Stocks mentioned:

Date                                                                             Current

Added                          Security                                    Cost                 Price                Return

May 2, 2007                General Electric                        37.31               38.24               +2.49

May 2, 2007                Barrick Gold                            29.58               29.75               +0.57

May 15, 2007              Pinetree Capital                        12.59               9.387               -25.41

May 25, 2007              Kim Eng Securities                   0.524               0.769               +46.91

May 25, 2007              KGI Securities                          0.045               0.060               +34.75

May 30, 2007              Southern Copper Corp.            86.88               94.61               +8.90

May 31, 2007              Bangkok Bank                         3.461               3.645               +5.32

May 31, 2007              Rojana Industries                      0.413               0.448               +8.49

May 31, 2007              Phatra Securities                       1.237               1.344               +8.62

June 4, 2007                Jinshan Mines                           2.080               1.881               -9.57

June 11, 2007              China Green Holdings               0.91                 0.925               +1.65

June 14, 2007              Uranium One                            13.77               13.449             -2.33

June 19, 2007              Silver Standard             37.31               35.74               -4.21

June 20, 2007              Taiwan Fund                            19.55               19.78               +1.18

This is a service provided to you the reader about the stocks I have mentioned in my blog and simply to track their performance over time.  I feel that if I mention an individual stock and add it to my portfolio I should track the performance. 

News:

Communications from The Loose Cannon are intended solely for informational purposes. Statements made by The Loose Cannon should not be construed as an endorsement by The Loose Cannon, either expressed or implied. The Loose Cannon is not responsible for typographic errors or other inaccuracies in the content. We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.

If anyone can provide me with 12/31/06 historical prices it would be greatly appreciated.

                                    6/22/2007                    6/15/2007                    Change

DJIA                            13,360.26                    13,639.48                    -2.05%

Euro Rate                     1.34                             1.34                             +0.24%

Yen Rate                      123.90                         123.41                         +0.39%

Brent spot price            68.89                           71.60                           -3.78%

Gold spot price             653.70                         654.50                         -0.12%

Silver spot price            13.03                           13.19                           -1.21%

Dow in Euros               9,963.28                      10,196.22                    -2.28%

Dow in Yen                  1,655,269.41               1,683248.23                -1.66%

Dow/Gold ratio            20.44                           20.84                           -1.93%

Dow/Oil ratio               193.94                         190.50                         +1.81%

Gold/Silver ratio           50.17                           49.62                           +1.10%

Explanations:

Dow/Gold – This number reflects how many units of the Dow an investor may buy with one ounce of Gold.  For further information, search for a 100 year chart of the Dow/Gold ratio.  The chart reflects period of inflation and deflation.

Dow/Oil – A lesser known number but like the Dow/Gold, it reflects how many units of the Dow a barrel of oil can buy.

Gold/Silver – This is used more often by precious metals traders looking to determine which of the two major precious metals are undervalued relative to each other.

Dow in Euros – This is how European investors see our market index and the returns they are getting on an investment in the Dow Jones Industrial Average. 

Dow in Yen – This is how Japanese investors see our market and the returns they receive on an investment in the Dow Jones Industrial Average.

If you would like to see any other averages or information just send an email and I will do my best.

Communications from The Loose Cannon are intended solely for informational purposes. Statements made by The Loose Cannon should not be construed as an endorsement by The Loose Cannon, either expressed or implied. The Loose Cannon is not responsible for typographic errors or other inaccuracies in the content. We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.

Yesterday we sent up a black swan alert for an outlier event that would shake the markets.  These are the reasons why we made that call:

In Asia, China is growing faster than expected and the Shanghai A share index is close to retesting its all-time high.  Ordinary investors are showing no fear of government policy.

The Japanese Yen has been dropping which makes the carry trade and Japanese exports more attractive.  The falling Yen is right now the only thing propping up the dollar.

