fuBarrio/GL Update

Wow.


It has been forever and a day since I've posted. Lots of things "happening" here in Uruguay.


I've been pretty busy during the weekdays, and sick as a dog last weekend so I didn't get a chance to update everyone on the 'haps'. Here is a brief summary:


Montevideo weather:


it's still sunny at times, but the weather is much colder and the "windchill" makes it almost chilly :) keep in mind, this is coming from the perspective of someone who was living in the bay area, ca, so "chilly" doesn't mean snow or anything like that....just not "shirt sleeves" type weather like so many of the other months.


Our living situation:


we are moving out of the "pocitos nuevo" neighborhood back to punta carretas. "pocitos nuevo" is a nice hood, close to shopping restaurants, nice homes, and situated between pocitos (beach neighborhood with lots of expats) and buceo (costal hood with port for small pleasure crafts and sailing lessons, etc where the uruguayliving offices are located).


loved the apartment. could love it more without all the construction. i made a post about the construction on day one i think and haven't touched on it since. it hasn't stopped. i've refrained from boring you with the details. let's just say that once i found out that the owners of the building had expanded the work to be done on the building once the project was started...thus extending my "pain" i was forced to look for somewhere else to live.


the next occupants will have a nice place once the construction is over with. it won't be us.

punta carretas is a slightly older neighborhood that went through a "renaissance" when an old prison was turned into an upscale "mall"....yeah, i know.... :) it's really not as hideous as it sounds. malls here aren't like the US with seas of parking lots, chili's, tgif's, check into cash's and various and sundry sketchiness.


the idea was i'd get a flat in an older buildin with fewer occupants (2 to 4 unit) but i just couldn't find it in the time frame i had. basically, gl was going crazy with the construction and i had to compromise with a small-ish 2 bedroom 2 bath in an access controlled building on a relatively quiet tree lined street. i'll take some pics so you can get a feel once we've moved in.


because the neighborhood is more upscale, and it's furnished pretty nicely actually, the apt will cost us 750/mo. "all in". not as cheap as you may have been led to believe apts run if you read the "hype" from international living or elsewhere. 750 is actually 650/mo + "gastos comunes" which includes paying for the doormen (24/7) building maintenance, elevators, and central heat.

House Fund

if ya'll have been following along, you'll remember that i've been calling for a collapse in northern hemisphere realestate for some time. if you've really been following along, i had opined that the realestate prices in Montevideo that had no relation to fundamentals (median incomes) were being driven by a few things:

1.) govt money (uruguayan and foreign -- this is a capital and there are lots of embassy employees etc.)
2.) foreign company money (there is a little bit of this...people bein paid in dollars or euros and living on pesos...nice gig if you can get it)
3.) equity locust money....People with big appreciation in western Europe and north america either selling outright or heloc'in the homestead to afford cash purchases "down under".

1 and 2 aren't goin to slow alot unless things get REALLY bad, but i suspect that the flexibility of the equity locusts is going to be limited a bit and i'm hoping that it takes some pressure off of the insanity down here.

that said, any natural slowing will probably be offset by more and more people "discovering" uruguay and the fact that it has what a lot of people are seemingly looking for these days....peace and tranquility.

So, with that backdrop, and since we had decided to stay here on a more permanent basis i had decided that buying would only be possible given a couple of criteria:

1.) i could purchase something in the 150k range so i wouldn't be tempted to sell and move up if/when a drop in prices occurs here
2.) paying cash for something in the 150k range wouldn't significantly derail my other financial plans.....right now, it WOULD! :)

so, i had decided that i would try to turn 50k into 150k as an experiment in "gambling" and speculation, stripped naked for all the world to see here.

however, as it became more obvious that we weren't goin to be able to ride out our lease....much less extend it a few months to get me to next fall (when i suspect things could move more in my favor -- at least for positions i feel comfortable taking), i lost a little bit of my gusto for "gambling".

just as well, i reckon, as my two positions i've taken have been pathetic underperformers.

1.) i held a 2x s&p short and sold it after a 1% decline after realizin shortly after the purchase that there wasn't even a trend in place. i was just "wishin and hoping"

2.) i purchased txm.v thinking that things would pick back up in Uranium juniors for a minute before the seemingly inevitable summer doldrums. it was a really ill-advised purchase because the price was falling off the table with no visible support at the time.

the deadcat bounce saved me and i was actually up from 4.39 all the way to 5.2...then, i noticed something ominous....

