Turd Needs A Vacation

Tue, Jul 10, 2012 - 10:54am

It's time for Turd to get away for a little while. Between dealing with the depressed metals, the login/registration issues of TTM and my personal, little band of trolls/stalkers...I'm more than a little worn out. Tomorrow, I'll begin a hiatus that will about 10 days. Though I'll still be posting content each day here at TFMR and at TTM, it just won't be as much.

Before that begins, though, we've got some regular business to attend to. First of all, you've likely seen by now that we have another MFingGlobal on our hands. In a stunning development, $220,000,000 in client, supposedly-segregated funds have once again been "vaporized" and...wouldn't you know it...the custodian of the funds is/was The Morgue. No! Really? I guess if you can steal 700MM from Chicago, you can just as easily steal 200MM from Iowa. What a freaking disaster.


ZeroHedge posted this morning a chart summary which shows some other futures/clearing firms which may soon be in the same boat. IF YOU ARE TRADING, you would be wise to check this post:


Against that happy backdrop, we've got to talk about the "DAG". Recall that DAG is an ETF which is comprised of 25% soybean futures, 25% corn futures, 25% wheat futures and 25% sugar futures. ( https://finance.yahoo.com/q/pr?s=DAG+Profile) When we last discussed it about 4 weeks ago ( https://www.tfmetalsreport.com/blog/3902/not-all-glitters-gold?page=1), it was about $9/share. Look at it now:

Holy cow! Got any other ETFs which have moved UP 40% in the past month? Me, neither. In fact, I don't even own DAG, though I wish I did. I'll give you this, though: Back in early May, I was looking at my RJObrien account and noticed that I had about $300 left in it. I called them up and bought a Nov12 $20 soybean call for 6c ($300 + comm.). I sold that sucker back on Friday for 19c ($950 - comm.) Yippee! Now, I'm waiting for a pullback. I do not think the drought/heat wave is over. In fact, I expect it to get a lot worse later this month and into August. Anyway, as you can see on the charts below, all four components of the DAG have had stellar performance lately. This could become a very dangerous situation.

  1. Input costs could send retail food prices soaring.
  2. Any kind of crop failure in the U.S. would have a catastrophic impact on global food supplies.
  3. Hungry people lead to civil unrest.
  4. Tyrannical despots often start wars when their populations are starving.

(Anyway, this is the kind of shit I worry about all day. Another reason why I need a vacation!)

The metals are higher again today...at least they were the last time I looked...though they are, once again, being capped just above 1600 and near the 50-day MA. The rally of yesterday and early today can once again be written off as "Happy Tuesday" CoT painting by The Cartels. (After the declines of Thursday and Friday, The Cartels are squaring some of their fresh shorts before the CoT survey later today.)

As stated yesterday, the latest CoT has me concerned that JPM will soon attempt to harvest the sell stops that almost certainly exist below $26 in silver. ( https://www.tfmetalsreport.com/blog/3940/lookout) & ( https://www.tfmetalsreport.com/blog/3963/lookout-part-ii) Again, I'm NOT saying that this WILL happen, only that it COULD happen and you must be prepared both mentally AND financially for this.

Also, I've noticed quite a few comments regarding my "Hot and Explosive Summer" thesis. Let's get this straight. I have NOT said:

  • Silver will be at a certain price level by a certain date.
  • That any one, single factor (like new QE) is the basis for this "forecast".

What I HAVE said is this:

  • I expect a hot and explosive summer, particularly in silver.
  • Northern hemisphere summer lasts from June 21 to September 21.
  • I further expect an exciting and powerful autumn.
  • I have no specific price forecast because, IF I am correct and events that I expect to come to pass actually come to pass, even I cannot predict just how high silver may soar.

So there you go. That's all for now. TTM is back up (for now) and subscribers should be able to go there and play yesterday's podcast. I'll be adding another podcast today, right on schedule.

Have a great day.


About the Author

turd [at] tfmetalsreport [dot] com ()


Jul 10, 2012 - 10:58am



Jul 10, 2012 - 10:59am



Enjoy your well deserved vacation TF.

