Google one more BULL is out of race

"Safa Rashtchy, a stock analyst who for several years has been at the forefront of covering Internet-based commerce, is resigning as managing director, senior Internet analyst at investment banking firm Piper Jaffray & Co.
Rashtchy will leave Piper Jaffray at the end of June. He adds that he will take off the rest of the year before deciding what to do next."

I would advise him definitely check his water supply - too much Prozac is in there, good investment will be to read history of Frank Quattrone and Henry Blodget.

As it was written here before:

"We tend to be critical of all these "Buy" and "Rising Target" and "Estimates" (of Buyers stupidity?) from young analyst from Big Houses, it looks like sometimes they did not invested in CASIO or have tendency to see only part of figures and are using a lot of monkey language messing up with GAAP and NON GAAP on one page. Big Houses always wins and stays, young guys are going, sometimes they are punished, sacked and even baned for life, but you know - it is not easier for you, your money is gone. You do not even ask sometimes curiosity sake how could it happen? Big House could not afford Casio or it just happen to have Big Positions in recommended stock which need to be unfolded. You know already this MR Market trick: for every happy Seller he needs to find a Sucker - called Buyer or Institutional Client (it is easy to find Suckers when you give them due respect or even better when they manage OTHER PEOPLE MONEY like pension funds come to mind)."

Google Sell OFF has not even started yet "Ordely decline" - distribution, More Trouble is Ahead

Google traffic Daily Reach is falling down further in March.

Internet Sector TA signals Trouble is Ahead

Silver is close to Explosive move

Gold is in Break Out State

USD becomes Subprime currency

Silver Wheaton is BUY daily

Silver Standart Resources ia BUY daily

HUI is BUY daily

Silver Wheaton coverage is initiated by Merrill Lynch at Buy and Target Price of $13.5

Are they reading my blog? Just joking, you know how careful we should take any main street advise, but here I can not find any traps, mail conclusions translated for audience:

1. The Pure Silver Company.
2. Outlook for Silver is bullish and "has been sharp increase in investment demand, due to recent listing of the Silver ETF".
3. With Silver sales of 13.5 MOZ Silver Wheaton is a major Seller of Silver.
4. Silver Wheaton presenting opportunity of high leverage play on increase in Silver price.
5. Company effectively controls sales of silver from 92.5 MOZ proven and probable reserves.

Now with Silver Wheaton put on the Wall Street Radar screen and Silver positive economics development we can expect fast break out from recent consolidation pattern.

Tenke mining is one of the Jewels in the Crown of the world's largest publicly traded copper producer

Now we can expect more development and news coming out:

1. Recent activity with cross trades of millions shares.

2. IFC is going to be more active in the region, PD is mentioned and its Tenke Fungurume project., news to be out on financing facilities.

3. By Q2 resource estimation will incorporate 15 months of recent drilling by PD.

4. Argentina development in order to recognise value of exploration activities.

5. More analyst coverage with further mine development.

6. New Tenke mining presentation.

"Upon closing, Freeport will operate a diverse portfolio of copper, gold and molybdenum reserves. The Grasberg, Indonesia, mine, the world's largest copper and gold mine in terms of reserves, will be the key asset of the combined company.
It will also operate significant mines in North and South America and proceed with development of the world-class Tenke Fungurume project in the Democratic Republic of Congo."

Google Hunting Seasons Begins

Prise is 11 billion cash position. As it was written before: "you can not base your intire business model around stolen content, Guys you must try harder for 140 billion market cap. Prize to "defend America" is in Google's Peggy cash position of 11 billion dollars. It is too big to miss, expect more law suites and more Heavy Weighters joining the Hunt". The rush will be to sue Google until company has enough money to pay, with slowing growth and broken technical strength stock is due for the hard times:

