Gold has traded between $1,081 and $1,096 so far today…as of 9:00 am Pacific, bullion is down $3 an ounce at $1,086…Silver is up 17 cents at $14.08…Copper has added 2 cents to $1.98…Crude Oil has slipped 23 cents to $29.19 while the U.S. Dollar Index is flat at 99.14…
China’s 4th quarter GDP curiously came in exactly in line with estimates, but today’s numbers merely confirm the pronounced deceleration in the country’s growth in 2015 which was an extension of a multi-year slowdown that shows little signs of abating…the growth rate, released by the government overnight, moderated to 6.8% for Q4 and and 6.9% for 2015…the annual pace was the weakest in a quarter century, and the quarterly level posted its lowest reading since the financial crisis…
Mark Faber, known as “Dr. Gloom”, told CNBC in an interview this morning, “We have this colossal debt bubble in China ($1.5 trillion) and in my opinion this will have to be deflated through either huge losses in the banking sector or losses in the bond market for investors. In addition to that, we have essentially a stock market bubble, which now is being deflated.”
The International Monetary Fund has cut its global economic growth forecast for 2016 as it expects a number of factors to weigh on world economies…global growth for this year is seen at 3.4 percent, up from a 3.1% forecast for 2015, but 0.2% lower than previously forecast…the IMF said “pickup in global activity is projected to be more gradual than in the October 2015 World Economic Outlook, especially in emerging market and developing economies. Risks to the global outlook remain tilted to the downside and relate to ongoing adjustments in the global economy.”
Canada Gets A Well-Deserved Snub (Slap, Actually)
A major slap in the face to Canada this morning, though entirely understandable given Prime Minister Trudeau’s foolish declaration that the country is going to withdraw from the air war against ISIS by pulling out its CF-18 fighter jets in the near future…in a highly unusual development in Canada-U.S. relations, the United States has excluded Canada from a high-level meeting tomorrow of what it calls “significant contributors” to the American-led coalition in order to step up the fight to defeat the Islamic State terrorists…it’s an almost unprecedented snub of Canada by U.S. officials, and the Liberal government has no way of “sugar coating” this…the meeting of defense ministers from the U.S., Britain, Germany, France, Italy, Australia and the Netherlands is set for tomorrow in Paris…no invite for Canada’s Harjit Sajjan…Trudeau is tone deaf to the dangers of Islamist terrorism – ample evidence for that including his awkward handling of the Paris attacks late last year and his comments this past weekend when he referred to Friday night’s barbaric terrorist attacks in Burkina Faso as “acts of violence” that he was “saddened” by (not outraged, but “saddened”)…he has no instincts for foreign policy…these attacks by al Qaeda killed 6 Canadians…
Fresh U.S. Deficit And Debt Concerns
The U.S. budget will rise in relation to the size of the economy this year, the Congressional Budget Office reported this morning, which will mark the first such increase since 2009…the fiscal 2016 deficit will swell to $544 billion, or 2.9% of U.S. economic output, from $439 billion in fiscal 2015…the deficit peaked at about $1.4 trillion in 2009 during the deepest recession since the 1930’s…the deficit projected by the CBO would increase debt held by the public to 76% of GDP by the end of 2016…
In today’s Morning Musings…
1. A chart with a clear breakout after a 4-year downtrend – how this could become a popular trade (the Short Canada Trudeau Trade)…
2. A profitable Venture company that’s also a play on a lower Canadian dollar…
3. The Venture vs. the TSX, the Dow and NASDAQ since the start of Q4 2015…
Plus more…to view the rest of today’s Morning Musings, login with your username and password, or click here to gain full access to this and other exclusive BMR content and features…
The Only Commodity Going Up In Price in 2016 http://oilandgas-investments.com/2016/latest-reports/the-only-commodity-going-up-in-price-in-2016/
Comment by zippy — January 19, 2016 @ 11:39 am
GGI – nice sell order at the end of day. wow
Comment by George — January 19, 2016 @ 1:08 pm
Yes George but a buyer for it , no big deal.
Comment by Tombc — January 19, 2016 @ 2:56 pm
Jon, are you folks at BMR losing confidence that the GGI results will not impress the market? The SP is certainly not giving me a good feeling. The longer it goes the less impressed I am with the silence. Anybody know if GGI will be at the Cambridge Conference?
