What market watchers are saying this week

David Parkinson tracks down the insightful, the outspoken, the colourful and, occasionally, the just plain weird words coming out of the investing community


David Parkinson- Globe and Mail

A Capital Condemnation

"The Dow Jones goes up whenever the unemployment rate goes up, because Wall Street likes it when people lose their jobs. It's better for the bottom line of companies when they don’t have to pay people and they can get the remaining people to work twice as hard.” – Filmmaker Michael Moore, talking with long-time sparring partner Wolf Blitzer of CNN about his new Wall-Street-bashing documentary Capitalism: A Love Story, argues that the stock market’s recovery has come on the backs of the unemployed, as companies pump up their bottom lines by slashing payrolls.

Filmmaker Michael Moore declares the New York Stock Exchange a crime scene in Moores new film, Capitalism: A Love Story, an Alliance Films' release.

So what else would we expect?

“His latest film isn’t really a documentary … but a freewheeling denunciation of the capitalist system that is often mordantly funny and, by lurching turns, scornful, rambling, repetitive, impassioned, mock-lofty, pseudo-lowbrow, faux-naïve, persuasive, tabloid-shameless and agit-prop-powerful.” – Wall Street Journal film critic Joe Morgenstern opines on Michael Moore’s Capitalism: A Love Story, which he gave a generally positive review despite its unabashed attacks on the newspaper’s core audience.

Much atwitter about nothing

“Twitter is rewriting that old saying about a penny for your thoughts. It turns out that our most mundane and irrelevant musings are worth $1-billion.” – TheStreet.com’s Glenn Hall comments on a new $100-million (U.S.) private financing at Twitter, which, by implication, puts the value of the popular (and profitless) social-networking website into the 10-figure range.

I guess owning the Coyotes won't help, either

“Three things could help RIM: A takeout by a larger company with smart phone ambitions; RIM’s own acquisition of Palm; or new employment for millions of stock brokers, which would boost RIM’s enterprise sales. Take a bet on all that if you will. The fundamentals speak for themselves, and they only suggest that business will get tougher from here on out.” – Tiernan Ray, columnist with influential investment magazine Barron’s, suggests some Hail-Mary solutions that would be necessary to alter the bleak prospects for Research in Motion and its stock. The Blackberry maker’s shares plunged Friday after the company issued disappointing financial results and an even worse sales outlook.

Hey, goldbugs, maybe you should put down those muskets, too

“Gold could be investors’ version of World War II France’s failed Maginot Line – an expensive defensive hedge, yet unfortunately built to fight yesterday’s battles.” – Vincent Fernando of website The Business Insider argues that the defensive play in gold no longer makes any sense. He believes deflation is a more serious risk than inflation, and that the speculators who have been driving gold’s surge are risk-takers, not the risk-averse who began the rally.

Oil price may be down in 2009 but pace of discovery is gushing

Oil price may be down in 2009 but pace of discovery is gushing TheStar.com - Business - Oil price may be down in 2009 but pace of discovery is gushing

More than 200 sites reported in what could be the most impressive number of new finds in a year since 2000

September 26, 2009

JAD MOUAWAD
The New York Times

The oil industry has been on a hot streak this year, thanks to a series of major discoveries that have rekindled a sense of excitement across the petroleum sector, despite falling prices and a tough economy.

These discoveries, spanning five continents, are the result of hefty investments that began earlier in the decade when oil prices rose and of new technologies that allow explorers to drill at greater depths and break tougher rocks.

More than 200 discoveries have been reported so far this year in dozens of countries, including northern Iraq's Kurdish region, Australia, Israel, Iran, Brazil, Norway, Ghana and Russia.

They have been made by international giants, like Exxon Mobil, but also by industry minnows, like Tullow Oil.

Just this month, BP said it found a giant deep-water field that might turn out to be the biggest oil discovery ever in the Gulf of Mexico, while Anadarko Petroleum announced a large find in an "exciting and highly prospective" region off Sierra Leone.

It is normal for companies to discover billions of barrels of new oil every year, but this year's pace is unusually brisk. New oil discoveries have totalled about 10 billion barrels in the first half of the year, according to IHS Cambridge Energy Research Associates.

If discoveries continue at that pace through year-end, they are likely to reach the highest level since 2000.

Although recent years have seen speculation about a coming peak and subsequent decline in oil production, people in the industry say there is still plenty of oil in the ground, especially beneath the ocean floor, even if finding and extracting it is becoming harder.

They say prices and the pace of technological improvement remain the principal factors governing oil production capacity.

While the industry is celebrating the recent discoveries, many executives are anxious about the immediate future, fearing that lower prices might jeopardize their exploration drive.

The world economy is weak, oil prices have tumbled from last year's records, corporate profits have shrunk and global demand for oil remains low. After falling to $34 (U.S.) in December, oil prices have doubled, stabilizing near $70 a barrel. But if the world economy does not pick up, some analysts believe the price could fall again.