Thailand and Taiwan, historically known as Asia's laggard markets have risen sharply recently.  The SET Index, in particular, has risen to its long term downtrend line. 

New Zealand recently surprised with an interest rate increase as did South Africa.  Sweden raised rates and delivered a hawkish forecast as well.

We have a reverse head and shoulders pattern with respect to WTI spot prices which suggests a test of last summers high of around $75-76 per barrel. 

The US has pretty much recovered from its recent selloff and the NASDAQ has made new 1 year highs.

The housing market continues to show substantial weakness despite being in its strongest period of the year.

The 10-year and 30-year Treasuries are shooting upward.  This was what tipped us off as the bond market suddenly rose on the back of weak data.  That could only mean forced selling from a hedge fund in trouble.  We later learned that two hedge funds from Bear Stearns, one levered 10x, were in trouble. 

Brookstreet Securities has been told by the NASD that they cannot accept buy orders and could only sell securities.  As of yesterday they were in capital violation.

Both the Bear Stearns and Brookstreet problems were related to CDO's who a couple of years ago were pushed to investors as offering a risk-free investment grade product that could make 10-15% per year. 

Corporate profits are slowing and making it more difficult to maintain the high PE levels.  Instead of announcing that corporation will miss quarterly earnings, companies prefer to guide analysts' estimates lower then come in ahead of the lowered estimate.

Despite all of this, we are told that everything is ok.  This is the goldilocks scenario.  At the beginning of the year we were worried about an economic slowdown and when the Federal Reserve will cut rates.  Now everyone seems to think that the economy will be stronger in the second half and we may have to worry about higher rates if inflation does not subside. 

The problem is that there was no adjustment period.  It may be that increased Yen carry trade activity and SWF's being put to work in equity markets worldwide are causing the buoyant activity and we are a long-term bull for that reason.  Increasing global liquidity is causing the markets to rise.  But when nobody feels pain it ensures that the eventual pain will be greater and more widespread than anticipated.

We see a black swan on the horizon coming towards us.  When it arrives, we do not know.  Initially I thought it would be 2009 but she may decide to land much, much sooner.

Sources:  Bloomberg, Reuters

Communications from The Loose Cannon are intended solely for informational purposes. Statements made by The Loose Cannon should not be construed as an endorsement by The Loose Cannon, either expressed or implied. The Loose Cannon is not responsible for typographic errors or other inaccuracies in the content. We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.

Taiwan is heading for a tumultuous period ahead.  The DPP and KMT are prepared to go head to head once again next year for the right to follow current president Chen Shui-bian.  Over the past 4 years Chen's reign has been dogged by allegations of corruption in which family members have been found guilty of embezzlement and Chen's wife is currently on trial.  In fact, earlier this year when Chen started his anti-China rhetoric forcing Taiwanese businesses to remove the word China from their names it was merely an attempt to steer the press away from the constant coverage of his wife's embezzlement trial. 

Currently, Chen has tabbed Frank Hseih as his heir apparent and he will face KMT nominee Ma Ying-jeou in an election next year. 

The DPP has spent the past few months attempting to remake itself into a pro-China party with similar views to KMT. 

The business community has largely become despondent.  Firms are delisting in Taiwan and relisting in Hong Kong to avoid the restrictions on Chinese investment in Taiwan.  Taiwanese firms remaining in Taiwan cannot wait for the election to arrive as they believe that a change is in order.

Valuations reflect the depressed nature of the business community and a lack of local investor participation.  Foreigners have been buying the market ahead of the election hoping for a change in leadership to a more pro-business government.

Most Taiwanese firms do not have liquid ADR programs so an investors' most liquid bet is to play either the iShares or the closed ended Taiwan Fund.  Our preference is for the closed ended Taiwan Fund currently selling for a 10% discount to the market.  The composition of the portfolio is more diversified than the iShares in which TSMC and Hon Hai counts for more than 20% of the total portfolio. 

I am adding the Taiwan Fund to my portfolio with a target price placed $0.01 above the NAV as I expect the discount to close sometime before the election. 