Comment by Dan1 — January 19, 2016 @ 3:04 pm
I noticed that George, from a couple different brokers in the last 2 minutes. Hopefully it’s nothing but …..
Comment by Danny — January 19, 2016 @ 3:42 pm
it’s true GGI as lost momentum, they should have keep us at least inform on the drilling plan from Roradero with core pics just like they did with grizzly.
Comment by Martin — January 19, 2016 @ 5:15 pm
GGI and DBV price are parallel …. 10 cents stock…. this is called twins! Next drop level to 8 cents. 50,000 shares at 9 cents seems to be a smart dump.
Comment by Theodore — January 19, 2016 @ 5:53 pm
Tombc, that doesn’t give me any comfort. There are always buyers all the way down.
Comment by Danny — January 19, 2016 @ 5:54 pm
Theodore – why does it “seem” to be a smart dump.
Comment by George — January 19, 2016 @ 8:39 pm
George, here’s the situation: We’ve been warning for days now about the possibility of global equity market upheaval, accompanied by a jump in Gold prices, as the broader markets landed on the edge of a cliff last week and technical momentum was likely going to push them over the cliff. The Perfect Storm given a combination of TA and fundamentals – global economic weakness, loss of confidence in governments and central banks, etc. Because of the increased potential/risk for a sharp drop in the broader indices, many investors will of course panic and this will create some incredible opportunities. Fear and greed drive the markets, and the only time to be greedy is when others are fearful. And fear is about to grip a lot of investors.
As far as GGI goes, a dynamic similar to last summer is about of occur IMHO – an extreme oversold situation will develop (it’s getting closer to that now), and then – boom – discovery news from the Grizzly and events in Mexico will drive a powerful move back up in the stock. Regoci’s decision to do a nearly $1 million financing just before Christmas now makes a lot more sense, doesn’t it? He has money, a discovery at the Grizzly, and a fabulous situation in Mexico.
Comment by Jon - BMR — January 20, 2016 @ 5:28 am
DBV- Well I was very happy to buy the 50,000 shares
Comment by Guy Delisle — January 20, 2016 @ 5:29 am
Jon where do you see a discovery at the grizzly ?
Comment by Guy Delisle — January 20, 2016 @ 5:34 am
Have you not been reading anything we’ve written over the past number of weeks, Guy? If not, you’re in for a surprise.
Comment by Jon - BMR — January 20, 2016 @ 5:35 am
Jon – I always agreed with the financing that GGI did and when they did it. Gold is up. I agree and believe that GGI has a discovery, just hoping its good enough to make money.
Comment by George — January 20, 2016 @ 5:48 am
Jon, has there been any hint from Regoci that news will be out this week? A few nervous Nellies have sold in last couple of days but I am holding firm. It sure feels like they have hit something, but it would be nice to get confirmation with some assay results.
Comment by Tom UK — January 20, 2016 @ 5:58 am
Tom, again, just going by the experience of the DBV timeline in 2013/2014, we’re getting very close I’m sure to news, though Regoci is not giving anyone a precise date because I’m sure he’s still dealing with some unknowns.
Comment by Jon - BMR — January 20, 2016 @ 6:43 am
NHC… besides the market conditions which are the worst ever.. anyone have a thought on why with the EBITDA of this company and future music that it is getting taken to the woodshed?? no logic or reason that I can see… hope I’m not blind..??
Comment by Jeremy — January 20, 2016 @ 7:08 am
Robin – Is the volume on GEM. V enough for you to buy in now? It is looking great. China is here negotiating with GEM and they picked up the phone and called GEM to come.
Comment by George — January 20, 2016 @ 7:10 am
The one thing we may have to our advantage, which Jon has mentioned before, relates to the overall markets. If GGI does truly have a significant discovery, there is a lot of capital on the sidelines and leaving other equities. This could be a big bonus for us. I think initially there will be some selling for ones that are just glad to make some money in this market, after that I think there will be some nice money that moves in. This of course is all based on a true discovery.
Comment by weatheritout — January 20, 2016 @ 7:17 am
BoC holds rates, kinda thought they would, just cause the bank anal-ysts + brokers wanted it, doesn’t mean its going to happen
Comment by david — January 20, 2016 @ 7:27 am
so much for the venture support and future… this thing is done… Thx to all those greedy fkd up CEO’s who created all of the hype and BS to suck in the investor only to take their money and their trust so that these investors are sure to never return to this casino..
thanks a lot….