Jul 10, 2012 - 11:00am

can we have one week of UP

for one year now. I think we have had very few weeks that were up. Fundamentals up. but not

silver.....GIVE US A BREAK ...............its depressing

Jul 10, 2012 - 11:03am


I finally see you made the top 10 on the hat tips...congrats

Hoping to learn
Jul 10, 2012 - 11:04am

My LCS has not had many

My LCS has not had many sellers for over a week now, the only thing he has is a bunch of generic rounds he bought a while ago and is asking too much for. He sells his 90 % as fast as it comes in but it has been two weeks since he has had any of that.

KEEP on stack'n

Jul 10, 2012 - 11:05am



According to Michael Lombardi, lead contributor to Profit Confidential, the Bank of International Settlements (BIS) is proposing to reclassify gold bullion as the safest and the highest quality asset for central banks and all other banks around the world: Tier 1 capital.

Jul 10, 2012 - 11:06am


Time to get away Mr Ferguson. Forget this stuff if you can, and have a great time.

Jul 10, 2012 - 11:08am

Enjoy the hiatus

Thanks for everything and I hope you find the peace and relaxation you need to recharge your batteries going forward.

Jul 10, 2012 - 11:08am

Lease Rates

And I have to talk about this for a moment.

Ever since I highlighted the obvious connection between plunging lease rates and, later, plunging paper price, I get emails every time there's a downtick in rates.


Several times in the past few months, the kitco lease rate charts have shown steep, one-day declines. This always seems to send some folks into a panic and it happened again late last week.

I have consistently maintained that these one-day anomalies are just that...anomalies. Data entry errors. Nothing nefarious. No cover up. Just bad data that is subsequently corrected. (Look, what reason do I have to stick up for Kitco or The Cartels? None! This is simply the most logical explanation.)

As you can see below, the latest charts show NO BIG DROP in lease rates and the "data errors" from last week have been corrected. No reason to panic. I check the lease rates almost daily. When I get worried, then YOU should get worried. Until then, please try to relax whenever you see strange moves in lease rates.

Jul 10, 2012 - 11:09am

Mr. T.F.

It is always good to take the family on a vacation and get away from the pressures of business. The current miners are just not tradable and it feels great to be out of the market and waiting. So, while you are licking your wounds over all the trolls , remember that many on this site have pulled big fiat out of their accounts months ago and have "SAVED" thousands of investment dollars because of your insights (myself included). Thanks for your input . jmo

Jul 10, 2012 - 11:10am

Cheers Turd. Don't take shit

Cheers Turd. Don't take shit too seriously. It'll make you old before your time.

Loud Noises
Jul 10, 2012 - 11:14am

Ready either way

If we get slammed down through 26 I have a plan for that... if we don't, then my steady stacking stays on track. Its fine with me either way. I feel for anyone that would be forced into selling now but make sure you list that TV, coffee table or whatever else on Craigslist before you get forced to capitulate at these levels. Remember it is always darkest before dawn. This is the right side of the biggest trade in my lifetime.

Turd, you seem like a rather enlightened guy but just as a matter of vocal support, don't let the haters/stalkers/etc get to you. Your work is overwhelmingly positive in nature and that's why I'm always back here reading. Not always posting, but always reading. Not to mention clicking on ads and feeding your Turds when possible. surprise

What you are doing is good and valuable and I hope you always feel that deep down.

I'm donating today to back up my words. yes

Jul 10, 2012 - 11:21am

I feel you man

WE all need a vacation from this crap! It's like a never ending drama, did I mention I hate drama :(.

Enjoy, Turd and don't drink to much! Cheers!!

Moderator Jane
Jul 10, 2012 - 11:28am

Turd Talks Metals Update

Just a heads up...we're going to be switching the management of Turd Talks Metals to be "in-house." As we make the transition from the last developer we'll be making some major changes/adjustments to the site, starting now. It may take a few days (at least) to before the dust completely settles. Apologies for any inconvenience.