An interesting play to mirror the iShares fund would be to purchase your allotment of the Taiwan Fund and then buy TSMC ADR's up to the level held in the iShares Fund.  It is a rough way of replicating the portfolio while playing the discount at the same time.

One final note, with the recent sharp rise in the Taiwan and Thailand stock markets we are going on a black swan alert as it appears as though the chances for a disruptive external event are high.  Within Asian markets, Japan tends to lead regional rallies with Thailand and Taiwan being laggards.  When they rally it is usually a sign that a top is being put in place.  No telling where or when the black swan will occur as they never give warnings but as an investor you should be on guard.

Communications from The Loose Cannon are intended solely for informational purposes. Statements made by The Loose Cannon should not be construed as an endorsement by The Loose Cannon, either expressed or implied. The Loose Cannon is not responsible for typographic errors or other inaccuracies in the content. We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.

History:

Silver Standard (SSRI) is one of the largest silver mining companies in the world with the largest in-ground silver resources of any publicly traded company.  Currently celebrating its 60^th year of being publicly traded, SSRI has 5 principal mines with 11 projects in the pipeline.

Financials:

The first quarter of 2007 ended with a slight loss per share and $270 million dollars of working capital with no long-term debt.  Current production is unhedged to silver spot prices.

Operations:

Silver Standard's projects are located in Peru, Argentina, Chile, Australia, Mexico, Canada, and the United States.  All stable pro-mining countries with low political risk.  A brief description of SSRI's major mining properties is listed below.

The Pirquitas, Argentina property is slated to begin production in 2008 with $31.5 million dollars already spent in a capital budget of $146 million.  An updated feasibility study is underway to reassess costs and expected revenues.  In 2005, cash operating costs were estimated at $2.42/oz silver with proven reserves of 20.5 million ounces.

San Luis, Peru – Drilling continues on the Ayelen Vein with the identification of a high-grade gold-silver mineralization over 550 meters in length and 200 meters in depth.  The vein remains open to strike and depth.  During the 1stQ of 2007 SSRI became an operator and elected to increase its interest to 70% by completing a feasibility study later this year.

Pitarrilla, Mexico – extension drilling in the Breccia Ridge Zone allowed SSRI to report a 20% increase in silver reserves and a significant lead and zinc resource.  Drilling is ongoing to extend and verify the resource as it remains open along strike and depth.  The Board of Directors approved a $12.5 million dollar program when the appropriate permits are in place.  Prefeasibility study is expected to be completed within the next few months. 

I am going to add Silver Standard to my portfolio as my exposure to the silver market.  Production will be commencing soon and value should be realized given rising global demand for commodities.

Source:  Silver Standard 2006 Annual Report and 2007 1^st Quarter Interim Financial Report

The author owns shares of Silver Standard

Communications from The Loose Cannon are intended solely for informational purposes. Statements made by The Loose Cannon should not be construed as an endorsement by The Loose Cannon, either expressed or implied. The Loose Cannon is not responsible for typographic errors or other inaccuracies in the content. We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.

When people turn on the television or read in the paper about the falling dollar they believe that this is good for our economy as it makes our exports cheaper and imports more expensive.  Those that read closer understand that the 80 level on the US Dollar Index is the preverbal line in the sand and when this line is crossed the dollars role as the world's reserve currency will end. 

But has anyone stopped to ask what comprises the US Dollar Index (USDI)?  The USDI is a trade weighted geometric average of the 6 currencies listed below:

Currency                      Weight

Euro                             57.6%

Japanese Yen               13.6%

British Pound                11.9%

Canadian Dollar            9.1%

Swedish Krona 4.2%

Swiss Franc                  3.6%

The USDI is calculated by measuring the dollars relative value to March 1973 with a base of 100.