Oil companies contend that is not a prospect they can afford. Despite reaping record profits in recent years, many executives have warned that they need prices above $60 a barrel to develop the world's more challenging reserves.

In fact, some exploration activity has already slowed this year as producers seek better terms from service companies and contractors.

Exploration spending swelled in recent years, partly to offset a doubling of costs throughout the industry – from steel prices to the cost of renting deep-water drilling rigs.

A big issue confronting the industry now is how to drive down costs while maintaining a high level of exploration.

On average, costs have fallen by 15 to 20 per cent from their peak, according to petroleum executives.

Carrigan Is A Bull - Technicals Show Time To Invest

Do You Have Rare Earth In Your Holdings?

It’s time for the Cambridge House Conference in Toronto
this coming weekend hosted by Joe Martin, the perfect host
and as usual, there is a long list of exhibitors and speakers.

We don’t mean to be blunt or nasty, but some of those long
list of speakers have been suggesting over the last many
months that the market was going to crash and to stay out
of it and had you listened to them, you might not have
made any of the money in the bounce back in the markets
of late. But then a more polite person would have said
those two or three people should be listened to just to hear
the other view.

We suggest you listen to some of the people that have
made you a lot of money in the last while, had you been a
subscriber or a listener to some of their views. Those peo-
ple have names like Jim Letourneau of the Big Picture
Speculator; John Kaiser of the Bottom Fishing Report and
one of the few people that know what the heck rare earths
are about; David and Eric Coffin of the Hard Rock Analyst
who have come up with some big winners and are admit-
tedly bullish on the gold market, but whose East Asia Miner-
als is now a five and six-bagger.

Our checklist for companies you have to visit include:
⇒ Avalon Rare Metals: One of the big rare earth stories and
one of the big success stories over the last while and
the question to be asked at the booth is; “just how big
their resource might be and how long one thinks the
rare earth phenomena can extend?”

⇒ East Asia Minerals: Has been one of the huge success
stories over the last while and one has to ask, “how
come the Coffin’s like it so much?” Just what kind of
resource estimate is it that they are talking about as
potential in Sumatra.

⇒ Hathor Exploration: This is one of the exploration plays
those in the mining sector all talk about, but it’s also in
a sector—uranium—that has been in the tank over the
last several months. When things change as I think
they will, one wants to be asking these guys in the
booth, how big they think their resource is and how big
a program they plan for this winter which will be impor-
tant. If Tony Nunziata is manning the booth, just whis-
per in his ear, “how big do you think it is Tony?”

⇒ Riverstone Resources: Is one you would have to call a
“cheapie with a chance” and after delay after delay
after delay, they are finally starting drilling in the next
few weeks on their project in Karma that the Coffin’s
have hopes to see rather significant success.
Rodinia Minerals: I’m quite sure the average person
doesn’t know much about lithium, so if Don Mosher
is in the booth, ask this ex-hockey player “what the
heck lithium is all about and what is the big differ-
ence between brine and all those hard rock sources
of lithium?” This should be one of your “must-see”
booths.

⇒ San Gold Corp: This is one of the success stories
over the last while as gold has recovered nicely and
their project in Manitoba, many think is an extension
of the huge gold discoveries of Red Lake. The
question to ask someone in the booth is “Just how
big the resource is at this time?”

⇒ Ucore Uranium: Soon to be called Rare Earth One
might have Jim McKenzie in the booth or someone
close to him and the question of course to ask them
is an important one…“Just how big do they think
their rare earth resource is at this time and just how
does the USGS come up with those numbers given
the little drilling to date?” Having said that, if the
rare earth mania continues, they are one of only a
handful of obvious plays.
As far as asking some of the speakers some ques-
tions of those that have been winners over the last while
go to:

⇒ Jim Letourneau: Letourneau has had some huge
winners of late, one of the first to mention rare
earths and winners like Medicago Inc. (MDG) and a
long list of others. The story of the day as far as we
are concerned is Wavefront Technology (WEE) who
just may have an advancement in oil and gas recov-
ery that could revolutionize the oil and gas busi-
ness. The question is obvious…“Just how big
could this be and what possibly could go wrong?”
Jim Letourneau’s two favorite picks other than
Wavefront are Energold Drilling (EGD) as gold and
mineral explorers ramp up around the world, and
Matamec Explorations (MAT). You might ask Jim
about Matamec, a cheapie in the rare earth sector.

⇒ John Kaiser: Is one of the very few people out there
who understands rare earth and has been talking
about it for a long time. Just how serious John are
you about the mania you suggest over the next six
months and what is it that could keep things going
and what are your favorites? The other question...just
how high a target does he have for Brett Resources
(BBR)...

Really? Today on BNN, Kaiser moves Pere-
grine dramatically!