Relative Strength

another uranium junior that i own (in another account) started rocketing up on higher volume (EMC.TO). trading was halted and they announced they were in "exclusive talks" to be acquired (perhaps).

the problem is that, that friday the entire sector (it seemed) when up heavily.....except txm.v. i got sick that friday night/saturday, or i was going to post something explaining "relative strength". Relative strength in a sector is important to look at because it gives you a much better idea of the strength of a given security than just looking at the perfomance alone.

imagine tiger woods and i golfed a round in a hurricane. tiger was 10 over and i was 110 over par. rather than conclude that tiger was a talented weekend duffer by looking at his score alone, by noticing that he was facing substantial "headwinds" (no pun intended) it would give you better predictive ability as to how he might do on a nicer day.

i had noted a month (or more) back that emc.to (US symbol EMU) was showing great relative strength.....i had attributed that privately to the fact that their uranium was closer to market than some of the other speculative juniors and they may be able to take advantage of the squeeze on short term supplies.

however, when the buyout speculation began across the industry 10 days ago and txm.v didn't move, it was time to get clear.... i didn't :) price fell from 4.8 to 4.15 over the next few days before rebounding slightly. i think if the industry faces a disappointment things could get rough for txm but i still suspect there is a floor of support just under 4 until the drill results are in. time will tell.

Ok...GL has just prepared me some 4 bean soup....time to eat lunch. I'll continue the update in another post.

peace,
fuBarrio

What will catalyze the "meltdown"?

Let's face it. fuBarrio has wasted a lot of time musing about potential melt-downs and scary outcomes for the financial markets in this blog. The executive summary of this entry in case you don't want to dig through the details of my still muddled mind is that I'm predicting a bankin crisis in the US -- beyond what we've already seen in the subprime lenders.

Uruguay and Argentina had a pretty brutal crisis here about 5 years ago that they are just shaking off. However, there are no shortage of people here with some pretty scary stories. While it's true that the people who were bein paid in dollars made out like bandits, those unfortunate souls would were being paid in pesos and borrowing in dollars made out like "bagholders"

The title of this blog entry "may" be overstating the case for a meltdown, but I believe a meltdown is imminent. So what does "imminent" mean? Well...this is a developin thesis so I'm still looking for feedback to help develop this theory from the two readers of this blog...but, as I start to lay out my arguments in a somewhat incoherent fashion (especially at first) maybe you can get an idea of what i mean by "imminent".

Here's the crux.

The US econ transforming into a service economy. While this sounds well and good, I believe it has gotten ahead of itself. Pushing bits has become the only way to make money in the US it seems. At first it was the technologists....and after that crashed the "bits" financial credits and debits represented by "bits" on a computer.....the new fangled version of pushing paper.

Why?

Lots of reasons, I guess....and i'm sure i don't know them all....but i think numero uno is costs of doing anything else in the North America. I had the opprotunity to look at the costs associated with opening up a new semiconductor fabrication facility in the valley in 2003/2004

Even with a desperate landlord and a built out fab selling for pennies on the dollar in the wake of the tech-wreck, all the "other" costs couldn't be reconciled against just boxing up the entire thing and sending it overseas. Now, don't get me wrong, moving, reinstalling and requalifying used semi fab equipment overseas ...even for a small fab, is a 7 or 8 figure expense....but the "hidden costs" of doing mfg business in the states is crushing.

Healthcare/insurance/pensions/unions
Regulatory hurdles to new facilities/beauracratic red tape
Attorney costs -- any long term relationship/contract with any vendor/partner/distributor/supplier becomes something for attorneys to pine over for weeks at 450/hr.
Taxes -- these come in a 101 flavors for the small business
Compliance -- this is a big bugaboo...Sarbanes Oxley hits not just big companies, but little companies with hopes of being big, or hopin to be bought by someone big.

So, it was hard to open a plant making refrigerators in America's heartland the last 10 years. So, rather than just sit around and starve we got creative about ways to feed our families.

Those with "education" and didn't want to pull down big bucks fixing toilets or swinging hammers often found themselves in some part of either the "Real Estate Industrial Complex" (REIC) or something broadly defined as "Financial Services"

The result of this (coupled with criminally loose monetary policy) has been an explosion in the REIC and financial services industry....to include in my definition for the REIC

builders & construction
specuvestors
appraisers
title companies
mortgage brokers
IB's repackagin mortgage products
RE Agents
inspectors
etc, etc, etc, etc.

And for the "financial services industry"

Managing
commodity trading
hedging
borrowing/lending
advising
mergers
hedge funcs
lbo's
PE funds
derivatives traders
etc, etc, etc, etc.

Now that the REIC is contracting massively, it is putting additional pressure on a financial services industry that is already leveraged to the hilt (in my opinion).

