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Babine Lake Mines Leaking Dangerous Contaminants into Salmon Habitat, Say Critics

Babine Lake Mines Leaking Dangerous Contaminants into Salmon Habitat, Say Critics

Advocates want greater oversight as a mapping project identifies more than 170 mines putting waterways at risk.

Two closed mines on islands in Babine Lake are leaking dangerous levels of copper that could be damaging the Skeena watershed’s most valuable sockeye salmon spawning lake, The Tyee has learned.

In a report due out this week, SkeenaWild Conservation Trust and the Lake Babine Nation say an analysis of monitoring data from mine owner Glencore shows wastewater from the mines has included elevated levels of heavy metals, including copper contamination up to 20 times greater than provincial water quality guidelines.

It’s unclear what impact that could be having on Babine Lake’s salmon stocks, which account for 90 per cent of the Skeena watershed’s sockeye.

But Donna Macintyre, fisheries director for Lake Babine Nation, says there is clearly a threat.

“Does it affect salmon? Obviously, if we’re putting discharge into the lake, and we’ve got zooplankton that the fish depend upon for food, it will affect them,” Macintyre told The Tyee.

“We have these guidelines for copper, all of the heavy metals that are discharged into the lake, but they’re basically for human consumption. Nobody has really done major studies on fish.”

Lake Babine Nation worked with SkeenaWild to analyze data that dates back to the mines’ operation in the 1970s. But the research focused on the past 12 years since the start of Glencore’s monitoring program at the sites. The studies were done on samples of water, sediment and tissue taken from lake trout and sculpin.

…click on the above link to read the rest of the article…

THE FORMER INDUSTRIAL METAL: The Silver Price Surges As Copper & Oil Get Crushed

THE FORMER INDUSTRIAL METAL: The Silver Price Surges As Copper & Oil Get Crushed

The notion that silver is just an “Industrial Metal” was utterly destroyed today as both the copper and oil prices were crushed as silver surged higher.  This is precisely what I was looking for as a positive sign showing that silver is now disconnecting itself from the INDUSTRIAL METAL BALL & CHAIN.

While analysts will continue to regurgitate that the future silver price depends on industrial demand, we can now take this analysis and throw it into the dustbin.  The world is heading into a new paradigm of “Building Wealth to Protecting Wealth.”  And let me tell you, you cannot protect wealth in most STOCKS, BONDS, or REAL ESTATE.  Those days are over for good.

Unfortunately, 99% of investors still haven’t figured that one out yet… but they will.

Today, it was quite an impressive day for silver (and gold) as the metals surged higher while copper, the king industrial metal, got destroyed.  Here is a chart of the copper price versus silver.

As we can see, copper is down 5% while silver is up 2%.  Thus, the leading indicator of the global economy, COPPER, just put out a very BAD SIGNAL, indeed.  Now, if silver was just a mere industrial commodity, why didn’t it’s price follow along with copper???

And, if that isn’t bad enough, take a look at the WTI Oil price.  The West Texas Intermediate oil price was down 5% as well.

With the U.S. oil price falling $2 in one day, that just wiped out $21 million in oil revenues to the oil companies.  This is also terrible news for the U.S. Shale Oil Industry is being held together by DUCT TAPE, BAILING WIRE, and ELMERS GLUE.

Today, I also posted the broad selloff in oil on my SRSrocco Report Twitter feed:

…click on the above link to read the rest of the article…

The Coming Copper Peak

The Coming Copper Peak

Elon Musk told a closed-door Washington conference of miners, regulators and lawmakers that he sees a shortage of EV minerals coming, including copper and nickel (Scheyder 2019).   Other rare metals used in cars include neodymium, lanthanum, terbium, and dysprosium (Gorman 2009).

***

Richard A. Kerr. February 14, 2014. The Coming Copper Peak.  Science 343:722-724.

Production of the vital metal will top out and decline within decades, according to a new model that may hold lessons for other resources.

If you take social unrest and environmental factors into account, the peak could be as early as the 2020s

As a crude way of taking account of social and environmental constraints on production, Northey and colleagues reduced the amount of copper available for extraction in their model by 50%. Then the peak that came in the late 2030s falls to the early 2020s, just a decade away.