Comment by Jeremy — January 20, 2016 @ 7:39 am
The broader market weakness is pulling the Venture lower at this point, Jeremy, but the pattern change over the last several months is interesting…the Venture has been outperforming a number of markets which is a notable trend change…back in 2008, the Venture actually led all markets to the downside immediately prior to the Crash and led all markets out of the Crash as it bottomed and turned higher before the Dow, the CRB, Oil, etc…that outperformance continued until early 2011 when suddenly the Venture turned south and started underperforming which was an ominous sign…if we get something like a 2,000 point drop in the Dow down to 14000 (nearest support is around 15500), which we speculated about last weekend, this could be a similar bullish set-up for the Venture, especially if Gold gains traction to the upside and the CRB finds a bottom…in retrospect, with a more than 80% drop from its 2011 high, the Venture over the last 5 years has mostly discounted what we’re seeing today…you can look at the glass as half empty or half full – times of panic, major volatility, have always created enormous profit opportunities…
On another point, yes, the Venture has its problems with certain CEO’s and other issues, but what’s even more alarming in this country are the governments of Alberta, Ontario, and Ottawa…that’s why we’re going to see a 60-cent loonie, mounting deficits and debt, higher taxes and a myriad of other problems…these governments are a bigger threat than a bunch of Venture CEO’s…
Comment by Jon - BMR — January 20, 2016 @ 8:07 am
Yuk , CDNX gets a 2.4% drop this morning to 469. .
Comment by Les — January 20, 2016 @ 8:10 am
Back then China was in full swing,Jon.That isn’t the case this time.We haven’t even had a Black Monday yet.Cramer is even calling for a crash now.
Comment by robinandthe7hoods — January 20, 2016 @ 8:30 am
Jon.. I accept your enthusiasm … but we have now had the biggest one drop in a while after a declining trend… volume is light..
isnt it safe to say that the baby is going out with the bath water, but the baby will never be found?
this time it IS different but I am hoping not… not idea what is going to save this mess… if anything… I truly mean that… this is more than ridiculous!!
Comment by Jeremy — January 20, 2016 @ 8:38 am
The truth of the matter is, no one takes the Venture seriously anymore. The exchange has caused so much wealth destruction, I am surprised they still allow it to operate.
Well, gold is holding up nicely. Oil is done for, and so are the oil sands. Very few companies have the balance sheet to operate up there while the storm passes by.
I expect the housing bubble to finally pop; and Canada can kiss those Chinese speculators goodbye because the Chinese government is going to come down hard on those who wish to get their money out of China.
Trudeau is PM, which doesn’t instill a lot of confidence. Never was a big fan of Harper, but he was somewhat respected by world leaders and businessmen.
Setting up to be an interesting year.
Comment by chris — January 20, 2016 @ 8:58 am
From Yahoo Finance…
The S&P futures are decisively below their August low this morning in a bearish development,” BTIG Chief Technical Strategist Katie Stockton said in a Wednesday morning note. “The inability of the market to sustain yesterday morning’s strength is a message — downside momentum is strong enough to maintain oversold conditions.”
“This is characteristic of a downtrend, as opposed to a correction,” she said. “There are times at which the contrarian extremes in our market internal measures are no longer bullish, even from a short-term perspective, and there currently appears to be risk of that.”
Read More ‘Selling stampede’ not over
The number of new Nasdaq lows surpassed the late August total of 765, the highest since Nov. 21, 2008, when 1,211 Nasdaq stocks made 52-week lows, according to Reuters.
Comment by robinandthe7hoods — January 20, 2016 @ 9:15 am
All of this should bode well for gold.
Comment by robinandthe7hoods — January 20, 2016 @ 9:22 am
Jon,of all the gold stocks out there,which one would you choose to do well this year if you had the choice of just one?Oppenheimer is calling for the S&P do continue falling for another 4-5 months.Should be a gold market this year from what I’m reading on the big sites.
Comment by robinandthe7hoods — January 20, 2016 @ 9:27 am
Bought GGI this morning.Like the price.Don’t like how slow Regoci is with everything,but with the price of gold going up and how easily this moves,any good news should get a run going.