What we are seeing now is banks (and other assorted bagholders) who still have yet to "come clean" on the depth of the mess. In one of the most disturbin revelations to come out of this, I read a few months ago (have yet to independently confirm) that many banks are booking negative amortization loans' unpaid balance increases as income in the current period. This is eerily reminescent of almost every other "accident waiting to happen" in recent memory of my adult life.

In summary...."income" being booked that had nothin whatsoever to do with "cash flow".

Those banks and financial institutions unfortunate enough to be holding a large amount of residential real estate returned to them by borrowers unable to pay will eventually be forced to unload their holdings at "any cost" to remain liquid.

So again, in summary....I need to study this issue more thoroughly, but I'm predicting a banking crisis of sufficient magnitude to hit the mainstream press....and not just in the subprime lenders as previously born out.

you'll see them first (probably) in smaller, less capitalized, regional banks in areas hit by heavy fraud...and then if it gets big enough this whole mess could people to look under the rocks at fannie mae.....and that's where you wind up with "too big to fail" issues. when something is "too big to fail" typically, the US taxpayer ends up footing the bill while a host of clowns sail into the sunset already set for life. This is a key covenant of "privatizing benefits" while "socializing risks".

The exact reactions of the Fed, the US govt, and our trading partners are a little difficult to gauge right now....We could see something like the old Real Estate Trust Co. (RTC) reformed and that is why i really don't have any "new" plays to try in this market other than *possibly* shorting the banking index with long term puts (this b.s. could carry on for years before it's brought to the light of day) and an inflation hedge offsetting your puts in case the printing presses try to paper over this mess.

for now, in the housing fund, i'll sit in depreciating dollars and txm.v

ciao for now,
fuBarrio

moving to cash

this month i've been slowly moving more and more of the holdings to cash.

i'm going to accelerate that move tomorrow and be sitting 90% cash before next week.

i'm not "top calling", but i need to have time to analyse global liquidity...and i don't have that time right now.

i will diworsify across several currencies and hold an inflation hedge or two with what remains in the market.

good luck.
fuBarrio

"Do as I say, not as I do!"

I was looking at my two trades last week.

OK...I was hurried. I lacked sleep. I missed breakfast. The sun was in my eyes....(sorry, can't think of any other excuses).

In looking at the charts I'm not sure what I was thinking in those trades. After all the preaching in my blog about not tryin to time a top or bottom, etc, I make two trades attemptin to do exactly that.

I sold out of my s&P short fast....perhaps too fast...and i'm still holding my junior uranium miner.

The chart on txm.v is positively frightening when i look at it.

I'm up about 10%-ish on that buy, but it has all the hallmarks of a "deadcat bounce".....In other words, it would be very easy to give back all those gains and more....the price was below my price point but it got there so fast that the stock hasn't had a chance to build slowly and bring in new buyers.

A jab down and reversal can be lead by dumbasses like me buying and thinkin they are getting a "bargain". The ride back up can be short lived as the people caught flat footed earlier decide to liquidate into the strength.

So, what has really been happening in uranium? Why all the volatility?

two big fundamental events unfolded at about the time that the spot went over 100 for the first time. perhaps it was coincidence, but almost "on schedule" with my blogged predictions (based purely on pschological factors of pushing through triple digits on U3O8) we saw profit taking across the board in the complex of stocks dealing in uranium.

australia (at the national level) relaxed restrictions on new U mines. This is big. By some estimates australia has 30 percent of the easily accessible uranium and it had previously been restricted to 3 mines.

second, nymex is launching a futures market for uranium next week. ugh. just what we need (NOT!) :) the futures market is fraught with problems of its own as it's not tied to a physical delivery of the commodity.....otherwise, rogue states like fubarrio's abandoned oil platform could just get their raw U3O8 direct from nymex without all the cloak and dagger prospective "evil doers" have to go through nowadays.

justifiably, on the back of these two tidbits uranium speculation is taking a breather. i went long on txm.v because it hit my price point, but would have MUCH preferred that it hit that price point after cupping a little lower after a long and grinding summer of little to no interest in the issues.

that said....that could be the case on my next purchase in late august. for now, i'll hold tight for what looks like it could be a wild ride.

i still think a leveraged short into the general market will pay off big sometime...soon....i'm just not sure what i can predict it "tomorrow" yet.

once i do, i'll post it here.

ciao for now,
fuBarrio

A day with the Relics....

This Sunday afternoon GL and I spent a day with the relics.

