Give me a bit of a scare, talking about "ratings review from Ba1", which is speculative in itself. Still, family credit rating is dicey and up for review. Moody's could really give GFI another "hole"; Just be aware...they are already rated "negative", and that's not Happy. Yet, when I look at some of the other miners, and their debt:assets, I see a smear here. I don' think GFI is as "dicey" as Moodys' points-out, especially seeing how they've been one of the few outfits to at least book some profits of late, no matter how minimal. GFI is working to get their debt down to 1:1. We'll see, and it's a decent gamble on the gap-fill, imo, dare I tell you the level!
Just wanted to inform the board, so you're not "flying blind" if you decide to bite here; On the flip-side, Goldman upgraded GFI from "sell-to-hold", but I think it's just s reiteration, b/c they issued the same rating some number of months back.
Actually, AUY faired among the best of the x12 Canadian miners Moody's put-on review, not receiving the "possibility of default" note, nor the "family credit downgrade", highlight, both of which can sky-rocket a Co's borrowing cost. If you look at the list, and read the notes, there are many others who didn't fair so well.
AUY is on watch for a possible ratings downgrade from "stable" and they only list one bond at risk:
..Issuer: Yamana Gold, Inc.
....Senior Unsecured Regular Bond/Debenture Baa3, Placed on Review for Downgrade
PS: I tried posting the link to the specific page, but if you go to Yahoo's main article about the "miners in review for possible Moody's downgrade", article, and click on the highlighted section about Moody's, you can work your way to the "x12 Canadian metals miners".
Things could really get ugly for so many outfits, if they have a full basket of ratings-downgrade, especially if their debt is rated "negative". It's not just the metals miners, but so many oil-and-gas outfits as well!
I agree with both arguments here; Yes, most people believe in the "equities-come-roaring-back" theory, b/c they have been conditioned to believe that the Fed's massive stimulus meant that stocks gained most of their phenomenal traction "on their own merit", while nothing could be further from the truth. Just look around you: "are things roaring-back for you, the average-Joe"? Is that why someone with such radical views as "Bernie Sanders" is gaining so much momentum? Or even Donald? No, we are living in a massive Fed-bubble, that is only just beginning to "pop". We gave-away $4.5-trillion of our treasury, to Wall-Street and Big-Banks, and tried to peddle the "tall-tale", that massively huge equity values, equated to "big-strong, recovered economy". I hate to say it, but read my past post for x5-years back. This is only getting going, and unfortunately, it must play-out, as it will, and outside further Fed stimulus, there's a lot of hot-air yet to escape in equity prices.
Heck, are we so naive to believe that commodity prices aren't SCREAMING something is way-way wrong? No, we are NOT that naive, and many of us well know "what's really going-in". People have made SO MUCH MONEY off the Fed's back and support; Sand thing is, we'll all pay for it, as this bubble comes-back-down to Earth, and frankly, it's damn un-fair for the average Joe, b/c "we are all affected". Just look at all the lay-offs happening! All b/c we let Wall-Street NOT ENDURE, the real consequences from 2008/9, and let the Market, organically, determine equilibrium of equity prices. Instead, we enriched corporate paper to such a degree, that, this is now what we get, when the Fed pulls-back, and says, "it's on you now". I really hope/pray it doesn't get as ugly as it well can! We'd be apt to pay attention to history and see what happens, when a culture opens-up the flood-gates of wealth-disparity, and calls it "GOOD". Heaven help us!
Cont.II, the Fed having raised +.25% of their Federal Funds Rate. And what have we seen? Well, everyone is trying to blame everything on China, and with some reason. You don't just "close down your stock Market" that easily, for two-days in 2016, and change policy at the whim of experimentation. But, what people are missing is that "this isn't just all about China". Unfortunately, it's so much more, a perfect storm of events, catalyst and ingredients, that imo, should have investors seeking safety AT ALL COST! This includes buying gold, or holding as the case may be.
There is a great article about Stanely Druckenmiller here: h***://www.businessinsider.com/stanley-druckenmiller-successful-because-of-the-fed-2016-1
Gaps don't have to fill, but if you look at the monthly chart in GFI, and many other Gold stocks that formed run-away gap-ups after the Chinese malaise ignited a huge flight to safety start of New Year, I think you'll see that unless we advance on a multi-year leg-up, and leave these lower gaps to get filled "years-down-the-road", that you'll see a final attempt to flush-out gold holders, and a real scare, ONE LAST TIME, to route gold. That's when I would buy with both feet, and I hope/pray for the opportunity, b/c the timing, the backdrop, the world-stage is ripe for gold to blossom. The main downside I can see, is the extremely deflationary environment that is unfolding. And I don't see the Fed's determination to bring inflation up to 2% happening, especially since they've already begun the rate-raise cycle. Thus, it's hard to see the big inflation that the Fed even says should be coming, as they have begun their rate-raise cycle, to head-such-off. But people are scared now, and they aren't waiting to determine what inflation will or won't do.
