With San Dimas strike still lurking in the background, and lefty Humala taking over Peru, with Bolivia nationalizing mines, the safe haven of S America mines, and the firms that depend on those streams, takes a mighty turn to the "left".
SLW is up to its ears in S American exposure along with many other miners. It's off 10% when silver is up 7%. That's a monster "hedge" against the loss of 15% cash potential cash flow.
The issue why we're selling into strength? Is lefty nationalization oriented countries going to go the way of the Mid East? Is there going to be a spontaneous ignition of revolutionary zeal all across the S American frontier?
This was not a part of the equation going into this year. It is now. And explains antsy investors with one eye on the soaring POS, and the other eye, on the countries that are slathering because they regret the deals of the past.
Check me out.
"This was not a part of the equation going into this year."
Right...it's been going on for about a century.
Reagan called Nicaragua's Somoza an "$OB but he's our $OB" before the Sandinistas killed him. His family ruled with our blessing for 40 yrs.
One of his kids is in Houston with a large part of the fortune his dad had flown to Miami via U.S. jet.
In El Salvador I used to perform surgery at the military hospital we built for our planned war down there. The Reagan-era "embassy" was a huge reinforced concrete bunker strategically placed and defensible, to double as a CandC center during invasion. Our right wing thugs today occupy their time with kidapping and extortion. Walk the streets past the nice houses after 9pm and you'll hear shotgun actions being pumped.
Once we left due to the Soviet dissolution what do you think would happen ? Democracy ? Ha...a lot of our "irregular" mercs got "regular" in a hurry and some were disappeared. Just carrying an M-16 in the wrong place would get you killed down there.
And the only democracy down there, Costa Rica ? The national hero greeting you at the airport and on their money is the 18 yera old kid killed whle running off Willian Walker, American filibuster who took over the country with 100 mercs and declared English the national language and reinstated slavery. His new government" was promptly recognized by the U.S.
And that's just Central America...it goes on all the way down to the Malvinas islands, or are they the Falklands ? Remind me, what was that war about ? Guano ?
The city dwellers have their cell phones and Domino's franchises and are quick enough to latch on and forgive. The barefoot peasantry and their leaders like Fidel, Evo and Hugo see a mine enriching a bunch of "Nortenos (northerners...that includes Canadians)
while they are still, well, barefoot.
Their new bud ? The Peoples Republic, of course.
The Gulf is holding on for now, we lost MENA, we're losing the rest of the Americas...only question is how fast.
YDM wrote "Imagine a national will built of people with a grudge about those kinds of guys"
They actually have it compartmentalized. They love the average American no sweat there. Even small biz types are OK. Bigger corps that employ heavily are even cool. But once you start trucking "stuff" out of the country wholesale, its a different attitude. They've been through that from the days of the "banana republics" and aren't too cool about it.
I'm hoping they get a short term lid on it...I am still stuck with some CDE !
Exploitation....gone on for years and is only subjective by isolation.
ex; ceo of wells fargo makes 18 million...workers makes about 2 -1000nth (2/1000) of that from customers who make 1/500 th of that...and on top of that the bank is supported, gauranteed and propped by taxes from the underlinks, reducing their small take to even lower percentages
this is right in the usa..one need not go abroad to find examples...the same goes on in the mining centers of our oun country.
when are we going to uprise..we have no guts, so what will some weakling undeveloped country do...not good odds.
lets pay the workers a much bigger salary..lets have the shareholders take a more reasonable cut, and the ceos, a much much smaller cut...gmho
I don't think it's the workers that we are worried about, yes it's true that they want more money but the problem is the Countries Gov. Like most Gov, they want it all. They see a opportunity to better their people and benefit from their own resources, and at the same time maybe fill their own pockets.
Taxing the 2% who hold 65% of the wealth of the country a bit more for their bounty is viewed as detrimental to the health of the entrepreneur.
Well, the least we can do is get the payroll tax to infinity, and grab a big load of undeductable $$ to beef up Shmocial Security.
They'll barely miss it, and couple with legitimate cuts over a decade, and the way Bernookie is driving the dollar to extinction, if you still have enough money left over after a $100,000 sandwich, your house value will double, just barely getting out from under. I'm talking to the banks here.