And no, before I get flamed, I'm not talkin about hangin out with the usual cast of retiree types who frequent the Sunday expat get togethers. (har har har)

Golden Lotus and I went to visit some tibetan holy relics that were in Uruguay as part of some tour....in the basement of the uruguayan version of the YMCA (i think).

Golden Lotus has been in bean curd heaven as she has been the official chef this last week for the monks traveling with the relics. GL has her nascient food delivery service deliver all the meals to the monks during their stay.

Good thing for them I think as I learned they are "vegetarian, striving for vegan-ism". Speaking from experience, eating without animals can be pretty challenging in this part of the world.

The relics themselves mostly consisted of really small "pieces" of ancient religious leaders, etc. noticed one labeled a peice of a tooth of buddha's elephant or something (?) they had a really nice layout and setup though with lighting, drapery, music, candles and rice leading a path into the space....better than the "ymca basement" makes it sound.

i'm glad i went and GL was really happy to be there and get a prayer from one of the monks.

sorry no fotos as it wasn't really a good place for cameras.

ciao,
fuBarrio

"Sell in May and Go Away"

That's an old saying in markets.

Needless to say, it doesn't always hold true, however when it does and you're caught on the wron side of it, that saying will ring in your ears all summer.

I'm still in the depreciatin dollar in my housing fund, and off today ("may day" holiday).

I'm watching very closely today to see if there is an opportunity to get short in a big way. However, I'm very concerned about the excess liquidity continuin to crop up in the market. The futures are up this morning, but it has done almost exactly as predicted....It has cropped up over 13k....and if it holds true to the prediction it will "hit the wall" as it becomes obvious that no new rate cut is forthcoming.

CNBC is spouting that the dead dollar is helping international earnings -- a very sick way of looking at things. Earnings expressed in "non-paper" money, prices of stock, and the averages are DOWN in my estimation.

Time will tell.

ciao,
fuBarrio

p.s. sds is a way to get 2x short s&p and qid is a way to get 2x short the nasdaq

p.p.s. edit from 11:25 eastern. i went long on sds (an s&p short, yikes, and long on txm.v a uranium play that by all rights should have trouble going north the next 4 months.....double yikes....what can i say? they both hit my targets so i dabbled....i will stop myself out if/when i lose between 8 and 10 percent....i will update you on their progress.....

txm.v i was lookin for 4.5....it got all the way to 4.25....i loaded up, but couldn't get a fill until 4.39.

sds i bought a little this a.m. at 54.07 as a way to hedge a total route in the markets taking down txm.v with it.....so much for "selling in may and going away"

edit: may 2, 10:12 eastern...i chickened out of the sds after it was down a mere 1.25% :) just seemed too much like "top calling" to me....a dangerous business when you are an inflation believer. i still think there is a big down day in the cards, but i'll try to get on board as it is in motion rather than "guess". sds moves 2x faster than the s&p so 10percent of my position was in txm.v and 5% in sds. 85 percent in the dollar.
now, i am 10 percent in txm.v and 90 in dollars. i will update my house fund holdings in a new post at end of day today.

fuBarrio

"Gambling" Episode 3

Let's face it....this series is starting out really slllloooowwww.....

Unfortunately, i haven't seen the setup i want/need to get the returns i'm looking for.

(semi)interestingly, on the second day of my challenge, a stock that i hold in my IRA got a buyout offer....

tnk.to (Tenke) received an offer (that they've apparently accepted) to be bought by Lundin Mining. I did really well on Tenke, but took on massive risk to do it....in under 6 months it is better than a double, but i risked political uncertainties in Africa AND a wildly vacilating copper price.

Sadly, a double in 6 months still wouldn't have been enough to bring me to my goal of 200% appreciation in my initial capital. That really drove home the point to me that this was going to be very difficult to accomplish without using options and/or margin for leverage.

There were some interesting things that "went right" (so far) with the Tenke trade that would be nice to repeat on this challenge. without getting into all the political and M&A activity that went right, the biggest thing was that the trade went right "from the start", I let it "run" (rather than clipping it at 15 or 20 percent 2 months into the trade), and i gave the bigger move time to "mature".

Of course, with the house trade, time may be a luxury that i don't have....

