fraudulent currencies is highly likely to mean it all ends many months from now, in a fiat currency revulsion, but only after the monetary authorities have first tried pouring in endless amounts of newly created money. A derivatives gambling world with an estimated quadrillion dollars of face value has to be unwound and the losses absorbed. In this sort of investing environment, cash, gold and silver and tangible assets are favoured over stocks and intangible assets.

As always if thinking about making an investment, it’s important to do one’s own due diligence. No one has more at risk in an investment than you do yourself. In these difficult economic times, there will likely be several false bottoms before the real one arrives and hindsight allows us to confirm that the bottom is in. Even then, a “V” shaped rebound is highly improbable. A double dip recession seems likely. Beware the false "statistical" government subsidised "recovery." It is a "recovery" bought from a future of fiat currency collapse.

Graeme Irvine

London Irvine Report: www.londonirvinereport.com/
Graeme@londonirvinereport.com

"Intellectual Muscles."

Baltic Dry Index. 2991 -07

LIR Gold Target by 2019: $3,000.

“When I am asked for a detailed forecast of what will happen in the coming months or years I remember Sam Goldwyn 's advice: "Never prophesy, especially about the future." (Interruption from the floor) Never mind, it is wet outside. I expect that they wanted to come in. You cannot blame them; it is always better where the Tories are.”

Margaret Thatcher. October 1980.

We open for the day readying for trouble in South Africa. South Africa appears to be heading off on the road to Zimbabwe. Bad news for mining companies in South Africa is very good news for competing mining companies in safer more stable countries elsewhere. My guess is that Canada, Australia, and Latin America will gain at South Africa’s expense. My guess is that excellent mining companies like Canada’s SEMAFO (TSX: SMF) operating in west Africa will be prominent among the gainers. Interestingly, SEMAFO is in the early stages of exploring with governments in the region the possibilities for solar power. While it’s too early to say if this “green energy” possibility will lead to a pilot project, it’s another sign of our world on the threshold of great change. Below, the Telegraph covers South Africa on the edge of resource nationalism abyss.

“We must find new lands from which we can easily obtain raw materials and at the same time exploit the cheap slave labor that is available from the natives of the colonies. The colonies would also provide a dumping ground for the surplus goods produced in our factories.”

Cecil Rhodes.

Mining groups fear backlash in South Africa
London-listed mining companies are bracing themselves for a wave of ethnic violence in South Africa as tensions escalate following the murder of notorious far-right politician Eugene Terreblanche.
By Garry White Published: 10:05PM BST 04 Apr 2010
The white supremacist leader was hacked to death at his Transvaal farm on Saturday – the same day that a senior member of the African National Congress (ANC) called for the nationalisation of all South Africa's foreign-owned mines.

Speaking in Zimbabwe on Saturday, Julius Malema, leader of the influential ANC Youth League, said South Africa's mines should be returned to black ownership.

"They have exploited our minerals for a very long time. We want the mines, now it's our turn," Mr Malema said.

Most of the UK-listed miners have significant interests in South Africa, particularly Anglo American, but Rio Tinto, BHP Billiton and Xstrata all have major assets within the country. Anglo American has majority stakes in many of the country's miners, including Anglo Platinum and Kumba Iron Ore. These four mining companies make up more than 10pc of the FTSE 100.
Widespread violence could lead to disrupted mine output, analysts said, potentially causing spikes in some commodity prices.

"This is one of the biggest threats to the South African mining industry today," one senior executive told The Daily Telegraph, although they declined to be named.

According to the South African Department of Minerals and Energy, the country has about 85pc of global reserves of platinum, which is used to make catalytic converters for vehicles.
It also has almost 80pc of the world's reserves of manganese and 73pc of global chrome stocks, which is used in the manufacture of stainless steel.

The country also has significant reserves of gold, zirconium and titanium.

"If South Africa adds to the problems it already has, investment is going to go elsewhere," John Meyer, head of mining at broker Fairfax said.

-----The outspoken Mr Malema, who has praised the farm seizures of Robert Mugabe, is widely blamed for stoking violence against white farmers after singing a controversial apartheid-era song which includes the line "kill the Boer".

He has been calling for nationalisation for the last three months, prompting Susan Shabangu, South Africa's respected mining minister, to say that a state takeover of the industry would not happen "in her lifetime". She said that Mr Malema was merely stretching his "intellectual muscles".