"SAN FRANCISCO (MarketWatch) -Viacom Inc. has filed a $1 billion lawsuit for copyright infringement against Google Inc.'s YouTube unit, alleging that more than 160,000 videos of its content have appeared on the free video-sharing Web site without Viacom's permission.
The suit, filed in U.S. District Court in New York, also asks that a judge bar YouTube from allowing its users to post any copyrighted videos.
Viacom is the first entertainment giant to file a copyright infringement lawsuit against Google since the No. 1 Internet search provider bought YouTube for $1.65 billion in stock last year. At the time of the purchase, announced in October, insiders predicted a bevy of copyright lawsuits would follow.
The Viacom lawsuit illustrates the difficulty Google and YouTube have had in reaching licensing deals with entertainment companies whose videos appear on the site . Viacom had been in negotiations with Google to license its content, it said, but talks have since ended.
"Their business model, which is based on building traffic and selling advertising off of unlicensed content, is clearly illegal and is in obvious conflict with copyright laws," Viacom said in a statement.
The litigation follows a demand by Viacom earlier this year that YouTube remove 100,000 video clips from its shows, including "The Daily Show" and "The Colbert Report." It was the largest such demand YouTube faced from a copyright owner, and the Web site complied with the request within a week.
Viacom adds that "YouTube's strategy has been to avoid taking proactive steps to curtail the infringement on its site, thus generating significant traffic and revenues for itself while shifting the entire burden - and high cost - of monitoring YouTube onto the victims of its infringement."
The lawsuit also touches on the challenges faced by YouTube and other video sites that let anyone upload videos, seemingly without any oversight.
Relying on user generated content has helped YouTube become one of the most popular sites on the Internet, but it's also opened the door for pirated content, and as Viacom has shown, potentially costly litigation.
A representative for Google and YouTube didn't immediately return a call seeking comment. Ben Charny is a MarketWatch reporter based in San Francisco."

Silver Wheaton as a "silver bank" will benefit from falling USD

Subprime worries are spreading very fast and as it was written before spiral of credit tightening will finish recent Bull market and put pressure on US dollar. Gold and silver will be rising again. Silver could benefit even more then gold just because size of the market is relatively small. One of the interesting companies is a "silver bank" Silver Wheaton (SLW) This company has secured supply of silver with fixed prices from silver mining companies by paying them upfront and if silver will be moving higher as I am anticipating this company will get all the upside from increasing prices. There is no specific mining risk connected to this company, it is pure option play without time decay on silver price. Now Silver Wheaton is finishing consolidation pattern and close to break out. If you are considering silver exposure for your portfolio, this company deserves your attention in line with silver juniors covered before Avino Gold and Silver mines, Sterling Mining and Mines management. Market cap of Silver Wheaton could accommodate big investors when fashion will be back into silver market and stock will benefit first from the money inflows in this sector. Very important to mention that this company is with real earnings and recently reported earnings of $23.8 mil or 10 cents per share, increase of 150% from $7 mil or 4 cents per share in the prior year quarter. For the year, earnings expanded to $85.2 million, or 37 cents per share, from $25.3 million, or 15 cents per share, in 2005. It is increase of 147% y/y and with current price $9.43 stock has P/E of 25.5. Everybody is still exited about Google growth, which is slowing by the way, and here we have ultimate earnings machine nobody have noticed yet. Silver sales more than doubled to $158.5 million from $70.9 million on increased silver sales volumes and higher average prices in 2006.

Silver Wheaton website: "Silver Wheaton is the largest mining company with 100% of its revenue from the sale of silver. Having silver purchase contracts with three separate mines, the Company expects to sell approximately 15 million ounces of silver in 2007, growing to 20 million ounces by 2009. The Company purchases all of the silver production from Goldcorp mines in Mexico and the Zinkgruvan Mine in Sweden, together with a portion of the silver production from Glencore’s Yauliyacu Mine in Peru. Silver Wheaton’s unique and simple business model is designed to create long-term shareholder value, providing for strong upside potential with downside protection. Silver Wheaton is unhedged and well positioned for further growth"

Silver Wheaton presentation.