After peak Copper

Whenever it comes, the copper peak will bring change.  Graedel and his Yale colleagues reported in a paper published on 2 December 2013 in the Proceedings of the National Academy of Sciences that copper is one of four metals—chromium, manganese, and lead being the others—for which “no good substitutes are presently available for their major uses.”

If electrons are the lifeblood of a modern economy, copper makes up its blood vessels. In cables, wires, and contacts, copper is at the core of the electrical distribution system, from power stations to the internet. A small car has 20 kilograms (44 lbs) of copper in everything from its starter motor to the radiator; hybrid cars have twice that. But even in the face of exponentially rising consumption—reaching 17 million metric tons in 2012—miners have for 10,000 years met the world’s demand for copper.

 …click on the above link to read the rest of the article…

“The Outlook For The Global Economy Has Deteriorated”: Oil, Copper And Lumber Are All Telling Us The Next Economic Downturn Is Here

“The Outlook For The Global Economy Has Deteriorated”: Oil, Copper And Lumber Are All Telling Us The Next Economic Downturn Is Here

Oil, copper and lumber are all telling us the exact same thing, and it isn’t good news for the global economy.  When economic activity is booming, demand for commodities such as oil, copper and lumber goes up and that generally causes prices to rise.  But when economic activity is slowing down, demand for such commodities falls and that generally causes prices to decline.  In recent weeks, we have witnessed a decline in commodity prices unlike anything that we have witnessed in years, and many are concerned that this is a very clear indication that hard times are ahead for the global economy.

Let’s talk about oil first.  The price of oil peaked in early October, but since that time it has fallen more than 25 percent, and the IEA is warning of “relatively weak” demand out of Asia and Europe

The International Energy Agency said on Wednesday that while US demand for oil has been “very robust,” demand in Europe and developed Asian countries “continues to be relatively weak.” The IEA also warned of a “slowdown” in demand in developing nations such as India, Brazil and Argentina caused by high oil prices, weak currencies and deteriorating economic activity.

“The outlook for the global economy has deteriorated,” the IEA wrote.

Meanwhile, the price of copper has been declining for quite some time now.  The price of copper also fell substantially just before the last recession, and many analysts are pointing out that “Dr. Copper” is now waving a red flag once again

The message of weakening demand on the oil front was reinforced by the falling price of copper.

…click on the above link to read the rest of the article…

After Noble, Here Are The Next 18 US Energy Companies To Be Junked

After Noble, Here Are The Next 18 US Energy Companies To Be Junked

Following Noble Group’s downgrade to junk and “Enron moment,” we thought it worth considering who is next to be junked?

Judging by the market’s expectations, there are now 110 credits that are rated “investment grade” but trade like junk, and as Markit’s Neil Mehta notes, this is up from just 21 in November.

Source: @NeilCredit

There are 18 US Energy names (and 23 globally) that are currently traded at CDS levels implying junk status, with Diamond Offshore, Nabors, and Encana top of the list.

*  *  *

And finally, away from the energy complex, we note that Freeport McMoran is at the top of the list of likely junk downgrades and today’s carnage has extended Carl Icahn’s losses…

 

as it seems FCX stockholders are getting the joke…

Freeport-McMoRan Inc

(1739bps; Av BBB; Imp CCC)

The US copper and gold producer has seen its 5-yr CDS spread trading at implied junk levels for the last six months. Troubles have intensified over the past month and credit spreads now imply a 79% chance of default within the next five years. Moody’s placed the $6bn company on review for a possible downgrade just last week.