In the face of rising concern among foreign investors, Jacob Zuma, South Africa's president, refuses to rein in Mr Malema. He argues that South Africa is a free country and all citizens and can do and say as they please.
http://www.telegraph.co.uk/finance/newsbysector/industry/7554120/Mining-groups-fear-backlash-in-South-Africa.html

In other news this morning, the IMF is about to recommend the G-20 adopting and implementing a bankster “excess profits tax.” PIIGS will fly first I suspect. The banksters, who’d sell their own granny for the fat she would yield, will move heaven and earth to change any government rash enough to do any such thing, I suspect. Below, the Telegraph covers the IMF’s “pie in the banksters eye” fantasy, to mangle a metaphor.

The bankster Duke of Dunstable had one-way pockets.
He would walk ten miles in the snow to chisel an orphan out of tuppence.

With apologies to P.G. Wodehouse.

IMF targets banks with 'excess profits tax'
The International Monetary Fund is poised to recommend an unprecedented new "excess profits tax" on banks worldwide.
By Edmund Conway, Economics Editor Published: 10:24PM BST 05 Apr 2010

The Fund is expected to suggest the tax – which is effectively on banks' cashflow – as one of the best ways governments can raise significant amounts from banks without drastically distorting the financial system.

The tax will be announced alongside the Obama-style banking levy, which the IMF will also rubber-stamp in its report, to be published at its spring meetings this month.

The IMF was commissioned by the Group of Twenty leading economies last year to investigate new taxes on banks.

Although most attention initially was on so-called Tobin taxes, which levy small charges on banks' financial transactions (a model promoted by campaign groups as the Robin Hood Tax), the Fund is likely to rule them out as a serious prospect. The move is likely to frustrate Gordon Brown, who threw his weight behind the transactions tax in the early stages of the research.
Most had assumed that this would mean the Fund would give its central recommendation to a form of balance sheet levy, which has already been implemented in Sweden, and which has been proposed by the Obama administration.
However, the Fund is also considering giving an equally-important recommendation to a less well-known type of tax which simply levies a charge on bank profits, beyond a certain level.
The advantage of the balance sheet levy is that it should encourage banks not to build excessively large stocks of assets, as Royal Bank of Scotland famously did ahead of the crisis. The benefit of the excess profits tax is that it is thought to be the most efficient way to raise money from banks, and could in time replace regular business taxes as the best way of generating revenue from financial institutions.

-----Peter Spencer, economic adviser to the Ernst & Young Item Club, said: "The problem with an excess profits tax would be that it is very difficult to draw a dividing line between one kind of industry – which does pay the tax – and another that doesn't. Migration and effectively avoidance are the things which would make it very difficult. Also, the last thing you want to do is to deter people from making profits."

Britain toyed with an excess profits tax during the Second World War, although the use of such a system in a specific industry would be unprecedented.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7557409/IMF-targets-banks-with-excess-profits-tax.html

Far away in a land where taxes and work are optional, most jobs are no-show jobs provided by the government and paid for by Brussels levies on hardworking Germans and Brits, and the sun never stops shining, the locals have started moving their money to the gnomes of Switzerland, home of the mega bank UBS, the Scarlet Pimpernel banksters with a contempt for other countries tax laws. Easy going, slothful but filthy rich Greeks might want to reconsider their choice of safe haven for their tax free, ill-gotten gains. Faced with going to a US guillotine or ratting out their US tax evading clients, the Scarlet Pimpernel in this 21st century edition, has just done a deal to walk away and rat out the American tax cheat aristocracy. I doubt that the Greeks will fare much better, when the German’s get forced into bailing out tax shy Greece.

They seek him here, they seek him there
Those taxmen seek him everywhere
Is he in heaven or is he in hell?
Or is he in a Geneva tax motel?

With apologies to Baroness Orczy. (Charles Dickens surely!)

Greek banks hit by wealthy citizens moving their money offshore
Greek banks are being hit by a wave of redemptions as the country's most wealthy citizens and corporations look to move their money offshore or to international financial institutions perceived as safer homes for their assets.
By Harry Wilson Published: 10:13PM BST 05 Apr 2010

Wealthy Greeks and companies have been clamouring to move their cash deposits to banks such as HSBC or France's Société Générale, which operate large branches in the country. They are among those to have received several billion euros of new money in recent weeks.

