Weekend Show – Sat 1 Dec, 2018

A Look Into What Matters For 2019

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This week the focus was on a speech by Jerome Powell that moved markets much higher on Wednesday. I talked to a lot of people about what was actually said and their thoughts on the market reaction. The answers were all over the place. Be sure to listen to the daily editorials last week for a recap. This speech is discussed on this weekend’s show but we also make sure to look ahead to 2019 with some important predictions.

As for the metals sector, it is encouraging to see the metals hold within their ranges. Stocks are breaking down as tax loss selling picks up. This is the best time to have cash and a list of your top stocks. It could all go lower in the coming couple weeks but as long as you have cash and are selective there is still money to be made.

Please let me know what you think of the show by emailing me at Fleck@kereport.com. Also if there are any companies or guests you would like me to chat with I am happy to reach out as well.

  • Segment 1: I kick off the show with a new guest Nicholas Pardini, Founder of Davos Investment Group. Nicholas shares why he calls the current markets the Era Of Hard Choices.
  • Segment 2: Managing Partner at the CPM Group Jeffery Christian looks into 2019 for metals complex.
  • Segment 3: Chris Martenson, Co-Founder of Peak Prosperity thinks the market is missing the most important of Powell’s speech and future Fed policy.
  • Segment 4: Rick Bensignor, Founder of Bensignor Investment Strategies outlines the most important factors for the markets and the similarities to past moves.

For more information or a trial issues of Nicholas or Rick’s letters please email Marc B Mishkin at marcb@hyperpyron.com or myself – Fleck@kereport.com.

Exclusive Company Interviews This Week


Segment 1

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Segment 2

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Segment 3

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Segment 4

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  1. On December 1, 2018 at 3:34 am,
    CFS says:

    Thanks for show.

    • On December 1, 2018 at 3:54 am,
      Skeeta says:

      Really appreciate your efforts guys.
      Thanks as always.

      • On December 1, 2018 at 8:45 am,
        Excelsior says:

        Ditto…..thanks for the show…… and for all the KER contributors.

  2. On December 1, 2018 at 5:44 am,
    OOTB Jerry says:

    HAPPY BIRTHDAY >>>>BIG OWL>>>>>>>on your 75th. Year OF HAPPYS……….
    I know it is your birthday, because it is Mine…… 🙂

    • On December 1, 2018 at 8:18 am,
      Markedtofuture says:

      Happy Birthday Big Al & Jerry!

      • On December 1, 2018 at 4:45 pm,
        OOTB Jerry says:

        Thanks guy……..appreciate your awareness……

    • On December 1, 2018 at 8:45 am,
      Excelsior says:

      +75 Happy Birthday to the Big Owl………


      • On December 1, 2018 at 8:49 am,
        Excelsior says:

        Happy Birthday J….The Long….OOTB The Claw Frank from Moscow Contrarians Contrarian Frank CCF The BOOT


        • On December 1, 2018 at 4:48 pm,
          OOTB Jerry says:

          that reminds me of Old Mother Hubbard……who lived in a shoe, she had so many children , she didn’t know what to do……… :)……….or just sole brothers in search of a mate….

          • On December 1, 2018 at 4:49 pm,
            OOTB Jerry says:

            BtW……..thanks for thinking of me…… 🙂

          • On December 1, 2018 at 6:15 pm,
            Excelsior says:


  3. On December 1, 2018 at 8:18 am,
    Markedtofuture says:

    The $GBRIF Story – An Asset – Liability Mismatch


  4. On December 1, 2018 at 9:04 am,
    Excelsior says:

    G20 & Gold: Key Chart Signals

    Morris Hubbartt – Nov 30, 2018 -Super Force #Video #PreciousMetals #Technical Analysis


  5. On December 1, 2018 at 9:26 am,
    Excelsior says:

    The Fed Warns The ‘Drop In Asset Prices Might Be Particularly Large’

    Jesse Felder – November 28, 2018


  6. On December 1, 2018 at 9:27 am,
    Excelsior says:

    Here’s Why Investors Should Still Pay Attention to Gold Miners: Chart

    Gold miners continue to look bullish this fall.

    Jonas Elmerraji – Nov 28, 2018

    “Shares broke higher in a classic reversal setup back at the beginning of October, and since then, they’ve been managing to make a series of long-term higher lows that defines an uptrend. Most gold-watchers will likely consider the important trendline in GDX to start at this ETF’s September lows. Instead, I think a more important trendline starts at the swing low in August that precedes that September reversal (the dashed line on the chart). That trend is less aggressive, and it’s also a common way to define a trend during periods of high sentiment swings.”

    “Meanwhile, relative strength continues to show that GDX is still outperforming the S&P 500 here. A near-term dip to trendline support in GDX looks like a solid buying opportunity with well-defined risk.”


