since the “stem cell ” mania has slowed down, hardball gamers are looking for new plays.
this is usually easy, being merely a factor of correctly assessing the financial and technical knowledge of the american public.
a few months ago some serious hardball guys (who..if u were there, were central and critical to the implosion of the so-called net bubble) brought out a couple of puppies based on the “green” future
talked about by everyone except massey coal and bp (fd: clients in bp).
one has some worthwhile promise, the other is a mania stock.
but first a word from out sponsor, “how things work”: a decent definition for “why” washington and some other rich guys and harvard intellectuals decided george iii was a “bad king, bad king..go sit in the corner..bad king” was the anglo-centric practice of making it totalllly difficult to vertically integrate the value add inside the colonies. raw goods were moved to shippable sizes, sent to england, value added to maintain the english economy, and then exported back to the colonies. when you were in 5th grade us history this was called “mercantilism.” in the real world, it was the means by which english puritan fat cats who wanted to genocide their way into wealth got a return for the silver they put into everyone from jamestown to penn’s woods..
these days, over on the other side of the world, the chinese have noticed that they already are a country, have a world class track record on resisting genocide and conquest, and have tonnes of mining equipment far more efficient than what massey coal would use to remove a mountain top so that the carcinogens can flow freely into the watershed.
meantime, back at the ranch in california–a place stolen from mexico on the seemingly reasonable grounds that the mexicans should like that more than having the russians steal it, that part of california now called colorado—and thence driven into prosperity by using hydraulic cannons to remove the mountain tops, some smart money noticed that there’s a fair amount of “rare earths” to be mined there. “rare earths” are all those cool minerals that make ur i-phone work.
so, slowly, land was picked up, on the assumption that for a few bux all good americans would learn that godless enemy water fluridating commies would crush us unless we closed the “rare earth gap”
( which would ..oddly enough be a cool name for a birkenstock wearing yuppie clad jam band to open for phish or somebody).
and thus was born molycorp, mcp:nyse.
and a few weeks ago, as luck would have it, the chinese announced that they were going to keep 10% more of their rare earths than they did the year before, since, well, the phreaking i-phone is made in china..so why export the raw materials unless it wanted to be a colony of taiwan. that concept being so utterly eisenhour/kenndy, and china being so aware that its current real estate bubble will break as soon as it goes back to monitoring bank’s books (maybe up to 1/3 of mortgages written in china are off the books, so that the borrower doesn’t have to explain how he got the down payment) …anyway.. (does anybody wayyy back before 911 when dennis miller was funny?? ) …anyway…
this set off a “rally” on mcp that took it from a 12 ipo, to touching 50, in like 4 months.
cause, yaknow…that “rare earth gap.” now predictably a random congressman or 3 wants to engage in some massive federal spending for a “rare earth strategic stockpile”–this, from the govt that still cain;t quite figure out how to do that yuma mtn thingy– at a time when the incoming congress have all sworn on their hannity/oreilly buttons to cut spending, while legally thdy are about to haver to raise the national debt ceiling.
and of course all that highly toxic rare earth refining will be re-imported to the usa, and of course dell laptops like the one suffering under my paws, and i-phones will soon be made in the usa, where the cheerful people of arizona will be happy with $178 a month jobs making them, just to reduce that nasty carbon footprint…
uhuh.
and of course the feds have an extra few billion to spend as guaranteed buyers, there being no other commodities..like housing… that the fed thinks of as defense worthy as an asset class.
and of course there are no chinese owned rare earth mines already in the usa…
and of course there will never be any value recovery model bizness (read: “recycling”) on this toxic rare earth stuff as a demand reducer that kicks in ever harder as commodity prices rise… cause adam smith was just like, whack….
and of course none of this stuff can be found in africa…
as a result of long discussions with clients, a couple went off the res and are doing thus:
they bought long time 50’s, and started shorting the traded common.
(i note that until short interest is reported within 20 minutes of r/t, it should be outlawed)
that’s one side of the coin.
the other is lsgc.ob …which actually has roots with the same $$$, but has >>>customers<<, and >>revenues<<. indeed, it’s current revs are like 3x those of btx…and at the time clients started chomping into lsgc, btx was like 3x higher priced.
there’s debt.. a chunk, which will swap its way out along the line.
however, there is a clear dot the i’s path towards entering the market across all retail and commercial frontiers adding to the one thing american biz learned in 2009: how to trim costs.
something tangible, diorect and doable to all the greenies in the retail space.
and no fda, ind, phase iii yaydyydydaaa that will continue to hammer biotechs.
clients are in @ 3 5/16 … and will take 2nd positions on the expected dips ..(bad news, stock coming to mkt… good news..because a class of p[referred got killed.)
and likely, if wise, 3rd, “defensive” tier positions.
goal? just trade into accumulation.
goal on mcp? 15% apr.
Posted under business
This post was written by admin on December 30, 2010