The Financial Crisis Of 2016 Rolls On – China, Oil, Copper And Junk Bonds All Continue To Crash

The Financial Crisis Of 2016 Rolls On – China, Oil, Copper And Junk Bonds All Continue To Crash

Buy Sell - Public DomainNever before have we seen a year start like this.  On Monday, Chinese stocks crashed once again.  The Shanghai Composite Index plummeted another 5.29 percent, and this comes on the heels of two historic single day crashes last week.  All of this chaos over in China is one of the factors that continues to push commodity prices even lower.  Today the price of copper fell another 2.40 percent to $1.97, and the price of oil continued to implode.  At one point the price of U.S. oil plunged all the way down to $30.99 a barrel before rebounding just a little bit.  As I write this article, oil is down a total of 6.12 percent for the day and is currently sitting at $31.13.  U.S. stocks were mixed on Monday, but it is important to note that the Russell 2000 did officially enter bear market territory.  This is yet another confirmation of what I was talking about yesterday.  And junk bonds continue to plummet.  As I write this, JNK is down to 33.42.  All of these numbers are huge red flags that are screaming that big trouble is ahead.  Unfortunately, the mainstream media continues to insist that there is absolutely nothing to be concerned about.

A little over a year ago, I wrote an article that explained that anyone that believed that low oil prices were good for the economy was “crazy“.  At the time, many people really didn’t understand what I was trying to communicate, but now it is becoming exceedingly clear.  On Monday, one veteran oil and gas analyst told CNBC that “half of U.S. shale oil producers could go bankrupt” over the next couple of years…

…click on the above link to read the rest of the article…

For Commodities, This Is The Next Great Depression

For Commodities, This Is The Next Great Depression

While the “sell in 1973, and go away” plan had worked out for some in the commodity space, the destruction of the last decade has only one historical comparison… the middle of The Great Depression.

The 10-year rolling annualized return for commodities is -5.1% – the lowest since 1938…

During the same period Stocks are up 7.3% annualized, Bonds 6.6%, and Cash unchanged. Dip-buying opportunity? Maybe.

UBS thinks so: Tactically we can see a bounce in Q1 before the capitulation starts

Tactically, in September 2015, we actually expected a more significant oversold bounce in commodities from last year’s late September risk bottom into ideally early Q2 2016 before we anticipated more weakness into later 2016. So far, the bounce failed since particularly in the energy complex we saw further weakness into December and the metals have been actually just trading sideways. Nonetheless, according to our Q1 US dollar pullback call, we still see the chance for another rebound attempt in commodities into later Q1, and if so the move can be significant (short covering). Such a rebound would however not change our underlying cyclical roadmap for commodities, and this means that any rebound in Q1 should be limited in price and time before we expect another and potential final capitulation wave to start into H2 2016, where we expect the CCI index to minimum test its 2008 low at 350 to worst case 320.

Commodities… on the way into a multi-year buying opportunity

All in all we are sticking to our last year’s projection and strategy call that commodities are on the way into an important H2 2016/early2017 cyclical bottom. What is missing in our view is the final act in this first bear market.

…click on the above link to read the rest of the article…

Plunging Commodities Interfere With The New World Order

Anglo American, a British company, and one of the world’s biggest miners, and a ‘producer’ (actually just a miner, how did those two terms ever get mixed up?!) of platinum (world no. 1), diamonds, copper, nickel, iron ore and coal, said today it would scrap dividends AND fire 85,000 of it 135,000 global workforce (that’s 63%!). 
Anglo is just the first in a long litany line we’ll see going forward. Commodities ‘producers’ are being completely wiped out, hammered, killed, murdered. They’ve been able to hedge their downside risks so far, but now find they can’t even afford the price of the hedges (insurance) anymore. And then there’s all the banks and funds that financed them.

And they’ve all been gearing up for production increases too, with grandiose plans and -leveraged- investments aiming for infinity and beyond. You know, it’s the business model. 2016 will be a year for the record books.

Just check this Bloomberg graph for copper supply and demand as an example. How ugly would you like it today?

And what’s true for copper goes for the whole range of raw materials. Because China went from double-digit growth to shrinking imports and exports in pretty much no time flat. And China was all they had left.

Iron ore is dropping below $40, and that’s about the break-even point. Of course, oil has done that quite a while ago already. It’s just that we like to think oil’s some kind of stand-alone freak incident. It is not. With oil today plunging below $37 (down some 15% since the OPEC meeting last week), it doesn’t matter anymore how much more efficient shale companies can get.

They’re toast. They’re done. And with them are their lenders. Who have hedged their bets too, obviously, but hedging has a price. Or else you could throw money at any losing enterprise.