    • On December 1, 2018 at 9:34 am,
      Excelsior says:

      IPT ISVLF Impact Silver Closes First Tranche of Financing

      @newswire on November 30, 2018


      • On December 1, 2018 at 11:22 am,
        Excelsior says:


        Korelin Economics Report – (11/20/2018) #AudioInterview

        “Impact Silver is a Company that has shifted more towards exploration this year in response to the drop in the silver price. Fred Davidson, President and CEO of Impact joins me to outline the current private placement and how the money will be used to advance the Company next year. With the focus remaining on finding and mining high grade silver there is also a new gold showing that will be followed up on. Impact has been a successful silver miner but with the drop in silver understood they needed to shift the overall strategy until a more substantial market recovery.”


        • On December 1, 2018 at 4:14 pm,
          Whit says:

          Impacts land package is impressive, the whole old mines. What not a better place to mine than old mine land. So Excelsior I have question for you, with Mexico. I was told that no gringo can own land, they lease it. Is Company land law different than individual land law? What I’m getting at will they kick in the door and take the metals for themselves?

          • On December 1, 2018 at 4:48 pm,
            Excelsior says:

            Hi Whit – I’ve stuck up for Mexico for years now as not nearly as risky of a jurisdiction as many perceived, but will concede that things have really gone off the rails the last few years and this new administration is a leftist wacko consortium that deeply concerns me.

            The gang/cartel violence has really ramped up higher over the last few years, where illegal mining groups are not pleased about international companies coming in and seizing large projects, right where their groups of artisinal miners have operated for a long time (paying their cut to the gangs of course).

            I’m concerned we may keep seeing more violence at Mexican mines, where workers are endangered (like we’ve seen the last few years), but it depends on which cartel is operating in which state and then down to the local level.

            Wise companies employee mostly local staff, work closely with communities to reach out and support them, and to offer in-roads into the company workforce, education programs to train skilled workers, and also give back to the communities they operate in.

            Even still this new government administration that just won the elections has the propensity to not just tax the snot out of mining companies, but shut down mines, nationalize mines, or make areas under exploration off limits.

            Personally, I’m still holding onto my Silver miners and a few Gold miners operating in Mexico, but will admit to focusing on US/Canadian/Australian/West African miners over Mexico at present.

          • On December 1, 2018 at 4:50 pm,
            Excelsior says:

            33 days before investing AMLO, investors flee Mexico

            BLOOMBERG – October 30, 2018 – By Eric Martin

            “The honeymoon of Andrés Manuel López Obrador with the investors stopped in its tracks 33 days before he assumes the Mexican presidency.”

            “His decision to discard a US $ 13 billion airport project when he took office in December sent markets plummeting. The peso sank 3.5 percent to reach 20 per dollar, the stock market lost more than $ 17 billion in value and JPMorgan Chase & Co. cut its economic growth forecast for 2019, noting that it is likely that now The central bank has to raise interest rates to reduce capital flight.”

            “It’s not that investors would love the airport project, it was far from perfect; however, the problem is that demanding its completion – just a day after a chaotic referendum indicated that most Mexicans did not agree with the bill – sent a broader message to investors: existing contracts can be canceled in any moment. Today is the construction of the airport and tomorrow, perhaps, the oil contracts, and mining the next day. For a community of investors that was always suspicious of AMLO, as the leftist is known, it is a disconcerting message.”


          • On December 1, 2018 at 4:50 pm,
            Excelsior says:

            Mexico: The new mining law and the changing scenario around mining

            (from IKN496) – 11/27/18


          • On December 1, 2018 at 4:51 pm,
            Excelsior says:

            Mining Sector in Mexico Next Target of “AMLO Effect,” Shares Plunge

            by Don Quijones • Nov 23, 2018

            “For a president who hasn’t taken office yet and whose government is still in waiting, Mexico’s Andres Manual Lopez Obrador (AMLO) has managed to ruffle a lot of very important feathers. First, he scrapped the country’s most lucrative infrastructure project, a partly built airport for the capital that was expected to generate billions of dollars for many of the country’s richest companies, banks and families. Then, two weeks ago, his National Regeneration Movement (MORENA) party proposed a bill that directly threatens one of the banks’ core businesses: fee gouging. Since then, billions of dollars have been wiped off the banks’ market value.”

            Now, the same party, which, together with its allies, holds majorities in both houses of Congress, has set its sights on the activities of the mining industry. On Tuesday Senator Angelica Garcia presented a bill that would make significant changes to Mexico’s mining laws, including a proposal that would allow the country’s Energy Secretary to declare certain parts of the country off-limits for mining companies due to their negative social or environmental impact.”