Here are the macro moves that I'm looking at....

uranium plays (as i discussed/predicted here) have been under pressure since the spot went over 100/lb. not a huge suprise. i really like a couple of these....txm.v and iec.v are two of these....emc.v (emu on nyse) is showing *relative strength* in this sector wide weakness. this can often be the harbinger of bigger moves. i don't feel like this is a great time of the year to be takin new long positions in miners, but i'm watching developments (esp in these three securities very closely) right now, i consider these good longer term plays on weakness in the market, but probably not enough upside to accomplish my goal...not to mention getting 150k out of some of the smaller issues might negatively effect the price if i was to see that kind of runup.

gold -- i think it needs to correct....a little.... i can't be sure if it is now or after a move to test the 720's.....i'm too scared to short it, so if it can get down to the mid 600's and base (slow cup shaped chart) i will be looking at some ways to take my first BIG swing. longer term i'm very positive on gold still so i'll be trolling for a buying opportunity.

dollar -- while i've been calling for its death for sometime, i think it will rally as gold corrects...not a lot, but slightly. of course, again, i don't have conviction in this....late last year in my post "get your affairs in order" i called for a countertrend rally and then a retest of the low 80's on the dollar index. something just doesn't seem right (even though it's done what i thought) there seems to be TOO much negativity about the dollar and maybe it needs to give people a minute to get used to its current level before the jailbreak downward. again i don't have enough confidence in that to long something (the dollar) -even for this short term trade - that i believe is doomed long term.

gen markets -- dow over 13k....another slight pop...perhaps to 13200 ish on some "good news" then a melt-down. if/when it pops over 13k i will be looking for some individual US stocks to be buying puts on (bets they will go lower). i'd like to implied volatilities to be very low so the price of my bets are very cheap...may also look to buy calls on the VIX in this case (a measure of volatility which is usually quite low during gradually rising markets (like now) and quite high when all hell is breaking loose on the downside.

oil, grains, etc -- i don't have an opinion on these yet, although i'm looking closely at the natgas market on increased usage for oil sands remediation, and on speculation that people are being lulled to sleep on the hurricane front this summer with all the other crap going on in the world and last year's relatively benign storm season
fuBarrio

iec.v long

i'm looking to lever up in this one. i already hold it....we'll see if i can get my price.

more details this evening on the "why", etc.

fuBarrio

Gambling Episode #2

It certainly looks like all Hell is breaking loose on the dollar index.

Forex trades offer *significant* leverage and if you can guess right on a directional move you can make a bucket of money really fast. you can also have your head handed to you if wrong.

Take a look at the last year on the dollar index. Almost makes me think that friday the 13th will be significant....it's now 2:30 a.m. NYC time

It really looks like it's getting ready to break down.

Unfortunately, I've been waiting for action similar to this month and last for two years, but i'm too busy working to take advantage with the house fund (yet). I will plan my attack and allocate funds this weekend...but for now it's in dollars!! (gasp! ) :)

In the past I was so anti dollar I would do anything other than hold dollars. But, even a ROUTE in the dollar can look pretty small compared to the 20% drawdowns in the metals or 40% haircuts you can take in minors or other nat resource plays that have been driven up.....so here i sit.

With any luck, if the mainstream media picks up on the acceleration to the downside of the dollar...big holders may decide to support it just a *little bit* longer before it breaks the all time low -- thus giving me a chance to setup for the wave.

"Gambling" Episode 1

gambling sounds so harsh...."speculating" seems more flattering....but maybe not as accurate.

A proper speculation would utilize a SMALL amount of our available risk capital, and attempt to achieve a healthy gain for the overall portfolio while only having a small amount at risk. However, given our criteria -- tripling our capital before my lease runs out -- i'm not sure that will get me the outsized gains i'm looking for. i'll likely have all of my money at risk large portions of the time until i hit my target or go bust.

So, below I'm going to attempt to outline some thoughts that are driving my gambling decisions:

1.) leverage

anyone who bought a house with credit knows what this is. to get the kind of gains i need, i'll probably need to use leverage. either margin (borrowing money) or derivatives, or both. if/when the time comes i'll explain how and why. both of these options have a cost over and above cash trading in an underlying security however. and, as any f'ed borrower underwater on his/her mortgage can tell you, leverage works both ways. :)

2.) focus

it could be argued this is just another way to say leverage, but i'll probably try to put all my eggs in one basket and watch it very closely, rather than "deworsify". actually, most of what i'll be doing is watching price and volume and attempting to discern something out of that. this will be hard to do because i've spent a long time patiently trading fundamentals. however, in this case, that will not work because the market can stay "irrational" way longer than the length of my current lease.

3.) trend following

going with the flow. forget my prejudices and just let the market tell me what is working and following it. for a really opinionated trader like myself this is pretty hard to do. especially when i think we are on the "cusp" of something that won't be so positive -- soon.