Around the world the dollar is rapidly depreciating against non-pegged currencies in Thailand, Brazil, Russia, and China or countries are struggling to hold their dollar peg.  Some countries with dollar pegs have had to resort to money printing in order to maintain the peg and sop up the excess inflows.  The problem with money printing is that it fuels inflation causing prices to rise and a loss of purchasing power when compared to the currency to which they are pegged.  If inflation becomes difficult to manage they may choose to either drop the peg altogether or shift the peg to a basket of currencies.

If we go back and review the currency rates of the Euro and Japanese Yen published in US Financial Data we will notice that the Yen and Euro have been moving in opposite paths.  In fact the movement in the Yen has more than offset the movement in the Euro on a percentage basis giving us the reason why the USDI has not moved below 80.

What we see is that the rise and fall in the USDI has been more of a factor of the index composition rather than the dollars actions worldwide.  If the index would have been more inclusive of countries around the world with whom the United States trades we would see the value of the dollar falling globally.

We can surmise that the demise of the dollar will be more a function of its performance against the Euro rather than its performance globally.  As long as the Euro rate is defended we will not see the line in the sand crossed. 

Source:  US Financial Data, U.S. Dollar Index USDX Futures and Options, New York Board of Trade presentation
Communications from The Loose Cannon are intended solely for informational purposes. Statements made by The Loose Cannon should not be construed as an endorsement by The Loose Cannon, either expressed or implied. The Loose Cannon is not responsible for typographic errors or other inaccuracies in the content. We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.

Date                                                                             Current

Added                          Security                                    Cost                 Price                Return

May 2, 2007                General Electric                        37.31               38.12               +2.17

May 2, 2007                Barrick Gold                            29.58               29.14               -1.49

May 15, 2007              Pinetree Capital                        12.59               9.802               -22.15

May 25, 2007              Kim Eng Securities                   0.524               0.678               +29.47

May 25, 2007              KGI Securities                          0.045               0.053               +19.24

May 30, 2007              Southern Copper Corp.            86.88               93.52               +7.64

May 31, 2007              Bangkok Bank                         3.461               3.512               +1.49

May 31, 2007              Rojana Industries                      0.413               0.422               +2.24

May 31, 2007              Phatra Securities                       1.237               1.271               +2.74

June 4, 2007                Jinshan Mines                           2.080               1.871               -10.05

June 11, 2007              China Green Holdings               0.91                 0.91                 0.00

June 14, 2007              Uranium One                            13.77               13.80               +0.22

This is a service provided to you the reader about the stocks I have mentioned in my blog and simply to track their performance over time.  I feel that if I mention an individual stock and add it to my portfolio I should track the performance. 

News:

SXR Uranium has changes its name to Uranium One.

Communications from The Loose Cannon are intended solely for informational purposes. Statements made by The Loose Cannon should not be construed as an endorsement by The Loose Cannon, either expressed or implied. The Loose Cannon is not responsible for typographic errors or other inaccuracies in the content. We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.

If anyone can provide me with 12/31/06 historical prices it would be greatly appreciated.

                                    6/15/2007                    6/8/2007                      Change

DJIA                            13,639.48                    13,424.39                    +1.60%

Euro Rate                     1.34                             1.34                             -0.61%

Yen Rate                      123.41                         121.62                         +1.47%

Brent spot price            71.60                           69.49                           +3.04%

Gold spot price             654.50                         645.60                         +1.38%

Silver spot price            13.19                           12.99                           +1.54%

Dow in Euros               10,196.22                    10,050.45                    +1.45%

Dow in Yen                  1,683,248.23               1,632,674.31               +3.10%

Dow/Gold ratio            20.84                           20.79                           +0.22%

Dow/Oil ratio               190.50                         193.18                         -1.39%

Gold/Silver ratio           49.62                           49.70                           -0.16%

Explanations:

Dow/Gold – This number reflects how many units of the Dow an investor may buy with one ounce of Gold.  For further information, search for a 100 year chart of the Dow/Gold ratio.  The chart reflects period of inflation and deflation.