…click on the above link to read the rest of the article…

Oil Prices Down As Storage Keeps On Filling Up

Oil Prices Down As Storage Keeps On Filling Up

Happy Thanksgiving Eve! One hundred and forty-eight years to the day after Alfred Nobel patented dynamite, and the fuse has been lit for an explosion to the downside for the crude complex.

After geopolitical tension was stoked yesterday, attention shifts back to oversupply today with the weekly EIA inventory report. Yesterday afternoon’s API report yielded a build of 2.6 million barrels to crude stocks, as well as solid builds to the products. This has adjusted expectations ahead of the EIA report, as a lesser 1 million barrel build was being baked into the cake.

Yesterday we discussed how copper is at a six-and-a-half year low due to a combination of falling Chinese demand and a rising US dollar. The chart below illustrates that despite the downward trend in copper prices, an ongoing supply glut is set to persist, as lower-cost projects come to fruition after billions of dollars have already been invested. Accordingly, global copper production is expected to reach an all-time this year…and is projected to rise through the rest of the decade.

Related: Big Oil: Which Are The Top 10 Biggest Oil Companies?

Given the broad-based sell-off we have seen in commodities, from copper to crude to coal, Bloomberg’s commodity index – which tracks 22 natural resources – has plunged two-thirds lower from its peak in 2008 to the lowest level since 1999:

Today is ‘double data day‘, as tomorrow’s Thanksgiving holiday means we get the EIA natural gas storage report a day early. A minor injection of +6 Bcf is expected, which will further add to the record storage level of 4.000 Tcf.

…click on the above link to read the rest of the article…

The Endgame Takes Shape: “Banning Capitalism And Bypassing Capital Markets”

The Endgame Takes Shape: “Banning Capitalism And Bypassing Capital Markets”

One month ago we presented to readers that in the first official “serious” mention of “Helicopter Money” as the next (and final) form of monetary stimulus, Australia’s Macquarie Bank said that there is now about 12-18 months before this “unorthodox” policy is implemented. We also predicted that now that the seal has been broken, other banks would quickly jump on board with an idea that is the only possible endgame to 8 years of monetary lunacy, and sure enough, both Citigroup and Deutsche Bank within days brought up the Fed’s monetary paradrop as the up and coming form of monetary policy.

So while the rest of the street is undergoing revulsion therapy, as it cracks its “the Fed will hike rates any minute” cognitive dissonance and is finally asking, as Morgan Stanley did last week, whether the Fed will first do QE4 or NIRP (something we have said since January), here is what is really coming down the line, with the heretic thought experiment of the endgame once again coming from an unexpected, if increasingly credibly source, Australia’s Macquarie bank.

* * *

Would more QE make a difference? Have to move to different types of QE or allow nature to take its course

It seems that over the last week investor consensus swung from expecting Fed tightening and some form of normalization of monetary policy to delaying expectation of any tightening until 2016 and possibly beyond whilst discussion of a possibility of QE4 has gone mainstream.

Although “QE forever” and no tightening has been our base case for at least the last 12-18 months, we also tend to emphasize the diminishing impact of conventional QE policies. As the latest Fed paper (San Francisco) highlighted, “There is no work, to my knowledge, that establishes a link from QE to the ultimate goals of the Fed-inflation and real economic activity. Indeed, casual evidence suggests that QE has been ineffective in increasing inflation”.

…click on the above link to read the rest of the article…

TSX falls 373 points as commodities sell off again

TSX falls 373 points as commodities sell off again

Canadian dollar loses almost half a cent to close at 74.66 cents US.

Canada’s benchmark stock index lost almost 2.8 per cent on another bleak Monday for commodities like oil, gold and copper.

The S&P/TSX Composite Index lost 373 points to close at 13,004. That’s the lowest level for Canada’s benchmark stock index since October 2013.

The TSX is now down by almost six per cent since the start of September. If that holds until Wednesday, the last day of the month, it will be the worst month for the index since 2012, and the June-to-September period would be the worst three-month period for Canada’s benchmark stock index since 2011.