4.) patience

this will be the hardest to practice cuz i don't have much time. but, given that we could be on the cusp of a change in direction....if i can stay in cash long enough to spot a trend before jumping in, i could enhance my gains...in other words, i could just focus on "not losing" until it's time to move, and with a big enough, leveraged, focused bet, make all of it in a week or so.

join us next time, on, "Gambling",
fuBarrio

fuBarrio Fall Programming Schedule

Ok....so a friend of mine was looking over my site today and i think her exact comments were, "dude....your site is 'hell-a' boring"

hahahahha....oops! :)

I tried to explain it away as "demographic targeting" and a conscious decision by the fuBarrio programmers to go after the high networth, low volume, high value transactions.

Truth of the matter though: I'm a pretty boring dude, and this is a pretty boring country! :)

The only time *any* excitement gets stirred up is when I inadvertently consume too much junk food, rage into a sugar-high, and I become my alter-ego, the grisled, blind, bald, spotted, fuGly dog, known as fuBarrio.

Given 37 years of serious overindulgence in all things "snack cake", I've built up a massive tolerance. That, coupled with the sad fact that twinkies are still not a staple in the Uruguayan diet, fuBarrio's appearances are on the "wane" lately.

Even so, let's face it, politics, housing, rare earth element pricing and raging against the Federal Reserve, aren't going to win me any nielson points with the genY set. Damn, there's that "lack of charisma" thing biting me in the ass again.

And yet, it's best to know what you are....Let's face it, CSPAN can't compete with "pimp my ride".....come to think of it, CSPAN can't compete with the test signal that comes on at 3 a.m....

So, on that note, I would like to announce.........

This fall's new fuBarrio programming schedule:

1.) Overthrow of the Government (any that piss me off -- in no particular order), and
2.) Gambling with money I can't afford to lose!

The first series of topics will point out why all government is evil, without any real solutions for making it better.....other than shrinking the size of government at all levels until they are completely off of my wave.

The premise for the second series of posts is quite simple. I can afford a $50k house in Uruguay. $50k houses don't appeal to me, and the construction noise in my rented apartment appeals to me even less. So I will take the $50k that I could have/should have purchased a humble home with and make trades (posted as near to real-time as possible in an attempt to triple my money before my lease is out. :)

Think of it as a "live demonstration of what can go right and what can go wrong when gambling with 'money that you can't afford to lose'". Of course, it will not be nearly as active as if I wasn't working, but I work during market hours now, so there won't be as many intraday transactions as you might otherwise see.

Please only follow along on the second series for laughs and maybe a healthy dose of shadenfruede....Don't follow my trades unless you are willing to lose all your money. What I'm doing is ill-advised and really just a 'goof' more than anything because those kind of trading gains necessitate taking really foolish risks to accomplish....as you will shortly see :)

peace,
fubarrio

Uranium at $113/lb....wow....

ok....the little birdie got *some* verification.

i found a link citing the same price online....it's the same original source however and "only" 100k pounds worth. crazy price advance given it was at 85/lb just a couple of weeks ago. looks to be parabolic by my reckoning.....i wouldn't short it be would suprised if we didn't see *some* retracement and backing and filling -- at least back down to the low 100's again...

here is the link and entire story from australia....the only place where the uranium story seems to be mainstream.

Uranium to $113/lb.

and, in unrelated news, today was of course easter and the end of semana santa in uruguay. things will hopefully return to normal tomorrow as i need to go get my visa stamped at the department of naturalization (or some such govt agency).

ciao,
fuBarrio

...a little birdie told me....

...that uranium changed hands at over 100/lb last week. actually, the rumor is that it was significantly north of 100/lb.

for those that aren't following along closely that's greater than 2x from when I started this blog, 3x from when i went into it last year (very late) and well over 10x from when the doug casey types started touting it.

i don't know what to make of it yet. it is not being reported by any news outlets or quoting services available to me (the lumpen masses).

if it's true, it's significant in that the mainstream media might even pick up on it.
if it's not true, the way the trend is playing out it's just a matter of time anyways.

ciao,
fuBarrio

Montevideo: city w/ Best Quality of Life in SA

Montevideo was rated the city with the best Quality of Life in South America by Mercer Human Resource Consulting.

Worldwide rankings put Zurich Switzerland at number one and Baghdad at dead last.