Thanks for all the thoughtful replies. Of course communism doesn't work but try telling that to the lefties. We tried telling that to the East Germans, and it took 28 years. And the people raised under that system were untrainable in the new capitalism. Your takeaway, "training" and propaganda is not going to convince those who think they should take back "the people's" property are trainable. That's how they got the power in the first place, by selecting that kind of ideology.
On the issue of contracts being honored, check out the movie the Treasure of the Sierra Madre to see what greed does to a pact, a "contract" between just three guys. It destroys them. Now understand the concept of unconscionable contracts as ruled upon by nations. That's a contract so egregious, so out of sync, so detrimental to their perception of fairness in their world, it is an abomination, it is ruled null and void, which is called the nullification of contracts as against national interest. The court would say, Barrick or GG was supposed to pay you, you got a beef, go to them for some alternate recompense.
No this is a sticky one kids, you can't just point to the POS and take the silver stream from S America as a given, under the last six years that part of the world has been deemed nonproblematic.
It looks like a lot of folks are worried about problematic here, they keep selling into strength since about the 30th of March.
Imagine a group of guys moving into power with a grudge on their shoulders about workers making 386 bucks a month, while a guy with a phone and some cash goes into the silver streaming for financial backing business. WE don't even like the Thains and the Mozillas, yet we tolerate them. Imagine a national will built of people with a grudge about those kinds of guys and the people behind them.
What chance do you have in S American court with them?
Imagine the mining industry now. Silver streams are being proferred as payment for financing a venture of capitalists.
That agreement is between two companies.
But there is always a third party, the government of the country in which the resources are found.
Suddenly that contract which is between two individuals, the third partner, the state, which is supposed to look out for the welfare of its people.
This is a sticky wicket full of thorns. It is something to think about before committing new money just because the POS is skyrocketing.
As long as you're getting some.
Now option expiration is over for this month, let's see how the shares play out next week.
Oh no! Don't tell me it's the Ventana mess in Colombia from last year - again! I ran from that one. Greystar, Galway - PM nightmare city! I ran from all of them, and now SLW? Say it ain't so. Say it ain't so. Help! How is Ford looking these days? What about DuPont? Where are my old blue chips. Horrors. Well, what about good old Silvercorp. Can't touch that baby.
There was once a fellow named Hitler who made many contracts and signed many treaties, and look what happened there. And the white Americans and their treaties with the Indians, and look what happened there.
If it does in fact turn out to be so that South America takes the mines - or even begins to, it's bye, bye blackbird for me. I'm not sitting through another Ventana roller coaster ride as I did last year. No way Jose.
YDM, I agree 100% that this is what's going on. I posted as much three different times today but all I got back was Op Ex.
It's funny how the reality of a situation can be so obvious yet so blinding at the same time. Lets see how this plays out when the exposure risks become more clear. I think potentially we could fall some more, but even worse would be if Silver falls back some, it may prove that SLW has little foot-hold. GL
I don't know for sure. Sabina was down today. Alexco didn't look so hot either. EXK was up. SVM down. Very mixed bag today. Wouldn't Monday give us more clarity with options expiry not being a factor as it was today. Remember too that it's not the Yankee imperialists that own the mines in most instances, but the Canadians(not thought of as great imperialists). Interesting scenario, and reasonable, but I'm not convinced on this one. Plus, the City of London would also have something to say about the loss of silver mines. Dunno.
I respect your post but,imo, contract's will be honored in a civalized society. If one human being in signing a contract cannot trust another human being, than the whole world is doomed. Is that the world that you think that we will live in... in the future?
You must be joking about contracts being honored. How many people in this country are breaking their marriage contract. If there is no honor in a personal contract how can you believe that a contract with a stranger would be honored?
Hmmmmm Think about the Chrysler and GM "secured" bond holders. The White House intefered in Chrysler's bankruptcy and Obama screwed them big time. Legally binding contracts were ignored. Their first dibs on assests was moved to the back of the bus- dimes on the dollar-and the UAW to the front of the bus with an ownership stake in both of these companies. The WH message to the bonder holders was clear "Sorry but this is how it is and we really don't care what the law is. We are the law and we can do whatever we want." If this can happen in the USA, the nation of laws,it can a happen anywhere and certainly in the emegring SA Marxist countries. For an example there, look at what happened to Owens- Illinois, and US oil companies in Venezuela.