Morning Mumble: The Greek Malady (poor I know), with political guff in the European Disunion and Satan's Schilling + Wolf Minerals and GKP (Gulf Keystone), the former muppet stock?

Good Morning, 

Greece come out of round one without even a bruise winning the poker tournament. The EU couldn't even afford to call their bluff and go to the wire the EU (Germany) knew what was happening. The FT Greece and Eurozone agree bailout extension Peter Spiegel in Brussels. 

The markets are now realising the agenda of Greece but aren't acknowledging the risks, save for the euro being trashed, off near 5% since the debacle began to unwind. When certain EU countries appear weighted to benefit by any austerity within the Eurozone, the underdogs will become bitter. The EU have added some more fuel to equities by a Chinese type of intervention saving the bondholders, namely themselves. 

Greece have in essence been given a cooling off period, any negotiations were too close to the Greek elections. In at least putting some space between the two events perhaps, although unlikely, just perhaps Greece will yield to the EU demands and lose some steam, a possibility but not without giving something in return.

What it does show is the commentators who thought Greece do not have a strong hand were wrong. As mentioned at the time on FTML, Greece have an agenda and that is its own backyard, unlike some of the European Union. With Greece's win yesterday, its wise to consider those risks approaching and the small print of the extension.

With the current Dutch finance minister and eurogroup chairman Jeroen Dijsselbloem, stating “I think tonight was a first step in this process of rebuilding trust. As you know trust leaves quicker than it comes. Tonight was a very important, I think, step in that process.” It’s fair to say the entire process has become disenfranchised from the "EU" collective. Trust? Really...If one needs to establish trust between a union and partnership, its time to leave. 

If Greece feel they have been compelled to take "Satan's Schilling" or not is immaterial. Greece had the money and now common-sense means with political change and blame they’re reviewing the terms and thinking, "what have we done." The problem is, the entire EU, contrary to the assertions by those alleged better informed analysts, is at stake. There may be a common-agenda or policy with the loss of a currency.

Greece's default will ripple through the EU, with those in hardship likely to vote for similar political representatives to broker such deals. Would it be best to forget EU QE and await the outcome of Greece, Spain, Portugal and Italy await the knock on effects? I doubt it, but one might just be throwing good money after bad...

There's some gossip doing the rounds about Wolf Minerals (WLFE). Its certainly not the price of Tungsten APT US$292.5/MTU. Hmmm...The hilarity was the contraction in the oil price with positions requiring to anti up more margin or close on Thursday and Friday, so what happened to the price!?!?! Those cheapskates sold their positions, thank you for making the Christmas card list!

Its suspected Malcy is the cause of the gossip and reviews on Gulf Keystone after his views on iii… 

Short one as it was very busy Friday and Saturday even allowing for Manflu and the like.

Atb Fraser

Morning Mumble: a euro thrown across the bow of Bourgeoisiem, Petra Diamond's (PDL), GEMD + Grocers

Good Morning, 

There shall be a few sore heads in Greece today and Troika's headache is just starting. Fear not, you will not find the in-depth implications or thesis on Greece leaving the Euro here.  The risks are somewhat being ignored, the outcome for the rest of Europe may be more significant than the press and Government's acknowledge. Simply put, if one feels like a kicked dog in the corner, even the most placid of people get up, fight or leave.

You'd expect nothing less to read the risk aware view here. The EU would be wise to gauge whether Greece is part of a trend that is spreading in popularity across Europe. With the increase in extreme views in the UK and across Europe there is something that the EU isn't addressing that is causing discontent. Greece, as the potential bellwether of voters across Europe warning. After all, there's a little bit of extremism in all and it requires groups to create trends for people to jump on the bandwagon and turn the switch on for the moderates. Examples being UKIP, where the other UK parties are adopting moderate attempts at similar policies.

Greece may have been the master of its own destiny and financial distress, now it would appear they are again, BBCAnti-austerity Syriza wins Greek election. The global assessors will ignore why Syriza has won this election (via coalition) and focus on the financial implications for the EU. 

The Greek elections are being misunderstood by the markets. Greece is blamed for the slide in the Euro, oil and commodity prices and not the US inventory levels being the highest in 85 years nor Saudi's views or business as usual. Greece should be viewed as a potential indicator of political fashions and trends. This is likely to have greater implications than any financial damage and benefits the European Disunion. 