Silver Wheaton is finishing consolidation pattern before break out

Ooops, my Non science Fiction happen to be true

As I put before in "Market SellOff and coming Slump: Gold, Silver and Commodities Meditation. CS " :"...Here are few important assumptions for the Health of the Market: you must be very Dumb in shoe making (remember your expertise is in windmill business (any Tech will do for Average Joe), you must think that people there are not so Rotten as in your industry (you will never invest in your neighbours windmill, they are all crooks) people in General are subject to Authority, so guys who will prepack IPO of shoe maker will put guy from Harvard in charge. And you must have other Market participants like analysts with Buy recommendation (who work for the bank which is selling IPO or have some position in shares and need to sell) and People managing Other's People Money. This is very special breed -your difference with them is that you are losing your Capital, they could lose their job in worst case scenario. Usually they are fine if the value of the Fund plunge together with Market, it is called Benchmarking."

"On March 1, a Wall Street analyst at Bear Stearns wrote an upbeat report on a company that specializes in making mortgages to cash-poor homebuyers. The company, New Century Financial, had already disclosed that a growing number of borrowers were defaulting, and its stock, at around $15, had lost half its value in three weeks. What happened next seems all too familiar to investors who bought technology stocks in 2000 at the breathless urging of Wall Street analysts. Last week, New Century said it would stop making loans and needed emergency financing to survive. The stock collapsed to $3.21. ... The Bear Stearns analyst who upgraded New Century, Scott R. Coren, wrote in a research note that the company’s stock price reflected the risks in its industry, and that the downside risk was about $10 in a “rescue-sale scenario.” According to New Century, Bear Stearns is among the firms with a “longstanding” relationship financing its mortgage operation. Mr. Coren, through a spokeswoman, declined to comment"

Same old, same old...ENRON, Worldcom, TYCO...Google (but this time it is different, is it?)

China has created SAFE way Agency to Invest Forex Reserves

I like Chinese, they can nail it down, today mostly their reserves consist of US treasures which are apparently considered UNSAFE: "China's central bank holds about 70 percent of its currency reserves in dollars and had a 2006 loss of 26 billion yuan ($3.4 billion) from exchange-rate movements, Standard Chartered Bank Plc's senior economist Stephen Green estimates." So they have found safe way to manage their reserves: "State Council had decided to divide the country's foreign exchange reserves into two parts: "normal" reserves and money to be used for investment seeking "more profits." The first part will be managed by the State Administration of Foreign Exchange (SAFE)." Will they invest part of 1 trillion foreign reserves in Google or other "high growth expectation dreams" I doubt it, this money is not going to safe American Bull: they will continue what they are already doing: securing assets which will allow them feed the Dragon and grow Chinese economy: Canadian oil sands, African mineral assets with Copper and other metals, Australian Uranium, Russian gas: "They're not going to be looking for financial assets, but energy assets and natural resources, minerals — things China desperately needs," said Jing Ulrich of J.P. Morgan. " Commodities bull market will receive new healthy dose of adrenalin from this Strategic Investor, which will not get busted in leverage plays or sell with every rumor in the market, but will hold these assets for their real value - base for manufacturing production and infrastructure development in Asia. Who will benefit: companies with great management and developing asset base: Canadian oil sands play like Habanero resources HAO.v; Copper in Congo like Tenke mining; Copper, Zinc, Gold and Silver in Canada like Copper Fox Metals, Copper and Silver in Mexico like Capstone mining; quality gold and silver juniors like Avino Gold and Silver mines, Sterling mining and Mines management. This recent development means that US dollar will be under pressure once Chinese will reduce holding of their Treasury bills and will trade them for real assets. Real rates will go up because in order to sell new IOU Treasury will need to give more discount on its unsafe (according to Chinese Central Bank) goods - treasury bills. With falling nominal rates in order to reinflate economy from recession after housing bubble has busted we will be in the Negative Rates territory like in recession in 2002 and Gold and Silver will blossom again. Will this development happen to be catalyst of ignating new Bull Leg in Commodities, Gold and Silver mining companies shares after recent consolidation? We will see it in nearest future, but for sure it is very important positive development in these markets.