          • On December 1, 2018 at 4:51 pm,
            Excelsior says:

            It’s a damn shame what is going on in Mexico at present, and that it is THE place to be regarding Silver mining on the planet. Most of the Silver producers are in Mexico, so this is going to be a situation we’ll have to watch unfold, but is like kicking them while they’re down.

            This is also good news for Silver companies that have diversified their risks outside of Mexico.

            (SVM) Silvercorp is the lowest cost Silver Producer, and one of the few making money, operating in China, so sometimes it pays to be diversified.

            (BHS) Bayhorse Silver is a small producer in the US operating in Oregon & Idaho.

            (USAS) Americas Silver is exposed to Mexico for sure, but they still have the large Galena complex in Idaho (where most of the Silver they’re sitting on for higher prices is located).

            (AXU) Alexco is a very advanced Silver developer in Canada with a completely built mill and processing center, that is about to make the announcement to go into production.

            (MMG) Metallic Minerals Group is the neighbor of Alexco at Keno Hill and have an exciting exploration program lined up for next year targeting similar high grade deposits.

            (DV) Dolly Varden is another great Silver Exploration/Development story headed up by KER friend Gary Cope.

            (HL) Hecla has some exposure to Mexico, but most of their mines and projects are in the US and Canada.

            (BBB) Brixton is exploring for Silver/Cobalt/Gold in Canada and US

            There are a few other smaller Exploration projects in the US and Canada that also may gain more traction as Mexico starts to wobble.

            Hi Yo Silver….. Away!

          • On December 1, 2018 at 8:04 pm,
            Whit says:

            Well…..I hope the cartels feel like it’s the year of giving….as any right people would do. It looks like location,location, does again. Thank Excelsior for all you do!!

          • On December 1, 2018 at 9:14 pm,
            Matthew says:

            Whit, for what it’s worth, I believe that Impact Silver is among the companies with the least to worry about. It is the largest employer in the region where it operates and does not appear to have ever had a conflict with the government. It has also not had any serious employee disputes that I am aware of. On the contrary, over the decade-plus that I’ve owned shares, my perception has been that the company’s relationship with its workers has been a very positive one.

            AMLO is no good but I am betting big that we are not looking at another Hugo Chavez.

          • On December 1, 2018 at 11:41 pm,
            Whit says:

            Matthew, thank you. I concur about Impact. Besides their land package that I liked, their community/family involvement is equally important. Also I get the feel that there employees like what they do, generations of miners.

    • On December 1, 2018 at 9:42 am,
      Excelsior says:

      Australian Gold Stocks and the Commonwealth Takeover

      November 30, 2018 – Katusa Research

      “One of the biggest stories in the resource sector this year is how well Australian gold stocks have performed.”

      “They’ve absolutely crushed their peers in the western hemisphere.”

      “Below is a chart which shows the huge out performance of the Australian gold producers over their North American listed cohorts….”


      • On December 1, 2018 at 11:19 am,
        Excelsior says:

        (SGI) (SUPGF) Superior Gold Inc. Announces Further Positive Results from its Phase Two Drill Program at Hermes South

        by @newswire on November 29, 2018


        • On December 1, 2018 at 11:20 am,
          Excelsior says:

          Superior Gold Inc. Announces Initial High Grade Gold Mineralization from Underground Resource Expansion Drilling

          @newswire on November 19, 2018



          • On December 1, 2018 at 11:25 am,
            Excelsior says:

            (SGi) (SUPGF) Superior Gold Inc. Announces Third Quarter 2018 Financial and Operating Results

            > Third Quarter Highlights:

            – Second consecutive record quarterly sales of 25,842 ounces of gold, an increase of over 24% for the same period in 2017
            – Strong quarterly production of 24,719 ounces of gold with an annualized production rate of 100,000 ounces for two consecutive quarters
            – Total cash cost of $1,042 per ounce sold, all-in sustaining costs1 of $1,119 per ounce sold and average realized gold price of $1,211 per ounce sold
            – Cash flow from operating activities of $3.6 million
            – Strong cash position, including restricted cash, of $22.1 million and No Debt at quarter end
            – Year-to-date gold recoveries averaging 88%, compared to 78% for the same period in 2017
            – 2018 production guidance revised to 92,500 to 97,500 ounces


    • On December 1, 2018 at 10:26 am,
      RICHARD/DOC says:

      Always optimism but the big move is still months away. Forget about a big after tax loss selling rally. We should limp into the new year. However, 2019 should be the year of a changing narrative.

      • On December 1, 2018 at 11:06 am,
        Excelsior says:

        Agreed that the big move may be mid 2019, but for the last 6 years in the PMs there has been a rally out of tax loss selling and into the Q1 Run into late Jan or mid Feb.

        Investors that ignored this season trend left some of the easiest gains on the table (even during the larger bear market).