Here's the link to the story that ran in Uruguay Daily News Montevideo News.

p.s. I let them use my pic for that story with the condition that fuBarrio got a photo credit. But, there isn't any credit! Editor must have figured that it hurt their credibility to suggest that a bald dog with cataracs and no opposible thumb could take such a nice pic. Of course I took it with my friend's camera which might explain why the pics on my blog don't always look so nice :)

p.p.s. i was looking at "cataracs"...that can't be spelled correctly. if you're wondering why i so frequently mispell words in my blog (sic)...it's because

a.) i don't know how to spell,
b.) my blogging software insists that because i'm in south america i must be trying to run their application in spanish (including the built in spell checker), and
c.) i'm too lazy to write it up in another app and spellcheck before bringing it back into my bloggin software...it screws up the WYSIWYG editor and i have to reformat everything.

ciao,
fuBarrio

UY's second most used currency has issues too....

If you are an expat and planning to live in a place that doesn't use dollars as their primary currency, make sure to protect yourself.....especially if you are living off of investments or fixed income.

One of the reasons that I predict the cup and handle formation "works", as I outline earlier in this blog is that it gives people a chance to accept the new reality that is in front of them.

It allows people to take profits that were in the trend earlier and newbies to feel like they are getting a "bargain".

The same works for inverted cups and handles.

While not perfectly formed, the US dollar chart looks pretty ominous.

What the inverted cup and handle predicts is that at the back end of the handle, it has fallen off the radar screen of the main stream media and the public's attention -- back to page 16 -- all the while nosing toward new nominal highs (or in the case of an inverted cup and handle).

We saw some months ago when the dollar was at these levels that it prompted a cover story in the Economist. I predicted some relief for the dollar. I made the post "Get your affairs in order". We got that relief.

Although I don't get a lot of main stream media down here, i suspect now the dollar is not on anyone's front page. Right now, however we are susceptible to a chunk of bad news pushing the dollar below technical support levels and getting some new news coverage AFTER the break....triggering more pessimism.


ciao,
fuBarrio

Injun Summer in Montevideo

Montevideo is enjoying some beautiful weather in early April. It's just as well, because lots of March was nothing to write home about.

Attached is a picture from Buceo, directly in front of my "office"

ciao,

fuBarrio

Inflation in UY

One of my alert readers sent this story in to me this weekend.

He had guessed that I'd already seen it, but frankly all i saw was the inside of my eyelids this weekend.

Curious that the stated inflation rate in UY is running at greater than 2x that of the states and yet the exchange rate hasn't budged in the last year. The story quotes over "this year" but they mean since January. Since I've been here it's essentially unmoved.

I guess there are some other forces at work, (taxes, duties, other government mingling, or inaccurate/inconsistent inflation counting, future expectations ?)

Of course, figuring out how long a situation like that could be technically sustainable....well, that's beyond my doggy brain's processing power right now.

So, I'll just post the story with the comment, "curious"...and point out that it should be factored in to any savings rate one would hope to get from a UY peso account.

from Bloomberg


“Uruguay March Consumer Prices Rise From Year Earlier (Update1)

By Jorge Rebella and Eliana Raszewski

March 30 (Bloomberg) -- Uruguay's annual inflation rate surged to a two-year high in March on rising prices for food, beverages and transportation.

Consumer prices rose 7.36 percent from a year earlier, the biggest jump since December 2004, according to Bloomberg data. Monthly inflation rose to 0.9 percent from 0.61 percent in February, the National Statistics Institute reported today on its Web site.

``The accumulated inflation rate makes me doubt the government can attain its annual inflation target,'' said Milton Ferla, a private economic consultant in Montevideo.

``In the first quarter, the consumer price index is already about half way to the ceiling set by the government for the whole year.''

Prices of food and beverages rose in the South American country 1.47 percent while transport costs rose due to a 3.15 percent surge in gasoline prices, the institute said. Consumer prices have risen 3.31 percent in the first quarter of the year.

The central bank targets an inflation rate ranging between 4.5 percent and 6.5 percent for 2007 following a 6.38 percent increase in 2006.

``We still have to wait for salary adjustments in all labor sectors to become effective in July as well as further rises in international oil prices,'' Ferla said.

Uruguay's peso was unchanged today at 24.12 pesos per U.S. dollar and has strengthened 1.2 percent so far this year. “

ciao
fuBarrio

Cups and Handles - Redux

It's been a while since I talked about this, but I wanted to do a quick review of cups and handles. As you'll remember, a "cup and handle" is a chart pattern that technicians use to occasionally attempt to predict future price movement in a security. Here is a link to my previous post on cups and handles.


Let's look at some simple charts of U.TO or Uranium Participation Group on the Toronto exchange. U.TO trades roughly in line with the price of U3O8 (with a speculative premium). U.TO is a company that stockpiles yellow cake supplies.



The first chart off to the rght is the period mid-2004 to september 2006 on U.TO. If you look closely you can actually see two separate cup and handle-esque pattern formed during this period.