The jury for gold appreciation is out for the time being on the Greek elections with the implications in oil already being misunderstood. The flight to safety as Syriza get their feet under the table by renegotiation and face-saving of greater importance than financial prudence. Surely years of pain for a stronger economy over the longer-term is better; we have prime examples of excessive spending under Labour Governments in the UK. A quick perusal of historic UK government borrowing will clarify the position.

It would be wise to revisit EMED's projections before spending all those gains on the final permitting being obtained. With copper catching a cold in Asia with little support for base metals (absence of long speculation) trading at circa $2.46/lbs, EMED's return for investors now needs to be considered appropriately. The long-term view being if they can survive this market and minimise costs now they're likely to go from strength to strength. Cashflow will be welcome but how much of it remains the question. 

As Roger Bade points out this morning the price assumptions in the Technical Report from 2013 (here) might need a few revisions. To quote EMED (Page 9 Tech Report), "A copper spot price assumption of $3.50/lb used in the projects economics analysis compares to relative current market copper prices of $3.70lbs ($8,200/t) and a trailing 5 year average above $3.00/lb.” 

When reading through the technical report to net present value (NPV) if one was to apply a 12.5% discount, the project would be currently losing money at sub $2.50/lbs. Estimates (my own), suggest it would be better to increase to 9m/t p.a. and raise a full $254M, to fund through to larger expansion and reduced costs that "could" be completed by end of year two. The funding would give viability to the long investors and transparency. The relevance of copper has an impact on the secured loan facility that was able to paid in copper subject to the price being above $6,613.86/t, although there's still time for the market to recover it would be wise to acknowledge these risks. Over to the market to be despondent on this…5m/t's is simply not viable in the current market and outlook.

Anglo American (AAL) shareholders have finally seen sense, in fact the whole sector has...can we see some realistic pricing to entice longer-term shareholders into the stock. Over to Credit Suisse with their preferred AAL and RIO (Rio Tinto) for a little review? We hope AAL can find some muppet for their Dawson and Foxleigh mines l. With Q4 results due 28th Jan, we can look forward to something spectacular. 

Petra Diamonds (PDL) have announced what the market knew in terms of prices softening but maintaining a common-sense. It's hoped the dividend will provide some hope for the stock, but this will be unlikely today. No matter what you call it, it’s a revision downwards, over to Awal Bank SA to give it another kicking...with 13.2 million shares needing a home. As a result of PDL, I decided to sell Gem Diamonds (GEMD). 

For those supermarket/grocer investors and the people wishing to expose shorting funds, it would be wise to read the Delhaize Group 2014 revenues and preliminary results. Turnaround stories in grocers are possible as shown by Delhaize Group (Euronext Brussels: DELB) & listed NYSE if you want to play Euro/USD arb. DELB was a prime shorting candidate a 3+ years ago, it's now recovered, with results coming in strong today the longs in the recovery are benefiting. With Europe likely to be the indicator of how grocers recover it would be wise to follow a few including Carrefour. Roble S.A. yet again having a nice coup back in May 2012 (See: EMC Short Sellers) 

Carrefour could just be coming in to play, Les Echoes (The Moulin family owners of Galeries Lafayette increasestake in Carrefour to 9.5%) and the English version, via Reuters. Whether the Moulin family increase their stake further is another question. They say no others have a differing view. 

With most aware of the Igas Energy debacle, Statement re Finance Facility, there's a gossip of some large bets going in! Better late than never...

Atb Fraser

Morning Mumble: QE...the amateur simpletons view & WRN...+++Rio, BLT, Monitise, Fever tree and Euroscepticism.

Good Morning,

Its coming and the bets are on but with the Swiss National Banks (SNB) decisive actions on Friday the market is looking for something a bit more charged. Putin will be praying for a significant cold spell, perhaps even planning a late 2015 re-entry where he can obtain leverage. QE is likely to assist this conversely promoting inflows of investment (where possible). The markets are getting hooked on drama rather than consistent and solid performance (read as also investing in crap!) with common-sense being applied. 

Unlike America where the culture may have ranges (diversity) but similar agendas, the Eurozone does not have this luxury with contrasting voters and more so agendas of protectionism (read as Germany and France albeit not a united front). 

Without pretending nor even attempting to be all things Euro or Macro, it’s looking more and more like an inverted pyramid with Germany propping up the fragile economies of the Eurozone. When considering the outcome, the markets will be cooking on gas again until they're taken off the market welfare assistance (QE). The real risk is the incapable governments utilising excuses to justify their spending rather than address their budgetary needs quicker to re-correct the fundamental issues within their economies.