        Investors in general equities hold on all year to Mutual Funds or ETFs or Index funds to scratch out 10%-15%, so I find it humorous that investors scoff or pass at 30-100% gains in 2-3 months on the tax loss selling trade in 2013, 2014, 2015, 2016, 2017, and we saw it again earlier this year in 2018.

        I mentioned repeatedly the end of last year that the time to get positioned was as the metals & miner pulled back during tax loss selling in early to mid December, and bought all the way up to Dec12th. On Dec 13th 2017 the Fed hiked rates and the PMs and Miners took off for a few months.

        There are no 2 years exactly alike, but the set up looks quite similar once again now that we are are in early Dec once again, in tax loss selling season, awaiting yet another Dec tax hike just like in 2015 (which ended the bear market in PMs), in Dec 2016, and in Dec 2017.

        History may not repeat, but it often rhymes. Why dismiss a 30-50% run to sit on the sidelines making 0%?


        Last December Goldfinger over at ceo.ca posted this question & chart:

        @Goldfinger – “Is it really that simple? Buy $gold miners in December and make big returns within 1-2 months?”


        (my short answer back to him was: YES)

  7. On December 1, 2018 at 9:27 am,
    Excelsior says:

    Saudis Say Nuclear Energy Will Speed Up Economic Development

    By SightlineU3O8 Posted in Nuclear Attitude


  8. On December 1, 2018 at 6:43 pm,
    Markedtofuture says:

    Bitcoin Black (BCB) November Update

    Launch – We have postponed launch until next month to ensure it is faultless. A network and security specialist who has worked with a major investment bank is taking the final check over everything to make sure no stone is left unturned. The code will become open sourced and we will be looking to expand the development team through the community once launched.

    Distribution – Distribution will begin with pre-sale members followed shortly by the airdrop becoming live, both to take place in December 2018.

    Rewards – At the time of writing it takes 86 commissions to be in the top 110 rewards members.

    Members count – Current members count 47,153

    Pre-sale – Stage 3 of the pre-sale is ongoing. Packets of 900,000 coins are available for $200.

    Alexa Rank – Alexa rank is a measure of website popularity. It ranks millions of websites in order of popularity, with and Alexa Rank of 1 being the most popular. Bitcoin Black is currently ranked 229,231. By mid 2019 it is planned for Bitcoin Black to be within the top 10,000.

    3600 Free Coin Airdrop – scroll to bottom of page ….


  9. On December 1, 2018 at 8:16 pm,
    David says:

    You may be right but you provide no facts about Mexico or the new President. It gives me caution, but need more. I will do my own tesearch and see if I can verify your claims. Something about an airport was mentioned…

    • On December 2, 2018 at 9:47 am,
      Excelsior says:

      David – Yes, I posted a few articles that outlined a number of definite facts about the new leftist President Andres Manual Lopez Obrador (AMLO) and there is plenty of substance if you click on the links and read the full articles. Yes, they are killing that large airport project and there was an uproar about it.

      Some of those articles & editoriasl also offered opinions like I did, but there were plenty of concrete points made thoughout them if you actually read them, not just “claims.”

      I didn’t post all the information and facts on the incoming administration from those articles in entirety, due to their length, and because anyone interested further in the political and business climate in Mexico can click on them, and read for themselves. That’s pretty standard with any article or piece posted on here.

      Yes, please do you own research and due diligence. and enlighten us on what you find out.

      I wasn’t offering investment advice or telling anyone what to do or making claims, but rather responding to change in political & business atmosphere in Mexico under the new regime. This is an investment blog, after all, where we share ideas, opinions, breaking news, and our responses to it.

      AMLO absolutely killed their new airport project, and markets absolutely reacted negatively the last 2 weeks, and the Peso already sold off harder when that new popped. If you go do the research on that Airport project you’ll see a glimpse of what the future looks like with this group of socialist nut jobs, and it is not pretty.

      Another fact is that his cabinet is made up of a consortium of different ideologies that don’t mesh well, and many of them have never served in public office before. Maybe they’ll just figure it all out from day one and turn Mexico around, but it is highly dubious.

      Another indisputable fact is that gangs/cartels have been openly operating in Mexico for a long time so that should not be considered a claim or debatable concept.


      A number of miners have had their workers attacked over the last few years from cartel gang violence, so go look it up and decide for yourself if they have a cartel or gang problem.

      Now a fledgling government, with no experience dealing with these groups or serving in public office, is going to “stop corruption”, and keep things organized in a civil way? Sure…. good luck to them.

      Again, it depends on each state of Mexico, and then drilling down to the more local level on how each company operates. Not every operating mine is in jeopardy, but many of the exploration and development companies land could easily be put on hold by the current administration which could really block the future of certain projects moving forward.

