Looking Ahead To The Fed Meeting

By Cory

Chris Temple joins me to wrap up the markets today with a look ahead to the FOMC meeting tomorrow. US markets recovered some of the losses from yesterday but are still a little ways off their highs and seem to be stuck in tug of war range trying to figure out where the next move is. This is also a sign of most investors waiting to see what the new Fed Chairman Powell is going to say at his first live meeting. We discuss the topics we would like to hear commented on… economic data, the yield curve, and potentially any international comments.

Download audio file (2018_03_20-Chris-Temple.mp3)

Click here to visit Chris’s site for more valuable market and economic commentary.

…read more

Source:: The Korelin Economics Report

The post Looking Ahead To The Fed Meeting appeared first on Junior Mining Analyst.

Copper price: Congo set to overtake US as world’s no 4 producer

By analyst

By Frik Els

The likes of Glencore, Randgold, Zijin, China Moly and Ivanhoe appear to have been blindsided by Congo’s determination to push through a new mining code that substantially increases the cost of doing business in the central African nation.

Lobbying of President Joseph Kabila (who insisted that the CEOs personally show up in Kinshasa for talks) that lasted six hours ended with no concessions other than that the miners’ concerns “will be taken into account through a constructive dialogue” after the law is promulgated.

Those negotiations kick off on Wednesday, but the mining companies’ hopes of more favourable case-by-case “transitional arrangements” or significant concessions in the detailed regulations (which need to be produced within 90 days) also seems faint.

The DRC will be the fastest growing major mining market in the world this year, despite mounting political and regulatory risks

Glencore et al may have overestimated the strength of their position with suggestions that the new law will “cause the certain death of a young industry” or that international arbitration was a viable option.

The industry may be young, but the DRC is already too important for global copper – and of course cobalt – supply that companies could simply up sticks. Glencore CEO Ivan Glasenberg told a commodities conference on Tuesday, the Swiss miner has invested $7 billion in the DRC since the investor-friendly 2002 mining law came into effect.

Today the country supplies more than 60% of the world’s cobalt and that share will only grow over the medium term. The DRC could also soon overtake the US as the world’s number four producer of copper.

Cobalt production is forecast to hit 86,000 tonnes by the end of the decade, that’s up from fewer than 18,000 tonnes in 2007 according to the country’s central bank. The expansion of copper output is more spectacular – from 96,000 tonnes in 2007 to a forecast 1.4m tonnes in 2020. Gold production is estimated to have grown to 35 tonnes by 2020 from a measly 122 kilograms in 2010.

BMI Research predicted in January that better metals prices, new projects coming online and expansions at existing operations “will make the DRC the fastest growing major mining market in the world this year, despite mounting political and regulatory risks.”

In an update last week BMI, a unit of Fitch Group, reiterated this view saying the new law will not alter the positive outlook for mining in the country:

Even with the announced hike in mining levies, the DRC’s royalty rates will remain among the most competitive in the world for key sources of income, including copper and gold, meaning the domestic investment environment is unlikely to be impacted.

Taking a fifth

From the DRC government’s point of view the new law, first tabled in March 2015, is transformative and overdue.
The 2002 mining code, designed with help from the World Bank, is retrospectively considered too one-sided in favour of miners
Moody’s Investors Service calculates new mining taxes and royalties will increase Kinshasa’s government revenue by more than …read more

Source:: Infomine

The post Copper price: Congo set to overtake US as world’s no 4 producer appeared first on Junior Mining Analyst.

US Stock Market – The Flight to Fantasy

By Pater Tenebrarum

Divergences Continue to Send Warning Signals

The chart formation built in the course of the early February sell-off and subsequent rebound continues to look ominous, so we are closely watching the proceedings. There are now numerous new divergences in place that clearly represent a major warning signal for the stock market. For example, here is a chart comparing the SPX to the NDX (Nasdaq 100 Index) and the broad-based NYA (NYSE Composite Index).

The tech sector is always the last one to get the memo – we have dubbed this the “flight to fantasy” – and it is always seen near major market peaks. Incidentally, the Nasdaq was the last index to peak in 1987 as well (the DJIA topped out in late August of that year, the Nasdaq on October 5). So this is a well-worn tradition. The divergences that have been established between these indexes in the recent rebound from the early February are a big red flag in our opinion.

The Urge to Burn Money

As mentioned in the annotations on the chart above, investors are now paying 10 times revenues for more stocks than at any time since early 2000. We discovered the following gem via Jesse Felder’s latest report (well worth reading in its entirety). A few years after the peak of the tech mania, former Sun Microsystems CEO Scott McNealy was interviewed by Bloomberg. He said the following about Sun’s peak valuation in 2000 (it was one of the stocks trading at more than ten times sales at the time):

“At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes. What were you thinking?”

(emphasis added)

The answer is of course that nobody did much thinking at the time – and the same is evident recently as well. Also via Mr. Felder, here is a chart that shows the number of S&P 500 companies trading at 10 times revenues over time – currently there are 28 such stocks; at the peak of the mania in 2000 there were 36 (for a very brief moment).

