We Told You So Tuesday: DOW will be DOW-N Over Bond Insurer Crisis & Extra Weak Economic Number

10:50 AM UPDATE: YIKES...after opening down -200 points at the bell, and leveling off to down -180, or so...The Batcomputer started going nuts...and raised the alert level, indicating a drop further to the DOW-N -220 to -250 (or -- clears throat -- more level). Watch SFK as an indictor. When it is UP above +5%, or more...start worrying about the DOW being down 220 at that point. So if SKF rises to +6%, or more...you know what is coming next!!! With the scare the bond insurance crisis, and derivatives market has given Wall Street (rightfully so) -- could be a slow boil of many DOW-N -200 points (or more) days this month.

2/5/05 GOLD & DOW ALERT: No gonna be a fun day for gold. Read Friday's prediction on what is going on with gold, today. (See thread on this blog below.)

And you are crazy if you think the DOW isn't about to hit a "rough patch" (as Bush calls it) on the opening bell, over bond insurer crisis and weaker than expected economic numbers. (All we've done since November-December is warn you about February. But you still aren't ready to believe what is about to happen. Because you never heard the phrase, "historic proportions", so you think you know what you can expect.)

2/4/08 ALERT: When SKF (Short Dow Financials) goes UP, the DOW goes DOW-N! (See yesterday's thread below.)

Gonna be a GA-REAT day for SKF! (Price is Right "Loser" Sounder): Whomp, whomp, whomp, whomp...(deflated), Whooooooooooompppppppp.

STAY AWAY FROM GFI & IAG: IAMGOLD (IAG) used to be a good mining stock. It was hit with bad news last week that we brought to your attention, and more bad news today, as it's target is lowered -- today -- most likely based on the news we brought you last week. Gold Fields (GFI) was one of the most recommended at the end of '07. Not anymore based on this kind of news:

This conversation was conducted on February 4th 2008 from . Bellwether Report

Q: What's your professional opinion of Gold Fields Ltd.?

A: We are taking a negative stance on share of Gold Fields Ltd. as we believe the company will experience tough operationally challenges for fiscal 2008.

Q: Why do you take a negative' stance on this stock?

A: One of the biggest issues will be increases to deep level mining risks. As it stands, the company has already announced a 7% decline for its second quarter South African gold production due to health and safety stoppages over the quarter. Adding to this is the rise in the cost of capital expenditures, which will put further pressures on margins. Lastly, the recent power supply shortages that the company has been experiencing as a result of the nations rapidly increasing demand for electric power will surely put a damper on production and profitability for the near future.

Q: What more can you tell us about the Company's current position amid power issues?

A: Currently, Gold Field's power usage has been limited to approximately 90% of its normal power requirement. However, the larger threat is that there is no guarantee that this power level will be sustained. In addition, at current power levels, six of the company's 21 operating shafts will be at risk of closure, seriously putting profitability at risk.

Q: Based on this, what would you tell investors looking to position themselves in this equity?

A: Consequently, we do not advice investing in shares of GFI until we see evidence of improving operationally conditions.


(Strategy Update recommended to pull out of this stock a week ago, or more, based on S. Africa electric problems that affected GFI's production):

When it it time to buy gold, don't buy GFI & IAG.
StrategyUpdate.com for updates, news wires and 24 hours live gold charts.