      They have already discussed hiking taxes again on resource companies like oil operators and mining companies. It is also a fact that Mexico has laid on higher taxes to miners over the last few years, and many of them had to go to arbitration to deal with tax issues and overreach from the government. If you believe that will improve with a bunch of tax-hungry socialist leftists in charge then I have a bridge to sell you.

      Some of the initiatives are simply proposed at this point, and still need to go through their congressional process, and some of the direction things will go with this brand new government is still unknown to everyone (including them) at present.

      My point was that their political situation and the potential ramifications on the safety in the country and the mining sector, is worth approaching with caution. That is the whole concept behind managing jurisdiction risk.

      • On December 2, 2018 at 9:59 am,
        Excelsior says:

        Here is an editorial, peppered with both facts and opinions, that discussed the uncertain approach the new administration may have regarding mining in Mexico.

        One of the areas that stood out as an industry concern was Security. They are talking about Guerrero state (where Torex and others had issues last year), but it is symptomatic of the larger issue with operating in Mexico in many states or jurisdictions.

        Then check out the facts (not claims) on how Mexico has already acted on taxes in the recent past. Then ask yourself if you expect this to get better or worse under socialist leftist?

        AMLO’s Nation Project and Mining
        by Veronica Yepes on November 8, 2018

        “Security is a main concern impacting Mexico’s productive sectors, including mining. Often located in isolated regions and a prime target of organized crime, miners take security seriously as this can have a damaging impact on their operations. Many industry leaders have highlighted the correlation between security and FDI. Alfredo Phillips, President of the Guerrero Mining Cluster says that several companies have left the region because security levels fell short of the basic conditions that allow them to operate. “This is an issue that I think the administration must address urgently. We should look at reconstituting the institutional capabilities of security provision at a local level,” he says.

        In 2014, the government implemented a fiscal reform that greatly increased the taxes mining companies must pay to the Mexican government. The possibility of an additional tax hike or change in fiscal policies could impact the competitivity of Mexico’s mining jurisdiction. “There is no doubt from my perspective that mining has become more challenging in Mexico over the last five to six years,” says Mitchell Krebs, President and CEO of Coeur Mining. “If Mexico wants to continue attracting foreign capital, it should re-examine its tax structure as it now stands out as being on the high end.”


        • On December 2, 2018 at 10:10 am,
          Excelsior says:

          Is Resource Nationalism Making A Comeback To México with López Obrador?

          Baker Institute – Jun 7, 2018

          “During the last year, Latin America has had more oil bidding rounds and more areas auctioned than ever before, with virtually every oil producer in the region trying to attract foreign investors. As opposed to the liberalization wave of 1990s, this time Mexico joined the movement. In fact, it led the way, opening widely to foreign investment thanks to a transformational and successful energy reform. Unfortunately, the upcoming presidential election has a real potential to reverse or slowdown the accomplishments of the energy reform if the current frontrunner and a harsh critic of the oil opening, Andrés Manuel López Obrador (AMLO), gets elected. And while AMLO would be limited in his anti-reform drive by institutional, economic and oil sector factors; his election to presidential office might spell another period of misguided nationalism that could impede Mexico’s ability to fully extract the benefits of its geology.”

          “There was opposition to the energy reform from the left. From the outset, AMLO was one of its strongest opponents. In particular, he fiercely opposed allowing private investors to operate in the upstream. He advocated, though unsuccessfully, putting the reform for approval in a popular referendum and later proposed a referendum to reverse the reform. Most recently he has somehow moderated his views, saying that he would not reverse the constitutional reform. However, he announced that he would “review” the existing contracts and cancel those deemed corruptly allocated. AMLO would also stop the bidding rounds that have been scheduled, at least for the time being. In addition, he proposed focusing investment on the downstream, building two –likely unprofitable- new refineries, and reducing the dependency on imports of refined products and natural gas from the U.S. He has also advocated for reestablishing subsidies to transport fuels.”


          • On December 2, 2018 at 10:13 am,
            Excelsior says:

            The Week in Mining: Introducing a New President, López Obrador

            by Veronica Yepes on November 30, 2018

            “The day has come. Andres Manuel López Obrador is Mexico’s new official President. But as they unpack their offices, Morena has already compromised the stability of Mexican mining, not to mention other industries. Now in power, investors are eager to witness the path the country’s economy is to take, for good or for bad.”

            – Mexican mining copes with uncertainty as major companies take a tumble on the BMV.
            – Gold mining companies’ production dropped over 10 percent in 3Q18. Goldcorp’s Peñasquito mine was one of the most impacted.
            – Mexican mining production decreased by 5.8 percent in the 12-months leading up to September 2018. Lead experienced the biggest drop of 31.1 percent. Also, Zacatecas shrunk its production in the period by 43.1 percent.
            – It looks like Germán Larrea is set to lock horns with Morena again as Los Mineros threaten a blockade at Grupo México’s flagship Buenavista del Cobre mine.


