October 2014

In recent years, the price of uranium has flown higher than that of gold, silver, platinum or palladium. From 2001 to 2006, the uranium price rose by approximately 700%.

It looks like the upside may have a lot further to go. Global demand for uranium is 160 million pounds per year, but only 90-100 million pounds is produced from mining production. The shortfall is being made up by drawing from stockpiles that had built up from the over-production during the 1970s and from decommissioned nukes from the former Soviet Union.

“For 20 years, mine supply has accounted for 60% of what is needed to supply reactors,” says Dr Tim Sugden, managing director at Nova Energy Limited at the gold and precious metals investment world conference in Hong Kong. Nova owns a major uranium deposit in Australia that it hopes to start mining in the near future. “After 2013, Russia has said it will stop supplying enriched uranium to the West.There will be a supply squeeze.”

Analysis: It is interesting and typical that people gain interest in an investment after it has gone up hundreds of percent. The fact that a supply squeeze is coming is of interest to us as we have fairly nice gains in our uraniums and will look to cash out as the public comes in at the top.…

Comstock Partners:

Widespread reports that the housing industry is stabilizing are just too incredible to believe.  Affordability remains at a 15-year low; inventories are at record levels, new housing permits are plunging; and industry executives are telling us every day how bad things really are.

Foreclosures in dallas highest sine 1980’s oil bust.

Dallas Morning News:

 Home foreclosure postings in the Dallas-Fort Worth area have surged to their highest level since the 1980s.Nearly 4,000 homes in Dallas, Tarrant, Collin and Denton counties have been posted for possible sale in November, up 49 percent from the same period a year ago.

“It’s high, much higher than normal,” said George Roddy, president of Addison-based Foreclosure Listing Service, which compiled the data.

Fueling the foreclosures are interest rate hikes, rising living expenses and consumer debt, and aggressive lending practices.

Home foreclosure postings reached about 35,300 so far this year, increasing 20 percent over the same period a year ago. That figure has already surpassed the total for 2005, which was about 32,500.…

Yahoo:

Dune Energy, Inc. (Amex: DNE – News) announced today that it has placed nine wells on production since August 30, 2006. Stabilized rates from these new wells has added gross production of 10.0 million cubic feet per day (MMcfe/d), bringing the Company’s total daily gross production to 12.3 MMcfe/d. This represents better than a four-fold increase over previous levels.

Four wells were drilled and placed on production by Dune on its existing core Barnett Shale acreage, while two were purchased as part of its recent acquisition of properties from Voyager Partners, Ltd.

Dune has also participated in the successful recompletion of three wells on its Bayou Couba property in South Louisiana. Dune owns a 91.4% WI in two of these wells and a 20.7% WI in the third.

In addition, Dune has participated in the completion of two wells on its Welder Ranch property in Victoria County, Texas. Both wells are waiting on pipeline connection. Dune was carried to casing point in the two wells as part of a previously announced farm-in agreement with Chesapeake Energy.

Amiel David, President and Chief Operating Officer said, “Dedicating the Itera #1 Rig to our Barnett Shale properties allows us to drill up to 10 wells per year. We have 24 horizontal and vertical locations in our current Barnett Shale drilling inventory. Upon successful closing of the remaining Voyager assets, our total number of drilling locations will increase to 51, excluding any additional acquisition of acreage in the Basin.”

Analysis: This could be another GMX Resources. If you remember we rode to around 400% gains on that stock under the same conditions. Huge increases in production will move the stock. This stock is a strong buy.…

Smith Blog:

While screaming-head entertainers/pundits can call all the “bottoms” they want, even a cursory analysis of the HGX chart suggests the bottom is a long way down. Not shown on the chart is the third downleg, which will bring the index down to 50 or even lower.

Impossible, you say? Recall the dot-com meltdown, if you will. Take a real company such as Akamai (AKAM) which ran to $348 at the height of the dot-com mania in early 2000. It subsequently fell to 56 cents in October 2003. If the housing sector continues to build unwanted inventory and dumps that inventory for losses, why would anyone buy housing stocks? For the land, which is depreciating rapidly? For the book value of deteriorating assets?

I would say fair value of the housing index at the real bottom several years hence will be about 38. Give or take a few points; check back in October 2008 and we’ll see where the index stands at that point.…

New York Sun:

Don’t get relaxed about the housing industry, because it’s going to get much, much worse. That’s the message from Gary Gordon at Annaly Capital Management, a firm which invests in mortgage-backed securities. Mr. Gordon is looking for substantial further declines in housing starts and sales, which will result in a recession beginning in 2007.

He is on the pessimistic side of the Great Housing Debate, which will doubtless be reignited when the figure for September housing starts comes out tomorrow.

The real issue is: How much consumer spending has been funded by rising home prices and how vulnerable is the economy to a fall-off in home values? Bears argue that the consumer has used his home ownership as a piggybank that is now ominously empty. They point out that mortgage equity withdrawals have climbed almost without pause since the early 1990s. Today, these borrowings are plummeting, a development that the folks at economics consultancy ISI call “unprecedented.”Equally without precedent is that existing home prices may actually decline this year.…