The sticking point is who will be responsible for each member states debt. Its ironic that in alleged harmony the wealthier members do not want to share the load (read as take the load). So whilst the finer print is muddled through one can't help but wonder if the EU is in for some re-branding, to European Disunion. 

The conflict of interest is disliking all things EU, with yet another tier of bureaucracy where if the costs of the EU were stripped out it would be a long-term form of QE anyway. For every country contributing there's a net benefit to 2 by their membership in the EU, its a wonder its lasted this long. The EU may or may not have a determination of strength in due course if QE does not work. 

The issues of high level unemployment (Circa 10%+*) are unlikely to be improved by the EU's bond purchases as greater focus on the issues within each country are needed. France has yet again (for the third time) asked for an extension to deal with its deficit. The French are notoriously difficult to deal with when they're doing something or not...(yes thought was put into the phrase). So in the absence of economical stimulus with a focused approached its unlikely to be as effective bar a few KPI's  (Key point indicators). These are likely to be superficial living standards and welfare claimants measures (distorted by in work benefits).

In the markets today, we had Worthington Group (WRN) (still suspended pending a prospectus which should have been out by now) update on CPS Energy Resources. The question should be, with the information (surely) to hand why was it not specifically excluded in in the Company's calculation of consolidated assets, profits, sectors or geographic locations announced on the 9th January 2015. After all the deal was announced back in October 2014. 

Is this one for the regulatory team of AIM...even as far as the FCA. The company made no exemption for CPS in their calculation of the net asset value for mining, oil and gas within the announcement on the Friday 09 January, 2015. Today, in the RNS only four areas are now included: property, litigation claims, new economy and emerging markets, yet 13 days previously it includes oil, gas or energy, oops and also mining now! If you hold the stock it would be wise to call an EGM and force disclosure of everything including the prospectus. Actually why bother, if you own this stock don't read on, close the page!

Copper woke up this morning, I suspect with some draw from gold and the dollar weakening. Iron ore minnows were getting a kicking, whereas Rio and BLT shrugged off the obvious and went on an easy trading run. In the absence of traders and pension funds would Rio and BLT be circa 2,500 and 985 pence respectively? Although there’s starting to be a good argument for near bottom of cycle buying that I disagree with. Rio's ramp up and inventory sales support their thesis on expansion, will it continue?!

BLT having further issues with Manganese as Roger Bade pointed out, prices down circa 10%. Over to the Atlas Iron (ASX: AGO) whom had opportunity to get out considerably higher thanks to the DCE (Dalian Commodity Exchange) extension in trading hours. Gold and silver both stabilising and awaiting the next indicators its over to ECB QE. Oil likely to benefit as well with the steady appreciation continuing, appreciating to circa $55/bbl give of take 3% drift between WTI and Brent.

AB Foods (ABF) finally giving in to common-sense with significant selling. Does it really take that long to digest the results? EMC view January 15, 2015, who'd have thought it and time to quote myself: "With little upside on the current SP, it’s wise not to carry profits much past the news. Under review for the short, now January 2015 has arrived." Will a DRIP (Dividend re-investment plan) assist? I doubt it...

Hulme Capital had a few issues this morning with the 'wording', for which having wanted to find out more had some diplomatic clarification from two companies in RNS REM & UKOG after this morning's Dismissal of Adviser REM & UKOG. By sheer coincidence both with a related party associated to both companies, Mr David Lenigas.

Monitise's (MONI) trading update & initiation of strategic review, informs us its up for sale with the price reacting in the right manner. With UK Mail (UKM) coming out the reporting starting blocks 10 days ago Royal Mail (RMG) Nine Months Trading Update had little in the way of surprises and was the long to the news. With little commentary (in fact none) on fuel cost benefits, RMG have missed an opportunity to promote their own stock, improving margins and energy costs reducing. 

Limited time for some, including Tullow (TLW) and Gulf Keystone (GKP) but to my left eye Malcy has saved myself via his blog today. Fever Tree (FEVR) pre-close update come with no surprises from a quality label. FEVR are the Carlsberg of tonics in my view! Having been drinking FEVR tonic for a good time, its about the only additive to gin I can differentiate in taste save for Hendricks Gin and Adnams Copperhouse Gin after one.

Atb Fraser

*Unemployment stats: Greece 25%, Spain 23%, Cyprus 16%, Croatia 16%, Portugal 14%, Italy 13%, Slovakia 12%, Bulgaria 11%, Ireland 10%, Latvia 10%, France 10%....all 17 others sub 10% with an average of circa 10%.