Wednesday, September 17, 2014

The Broken Silver Parabola

I was right about the silver bubble.

Now looks like another very good risk reward for being short. The "support" at around $18 has been broken. My target to the downside would be and has been marginal cost of mining.

See the latest Pan American Silver investor presentations, for example. Based on the chart above, the production growth despite declining prices, and the mines' cash costs, $10 per ounce sounds about right.

Ackerman: "Strong Dollar Augurs Even Lower Rates"

"the recovery is so weak that even a small upward shift in rates would put the U.S. on the same recessionary track as Europe"

"Judge Approves NII's First-Day Bankruptcy Court Requests" $NIHD

WSJ

"NII said at the time that it would continue negotiating a restructuring with the bondholders up until the deadline, which was this week. Last week, NII announced those discussions hadn't produced an agreement on restructuring. The company has two main groups of creditors, one led by Aurelius Capital Management LP."

"Aurelius Supports NII’s Swift Emergence from Chapter 11" $NIHD

Press release from NIHD bondholder Aurelius

We have taken the lead among bondholders in supporting a plan that would allow the Company to emerge from Chapter 11 swiftly, by deferring until after emergence the resolution (through litigation or settlement) of many inter-creditor disputes. Aurelius was ready last week to enter into a binding agreement to support a plan (the “Reserve Plan”) that would have:
Converted all $4.35 billion of NII bonds into 100% of the reorganized company’s equity (before taking into account the rights offering mentioned below and any management incentive plan).
Allocated that equity among the bondholders in accordance with the absolute-priority rule.
Raised fresh equity through a rights offering. Aurelius offered to backstop $125 million of that rights offering.
Deferred all inter-creditor disputes until after NII emerges from Chapter 11. A portion of the new equity would be placed in reserve and released as each dispute is resolved, whether through litigation or settlement. (Any settlements reached before emergence would be taken into account in the initial distribution of shares at emergence.)

"For RadioShack, a History of Misses" $RSH

NYT

"The big box stores like Best Buy began to capture the bulk of the electronics business. RadioShack remained largely your local stop for electronics gear. The problem was that most of the equipment became cables and ancillary things to make the computers go.

Looking yet again for a new business model, RadioShack seized on mobile. But this merely made RadioShack a pawn in the cellphone wars as it tried to profit from selling a commodity."

"Execs Leave Cash Behind in Bolting RadioShack" $RSH

"Newly departed RadioShack CFO John Feray is far from the first executive to leave lately--and it cost him. Just like it did Troy Risch, RSH's former store-operations executive. He left in April for a job at furniture and appliance store Hhgregg. Both forgoed a $275K retention bonus on top of regular salary and performance pay the company promised if Feray and Risch stuck around until March 2015."

Monday, September 15, 2014