Sunday, February 22, 2009

Egypt becomes the focus of Terror

DeepLode wrote sometime ago about the increased sovereign risk for investment in Egypt as a result of perceptions in the region about its involvement in the Gaza war.
Unfortunately today in Cairo a terrorist attack has confirmed that view.
Reports suggest that a bomb was thrown from the Al Hussein Hotel overlooking the square where the bomb exploded.This is very close to the Al Hussein Mosque.
Eye witnesses are saying that the perpetrators were two people donning a face veil (niqab) accompanied by one man.
News wires are reporting that seventeen people were wounded, including 11 French tourists, three Germans and three Egyptians when a bomb went off in the tourist district of Al Hussein, near the popular Khan Al Khalili market in the heart of Cairo at around 7 pm.
A conflicting report by Reuters claims that four people have died.
Let's hope this is not the start of a serious campaign to further de-stabilise the region.

(major source..Daily News Egypt)

Saturday, February 21, 2009

Mrs Clinton goes to Beijing

Pundits on the news wires for the past week or two have been pointing to China’s official manufacturing index and an increase in bank lending as a sure sign that China is on the improve and will lead the global recovery.
DeepLode has been consistent in pointing to the enormous potential of China to recover more quickly than other countries. Its cash reserves are enormous and word coming through contacts in Hong Kong, which DeepLode has mentioned, has been optimistic.
Let’s remember that in January car sales in China topped those in the USA…not difficult at the moment but unthinkable in the very recent past.
And also we need to be aware that Beijing has spent only a little of its huge stimulus package announced late last year.
Banks have responded to the government's demand to lend and have extended a monthly record of 1.2 trillion yuan ($US176 billion) in new loans in January.
And now Mrs Clinton is in Beijing heralding a new era in Chinese-USA co-operation.
The new administration in Washington is (painfully) aware that China is its economic saviour and Mrs Clinton is now swallowing her own presidential campaign message. During her campaign Mrs Clinton, in a letter to Henry Paulson, expressed her concern about “the exposure of our economy to economic developments in countries like China. As we have been running trade and budget deficits, they have been buying our debt and in essence becoming our banker.” Get tough was her message!
And now of course she is in Beijing being very diplomatic…after all how do you go about “being tough” on your country’s banker.China will be the first economy to recover…it has indeed started….and the swing of financial power away from the USA will be in full force.
George W’s legacy will take decades to turn around. The U.S.will retreat to re-build. Its forays into every corner of the Globe and its unregulated excesses in financial experiments are over. And China will be making hay...buying up Australian assets, American debt and extending its oil diplomacy in West Africa and the Middle East.
DeepLode again urges don’t sell those Australian spec miners we follow that have good prospects and close production…They are the diamonds in the recovery.

Wednesday, February 18, 2009


DeepLode thinks that the giant Alcoa is a very smart operator. It has done some highly advantageous deals in Australia eg the energy supply deal with the Victorian Government has been a bonanza for them.
It looks as though they may be on to another good deal in W.A. Having agreed to farm in to a major stake in the Warro tight gas project in Western Australia’s onshore Perth basin in return for funding development of the field you can bet they will be wringing concessions out of the W.A. Government

Alcoa knows the gas is there (at least 5 trillion cubic feet of the stuff) and to energy starved W.A. that's very attractive.But of course being tight gas the trick is to get it out.The Americans are old hands at tight gas extraction the finer details of which escape DeepLode. However DeepLode doesn't need to be an oil engineer to know that the rewards could be substantial.
A beautiful state of the art, specially designed rig has arrived from the States and is now at work on the first well. Any success will have a huge impact on energy exploration and supply in Australia. The action is dominated by Alcoa Australia with 65% of Warro, project leader and private company Latent Petroleum will hold 25% and a little Australian spec. stock will hold 10%.
That spec stock Transerv Australia (ASX: TSV) stands to be seriously re-rated at any scent of success and news will be forthcoming in the very short term. DeepLode is of the opinion that a little holding in TSV could be the way into a major development backed by major keep an eye on this project.

Saturday, February 14, 2009

The Australian Bush Fires

DeepLode lives in Victoria.
The past week has been horrific. All the people who are dead have not yet been found.
Those that have been are lying in morgues away from their loved ones.
Many who have been found are not able to be identified.
Other bodies are still in burnt out houses, cars or lying in gullies or creeks where they ran for cover. Those who survived are in shock...and in the parlance of the denial. And why not be in denial!
Not only has your home gone but also your neighbours and their boisterous children are dead. Your main street is gone...your farm is gone..your cattle are dead...your fences are shops, schools, community centres, sports clubs...all gone.
One woman said to DeepLode .."I am alive but I have lost my life."
The beautiful eucalyptus full of their wonderful cleansing oils were turned on us by a freak of nature , in some situations by distorted fellow citizens, and their cleansing oils became destructive fire balls.. Let us hope recovery is possible and if possible is fast. We have lost much and we all are fighting the battle to survive. Join us if you can.

Thursday, February 12, 2009

China goes exploring in West Africa

Deeplode has noticed that the Chinese Premier is visiting West Africa and has made his first stop Senegal. It seems that Beijing is ignoring the criticism from the West that its diplomacy in West Africa is a drive to secure the natural resources of vulnerable African states.
Ah! is the West innocent of that?
But DeepLode is very interested in the Premier's stop over in Senegal.
Could it be that the fabulous offshore tenement now in the possession of a tiny ASX stock FAR has China's attention.?
And the last few days buying of FAR on the ASX has been very upbeat.
After all the Senegal Government..not long before this visit from the Chinese Premier..has granted all rights over the tenement to FAR and the Hunted has retreated.
Now for a joint venture. Deeplode enjoys following the intrigues of international small spec funding and it seems FAR is on the money.
DeepLode follows the spec buy funds coming through Hong Kong...and no doubt about this one...China has been buying.
Some interesting posts on

easy to join the threads .....just register on line and its free.

Thursday, February 5, 2009


Deeplode had an interesting round of golf yesterday with some visitors from Hong Kong.

Interesting, not because of the golf swings, but because of the swing in mood amongst the visitors from my previous contact with them. They were actually talking about earlier than expected growth in China and a second quarter rebound.

In summary the points they made went like this

• The IMF on Monday suggested that although 8% growth for ’09 was a challenge it was possible.

• Steel prices have been rising since November, up another 200 yuan this week.

• Credit is flowing faster than expected. A major bank (Industrial and Commercial) has approved 252 billion yuan in loans in January for power grid , rail and road projects as well as to businesses and individuals.Deeplode is aware that these figures can be inflated by the lending process but they are still impressive amounts)

• They also pointed out that in their opinion China had nowhere near reached the limit of its stimulus capacity.

• There were large outflows of sovereign funds into off shore joint ventures. (We in Australia are aware of that!!!)

Deeplode has blogged previously in regard to China’s continuing investments in West Africa and in the prospects of FAR in Senegal

Asia has shown in the past that it can confound the experts by recovering quicker than expected driven by political need, opportunism and the sheer weight of population. The second quarter could be a repeat of that capacity to surprise.