The number of S&P 500 stocks trading at ten times revenues: “investors” are going crazy again.

It is quite ironic that companies trading at such lofty multiples are …read more

Source:: Acting Man

The post US Stock Market – The Flight to Fantasy appeared first on Junior Mining Analyst.

Technical Insights from the Web – Tue 20 Mar, 2018

By Cory Technical Outlook For A Wide Range Of Commodities

I came across this video on the StockCharts website. Greg Schnell looks at a wide range of commodity and currency charts. For all those who follow technicals or are at least interested this is a good video to watch.

Click here to visit the original posting page.

…read more

Source:: The Korelin Economics Report

The post Technical Insights from the Web – Tue 20 Mar, 2018 appeared first on Junior Mining Analyst.

Social Security “Steals” $131.8 Million From Widows…

Nilus Mattive

By Nilus Mattive

This post Social Security “Steals” $131.8 Million From Widows… appeared first on Daily Reckoning.

When it comes to Social Security, there are several points that I have made very consistently over the last decade (beyond the fact that the program itself is in poor financial condition)…

Point #1. The system is very complicated with thousands of rules, regulations, and possible forks in the road.

Point #2. Understanding all your filing options can make a huge difference in how much money you end up collecting out of the system.

AND…

Point #3. You cannot completely rely on your local Social Security office to help you choose.

My own father saw this when he went to apply a strategy that I gave to him and the Social Security employees tried to talk him out of it.

Fortunately, Dad had the knowledge and confidence to do what was actually best. My parents should end up getting an extra $100,000 over their lifetimes because of that.

Unfortunately, thousands of widows have not fared as well.

That’s the latest finding from the programs’ Office of the Inspector General.

According to this report:

“SSA needs to improve controls to ensure it informs widow(er) beneficiaries of their option to delay their application for retirement benefits. Based on our random sample of 50 beneficiaries, we estimate 11,123 would have been eligible for a higher monthly benefit amount had they delayed their retirement application until age 70. Of these, we estimate SSA underpaid about $131.8 million to 9,224 beneficiaries who were age 70 and older. In addition, we estimate SSA will underpay an additional 1,899 beneficiaries who were under age 70 about $9.8 million, annually, beginning in the year they attain age 70.

“We did not find any evidence SSA had informed claimants of the option to delay their retirement application when they applied for benefits, as required. We also found that SSA did not have systems controls in place to alert its employees when they should inform widow(er)s of their option to delay their applications for retirement benefits.”

In plain English, widows have the option of collecting their spousal/survivor benefit while allowing their own work record benefits to continue accruing delay credits.

Then, when they turn 70, they can switch to their own (possibly much richer) benefit checks.

However, Social Security employees weren’t telling applicants that this was an option or how it could end up handing them more money.

Hey, mistakes happen. I get it.

But it had happened in 41 of the 50 cases the inspector general examined in detail.

An 82% failure rate is abysmal!

And this is just one of many things I’ve seen from Social Security over the years.

A previous inspector general report from 2015 said active Social Security records existed for more than 6.5 million people born before the summer of 1901.

See, Social Security has a master “death file” but apparently it was unable to keep track of people “who exceed maximum reasonable life expectancies.”

So although there were only something like 40 people in the world living …read more

Source:: Daily Reckoning feed

The post Social Security “Steals” $131.8 Million From Widows… appeared first on Junior Mining Analyst.

Company Updates From Management – Tue 20 Mar, 2018

By Cory CVR Medical – Timelines For Additional Trials and FDA Clearance

After my last chat with Peter Bakema, President and CEO of CVR Medical (TSX.V:CVM, OTCQB CRRVF) there were a couple questions that I received asking for some more clarity on timelines to FDA clearance and the need for additional trials. To get these questions answered I have the Chief Operations Officer Tony Robins join me on the show. We discuss the upcoming trials and path/timeline to FDA clearance.

If you have any follow up questions to the CVR team please comment or email me directly – Fleck@kereport.com.

Click here to visit the CVR website.

Download audio file (2018_03_20-Tony-Robinson-CVR-Medical.mp3)

…read more

Source:: The Korelin Economics Report

The post Company Updates From Management – Tue 20 Mar, 2018 appeared first on Junior Mining Analyst.

KER Politics – Tue 20 Mar, 2018

By Big Al Remmber “Nemo” and his third party philosophy? At this point Big Al feels that he is correct.
Both political parties are more dysfunctional than Trump White House – Contributed to our site by Timothy Howe

BY ANDREW MALCOLM Special to McClatchy

The nation’s Founding Fathers had numerous brilliant, innovative ideas for designing our new form of self-government, many of which endure to this day. One of them was a thorough disdain for coarse political parties.

However, the rejection of parties did not last long. Humans, like wolves and whales, have an apparently innate need to inhabit packs, pods and political groupings. So, here we are about a quarter-millennium later stuck with two major political parties, neither of which is functioning very well.