          • On December 2, 2018 at 10:36 am,
            Excelsior says:

            Morgan Stanley Downgrades Mexico Mining Stocks

            Illuminati Silver

            “Today is Monday 26th November 2018 and we are just alerting you briefly to keep an eye on what is happening in Mexico.

            Fears that Incoming President Andres Obrador may oversee the tightening of regulations on the mining industry in Mexico which include:

            • empowering the Ministry of Economy to declare certain zones
            as not viable for mining

            • revoking permits and existing concessions that have a
            negative social impact

            Last week Morgan Stanley downgraded mining stocks on concerns that Mexico’s new congress is considering as many as 11 bills or resolutions that could materially impact mining companies operating in the country.

            The first nine bills tabled in congress could impact Mexican miners’ Ebitda, Fresnillo, Penoles and Grupo Mexico according to the Morgan Stanley report.

            These companies each lost between 4 and 12% of their stock-market value and Fresnillo, which is listed in London, saw its biggest decline in five years.”


          • On December 2, 2018 at 10:42 am,
            Excelsior says:

            Mexico Mining Selloff Worsens as Concerns Grow on Law Proposals

            By Laura Millan Lombrana – November 22, 2018

            “Fears of tougher mining regulation in Mexico under incoming President Andres Manuel Lopez Obrador are taking over investor sentiment, with some of the top stocks falling for the third consecutive day.”

            “Industrias Penoles SAB, Grupo Mexico SAB and Fresnillo Plc extended losses after Morgan Stanley downgraded the stocks on concerns that Mexico’s new congress is considering as many as 11 bills or resolutions that could materially impact mining companies operating in the country. On Tuesday, an initiative from Morena party Senator Angelica Garcia called for increasing surveillance of mining activities and giving greater powers to communities and the government.”

            “LISTEN TO ARTICLE
            In this article
            MORGAN STANLEY
            GRUPO MEXICO-B
            FRESNILLO PLC
            Fears of tougher mining regulation in Mexico under incoming President Andres Manuel Lopez Obrador are taking over investor sentiment, with some of the top stocks falling for the third consecutive day.

            Industrias Penoles SAB, Grupo Mexico SAB and Fresnillo Plc extended losses after Morgan Stanley downgraded the stocks on concerns that Mexico’s new congress is considering as many as 11 bills or resolutions that could materially impact mining companies operating in the country. On Tuesday, an initiative from Morena party Senator Angelica Garcia called for increasing surveillance of mining activities and giving greater powers to communities and the government.

            “We believe Mexican mining equities will decouple from fundamentals for the foreseeable future given the heightened uncertainty around the regulatory framework,” Carlos de Alba, an equity analyst at Morgan Stanley, said in the report. “The risk ranges widely and could be material.”

            “Proposed initiatives include empowering the Ministry of Economy to declare certain zones as not viable for mining, and revoke permits and existing concessions that had a negative social impact. They also contemplate charging Mexican agencies with overseeing the social and environmental impact of mining activities.”

            “The first nine bills tabled in congress could impact Mexican miners’ Ebitda that originates from mines in the country by as much as 3 percent for Fresnillo, 2 percent for Penoles and 1 percent for Grupo Mexico, Morgan Stanley’s report said. Miners would also see a 5 percent reduction in revenue from mining operations located in indigenous territories.”


    • On December 2, 2018 at 10:50 am,
      Excelsior says:

      The concerns are legitimate, although, like in most instances, the market is likely over-reacting. There is no guarantee that these proposed bills will make it though their government process, or find enough support, so at this point it is financial firms, companies, and investors trying to gage how concerned to be.

      My hope is that they’ll temper their over-reach, but I’m prepared for this leftist administration to over-reach on taxes, compliance, and over-regulation ( like they typically do), and in that scenario, it puts Mexican miners at a disadvantage.

      Again, each company and local jurisdiction should be analyzed separately, but some of the national policies will be a wind blowing on the whole resource sector in Mexico. Also the union deals and pressure will absolutely change under this new jurisdiction and may improve in some cases, or may be forced upon miners that wanted to remain union free.

      If nothing else it’s worth watching how things develop in Mexico, what laws actually pass, what the financial/social impact/fallout will be, and if things get too oversold on fear, then the potential for inefficient markets where Mexican miners become a contrarian bet. This is what played out in West Africa where the concerns were real but got way overblown, and now there is real value to be found in many countries there in mineral extraction.

      Good luck to everyone in their investing.

      • On December 2, 2018 at 11:45 am,
        Dick Tracy says:

        Yes Ex, Mexico is also under threat from the drug cartels now that marijuana is being legalized and sold by corporations. The cartels will be looking for new sources of revenue and the police in Mexico are in their pockets. If Trump closes the border it will be harder for the cartels to make money from illegal immigration, mining is under duress no doubt about it. DT

        • On December 2, 2018 at 12:11 pm,
          Big Al says:

          The research. Companies will eventually make that particular illegal industry suffer greatly.

