Business

Three weeks ago we wondered when Moody's would finally get the Freeport McMoRan joke when, with its stock crashing to unseen lows, it would finally cut investment-grade rated FCX (Baa3) to its rightful place deep in junk territory:

As we noted then "the US copper and gold producer has seen its 5-yr CDS spread trading at implied junk levels for the last six months. Troubles have intensified over the past month and credit spreads now imply a 79% chance of default within the next five years."

Following the post-regulatory-change spike in existing and new home sales, pending home sales disappointed with a mere 0.1% rise MoM (missing expectations of a 0.9% rise). The weakness of the forward-looking indicator of home closings was blamed - as usual - on low inventories but also on "sizable losses in the stock market." The 3.1% YoY sales increase is close to the weakest since November 2014.

Not what New and existing home sales suggest (but more like homebuilder sentiment)

Headlines about "oil production cuts" are the new "Greece is saved" trial balloon.

Following today's dizzying surge in crude oil on speculation by the Russian energy minister that the Saudis have proposed a 5% supply cut, which was subsequently trimmed to merely a statement that a "meeting may be called where a production cut could be discussed" we asked how long until the denial:

What time is the Saudi denial?

— zerohedge (@zerohedge) January 28, 2016

We have consistently been making the contrarian call for a falling silver price and a rising gold to silver ratio for years. This ratio has risen a lot during this time. So are we ready to change our call yet?

Review of Our Call in 2015

Headline hockey continues in the energy complex as earlier confirmation of a pending OPEC meeting possible in February has seen more color added, via Reuters, that Saudi Arabia made a proposal that OPEC members cut production by a maximum of 5%. There remains confusion however as Bloomberg reports simply that Russian energy minister has said they "may discuss it," as opposed to being a specific proposal.

Reuters seems confident that The House of Saud has backed down and prosposed the cut...