Dagney Taggart
Jul 10, 2012 - 11:31am

10 Days, huh?

Turd, since you are a shill (/sarc) now I know how long to sit in the bunker while the zombie sheep destroy each other.

Enjoy your Blythe-romp in ..... Venezuela was it?

Jul 10, 2012 - 11:34am

Take a break, Turd!

The Mods will keep us in line. The trolls don't rattles us much anymore. We have plenty of vociferous and loquacious members to challenge them so that our new PM colleagues keep their heads on straight.

Jul 10, 2012 - 11:35am


For what possible reason would you admonish him "don't drink to (sp) much?"

Jul 10, 2012 - 11:38am

Get out in the Fresh Air Mr. F!!!

I only digest a small portion of what you and others in the "know", deal with daily. It can wear on ya, that's for sure.

The fact that it has been getting to ya means, you are HUMAN! yay!

Hey, bring the whole fam damily up here and eat some cheap lobster!! :)

Moderator Jane
Jul 10, 2012 - 11:40am

Important Note for New Users on Commenting

Just a note for new users who want to comment - all new users are set to moderation first. When you've contributed a few good comments your account will be set to full access.

FYI: We just adjusted the user "permissions" to enable a new account type, and in the process some new users may not have had permission to comment at all. Apologies. This should be fixed now...but if you are still having problems, please be patient. We need to take care of the Turd Talks Metals site first so it may be a day or two before we can troubleshoot your comment issue. 

Jul 10, 2012 - 11:44am


That's what my mom always says to me, when I go on vacation :)

Jul 10, 2012 - 11:48am



Well, Endeavour Silver just came out with preliminary figures for Q2 2012. Here are there STATS:

Silver production was up 22% to 1,040,026 ounces (oz) and gold production was up 59% to 7,695 oz compared to the Second Quarter, 2011. Revenues were up 11% to US$40.4 million due to the higher metal production even though metal prices were lower in Q2, 2012 compared to Q2, 2011.
Endeavour Silver Production Highlights of Second Quarter 2012 (Compared to Second Quarter 2011)

  • Silver production increased 22% to 1,040,026 oz
  • Gold production rose 59% to 7,695 oz
  • Silver and equivalents production escalated 31% to 1.46 million oz (at a 55:1 silver: gold ratio)
  • Revenues jumped 11% to $40.4 million on 1,075,000 silver oz sold and 5,650 gold oz sold
  • Realized silver price fell 22% to $29.21 per oz sold (close to the average spot price for Q2/12)
  • Realized gold price rose 5% to $1,599 per oz sold (close to the average spot price for Q2/12)
  • Metal held in inventory at quarter-end included 896,501 oz silver and 6,124 oz gold


Endeavour Silver will have their complete financial results out by AUG 7th. However, we can already see the damage already. Even though silver production increased 22% and gold 59%, Revenues only increased 11%. This was due to falling silver and gold prices. Endeavour Silver got 22% less for their silver in the second quarter.

Second quarter profit margins are going to be slashed due to elevated costs and declining prices paid for gold and silver. It will be interesting to see what Endeavour Silver's Net Income will be. If they produced 22% more silver, that means a similar increase in cost per tonne. I would imagine costs will increase 20%+, while revenues only increase 11%.

Here are Endeavour Silver's changes in figures from Q1 2012 and Q2 2011:


Silver Production = 1,072,491 oz

Gold = 6,321 oz

Revenue = $49 million

Net Income = 19.8 million (40% margin)


Silver Production = 850,476 oz

Gold = 4,831 oz

Revenue = $36.4 million

Net Income = 17 million (46.7% margin)


Here we can see that during the second quarter of 2011, the NET INCOME MARGIN was higher than in the first quarter of 2012.....with 22% less silver produced. Here are the different average prices for silver from each quarter:



Endeavour Silver got $8.00+ less an ounce for silver this quarter compared to the same quarter in 2011. I would imagine their NET INCOME will more than likely be 25-30% of their REVENUES. Mining companies such as U.S. Silver & Revett Minerals will more than likely see FLAT or even losses in this quarter.




