Daily Archives: December 1, 2007

Brits Accuse China Of Spying On UK Businesses

According to The Times of London, the Director-General of MI5 sent a confidential letter to 300 chief executives and security chiefs at banks, accountants and legal firms this week warning them that they were under attack from “Chinese state organisations”.

The paper adds “The contents of the letter highlight the following: the Director-General’s concerns about the possible damage to UK business resulting from electronic attack sponsored by Chinese state organisations, and the fact that the attacks are designed to defeat best-practice IT security systems.”

The only question is how bad is the China corporate and financial spying problem in the US?

Douglas A. McIntyre

Posted on: December 1, 2007 – 6:31 pm in China

Letter From Caracas

Nut-ball Venezuelan leader Hugo Chavez thinks that the CIA or some other branch of the US government is out to mess up the elections in his country. And, he is prepared to cut the supply of oil to America if he finds evidence to support his concerns.

The evidence, at least for Mr. Chavez, resides in his head and not in the more objective world of international relations.

According to The Wall Street Journal "President Hugo Chávez alleged the U.S. was planning to sabotage a vote Sunday on proposed constitutional changes and threatened to cut off oil shipments if Washington did so."

Chavez can make good on his threat. The Journal says that the South American country provides 1.3 million barrels of oil and other petroleum products a day to the U.S. Even if it undermines his own economy, the Venezuelan leader appears unstable enough to move ahead with a plan to harm the US economy.

Last week, when a pipeline between Canada and the US blew up, oil jumped $4. That happened despite the fact that the structure could be repaired in a matter of days.

Mr. Chavez can take oil above $100 a barrel without any help from OPEC. He may not be in his right mind, but that does not count for much when people are trying to heat their homes.

Douglas A. McIntyre

Posted on: December 1, 2007 – 1:05 pm in Oil & Gas

Letter From Riyadh

The time may come when the nation-states of the Middle East will spend to pay for military forces large enough to defend them and their oil fields. But, in the meantime they would rather use their money to buy American banks and semiconductor companies. The US Defence Department keep their borders secure.

To keep the money flowing to fill the accounts of their sovereign investment funds, the Middle East members of OPEC still appear to want to keep the price of oil high. The oil minister of Saudi Arabia says that he expects oil demand will go up as the end of the year approaches. Minister Ali al-Naimi told Reuters "That is what it normally does, every winter the fourth quarter is always higher than the third quarter." It does happen when it gets cold.

But, as to supply, the signal from Riyadh is that things are fine. Speaking of current oil stocks, the Saudi minister said "I think they are in a very comfortable range."

In other words, oil may be down over the last week or so, but it is not going to continue that way.

Douglas A. McIntyre

Posted on: December 1, 2007 – 12:35 pm in Oil & Gas

Citigroup’s (C) SIV Problems Get Worse, Perhaps A Hedge Fund Can Buy The Bank

According to The Wall Street Journal "Debt-rating agency Moody’s Investors Service, signaling a new turn for the worse for some bank-affiliated funds, said it downgraded or put on review debt totaling $119 billion that was issued by structured investment vehicles that have been paralyzed by lack of investor appetite."

And "the drop in the market values and the inability to finance the SIV debt is expected to put new pressure on banks such as Citigroup (C) to support the billions of dollars in debt that SIVs face having to pay in coming months."

The news brings Wall St .back to the plan, supported by Citi, Bank of America (BAC), and JP Morgan (JPM) to set up a bail-out fund of $85 billion to make short-term loans to the SIVs. Greenspan, Buffett, and other financial geniuses have suggested that if the SIV assets are never marked to market, the financial crisis in the debt markets will be prolonged and Citi will only be forestalling its day of reckoning. The plan may also simply be a case of throwing good money after bad.

If the SIVs related to Citi do fail, there may have to be a bail-out of the bank. There is precedent in recent history for helping big US companies. Just think of it. The government bailed out Chrysler, and not it is owned by a hedge fund. Maybe a hedge fund can own Citi, too.

Douglas A. McIntyre

Posted on: December 1, 2007 – 7:53 am in Banking, , ,

This Week on Stockhouse November 26 to 30

Markets staged a powerful comeback this week, with most major North American exchanges pulling up their socks for significant gains, including from financials – though the resource-heavy TSX Venture got left in the dust. Gold and oil saw wild swings, while anticipation for a U.S. Fed rate cut picked up even more steam.

On Monday…

Danny Deadlock reported on an overlooked piece of the energy puzzle in Small coal play attracts big names.

littleguy123 kicked off a series that examines the triumvirate responsible for our financial “WMDs” in The real “Axis of Evil.”

November volatility and big news in Australia makes for interesting times for uranium investors, reported Luke Brocki in No November doldrums this year.

Buzz on the Boards offered a glimpse into NovaGold Resources (TSX: T.NG, Bullboards) investors.

For news about small stocks that made big moves in Monday trading, please read the Stockhouse Canadian Small and Micro-cap Stock Report.

Then on Tuesday…

John Lee, CFA, looked at some serious issues facing Fannie Mae and Freddie Mac – and how gold fits into the picture, in Fannie and Freddie’s insolvency and gold’s immediate outlook.

Greg Silberman, CFA, backed up a case for gold and commodities with an interesting chart of the Dow versus the Yen in New York Stock Exchange on the edge.

Buzz on the Boards Nortec Ventures (TSX: V.NVT, Bullboards) and Copper Fox Metals (TSX: V.CUU, Bullboards) made the cut.

For news about small stocks that made big moves in Tuesday trading, please read the Stockhouse Canadian Small and Micro-cap Stock Report.

On Wednesday…

Steven Saville always finds a unique way to put the gold rally into perspective. In this article, Industrial metals in nominal (dollar) and real (gold) terms, it is industrial metals and bond yield spreads that get the Saville treatment.

Jay Matulich of Septos Capital Management dove into the subject of market conditions going forward into 2008. Read Playing the bear market rally for more.

No matter which way they play it, debt rating agencies are in trouble. SH community member liverless highlighted some of the problems in First card of the house to fall?

Matt Stiles served up a second helping of turkey for SH readers – but wonders whether alcohol might be more appropriate, given current market conditions. Find out why in More wine with that turkey?

Buzz on the Boards found some activity on the International Commercial Television Inc. (OTC: BB: ICTL, Bullboards) and Ascendant Copper (TSX: T.ACX, Bullboards) Bullboards.

For news about small stocks that made big moves in Wednesday trading, please read the Stockhouse Canadian Small and Micro-cap Stock Report.

While on Thursday…

Jesse Greenwald of MF Global is not being Coy about corn commodities with this analysis of the “feed and fuel” market.

Buzz on the Boards caught up with Miranda Gold (TSX: V.MAD, Bullboards) and Playfair Mining (TSX: V.PLY, Bullboards) investors.

For news about small stocks that made big moves in Thursday trading, please read the Stockhouse Canadian Small and Micro-cap Stock Report and the Stockhouse U.S. Small and Micro-cap Stock Report.

Finally, on Friday…

Nancy Zambell looked at a new and fast-growing investment vehicle known as an HSA, available for U.S. citizens to augment their health insurance. Health savings accounts – are they right for you?

Community member Milan Malhi offered up a bullish report on a junior explorer gearing up to report news from Mexico in Golden Goliath has the goods.

News travels fast from Bullboard to Bullboard, and sometimes there’s a tasty little treat in there. Buzz on the Boards heard from a friend that Tirex Resources (TSX: V.TXX, Bullboards) was worth a look.

Posted on: December 1, 2007 – 7:44 am in Uncategorized