TFN eNews 12/01/2009: This is how the global game of Risk is played!
Published via e-mail broadcast on December 1, 2009
In today’s TFN eNews:
* Our silver position is up 75%
* That’s how the global game of Risk is played!
* Betting on cyber shopping
Dear TFN eNews reader,
The Dubai interlude is history.
The apparent ease with which Dubai World entered into debt restructuring talks with its lenders makes you wonder what the fuss was about in the first place. Unless, of course, the unexpected publicity — and accompanying hit to share prices — were the blunt instrument that convinced lenders to speed up the restructuring process.
In which case it worked so well we may expect other prominent debt-ridden entities to pursue exactly the same strategy in the months to come.
But investors have short memories: After dropping steeply last week, stocks today rallied from Shanghai to the New York Stock Exchange. The dollar continued to fall. Chinese manufacturing grew at the fastest pace in five years (partly because the dollar continued to fall).
Gold bullion rose to a record above $1,200 an ounce. Crude oil climbed more than 2%. Aluminum, copper, lead and zinc all were up — just as if the building boom were to magically resume in Dubai.
Silver and palladium soared.
Our Hot Stock Confidential position in Silver Wheaton (NYSE:SLW) is up over 75%… and anyone paying attention to my selfless promotional SLW plugs in the TFN eNews over the last couple of months should be sitting on at least double-digit gains by now.
(And please don’t tell me you can’t make money in stocks!)
*** Interesting news from the natural gas industry:
Norway’s StatoilHydro ASA (NYSE:STO) and Russia’s Gazprom OAO (OTC:OGZPY), signed initial deals to import liquefied natural gas (LNG) to the United States.
Given the glut of natural gas in the United States, does that strike you like a venture to import mosquitoes and black flies to the Maine or Minnesota backwoods?
A core part of the deal provides for Gazprom to obtain regasification capacity right here at the Cove Point, Maryland, LNG receiving terminal. Gazprom will receive access to 50 million cubic feet per day, or 0.5 billion cubic meters per year of regasification capacity at the Cove Point terminal, starting in 2010.
But here’s the heart of the contract: The deal allows Gazprom to purchase 1 bcm per year from Statoil at various trading hubs in the United States for “more than five years”: Statoil will sell natural gas to the Russians at various U.S. locations, while purchasing LNG from them at Cove Point.
Now, this is more like it! It signals that the Russians have a viable short-term interest to get their hands on dirt-cheap U.S.-produced natural gas — and possibly sell it to their European trading partners at european (oil-pegged!) prices!
Here’s what our resident “gasman” Andre Snyder had to say:
“This is the kind of news that will put a lid on natural gas prices for years to come. With Gazprom and Statoil tag-teaming the LNG business, domestic drillers like Chesapeake, Anadarko, and Range Resources have got to be scared of what’s to come. They’re already hurting from the current glut of gas (reserves are at 99% capacity and growing), and thanks to Russia forcing its way into the market this winter’s low prices are not a one-time glitch. I don’t suspect Russia will be able to price its gas anywhere nearly as cheaply as the stuff coming out of the Marcellus Shale play, but if it manages to find a way, look out.”
Conversely, Gazprom’s existing deals with European and Asian customers will enable the Kremlin-owned monopoly to effectively push aside those U.S. gas companies who’ve been trying to sell LNG by the boatload to overseas customers!
*** The ethanol industry is having yet another good day. After near-abandonment by the politicians (who had to reconsider starving millions with the benefits of non-petroleum-based fuel), the U.S. biofuel sector suffered a wave of bankruptcy filings earlier this year.
Now, thanks to some more political maneuvering the industry is once again finding itself on the leader board. Andrew Snyder wrote:
“Today was supposed to be the EPA’s deadline for a decision that would allow gasoline blends to contain up to 15% ethanol versus the 10% cap now in place. But word this morning is the EPA’s not ready to make its decision quite yet. It now wants to wait until sometime next summer. Judging by the day’s pricing action, the Street views this as a positive sign.
“Companies across the industry are eager to push more of their product into the nation’s fuel source. One of the big winners today is Pacific Ethanol (NASDAQ:PEIX), the once highly touted California-based producer with subsidiaries in and out of bankruptcy court over the past year.
“Word that more ethanol production may be around the corner was enough for the company to pull its Burley, Idaho production facility out of mothballs by January. The company owns a total of four production facilities, only one of which is currently operating.
“If the EPA gives the thumbs-up, expect shares to continue to climb. As I write, traders are getting in (and out) at $0.87, up 56% on the day.
“Two more companies worth mentioning: Oh, just finish the article at the TFN main portal!”
***This Thursday, a small biotech company will present its revolutionary technology to 100 financial institutions.
If just one of them decides to buy as little as 100,000 shares, this stock could soar 20, 30, or even 50 cents.
Find out which stock it is — plus 12 more stocks with ”Moon Shot” potential:
Even in this market, it’s not really uncommon for some stocks to return 500%, 1000%, even close to 3,000% in just a few months. Sometimes it only takes weeks. Or even days. What do they all have in common? We’ll tell you right here…
http://www.todaysfinancialnews.com/PSC/LAUNCH/EPSCKB07.html
*** Quote of the Day:
“Government pressures on mortgage lenders to accept less than the full amount they are owed may win votes for politicians, since there are far more borrowers than lenders. But how much future lending can be expected when the lenders know that politicians are ready to intervene at any time to prevent them from getting their money back?” — Thomas Sowell
Recommended Reading:
3 Penny Stocks With Winning Potential
Is the ethanol industry ready to soar?
Today’s Top 3 Financial News Stories:
MoneyNews.com – Zell: Obama Ignoring Debt Dangers “If there isn’t any radical change in this current administration’s direction, it’s very hard to imagine that we’re not going to be confronted with inflationary pressures going forward.”
Telegraph.co.uk — Brace yourself for the IPO stampede “It is, in fact, the seasonal rush of privately owned companies heading for their new feeding grounds on the London stock market.”
Bloomberg.com — Dubai Credit Risk Falls Most in 9 Months On Debt Plan “Dubai’s credit risk fell the most in nine months after state-controlled Dubai World began talks on restructuring less than half its total liabilities and said the rest of its obligations are on ‘a stable financial footing’.”
Cordially yours,
J. Christoph Amberger
Executive Publisher, TodaysFinancialNews.com
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