Dr G
Jul 10, 2012 - 11:49am

Congrats on the time off,

Congrats on the time off, Turd. You deserve it. I just returned from a similar vacation and it was wonderful.

It would serve everybody here well to take a vacation as well. If you can't physically go someplace, then at least log off for a couple of days. Don't read KWN or ZH or any other sites. Clear your mind. You won't miss anything. It's the doldrums. :)

El Gordo
Jul 10, 2012 - 11:49am

Have a nice vacation, but

don't forget about all us Sheeple down here sitting on "idle" like those diesel trucks at a truck stop, just waiting for you to return, line us all up, and march us off into the abyss. You might at least leave a not behind telling us when to eat, when to sleep, etc. until your return.

Jul 10, 2012 - 11:54am

sold some DAG to get some dry powder for AGQ

during the next beat-down. Bring it on.

avg cost of DAG $7.85

Jul 10, 2012 - 11:55am

Summer Doldrums Continue.

June and July historically have been the two slowest months in the calendar year for the PM's, with most of August following right along. Sell in May and go away until September is still the operative 'modus operandi.'

September and October have always been the two 'big happenings' months of the year, with the five largest stock crashes happening in these two months.

I still maintain that excitement must be contained until gold breaks $1,710/oz and silver clears $33.10/oz then breaks $34.50/oz. Until these levels are surpassed, both will be range bound in their current trading patterns, as any lower prices have major buying support levels and any higher valuations are capped by the EE.

Thank you once again TF, for all that you do here. Relax, refresh and enjoy your much deserved holidays.

I Run Bartertown
Jul 10, 2012 - 11:57am

Enjoy the break!

Good post. Kinda reminds me what got me tuned into the financial and economic news so much in the first place. As an Early Warning System for a real SHTF scenario...not just an ugly spreadsheet 'catastrophe'. The grain situation could impact a lot of things.

Dagney Taggart
Jul 10, 2012 - 12:07pm


Wow! Thanks for pointing that out.

The gulch's message rings apparently.

Jul 10, 2012 - 12:10pm

Have a Nice

Enjoy the vacation. Take the gun along and shoot SOMETHING, anything - it will make you feel much better.

Jul 10, 2012 - 12:18pm

Gold Manipulated like LIBOR

Have a good break Mr. Turd F.


Was Gold Manipulated Like Libor Rates?

"Gold may have been manipulated like the London interbank rate or Libor over a long time frame, Ned Naylor-Leyland, investment director at Cheviot, told CNBC.

The scandal surrounding the fixing of the Libor has opened markets up to "more scrutiny and more investigation," Naylor-Leyland said.

He expects to see revelations over the next few months that the price of gold (Exchange:XAU=) was also manipulated because "gold and silver reflect the true value of money the same way interest rates do."

"It is effectively an intervention in two ways; one would be the fact that for central banks, gold and silver going up doesn't make their currency look any good, and secondly a number of the big commercial banks have very large short positions which they like to manage and make easy money from," he said.

A formal investigation into the manipulation of silver has been going on for two years in the U.S. "Although there is a lot of evidence that it is taking place, nothing has come out of the investigation yet," Naylor-Leyland said."


Jul 10, 2012 - 12:19pm

Times They are a-Changin.

Hang in there Turd. A vacation is much deserved. As you have rightly said - we all need to be patient. 

I believe that the metals will eventually find proper value. [The natural laws of value will prevail]. I really don't worry too much about these daily/weekly price fluctuations. My strategy is steady accumulation of ounces. In the end, when "real value" is found it will be something like a few ounces of Gold for a small home (or something similar). The fiat valuation per ounce will be inconsequential. The times they are a-Changin. And when they do - those folks playing in paper will wish they had ounces. [It's not a time to gamble your ounces in hopes of increasing them, IMO].

Glad to see Shimshock Group is looking after TTM from here on out. smiley

Bob Dylan - Times They are a-Changin
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