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Saturday, March 22, 2008

Saturday News and Reading Round-up

Oil and Gold Prices Continue to Slide
Oil, gold and other major commodities fell sharply on Thursday, capping their steepest weekly drop in a half-century, as investors fled what many had believed to be the last safe haven in turbulent markets.

XX My take -- Oh ye of short memories. Remember the last time that commodities crashed, in 2006? And it was supposed to be THE END OF EVERYTHING!!!!! How did that turn out?Sure, we can have more downside in commodities. But the big commodity supercycle is real. Some speculative money rushing for the exits won't change that.

Bernanke Vindicated as Fed Lending Spurs Commodities Drop, Rally in Stocks The biggest commodity collapse in at least five decades may signal Federal Reserve Chairman Ben S. Bernanke has revived confidence in U.S. financial firms.

XX My take -- Revived confidence in financial firms how? Certainly not in earnings ...

Bank of America May Report $6.5 Billion Loss Provision, Punk Ziegel Says Bank of America Corp., the second biggest U.S. bank by assets, may take a record $6.5 billion loan- loss provision in the first quarter to cover possible future losses in its home equity and mortgage portfolios, Punk Ziegel and Co. analyst Richard Bove wrote.

XX in fact, the outlook has turned so bearish on commodities so quickly, I think some good news is being overlooked ...

Rush back to gold by Eastern jewellery markets suggests price may have bottomed.
Reports from Asia in particular suggest that jewellery sector buyers and investors have been climbing back into the market for the yellow metal in a big way in the past few days after virtually boycotting it in the run up to the recent higher price levels. The jewellery market tends to be pretty shrewd in its assessment of price levels, and this activity suggests an underpinning of the gold price at or around current levels and further suggests, perhaps, that the upward momentum will come back into effect before too long.

XX especially in uranium ...

Nearly 350 new nuclear reactors on horizon
These will be introduced in addition to 439 uranium-using nuclear reactors already operating in 41 countries, which, collectively, produce 16% of the world’s electricity requirement

Denison expects boost in '08 from uranium prices despite lower forecast “We expect the spot price to recover and see (uranium) trading much closer, or even above, the long-term price later this year, and believe the long-term price may increase also,” CEO Peter Farmer said during a call with analysts early Wednesday.

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