In short, what I have learned almost more than anything about the Markets in the last-past x7 years, is how effective and affective the Fed is in determining asset values. In closing, read link up!
Is that GFI somehow fills that lower-end gap at $2.20 I have been disillusioned with Gold, and have held options of this stock for so long, and have watched this thing under-perform for so long, that I have/had nearly bought-into the "Gold is dead/worthless" mantra pushed by the Fed-induced, stock-bubble folks even since Quantitative Easing began in earnest. But what many of us missed in the early years, is the insistence that the Fed's policy would lead to massive currency devaluation and inflation, right away; Instead, we saw the exact opposite, and we trudged through the folly of "Fighting the Fed", by buying hard-assets in the face of a paper catapult, that lifted all things corporate equity into the stratosphere. Meanwhile, us earnest gold-holders have been "slammed, bammed, derided and called bugs, kooks and worse". But then a tell-tale things happened. Stanley Drukenmiller invested north of $250-million of his personal fortune in GLD, late last year. But his bet seemed paranoid and without merit as 2015 rolled-on, and money mangers certainly weren't going to sell the winning bets they had made for the past x7 years at the end-of-the-year, even though the Fed put the "CLOSED and LIGHTS OUT" sign on the buy-any-stock-and-we-guarantee-it-will-go-up on Wall-Street's dais in November. So that really fooled me, and I kept posting wonderments over "what the heck was Mr. Drukenmiller thinking, recklessly sinking so much money into such a sinking idea". But then another strange thing happened, 2015's trading turned into day-1 of 2016, which was actually Monday, January 4th, the first trading day of 2016, when big-money was back from the Holidays, and it had no compunction to hold gains for end-of-year taxes. Instead what did we see? We saw the Chinese stock Market close early due to their -7% automatic circuit breakers kicking-in, we saw the first real time that our Market wouldn't trade at the behest of the Fed's endless backing, their having...Cont. II
I know he's a billionaire, but even at $2-Billion, losing principle on a $250-million GLD bet is a big hit. When he first announced his big purchase into GLD, I felt a little more secure, figuring he's have more insight than others, since he's plowing his greatest amount of money into this asset-class. But low-and-behold, he's getting fleeced, along with every other gold-investor.
I personally think people don't realize how powerful the Fed is to dictate the Markets and USD valuation. Unless things slip beyond their control (one thing Miller was figuring in his big-GLD-bet!), they will continue to juice the stock-market higher (even with their so-called tightening, it will be so minuscule, and so non-traditional, as in, no "tightening cycle", but rather, a series of hodgepodge, let's "see-what-happens-if-we-try-this", type experimentation", that you'll never know that the Fed actually tightened.) That's my guess anyhow.
But I did think Drunkenmiller would be a little wiser than to get so fleeced as he is. Damn, just goes to show!
People don't want to acknowledge, much less believe, the rampant, often big-institution manipulation of Markets, that goes-on routinely, while the SEC sits-on-its-hands. What ever happened to the US Justice Department's investigation into the Big-Bank gold-price fixing scheme?
Y'all, ever since the Fed co-opted our markets in 2008, with their $4-5 trillion-dollar backstop of not only the stock-market, but also the big-banks, we've seen nothing but a strong-strong Market that can never really go-down! It's being held-up by the Fed, and the Fed's policies have hurt other economies currencies, while sending ours through-the-roof; And all this has put "gold" into the toilet, even though the physical market has never been bigger, or seen more "buying by nation-states". They've turned true supply-demand economics 101 on its head, and not it's all about putting money into Wall-Street's pockets, at the expense of nearly everyone or everything else in the world, savers and pensioners be damned! But, this obscene largess won't go without consequences. IMO, we've sown the seeds of a great financial calamity yet to come, b/c real Market valuations have been turned on its head, and now it's all about Fed-induced actions. Yet, the Fed is the biggest bank in town, so, as long as they can dictate policy and have the Markets respond, in kind, then all is well; It's when they lose their power and legitimacy that "all heck breaks loose". One only need study a bit of world history to see the end-result of "all this"...and it's often "not pretty"! GLTUA! eom!