Both U.S. political parties have gone through identity crises and internal turmoil before, though rarely at the same time. The Democratic and Republican parties, the world’s second and third oldest parties, have been amazingly resilient — yes, and loud — political organisms, adaptive and roughly balancing each other out.

Like a playground teeter-totter, when one was down, the other was up and ruled as the dominant political grouping until the other provided voters with a more attractive alternative. Think of the Democrats’ 20-year White House rule under Franklin Roosevelt and Harry Truman, which ended in 1953 when Gen. Dwight Eisenhower led Republicans out of the political wilderness.

But what happens when both parties are down? The system is out of balance.

We’re living through that difficult experience right now with partisans at both ends of the spectrum happy in their fervent bitterness. And the rest of us feeling a mounting, disturbing sense of unease and disquiet.

Nothing is set in concrete in such turbulent times. But as spring starts its slow northward creep across the country, the outlook is for prolonged political paralysis. If historical midterm election patterns stick, Democrats will re-capture at least the House of Representatives, where all financial legislation originates.

Tracking polls in last week’s special House election near Pittsburgh revealed Trump animus motivated far more voters to overcome the district’s long-term GOP tilt and narrowly elect a Democrat.

The historical average first midterm loss for a president’s party is 30 House seats. Turnover of just two dozen would give returned Speaker Nancy Pelosi and her minions control of all House committees with their broad investigative and subpoena powers. Can you say Donald Trump impeachment?

That would return Washington’s power balance to the partisan gridlock that modern-day voters seem to prefer, one party holding the White House, the other controlling one or both chambers of Congress.

But either way neither party has shown an ability to get much done. While Democrats pine for Barack Obama to play a key role, he’s shown more interest in the show business that produced his successor. Hillary Clinton is “only” 70, but she’s on an Asian book tour falling down almost daily and explaining how American women voted for Trump as ordered by their husbands.

Democrats’ political bench is thin and …read more

Source:: The Korelin Economics Report

The post KER Politics – Tue 20 Mar, 2018 appeared first on Junior Mining Analyst.

Key Data Commentary – Tue 20 Mar, 2018

By Cory FOMC Preview – By The Data

This information below is from the Calculated Rick blog. I check out the site on a regular basis because I think the author, Bill McBride does a great job of presenting the numbers without any major biases. Getting the actual data is very important to me because it allows for a level headed look at what is going on. Since everyone is watching/waiting for the FOMC meeting on Wednesday let’s check out how the data and projections have moved since the last live meeting…

Click here to visit the Calculated Rick blog for more great information.

The consensus is that the Fed will increase the Fed Funds Rate 25bps at the meeting this week, and the tone might be a bit more “hawkish”.

Assuming the expected happens, the focus will be on the wording of the statement, the projections, and Fed Chair Jerome Powell’s first press conference to try to determine how many rate hikes to expect in 2018 and in 2019.

Here are the December FOMC projections.

Current projections for Q1 GDP range from 1.8% to 2.7%. There is probably some residual seasonality in the Q1 GDP numbers (pulling down GDP). So it is too early to revise down 2018 GDP.

At this point, as far as the impact of fiscal stimulus, the Fed has probably incorporated the estimated impact of the tax cuts in their projections for 2018 and beyond. So the FOMC might increase their projections a little.

GDP projections of Federal Reserve Governors and Reserve Bank presidents

Change in
Real GDP1
2018
2019
2020

Dec 2017
2.2 to 2.6
1.9 to 2.3
1.7 to 2.0

Sept 2017
2.0 to 2.3
1.7 to 2.1
1.6 to 2.0

1 Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.

The unemployment rate was at 4.1% again in February. So the unemployment rate for 2018 will probably be unchanged.

Unemployment projections of Federal Reserve Governors and Reserve Bank presidents

Unemployment
Rate2
2018
2019
2020

Dec 2017
3.7 to 4.0
3.6 to 4.0
3.6 to 4.2

Sept 2017
4.0 to 4.2
3.9 to 4.4
4.0 to 4.5

2 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.

As of January, PCE inflation was up 1.65% from January 2017. Based on recent PCE readings, PCE inflation might be revised up slightly for 2018.

Inflation projections of Federal Reserve Governors and Reserve Bank presidents

PCE
Inflation1
2018
2019
2020

Dec 2017
1.7 to 1.9
2.0
2.0 to 2.1

Sept 2017
1.8 to 2.0
2.0
2.0 to 2.1

PCE core inflation was up 1.5% in January year-over-year. Core PCE inflation might be revised up slightly for 2018.

Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents

Core
Inflation1
2018
2019
2020

Dec 2017
1.7 to 1.9
2.0
2.0 to 2.1

Sept 2017
1.8 to 2.0
2.0
2.0 to 2.1

In general the data has been consistent with the FOMC’s December projections, so any revision will probably be related to the FOMC’s view of the impact of policy.
Read more at http://www.calculatedriskblog.com/2018/03/fomc-preview.html#p1xedEmruxGQmoAs.99

…read more

Source:: The Korelin Economics Report

The post Key Data Commentary – Tue 20 Mar, 2018 appeared first on Junior Mining Analyst.