        • On December 2, 2018 at 12:52 pm,
          Excelsior says:

          DT – That is precisely the concern at present, that the gangs/cartels make mining even more difficult so they can scalp off illegal mining operations. Multi-national companies from Canada, the US, Australia and abroad will not be welcome by those groups.

          Then simultaneously you have a new completely inexperienced leftist administration coming into power, that is against corruption as it’s party line and unifying agenda. Either they are just as corrupt and freeing many of their party members of charges to strike back at the old regime and will continue taking the payoffs as usual, or they are incredibly naive that Mexico can turn off the corrupt payola machine overnight with a few political changes in who says they’re in charge. It’s painfully clear which groups are really in charge.


          • On December 2, 2018 at 12:57 pm,
            Matthew says:

            Leftists against corruption? Good one!

          • On December 2, 2018 at 5:47 pm,
            Excelsior says:

            Yes, I found that humorous as well that their platform was to end corruption. (lol)

            Leftists tax the crap out of their contributing citizens just to fuel further corruption.

            Individual liberties get sacrificed for the government control of the collective and people voted for that garbage.

            Ask Greece, Italy, Spain, and France how well it is working out lately. 😉

  10. On December 2, 2018 at 8:20 am,
    Dick Tracy says:

    Going meatless, plant based proteins infused with the aroma of meat and sold as roasts, burgers, and any meat product you can think of, this will be much bigger in the near future, just like electric cars. I watched Dragon’s Den ( Canadian version of Shark’s Tank) last week and some entrepreneurs are manufacturing pork and beef roasts and selling this product to restaurants. The Dragons were tripping over themselves to get a shot at the action. Big food retailers from all over the world are joining in, less beef cattle also means a lot less methane which is good for the environment. Fast food burger restaurants are adding veggie burgers to their menus. If you are into investing I believe that this is an area that will produce a pay off for those that get in early.

    • On December 2, 2018 at 12:12 pm,
      Big Al says:

      You could be absolutely correct Mr Tracy.

    • On December 3, 2018 at 6:36 am,
      Whit says:

      Planted tilled ground is stale to the natural environment, compared to pasture land. Pasture land holds alot more diversity.

    • On December 3, 2018 at 7:06 am,
      Whit says:

      Leave the food alone…. Let a carrot taste like a carrot….ohh wait this carrot taste like a sausage…. only hell knows what they put in the carrots to acquire the sausage taste….

    • On December 3, 2018 at 9:41 am,
      Wolfster says:

      Let’s give credit where credit is due …..shark tank was a copycat of dragons den which has been around many more years than shark tank

    • On December 3, 2018 at 6:24 pm,
      Whit says:

      The more I think about eating that shit……all I think about is Agenda 21……get in your cubical…..

  11. On December 2, 2018 at 9:50 am,
    Markedtofuture says:

    Federal Reserve Says 2018 Bear Market Was Caused By CME’s Bitcoin Futures Offering

    While many people had glossed over this little-known statement released by the Federal Reserve earlier this year (in May), but according to the letter, the government body blamed the launch of Bitcoin futures markets on the Chicago Mercantile Exchange (CME) for adversely affecting the overall value of Bitcoin (as well as many other alt-assets available in the market today).


    • On December 2, 2018 at 12:14 pm,
      Big Al says:

      Interesting Markedtofuture, now that I am doing little to no investing I was not aware of that.

  12. On December 2, 2018 at 9:51 am,
    Excelsior says:

    The Next Bull Market Move


    “How do you become a successful speculator? My new interview with @RealRickRule is coming soon. During our interview we talked about #Uranium, #Nickel, #Gold, and what it takes to be a successful speculator. ”

    > Preview clip below –


  13. On December 2, 2018 at 12:16 pm,
    Big Al says:

    Where can I hear that interview, Excelsior?

    • On December 2, 2018 at 12:54 pm,
      Excelsior says:

      There is a preview audio clip on Kerem’s twitter feed linked above with Rick Rule.

      The main interview will be released later this week. When he posts it, I’ll post it here for easy reference.

  14. On December 2, 2018 at 3:27 pm,
    David says:

    Excelsior: Thanks for all the Mexico posts. I hate to see the risk escalate because of the weakness of criminals and politicians. I guess that is the history of the world.

    • On December 2, 2018 at 5:57 pm,
      Excelsior says:

      Hi David – Yes, agreed about disliking the escalating risk due to the weakness of politicians and the strength of the criminal element. That is the history of the world and found in most governments and nations since the beginning of recorded history, but it is sad to watch a country slipping right before everyone’s eyes.