HSBC's private banking in the country is understood to have been flooded with business, while the local operations of several other major international banks have already seen large inflows of money. A spokesman for HSBC declined to comment.

Eurozone countries are still at loggerheads on bailing out the southern European nation, with Germany believed to be in conflict with other countries in the single currency over how much interest to charge on the emergency loans package. Germany wants interest rates of 6pc to 6.5pc, with other countries willing to accept 4pc to 4.5pc interest.

More than €3bn (£2.6bn) of deposits held by Greek households and companies left the country in February, while in January about €5bn of deposits were moved out, according to the latest figures available from the Bank of Greece.

Switzerland, the UK and Cyprus have been the largest recipients of the money, with the wealthiest Greeks looking to move their deposits to Swiss banks accounts to escape the more punitive tax measures many fear will be introduced in the wake of the country's economic crisis.
John Raymond, a banks analyst at CreditSights, said that on a visit to Athens last week capital flight was the number one issue worrying most Greek bankers.

"The banks themselves are concerned by it because they can't get funding elsewhere at the moment," he said.

"Greek banks won't be able to increase lending volumes if deposits don't increase, and a continued deterioration in their deposit base will lead them to cut back lending even more, stifling real economic growth."
http://www.telegraph.co.uk/news/worldnews/europe/greece/7557213/Greek-banks-hit-by-wealthy-citizens-moving-their-money-offshore.html

We end for the day with “the man who saved the world” twice, heading over to Buckingham Palace to ask the Queen to dissolve “the Crooked Parliament” of 2005-2010, to be renamed Brown Palace in the Old Labour plans for a socialist people’s republic, in the unlikely event that Stalin MacBroon and Bob Crow, leader of the Rail, Maritime and Transport union, get returned to power in the coming general election in Britain. Stay long precious metals, but outside of UK jurisdiction.

They're changing PM at Buckingham Palace -
Gordon Brown went down with Alice.
A face looked out, but it wasn't the Queen’s.
"She's much too busy packing things,"
Says Alice.

With apologies to A.A.Milne.

April 6, 2010
Fiercely contested election campaign begins today

Gordon Brown will travel the mile from Downing Street to Buckingham Palace today and launch the most fiercely contested election campaign for a generation.

He will ask the Queen to dissolve Parliament next Monday and will name May 6 as the day voters decide his fate.

Within minutes the frenzy of electoral combat will begin. Mr Brown will make a symbolic trip to the South East, showing his determination to hold on to new Labour gains of 1997. David Cameron will head in the opposite direction, taking the fight to Labour in the Midlands and the North.

The formalities between the Prime Minister and the monarch will take only a few minutes but will trigger the most eagerly awaited showdown since Tony Blair swept away 18 years of Conservative rule in 1997 and what promises to be the most closely fought election since John Major defied the polls and Neil Kinnock in 1992.
http://www.timesonline.co.uk/tol/news/politics/article7088375.ece

Personally, I think dissolution is too good for Her Majesty’s House of Crooks and suggest reintroducing the stocks, the pillory, and bringing back being hung drawn and quartered for quite a few. Sadly our false prosperity is coming to its end. Sometime after May 6th, 2010, economic reality is about to intrude into most hapless Brits, downwardly mobile life. Shortly ahead for modern Britain’s serfs, a taste of Icelandic, Irish and Greek style austerity, although if the people’s republic gets returned to power a post Soviet Union style economic collapse seems highly probable to me.

They're changing PM at Buckingham Palace -
Gordon Brown went down with Alice.
"Do you think the Queen knows all about me?"
"Sure to, dear, but it's time for DC,"
Says Alice

With apologies to A.A.Milne.

At the Comex silver depositories Monday, final figures were: Registered 53.77 Moz, Eligible 62.29 Moz, Total 116.06 Moz.


Crooks & Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

Today, the views of disgraced, fallen former economics guru Greenspan, the Bernie Madoff of Federal Reserve serial bubbles built on securities fraud and Wall Street flim-flam. An economist who never saw a bubble he didn’t like, nor ever saw an approaching pin for every bubble. Perpetually gun shy, after the stock market crash of 1987, he threw ever increasing amounts of fiat dollars at every problem that surfaced, until Wall Street’s “finest” packaged up hundreds of billions of “triple-A” rubbish and foist it on a brain dead unsuspecting world, even as they created derivatives instruments that allowed them to bet against their mugs. Run immediately to precious metals, “Bubbles” is now bullish on the US economy. What could possibly go wrong?