I have my theories on what has been going on,but like the potential of the property.The sheer size could make this another Pebble Mine.They just need depth to go with the porphery numbers we expect.
Comment by robinandthe7hoods — January 20, 2016 @ 9:39 am
I believe GGI is dealing with coarse gold in Hole #3.The fire assay didn’t match the XRF Analyzer numbers and were asked to re-do the fire assay.This can happen with coarse gold.Otherwise it’s pretty routine.
Hole 1-2 will show normal Sheslay porphery numbers,Hole #3 is the one that could make the market move.
Comment by robinandthe7hoods — January 20, 2016 @ 10:02 am
30, 31: Yes I bought as well this morning. Holes 1 and 2 will shares some of the same core description as 3 but you’re right, Hole 3 is the one to hang your hat on. If this comes out as hoped, watch out.
Comment by Foz1971 — January 20, 2016 @ 10:35 am
Harper was respected? By whom? Neo-cons from the US who think Israel can do no wrong? that climate change is a hoax? that science needs to be vetted and censured if it doesn’t support their right wing agenda? Harper was an abomination to the democratic process. Good riddance to that ego-maniacal areshole.
Comment by Treb — January 20, 2016 @ 1:58 pm
Treb, U.S. defense secretary Ash Carter is an Obama-appointed Democrat (a former Harvard University professor) who is incensed with Trudeau’s decision to pull Canada’s CF-18’s out of the air war against ISIS. As a result he didn’t invite Canada to today’s strategy session for “significant contributors” to the ISIS fight, and last week made an indirect reference to Canada as a “free rider” when it comes to security and defense. Major strategic blunder on Trudeau’s part, especially at a time of heightened terrorism concerns and when U.S. politicians are watching their borders very closely. Never would have happened under Harper. It would be really interesting to see how Trudeau handles Trump or Cruz if he’s already having problems with a Democrat and a Harvard University professor.
Trudeau has shown no instincts for foreign policy – he certainly doesn’t understand the Islamist terrorist threat – and has put this nation at an even greater risk of a terrorist attack.
Comment by Jon - BMR — January 20, 2016 @ 2:16 pm
Jon,Harper didn’t msake all his decisions based on what he wanted to do.He found out what Chretien found out.When Chretien decided he wasn’t going to Iraq,which was the right decision because he knew the Bush gang was involved in 9/11 and had an agenda to start a war,the Mad Cow situation suddenly arose,the Softwood Lumber Dispute went to another level,the borders became a hassle to cross etc etc.
Our economy took a big hit and wouldn’t have resolved itself until Chretien,behind the scenes caved in,and became part of the coalition.
Harper was caught in the same situation,and Trudeau will figure it out very fast,especially in this economic climate.Buck your #1 trading partner and watch your problems escalate.Those CF-18s,will soon be back in the game,even if unannounced.
The US makes many of our decisions these days,and with this economy,we can’t be making enemies with our southern neighbours.
Right and wrong don’t always enter into it.
Comment by robinandthe7hoods — January 20, 2016 @ 2:30 pm
Of course it wouldn’t have happened under Harper. He was all too eager to be America’s lap dog especially when their foreign policy was and is so heavily influenced by far-right wing conservatism.
I have no Idea how Trudeau will perform and be judged after his tenure, however he’s got lots and lots of wiggle room for so called blunders given Harper’s track record.
With respect to the Hornets … keep in mind that the ONLY reason that ISIS even exists today stems from the illegal and immoral invasion of Iraq by yet more conservative nutjobs hell bent on capturing Iraq’s oil, greater influence in middle eastern politics, and imposing a way of life that has taken centuries to evolve in the west.
Perhaps Trudeau’s decision is his way of announcing a new guard in Canada, one that thinks and acts for itself and doesn’t involve itself in the war crimes of our southern neighbors.
This comment is about US govt and foreign policy NOT about the US in general or the good people who live there.
Comment by Treb — January 20, 2016 @ 3:23 pm
Jmo,but unless Trudeau can find a magic cure-all for our economy,he’ll probably figure out politics is a tougher game than he thought.
Ontario has become a hellhole with all the screwups made by the Liberals the last 10 years.Manufacturing has taken a major hit there.Alberta is on the verge of becoming a have-not province if this oil problem lasts 2-3 years,which it just might.