Subprime meltdown is the begining of the End of the Bull

In the end of the Housing bull market you could apply for loan and get it without any proper credit check, with your income sufficient enough only to repay interest, and without any down payment. "Mortgages requiring little or no documentation became known colloquially as “liar loans.” An April 2006 report by the Mortgage Asset Research Institute, a consulting concern in Reston, Va., analyzed 100 loans in which the borrowers merely stated their incomes, and then looked at documents those borrowers had filed with the I.R.S. The resulting differences were significant: in 90 percent of loans, borrowers overstated their incomes 5 percent or more. But in almost 60 percent of cases, borrowers inflated their incomes by more than half." Once market moved into the bear territory value of the loan is higher then value of the house - you are in negative equity. You do not have money any more to pay interest because it has risen with Fed hikes, you will not be able to return loan and house will go in foreclosure with 20-30% discount even to recent market value. It is only on the margins of economy? I am afraid not so. Just look at GM, I thought they were supposed to compete with Nissan and Toyota. The biggest problem is that Marginal Bank repackaged all those mortgages to another banks in a way of Bonds sold with New High rating but with the same Junk underlying. The chain was going up in perceived quality of Bonds with increasing Rank of Latest Bank, when the house of cards will fall down all these A ratings will be worth less then paper to print them. Goldman, Merrill Almost `Junk,' Their Own Traders Say

How big is disaster? "Investment manias are nothing new, of course. But the demise of this one has been broadly viewed as troubling, as it involves the nation’s $6.5 trillion mortgage securities market, which is larger even than the United States treasury market." All that excess liquidity from reinflation of economy out of recession in 2002 and which was driving Recent Bull market in equities found its way into the broadest available market - housing, unsustainable bubble was created and inflation spiraled out of control. Tightening in the way of increasing Fed rates brought first "marginal" borrowers to their knees, foreclosures and first losses will bring further tightening in the form of "restoration" of credit quality: loans will become less available, demand for housing will go down further, prices will collapse and consumer will stop drive economy without home ATM machine. Economy is in recession. Markets are plunging, rates are cut, negative rates pushing USD downwards and driving commodities, gold and silver bull markets.

"Late payments swelled to around 12.6% last autumn, according to Morgan Stanley, up from about 7% at the end of 2003.

General Motors, the world's biggest carmaker, may have to take a charge of almost $1 billion to cover the bad mortgage loans of its subsidiary, Residential Capital, says Lehman Brothers. HSBC, Europe's biggest bank, saw its bad-debt costs soar by 36% to over $10 billion in 2006 because of sloppy lending. Its chief executive, trying to reassure investors, said: “This is not trailer-park lending...this is Main Street America.”

Subprime mortgage loans made up over a fifth of all originations last year, according to Inside Mortgage Finance, a newsletter, up from 6% in 2002 (see chart).

They lowered underwriting standards and offered a bevy of “affordability” products like extra-long-term or “interest-only” mortgages (in which principal payments are deferred for a time) and loans with low teaser interest rates, known as hybrid mortgages, that balloon after a few years.

The “FICO” credit scores on which mortgage lending often relies did not capture this risk layering. Scores were probably inflated. David Hendler of CreditSights, a research firm, says around 40% of a FICO score is based on repayment history—but these records were “artificially rosy” because of the recent housing boom.

The effects of a dramatic slowdown, or credit crunch, in the subprime and the Alt A market could spread. The stock of unsold homes would remain unsold longer, crimping house prices. Consumer spending might slow. Investors might shy away from securities backed by prime mortgages and other assets, not just subprime ones, pulling liquidity out of the market. "

"Subprime lending
Rising damp
Mar 8th 2007From The Economist print edition

http://www.economist.com/finance/displaystory.cfm?story_id=8829612

HUI Break Out is still intact, Buy is not Violated

Google is locked in the Downtrend Channel at Upper resistance SELL