Alan Greenspan upbeat on US economy
The former chairman of the US Federal Reserve, has said there is "momentum building up" in the US economy.
By Garry White Published: 9:44PM BST 04 Apr 2010

He added that the odds of the US economy stalling had "fallen very significantly".

"There is a momentum building up which is really just beginning and it's got a way to go," said Mr Greenspan, adding that the country was on the edge of a "significant build-up" in inventories "and that was a self-reinforcing cycle".

His comments, in an interview with ABC news, followed last week's figures that showed US employment growing in March by the largest amount in three years.

The Labour Department said that payrolls over the month increased by 162,000, the third gain in the past five months and the most since March 2007.

Mr Greenspan also said that corporate investment in new equipment was starting to come back "in a fairly substantial way".
http://www.telegraph.co.uk/finance/economics/7554158/Alan-Greenspan-upbeat-on-US-economy.html


"Were we to be directed from Washington when to sow and when to reap, we should soon want bread."

Thomas Jefferson



The monthly Coppock Indicators finished March:

DJIA: +168 UP. NASDAQ: +370 UP. SP500: +196 UP. The great Bull market goes on with the all three continuing higher in positive numbers.



Help the LIR fight Banksterism, the EU, and for sound money.
If you can, help the LIR stay around and make a difference. Please make a donation at the PayPal link on the website or better still become a sponsor for what looks like an exciting 2010. Capitalism not banksterism.


Sunspots – A 22 year colder world? (From 2004?)

Spotless Days April 04 Current Stretch: 0 days
2010 total: 6 days (6%)
2009 total: 260 days (71%)
Since 2004: 776 daysTypical Solar Min: 485 days
http://www.spaceweather.com/

The long minimum seems to have ended.

New Solar Cycle Prediction
http://science.nasa.gov/headlines/y2009/29may_noaaprediction.htm
Is the Sun Missing Its Spots?
http://www.nytimes.com/2009/07/21/science/space/21sunspot.html?8dpc

Are Sunspots Different During This Solar Minimum?
-----But something is unusual about the current sunspot cycle. The current solar minimum has been unusually long, and with more than 670 days without sunspots through June 2009, the number of spotless days has not been equaled since 1933.

----During the period from 1645 to 1715, the Sun entered a period of low activity now known as the Maunder Minimum, when through several 11- year periods the Sun displayed few if any sunspots. Models of the Sun's irradiance suggest that the solar energy input to the Earth decreased during that time and that this change in solar activity could explain the low temperatures recorded in Europe during the Little Ice Age.

----The same data were later published [Penn and Livingston, 2006], and the observations showed that the magnetic field strength in sunspots were decreasing with time, independent of the sunspot cycle. A simple linear extrapolation of those data suggested that sunspots might completely vanish by 2015.These observations caused researchers to wonder whether the characteristics of sunspots are different now than in other solar cycles.http://www.leif.org/EOS/2009EO300001.pdf

Big freeze could signal global warming 'pause'
The Arctic conditions which have brought Britain to a standstill over the past week could be the start of a "pause" in global warming, some scientists believe.
Published: 9:20AM GMT 11 Jan 2010
http://www.telegraph.co.uk/earth/environment/globalwarming/6965342/Big-freeze-could-signal-global-warming-pause.html

Sunspot cycle 24: Together with sunspot cycle 25, the next two global cooling cycles. The new “Dalton Minimum?” Twenty Nine months now with low sunspots numbers, and counting. March was the 29th month of yet another low number of 15.4 http://en.wikipedia.org/wiki/Dalton_Minimum
Smoothed sunspot numbers (SSN). 2007, Oct. 0.9. The end of cycle 23.

Sunspot cycle 24: Nov 1.7. Dec 10.1. Jan 3.4. Feb 2.2. Mar 9.3 April 2.9. May: 2.9. June 3.1. July 0.5. August 0.5. Sep 1.1 Oct. 2.9. Nov. 4.1 Dec 0.8. Jan 1.5. Feb 1.4. Mar 0.7. Apr 1.2. May 2.9. June 2.6. July 3.5. Aug. 0.0. Sep 4.2. Oct 4.6. Nov 4.2. Dec 10.6 Jan 13.1 Feb 18.6 Mar 15.4.