So,it looks like legalizing MJ might be the only recourse Trudeau’s got for tax dollars and jobs.I have no idea what he comes up with after that.
Trudeau.s got his work cut out for him.
As for Harper,like him or not,he kept the country afloat in what was a very tough recession in his time in office.
I think he saw the writing on the wall in this era of the markets and seemed relieved he lost the election.
Comment by robinandthe7hoods — January 20, 2016 @ 6:01 pm
Trudeau showed his true colors again today at the economic forum in Davos in his speech regarding investing in Canada, and his “downplaying” of the resource industry in this country. Even the ultra-liberal Calgary mayor took offense to Trudeau’s comments. An Ottawa-Ontario-Alberta Axis of Destruction has come upon the Canadian economy. The downturn is not just the result of low commodity prices—-it’s being exacerbated by the Trudeau-Wynne-Notley Big Government agenda of higher taxes, high spending, anti-Oil, climate change fanaticism, social engineering, you name it. Absolutely destructive to jobs, investment and wealth creation (don’t forget, he has also cut our TFSA contributions in half). And just wait until problems in the Canada-U.S. relationship start appearing (just like they did when the other Trudeau was Prime Minister) if a Republican President gets elected, because no Republican worth his salt would put up with this climate change radical Prime Minister who wants to legalize marijuana and also doesn’t understand the terrorist threat or any other foreign policy challenges. Any marijuana taxes he collects, if he’s able to legalize it, won’t even come close to the taxes lost from some of the highest income earners in this country who will flee south or somewhere else in a brain drain where they won’t be penalized with such a massive marginal tax rate. His economic policy is built around piling up deficits and more debt to roll out infrastructure programs that will ultimately have to be paid for with job-killing higher taxes, including a boost to the GST. God help us.
Comment by Jon - BMR — January 20, 2016 @ 6:42 pm
Reading between the lines here, I take it you aren’t a Trudeau fan. 🙂
Jon, do you support the legalisation of marijuana? It seems from your last post that you lump in Trudeau’s intention to do so with his other alleged deficits but some of your calls have been marijuana companies like cgc and aph.
I’m all for it and have been for years. Weeding out the criminal element aside our government would certainly reap substantial tax revenues. An article I read recently stated that Colorado marijuana sales revenue was 700 million in its first year of being decriminalized.
Comment by Treb — January 21, 2016 @ 5:11 am
No I don’t, Treb. I just don’t believe that’s a positive message for our youth. And the government should be focusing its energies on a limited number of key priorities, and do them well. Unfortunately, whatever revenues the Trudeau Liberals would bring in on taxes from legalizing marijuana, they’ll spend it faster than rabbits make bunnies, and they’ll use it to increase the size of government which is their main mission these next few years. Canada will be back with a $40 billion per year deficit as early as 2017.
Comment by Jon - BMR — January 21, 2016 @ 6:13 am
there is enough evidence to suggest smoking in your teens is not a smart move. lets not help it along. I know a # of kids that are messed for life and I know kids that will skate thru no problem likely. is it worth the chance? the sale of pot is one thing, but the unintended consequences of the food pot sales to minors will go thru the roof. the sales in COL suggest that 80% of the sales are repeat sales to just 20% of the clients. pot is a gateway drug. do it long enough and you’ll wonder what’s better. as a teen, you don’t likely have the control or complete understanding to realize the consequences of that rabbit hole. so many other things that are worth fixing first in the country, pot isn’t one.
Comment by david — January 21, 2016 @ 9:19 am
Gateway drug? And how does that compare to alcohol, a far more destructive substance that also happens to be a class 1 carcinogen.
The war on drugs was lost before it began. In any country if the demand is there someone will supply it. Keeping marijuana illegal just encourages more organized crime and it’s the criminal element that is the real gateway, not the substance that can arguably be said to be far less harmful than alcohol, and no one seems to be tub thumping about bringing back prohibition.
Legalize it, allow adults to use it recreationally or for medical reasons as is their right. Kids nowadays can get marijuana more easily and readily than I could get my hands on a six pack of beer back in the eighties. Legalizing it won’t make it any worse and most likely will make it harder for the underage to obtain.
Comment by Treb — January 21, 2016 @ 3:39 pm