Almost all of the sub-sectors were lower. Commodities were especially hard hit as the December gold contract fell $13.40 to $1,132.20 US an ounce and the November crude oil contract was down $1.23 at $44.47 US a barrel.

The gloom in commodities was largely tied to more news out of China about that country’s slowing economy. Profits at Chinese industrial firms dropped by the largest amount on record since Beijing started releasing the data in 2011.

“Whenever the market is down, the first place to look these days is China,” John Manley, chief equity strategist at Wells Fargo Fund Management, told The Associated Press.

“Right now, we need evidence that China is not slowing that much and that profits are still going to be OK.”

Alcoa splitting in two

In corporate news, one of the world’s largest mining companies, Alcoa, was a bright spot for mining stocks with the stock rising about six per cent on the NYSE. But that optimism was only because the company announced it was splitting itself into two, to insulate its growing and profitable aerospace and automotive business from its sagging base metals business, which primarily consists of aluminum assets.

Prior to Monday’s bounce, Alcoa shares had lost more than 40 per cent this year as the price of metals cratered.

The Canadian dollar lost almost half a cent amid the gloom, to close at 74.66 cents US.

…click on the above link to read the rest of the article…

“This Time May Be Different”: Desperate Central Banks Set To Dust Off Asia Crisis Playbook, Goldman Warns

“This Time May Be Different”: Desperate Central Banks Set To Dust Off Asia Crisis Playbook, Goldman Warns

Early last month, Bloomberg observed that plunging currencies were “handcuffing bankers from Chile to Colombia.” The problem was described as follows:

Central bankers in commodity-dependent Andes economies aren’t even considering interest-rate cuts to revive growth, even as prices for oil, copper and other raw materials collapse.

That’s because the deepening price slump is also dragging down currencies in Colombia and Chile — a swoon that’s fanning inflation and tying policy makers’ hands.

That was six days before China’s decision to devalue the yuan.

Needless to say, Beijing’s entry into the global currency wars did nothing to help the situation and indeed, since the yuan devaluation, things have gotten materially worse. The real, for instance, has plunged 10.5%, the Colombian peso is down 6.6%, the Mexican peso is off 4.4%, and the Chilean peso is down a harrowing 8% (thanks copper). And again, that’s just since China’s devaluation.

Meanwhile, plunging commodity prices, falling Chinese demand, and depressed global trade aren’t helping LatAm economies. Just ask Brazil, where the sellside GDP forecast cuts are coming in fast (Morgan Stanley being the latest example) now that virtually every data point one cares to observe shows an economy that’s sliding into depression.

Of course a plunging currency, FX pass through inflation, and a soft outlook for growth is a pretty terrible place to be in if you’re a central bank, but that’s exactly where things stand for the “LA-5” (believe it or not, that’s not a reference to the Lakers, it’s short for Brazil, Chile, Colombia, Mexico, and Peru), who very shortly will be forced to decide whether the risks associated with further FX weakness outweigh those of hiking rates into a poor economic environment.

For Goldman, the outlook is clear: LatAm central banks will, in “stark” contrast to counter-cyclical measures adopted during the crisis, hike in a desperate attempt to shore up their currencies and control inflation. 

 

…click on the above link to read the rest of the article…

It Starts: Broad Retaliation Against China in Currency War

It Starts: Broad Retaliation Against China in Currency War

The biggest global “tail risk” is China’s deteriorating economy and an emerging market debt crisis, according to BofA Merrill Lynch’s monthly poll of fund managers. And 48% of them were expecting the Fed to raise rates, despite languid growth and low inflation expectations.

Hot money is already fleeing emerging markets. Higher rates in the US will drain more capital out of countries that need it the most. It will pressure emerging market currencies and further increase the likelihood of a debt crisis in countries whose governments, banks, and corporations borrow in a currency other than their own.

This scenario would be bad enough for the emerging economies. But now China has devalued the yuan to stimulate its exports and thus its economy at the expense of others. And one thing has become clear today: these struggling economies that compete with China are going to protect their exports against Chinese encroachment.

Hence a currency war.

