Uranium and Mining Stocks Recovering

The Energy Report: Between the first quarter of 2009 and the first half of 2010, uranium tested $40 on the downside about three times. Has it found solid support? Also, what minimum level does it need to maintain for companies to be profitable?

Geordie Mark: That's a very good question. Certainly it has had a lot of technical support at $40 with a lot of buying strength coming in at that level. I'd say there's been even more buying strength recently. So that's a lot of strength. For the ultimate strength of investment health of this sector, I think we're looking at numbers north of $65. In fact, it would probably have to be higher than that to warrant risking venture capital for exploration. Also, you need to see higher prices for investment in large-scale, leveraged development-stage projects. Spot is now around $52, and we see positive movement there in terms of pricing with the long-term price at $60.

TER: You see positive movement, but it sounds like mining uranium is risky now. Is that right?

GM: Yes, mining does have technical risk. That's correct. As part of an offset to that, the projects we see going into production, certainly over the next year or so, are the lower-cost projects involving lower capital expenditure for development. Those are called in-situ recovery operations and they have a low-cost basis. So you're looking at cash costs of $30 per pound or less. They are the ones that can accommodate the current commodity price, but not the larger-scale projects requiring significant injection of capital. That's why we've seen delays in that development pipeline; $40 spot prices make it difficult to justify large, higher-cost projects. However, in our view, we do need those larger projects to sustain increasing demand. (more)

Long-term housing prospects hinge on an economic recovery for working Americans first – No housing bottom until middle class recovers a foothold in th

The housing market can have no sustainable recovery without the employment market improving. It is incredible that over three years into this crisis that there has been little focus on coupling employment with housing. Banks argue that many are simply not paying their mortgage yet they want the Federal government to ease lending restrictions. Who are they going to lend to? Over 95 percent of all mortgages now being originated are government backed. It is disturbing that all bank bailouts including the Fed forcing the interest rate lower merely focus on one aspect of the financial equation. The reality is, without a burgeoning middle class housing will never recover. Even the rising default rates in government backed loans, many “plain vanilla” loans are defaulting in record numbers because people are not able to service their debt.

We need a backdrop to the current foreclosure problems. The financial industry simply dominates too much of our economy and now has deep connections in our political system. Let us first look at mortgages currently in foreclosure: (more)

JPMorgan, HSBC sued for alleged silver conspiracy

* Hundreds of millions in illegal profit alleged

* Triple damages sought in one of two lawsuits

* CFTC proposed new tools to thwart price manipulation (Adds adviser comment, details)

By Jonathan Stempel

NEW YORK, Oct 27 (Reuters) - JPMorgan Chase & Co (JPM.N) and HSBC Holdings Plc (HSBA.L) were hit with two lawsuits on Wednesday by investors who accused them of conspiring to drive down silver prices, and reaping an estimated hundreds of millions of dollars of illegal profits.

The banks, among the world's largest, were accused of manipulating the market for COMEX silver futures and options contracts from the first half of 2008 by amassing huge short positions in silver futures contracts that are designed to profit when prices fall.

"Defendants reaped hundreds of millions of dollars, if not billions of dollars in profits" from the conspiracy, one of the complaints said.

The respective plaintiffs, Brian Beatty and Peter Laskaris, each said they traded COMEX silver futures and options and contracts, and lost money because of the alleged manipulation.

Beatty lives in Connecticut and Laskaris in New York, court records showed. The lawsuits seek class-action status, damages that may be tripled and other remedies. The defendant banks are major participants in the silver market. (more)

George Carlin ~ The American Dream

Emini Futures And The Falling Dollar

When in doubt, sit it out? That may be the mantra of many traders today. The Initial Jobless Claims actually came in better than expected falling 21,000 to 434,000. This was about the best number in the last 2 years. The high of today in the E-Mini S&P 500 of $1187.50 was reached at 7:30 AM CST, but by 11:30 AM CST, we descended to the low of the day at $1173.50.

After the first couple of hours, we saw coiling and a pretty choppy session. Emphasis is still on the Election and the FOMC with the buzz reflecting sentiment about the potential Election results and the Fed’s next move. It is my thought that in such a fragile time frame, that the Fed may walk softly and want to alleviate fears of any severe change. It may be after the impact of the two events that ideas or rumors in fact create more of a stir in the marketplace the latter part of next week.

The US Dollar traded lower on the day creating a question mark regarding its typical inverse relationship with the E-Mini S&P 500. We traded within the CFRN Weekly Trade Zones of $1185 - $1186 and $1178 - $1179 today.

Tomorrow, we look forward to the GDP numbers which consists of 70% consumer spending. It will be interesting to potentially see a positive report with so many citizens still out of work. The market may still shrug off any positive report to focus on the events of next week. We may see lower volume that could cause more erratic moves in the market. (more)

China Urges Bernanke: Stop Printing Dollars!

Too many dollars rolling off Washington’s printing presses are giving China a huge case of “imported inflation,” according to Chinese Commerce Minister Chen Deming.

"Given the current situation, companies have thought ahead and prepared for exchange rate fluctuations as well as an increase in labor costs," Chen said, Breitbart.com reports.

"But because the issuance of dollars is out of control, and international commodities prices are continuing to rise, China is confronted with imported inflation, which has created major uncertainties for businesses.”

While Beijing pledged several months ago that it would allow the yuan to trade more freely, U.S. and European policymakers believe the currency is still undervalued by as much as 40 percent.

Critics of China in the U.S. assert that the Chinese government is artificially undervaluing its currency to give itself an unfair advantage in exporting goods. (more)

The Rare Earth Bubble Is About To Go Into Overdrive

We've been writing a lot lately about the mania for rare earth stocks.

Companies like MolyCorp and Rare Elements are surging despite having no revenue (let alone income).

All that moves them are headlines. Every time China reduces exports to Japan, they surge. When a German economic minister mentions that his country is at the whim of China, they surge.

And now, there's a new reason they can surge: A rare earth ETF. Gone is the need to do any research or anything like that. Just buy the Market Vectors Rare Earth/Strategic Metals ETF (REMX), which will begin trading today, and your work is done. So long as the bubble continues, you're in good shape.