I do a lame attempt at tryin to highlight these pattern in red ink in the second chart. the two green vertical lines are merely indicating the period where a bullish run-up in price took place off the back end of the first handle.

Remember, that cups and handles are most indicative of future trending behavior after a longer term trend is already in place (duh). In other words, it more indicative of a longer term trend taking a "rest" or getting ready to continue with a longer term trend.

In these cases, the reason we care, is that as the cup and handle breaks out it can be rather explosive in price. In chart three I highlight the second cup and handle. This cup and handle isn't as well formed as the first as the price action is quite choppy.

In the fourth chart I "zoom in" on this second cup and handle. While choppy, given the fact that it took place after a run-up in a longer term trend, i still viewed it as quite positive, and made several comments on this blog and to personal friends that Uranium was looking quite bullish.

As you can see in the fifth and final chart, which shows the second cup and handle and the price action from the subsequent breakout, the price action was pretty magnificent.

While most who trade on the fundamentals would attribute this to the cigar lake accident which put into question a large futre prospective uranium supply. it's also interesting to note that the price action in U.TO and the Junior miners set up *ahead* of this accident.

Once the news broke publically, the true breakout happened. But at the time, the prices were already nosing up against all time highs on the backside of a cup and handle formation in the midst of what looked like a signficant long-term bullish trend.

If you want more info on cups and handles, and why i think they might actually be some insight on market psychology -- especially when they are evaluated in conjunction with volume trends which i didn't bother doing here, see my earlier post.

ciao for now,

fuBarrio

i'm-a-radioactive...

I think the old joke goes something like this:

Q: "How do I build up a million dollar portfolio in Junior Uranium Mining Stocks?"

A: "Start with 10 million dollars...."

All jokes aside, as documented here, (along with gold) Uranium juniors were a big pony that I staked the last year as I saw some other markets starting to get really "wobbley".

Junior Uranium is the new Internet, for better or worse. There are no earnings. Yet, many of these companies are up WELL over 100% since this summer....actually almost ALL uranium juniors are up a similar amount as a result of a production setback by the biggest miner of them all.

The reason that I'm bringing Uranium miners up again is this:

1.) neener neener neener -- "I told you so!!!" :)

2.) We are rapidly approaching a period of the year when junior mining shares generally do NOT perform as well .....mid-april-ish to september.

3.) i think some stock traders *may* look to book some profits if/when we move above 100/lb on the yellowcake (currently at $95)....Fortunately, the price of physical Uranium itself doesn't have a futures market, so most of the buying/selling is done by commercials and not speculators....although there are a couple of vehicles out there for giving traders the ability to take down physical supply off of the market further exascerbating the physical supply problems.

While there are lots of reasons that "this time it's different" one must be aware of tidal influences if one is going to surf the global liquidity wave for a living. The good news is, if you haven't already jumped on the uranium bandwagon there is a nice period here where you could have a chance to do your research, get set up, and get into a speculation or two during the "slow season" this summer.

If you're going to invest in the junior miners try to pick ones with proven URANIUM mining experience. Given the length of the recent downcycle these are very few and far between and will quickly winnow a list of about 300 down to 10 or fewer for you.

There are going to be a couple of companies that build mines of lasting values. And, there will be lots of people who throw their money away on speculative juniors that never become anything -- some of which will detail their foibles under pseudonyms while taking on the personae of balding, spotted dogs.....

p.s. for anyone crazy enough to think about speculating in junior mining shares, please take note of fubarrio's first theorem of bad luck (tm) as it applies to securities mentioned positively in a public setting and set your expectations accordingly. for the uninitiated, fubarrio's first theorem of bad luck predicts a decline in the value of any proposed speculation in the immediate aftermath of any mention in a public forum

ciao,
fuBarrio

"Where have you been?"

Well, I've been noticably absent from the scene as of late, so I thought I'd take a minute to catch some folks up on what's been happening.

I've been very busy working with some other "Uruguayan immigrants" (aka expats) on building a few companies here in Montevideo.

The company has been around for a while. So what do we do?

Well, if someone needs to transmit a large wire transfer, or money transfer....(especially an overseas or offshore wire), we do that quickly and confidentially while inviting the absolute minimum of intrusion into your private financial matters.

Sounds pretty esoteric, right?

Well, there are some other services that are going to be layered on top of this eventually that will make it more clear in case you're still wondering why someone would actually want or need these services.

If you're a reader of this blog you can probably guess why.

Ok...back to your regularly scheduled programming...

ciao for now,
fuBarrio
offshore wire hound