It didn’t help that oil plunged nearly 5% to a new 6-year low, with WTI at $40.55 a barrel, after the EIA’s report of an “unexpected” crude oil inventory buildup in the US,now, during driving season when inventories are supposed to decline!

And copper dropped to $5,000 per ton for the first time since the Financial Crisis, down 20% so far this year. Copper is the ultimate industrial metal. China, which accounts for 45% of global copper consumption, is the bull’s eye of all the fretting about demand. 5,000 is the line in the sand. A big scary number. Other metals fared similarly.

Copper powerhouse Glencore, whose shares plunged nearly 10% today, blamed“aggressive and synchronized large-scale short selling” for the copper debacle, instead of fundamentals. But fundamentals have been whacking copper for years, and shorts have simply been joyriding the trend.

…click on the above link to read the rest of the article…

 

 

If History Is Any Indication, Junk Bonds And Copper Are Telling Us Exactly Where Stocks Are Heading Next

If History Is Any Indication, Junk Bonds And Copper Are Telling Us Exactly Where Stocks Are Heading Next

Stock Market - Public DomainYields on the riskiest junk bonds are absolutely soaring and the price of copper just hit a fresh six year low.  To most people, those pieces of financial news are meaningless.  But if you understand history, and you are aware of the patterns that immediately preceded previous stock market crashes, then you know how howhuge both of those signs are.  During the summer of 2008, junk bond prices absolutely cratered as junk bond yields skyrocketed.  This was a very clear signal that financial markets were about to crash, and sure enough a couple of months later it happened.  Now the exact same thing is happening again.  The following comes from a Wall Street On Parade article that was posted on Tuesday entitled “Keep Your Eye on Junk Bonds: They’re Starting to Behave Like ‘08“…

According to data from Bloomberg, corporations have issued a stunning $9.3 trillion in bonds since the beginning of 2009. The major beneficiary of this debt binge has been the stock market rather than investment in modernizing the plant, equipment or new hires to make the company more competitive for the future. Bond proceeds frequently ended up buying back shares or boosting dividends, thus elevating the stock market on the back of heavier debt levels on corporate balance sheets.

Now, with commodity prices resuming their plunge and currency wars spreading, concerns of financial contagion are back in the markets and spreads on corporate bonds versus safer, more liquid instruments like U.S. Treasury notes, are widening in a fashion similar to the warning signs heading into the 2008 crash. The $2.2 trillion junk bond market (high-yield) as well as the investment grade market have seen spreads widen as outflows from Exchange Traded Funds (ETFs) and bond funds pick up steam.

And right now we are seeing the most volatility in the junkiest of the junk bonds.

…click on the above link to read the rest of the article…

4 Mainstream Media Articles Mocking Gold That Should Make You Think

4 Mainstream Media Articles Mocking Gold That Should Make You Think

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For those of you who have been reading my stuff since all the way back to my Wall Street years at Sanford Bernstein, thanks for staying along for the ride. I appreciate your support immensely considering that I essentially no longer write about financial markets at all, and for many of you, that remains your profession and primary area of interest.

There are many reasons why I stopped commenting on markets, but the main reason is that I started to recognize I wasn’t getting it right. In fact, in some cases I was getting it spectacularly wrong. Whenever this happens, I try to isolate the problem and fix it. In this case there was no fix, because much of why I was no longer getting it right was rooted in the fact that my heart, soul and passion had moved onto other things. My interests had expanded, and I started a blog to express myself on myriad other matters I deemed important. Providing relevant market information needs intense focus, and my focus had shifted elsewhere. I recognized that I wasn’t intellectually interested enough in centrally planned markets to provide insightful analysis, and so I stopped.

This doesn’t mean I won’t start up again. When central planners do lose control, I may indeed become far more interested in opining on such matters. Time will tell. In the interim, financial markets do still play an important role in the bigger picture of social, political and economic trends I passionately care about. The stability and increase in financial assets (stocks and bonds) is of huge importance to the propaganda machine, in particular keeping the non-oligarchic, non-politically connected 1% in line and believing the hype (see: The Stock Market: Food Stamps for the 1%).

…click on the above link to read the rest of the article…

 

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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