Sunspots. http://solarscience.msfc.nasa.gov/SunspotCycle.shtml

The count. http://sidc.oma.be/products/ri_hemispheric/

Why a New Minimum. http://sesfoundation.org/dalton_minimum.pdf

The “Carrington Event,” September 1, 1859.
http://science.nasa.gov/headlines/y2008/06may_carringtonflare.htm

Current Space Weather.
http://www.swpc.noaa.gov/

What happened to global warming?
http://news.bbc.co.uk/1/hi/sci/tech/8299079.st

This week’s featured links: Silver & Gold Miners + Rare Metals.

With US trillion dollar deficits stretching as far as the eye can see, and voodoo economics the order of the day at the central banks, I think it is now time to begin selectively scaling into precious metals companies that mostly meet the following criteria:

Adequate cash reserves. Good management. Strong in-ground reserves or prospects. NAFTA based, or else located in countries with strong rule of law.

Endeavour Silver Corp. TSX: EDR. http://www.edrsilver.com/s/Home.asp

Semafo TSX: SMF http://www.semafo.com/home_company_intro.php

ATW Gold Corp. TSX.V: ATW. http://www.atwgold.com/

US Silver Corp. TSX.V: USA. http://www.us-silver.com/s/Home.asp

Excellon Resources Inc. TSX: EXN. http://www.excellonresources.com/

First Majestic Silver Corp. TSX: FR http://www.firstmajestic.com/s/Home.asp

New Jersey Mining Company. OTCBB: NJMC
http://www.newjerseymining.com/index.html

Atna Resources Ltd. TSX: ATN. http://www.atna.com/s/Home.asp

Barkerville Gold Mines TSX.V: BGM. Formerly International Wayside Gold Mines Ltd.
http://www.barkervillegold.com/s/Home.asp

Shoreham Resources Ltd. TSX-V: SMH
http://www.shoreham.ca/

ATAC Resources Ltd, TSX.V: ATC. http://www.atacresources.com/s/home.asp

Evolving Gold Corp. TSX.V: EVG http://www.evolvinggold.com/

Lydian International Ltd. TSX: LYD. Note: LYD operates in Armenia, a region carrying higher risk than our usual safer picks in NAFTA lands. http://www.lydianinternational.co.uk/

The story of rare earths and metals is mostly one of China producing and exporting, Japan, America and everyone else importing. Vital to our new technologies, and lifestyle, and critical to hybrid and electric cars, Rare Earth Elements and Heavy Rare Earths, are a strategic choke point held in China’s hands. Lately China has been squeezing that choke point. I think that AVL at Thor Lake Canada, has a property of global importance. A property with the ability to offer NAFTA access to REEs and HREs for the decades ahead. As America and the west move to reduce over dependence on oil from unstable regions, we will see demand for rare metals take off.

Avalon Rare Metals Inc. TSX: AVL. http://www.avalonraremetals.com/

We will be adding more REEs as appropriate.

Warning.

Sadly we are all in unexplored territory. The world has never before suffered a severe recession/depression while operating on fiat currency. As is widely apparent, the central banks haven’t a clue and are making up the rules as the flounder along. They never saw it coming they claim, although it was obvious to many fine writers though not unfortunately in the mainstream media, that a giant financialised derivatives gambling economy would always end badly. There are no experts now, for the simple reason that we have never before faced such a sudden synchronised and deep collapse in the global economies.

The unfortunate fact that we are operating on fraudulent currencies is highly likely to mean it all ends many months from now, in a fiat currency revulsion, but only after the monetary authorities have first tried pouring in endless amounts of newly created money. A derivatives gambling world with an estimated quadrillion dollars of face value has to be unwound and the losses absorbed. In this sort of investing environment, cash, gold and silver and tangible assets are favoured over stocks and intangible assets.

As always if thinking about making an investment, it’s important to do one’s own due diligence. No one has more at risk in an investment than you do yourself. In these difficult economic times, there will likely be several false bottoms before the real one arrives and hindsight allows us to confirm that the bottom is in. Even then, a “V” shaped rebound is highly improbable. A double dip recession seems likely. Beware the false "statistical" government subsidised "recovery." It is a "recovery" bought from a future of fiat currency collapse.

Graeme Irvine

London Irvine Report: www.londonirvinereport.com/
Graeme@londonirvinereport.com