      Honestly, Mexico is a big unknown right now, and it will depend on how gradual or sudden some of these changes take place from the new administration in how chaotic things may get. Luckily, many of the new initiatives and bills on the table still have to get a majority acceptance and pass through their political process, so one can only hope they remain so fractured ideologically that little of it actually passes.

      Still, for resource investors (especially in oil, but also in mining) it is time to stay vigilant. If the markets just completely over-react, then it will create opportunities to good to pass up on, but right now, the sentiment is to flee, at a time when the sector is down, so it is really punishing many of the miners in Mexico the last 2 weeks, right in the middle of tax loss selling.

      Personally, I’m going to need to drill down a bit deeper on each company’s local environment a bit more to see if they are potentially at risk. Not all companies will be effected, and honestly I worry more about the unions down there, than the increase in taxation. The other thing that is concerning is that an exploration company could be doing good work on a project that will never get approvals to see the light of day as a mine. This doesn’t help on the front-end side of discovery and development side of the business.

      • On December 2, 2018 at 6:22 pm,
        Excelsior says:

        and now this……

        U.S. consulate in Mexico is attacked with a grenade hours before country swears in new leftist president

        US consulate in city of Guadalajara was attacked with grenade on Saturday
        Monday, Dec 3rd 2018 – Daily Mail

        – There were no reports of injuries or deaths in the attack on the consulate

        – Came hours before new President Andres Manuel Lopez Obrador took oath

        – Underscores security challenges the left-wing populist faces in office


        • On December 2, 2018 at 6:28 pm,
          Excelsior says:

          Mexico’s AMLO Takes Office With Attack on Energy Overhaul

          By Nacha Cattan and Eric Martin – December 1, 2018

          ““Neoliberal economic policies have been a disaster,” Lopez Obrador said. “For example, the energy reform, which they said will come to save us, but has only meant a drop in oil production and rise in gasoline prices.”

          The 65-year-old former mayor of Mexico City frequently uses the term neoliberal to describe policies that he sees as favoring markets and investors over the best interests of Mexico’s roughly 131 million people.”

          “Some of his actions since the election have rattled investors, including the move to scrap a $13 billion new airport following a national referendum. That triggered the biggest peso rout since the 2016 U.S. election.”

          “Mexico’s central bank has warned that public policy decisions could result in a loss of confidence in the country as a destination for investors, and a weaker peso carries a risk of inflation. Analysts watched Saturday’s speech for clues on how the new president will govern and its potential market impact.”


          • On December 3, 2018 at 10:09 am,
            David says:

            Read all those Mexico articles. Thanks for all the work. I have quite a few Mexican miners and you got my attention.
            To a certain extent, most of what is being discussed are things that miners have to address in the US, Canada and Australia among others. I agree we have to watch the new Mexican Administration closely.
            To me one of the biggest problem is the paper markets (CME and LBMA) do not care about the miner cost of doing business where these pilitical decisions can be absorbed. All they care about is stealing money through market manipulation with the endorsement of Public Regulators. It is the paper markets that are the threat to all miners and can be a self fulfilling prophesy of destruction. Along with pisdible Mexican miscalculation we have to watch the indifference if the paper market criminal banking system.

          • On December 3, 2018 at 5:19 pm,
            Excelsior says:

            Thanks David. I have about a dozen miners in Mexico myself, and brushed off someone else’s comments to me initially about his concerns on Mexico until I looked into things a bit closer, and it does have my guard up until we see more about what this new administration will propose or act on.

            Yes, unfortunately for now, the paper markets are where the prices are set or maintained, and they are getting divorced from the cost of production from the miners themselves. I’m continually looking for companies that have good economics that can survive in this tough metals price environment, or that have margins that will spike if we just a meaningful pop in prices.

            Good luck to you in your investing and hoping 2019 is a more constructive year for the sector.

  15. On December 3, 2018 at 7:50 am,
    Silverdollar says:

    Pardini is certainly a different listen……..and a good one because of his different thoughts about where we may be headed. His view that if one isn’t in the leveraged housing markets or heavily invested in equities, he may be able to simply coast through whatever is coming. That alone may save a revolution. I guess where I would differ is that when housing goes down, most everyone is affected. Many mortgaged owners will walk away. Building slows. Contractors eliminate people. Housing component suppliers from carpet to concrete and shingles to paint all take a hit. With that slowdown in new tax base, budgets never shrink so taxes go up on the remaining real estate. Only benefit I see is a possible drop in rents for those that live that way. Many though, may not have a job so the drop isn’t really helpful.
    Building is still strong where I’m at but I believe the higher priced homes are stacking up. The developer in this neighborhood doesn’t seem to see the problem and continues to add to their unsold inventory above 2500 SF. They have a lot of big California money behind them though so maybe they’re immune…..
    Thanks Cory.