Dow/Oil – A lesser known number but like the Dow/Gold, it reflects how many units of the Dow a barrel of oil can buy.

Gold/Silver – This is used more often by precious metals traders looking to determine which of the two major precious metals are undervalued relative to each other.

Dow in Euros – This is how European investors see our market index and the returns they are getting on an investment in the Dow Jones Industrial Average. 

Dow in Yen – This is how Japanese investors see our market and the returns they receive on an investment in the Dow Jones Industrial Average.

If you would like to see any other averages or information just send an email and I will do my best.

We mentioned a few days ago that it would not be surprising if a bond fund was blowing as the reason behind the sharp rise in bond yields.  Yesterday, Bear Stearns revealed that it is accepting bids for $3.8 billion dollars worth of mortgage securities from the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Fund, down 20% so far this year.  The fund, which has approximately $600 million in assets, was obviously very highly leveraged and the sell off in mortgage backed securities has taken its toll.

Last month, UBS AG closed down its Dillon Read Capital Management LLC hedge fund unit as well due to large losses in the mortgage bond market.

While these two events may not be directly related to the US Treasury bond market, as we will find out shortly in an article in process, mortgage backed securities have become increasingly complex over the past few years.  The creation of securities such as CDO's spread risk over the entire bond market rather than just one sector.  In the article I will detail how securities such as CDO's are created and the various risks they entail.

The fact that Bear Stearns is accepting bids rather than attempt to sell these securities in private transactions shows how liquidity has dried up in various sectors of the bond market. 

The US Department of Labor released the May PPI report yesterday showing a 0.9% rise in PPI for May 2007 with the core rate rising 0.2%.  June CPI was up 0.7% in May as the core rate was up 0.1%.

It is expected that the June PPI and CPI reports will show a drop as gasoline prices are trending lower as the summer driving season has started.

It appears as though the sharp drop we experienced earlier in the week will be known as the summer correction.  Technically, we are bouncing along the top of the trend channel which always worries me.  I prefer to be somewhere in the middle to bottom remembering the old adage 'buy low, sell high.' 

A number of my indicators are still bullish which means we should see further upside.  As long as liquidity is increasing at a strong clip and corporations are flush with cash any significant downside is limited.   If you have a stock in your portfolio and it is showing weakness pay a little more attention to it. 

The end of quarter earnings games have started.  What happens in the end of quarter game is Wall Street will lower earnings estimates so that companies can more easily beat the bar rather than announce that they will miss estimates.  Last quarter earnings growth slowed to 6% from double digit rates the previous quarter but you can see that a number of companies who had their earnings estimate trimmed significantly in the final weeks of the quarter beat or matched estimates in the quarter.  If you have access to Bloomberg where you can see the change in earnings estimates you can see this in action.  The purpose of this exercise is to keep the bad news to a minimum so as not to affect the confidence level of the US citizens.

Source:  Bloomberg, US Department of Labor PPI and CPI reports

Communications from The Loose Cannon are intended solely for informational purposes. Statements made by The Loose Cannon should not be construed as an endorsement by The Loose Cannon, either expressed or implied. The Loose Cannon is not responsible for typographic errors or other inaccuracies in the content. We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.

History:

Sxr Uranium (SXR) was formed in December 2005 in a merger of Aflease Gold & Uranium and Southern Cross Resources. 

In July of 2006 (SXR) purchased the assets of US Energy Assets.

On February 12, 2007 SXR entered into a merger agreement with UrAsia Energy Ltd. giving SXR exposure to large ISL projects based in Kazakhstan.

On June 4^th, SXR acquired Energy Metals Corp. (EMU) for stock at a ratio of 1shr EMU = 1.15 SXR.

When the acquisition of EMU is complete, the combined company will have a market value of $7.8 billion with $678 million in cash (includes in-the-money warrants and options) with a completely unhedged book.  SXR will have production and asset exposure to the 5 largest Uranium jurisdictions, Kazakhstan, South Africa, Australia, Canada, and the United States.

Key assets acquired in the EMU transaction:

1.  6 US properties with an estimated production of 8-10 million lbs. by 2013. 

2.  The Hobson ISR processing facility which is being expanded to 1 million lbs/year.

3.  EMU's share of their uranium holdings indicates 196 million lbs. of Uranium. 

4.  Ownership of 2 mills to process production. 

Selected property review:

Dominion (South Africa) – A Certificate of Registration was issued in February 2007 allowing the mine to proceed with operations.  The processing of ore has started with delivery slated for the second quarter of 2007.  Production is expected to rise to 3.8 million lbs. by 2011.  Cash operating costs are estimated to be $14.5/lb according to the Phase 1 feasibility study with a 30 year project life.  Probable and proven reserves are 31.3 million lbs. with indicated reserves of 34.8 million, and inferred resources of 199.2 million lbs.

Honeymoon (Australia) – Design work is underway and infrastructure is proceeding with an ISL project in South Australia.  This will be the 2^nd operating mine for SXR in 2008 with 880,000 lbs. of Uranium processed per year.  The property has indicated reserves of 12.9 million lbs. and inferred reserves of 7.9 million lbs.  Average operating costs over the life of the mine are estimated to be $14.13/lb with expected capital costs of $40 million.

Betpak Dala JV (Kazakhstan) – 70% ownership and all loans have been repaid ahead of schedule ($62.6 million as of 12/31/06.)

Akdala (Betpak JV) – World's largest ISL mine in the world with an estimated cash cost of $12/lb. and 1st quarter production of 497,000 lbs. of Uranium.  17.4 million lbs of proven and probable reserves with 10.9 million ounces inferred.  SXR is authorized to market 100% of production on behalf of the JV. 

South Inkai (Betpak JV) – Cash costs of $10/lb with a 25 year project life.  7.3 million lbs. in production by 2010. Production should start at the end of 2007.  Construction is currently behind schedule but not off target for a 4^th quarter start.  Exploration and production drilling are on schedule.  SXR is authorized to market 100% of production on behalf of the JV.

Kharassan – SXR holds a 30% ownership stake in the Kyzylkum JV located in Kyrgyzstan.   Production is slated to start at the end of 2007.  Drilling and construction are behind schedule but not off target for a 4^th quarter start.  4.1 million Indicated and 22.6 million inferred resources.  The mine is slated to start production in the 4^th quarter of 2007 with expansion to 2.3 million pounds of production by 2011.  A cash cost of $10.5 per pound is expected with the project having a 30 year life.

Other Properties:

Pursuant to the original merger of Aflease and Southern Cross, SXR retained a 68% ownership of Aflease Gold. 

SXR owns 100% of the Modder East mine gold mine in South Africa.  Surface construction is complete with production beginning in the 3^rd Q of 2009.  It is estimated that the mine will produce 110,000/oz per year at a cash cost of $217 oz. 

Aflease also owns 7 exploration licenses in Kyrgyzstan.

SXR is a difficult company to value because there are no revenues.  However, they are ahead of most juniors in that they have acquired multiple large deposits that will be profitable even if the Uranium price drops because of ISL mining's low cost structure.  Current production should provide more than enough cash flow to fund the rest of SXR's project pipeline. Needless to say, SXR is about to join the ranks of major Uranium producers and I am going to add SXR to my portfolio.

Sources:  Uranium1.com

Communications from The Loose Cannon are intended solely for informational purposes. Statements made by The Loose Cannon should not be construed as an endorsement by The Loose Cannon, either expressed or implied. The Loose Cannon is not responsible for typographic errors or other inaccuracies in the content. We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "AS IS" without any warranty of any kind. Past results are not indicative of future results.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN THE STOCK, BOND, AND DERIVATIVE MARKETS. WHEN CONSIDERING ANY TYPE OF INVESTMENT, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individuals risk profile.