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Feb 26, 2011

Forbes: Investing - It's The Corruption, Stupid

Susan Richards:

Before you invest, look behind those gleaming Russian facades.

While money is fleeing Egypt and the Middle East, the fact that Russia’s economy grew by 4% in 2010 may make certain Western investors salivate. And when you hit Moscow, the opulence of the expense accounts and the sheer panache of the boutique hotels and shopping malls may make life back home feel a tad dog-eared. But before you invest, you must look behind gleaming facades. And it’s not a pretty sight.

Russia’s very own Wikileaks website,, revealed recently that, at the annual meeting between Prime Minister Putin and Finland’s President, Tarja Hallonen, Putin seemed surprisingly "frustrated and anxious." I would be too if I were running Russia.

Troika Dialog, the largest private investment bank in the ex-Soviet region, has just published the report "Russia: 20 years of change." It reviews some of the striking facts about the cataclysmic change that has taken place there.
A mere six years after the fall of communism, 70% of the state-run, planned economy was already in private hands. Today 55% of Russians are middle-class, according to the standard global definition. Annual consumption, which was under $1,000 per head in 1990, now stands at almost $6,000. In addition, as the report does not even bother to say because we all know it: Russia enjoys the world’s largest energy resources.
So what’s the problem? It’s corruption, stupid. After Russia’s post-Communist decade of Wild West gangster capitalism, in 1998 Transparency International ranked the country as only the 76th most corrupt country out of 180--square in the middle between more respectable Western countries and those largely from the Third World, where anything goes.
Today, after Vladimir Putin has claimed to have restored law and order, Russia has dropped to near the bottom of the honesty league, ranking 154th out of 180. How did that happen?

To read full article click: 

GATA: THE GATA DISPATCH: Gold scrap scarcity hobbles Indian refineries.

Gold scrap scarcity hobbles Indian refineries

Gold Refineries' Operating Capacity Declines
By Dilip Kumar Jha
Business Standard, New Delhi
Sunday, February 27, 2011
MUMBAI -- The operating capacity of domestic gold refineries reached alarmingly low levels due to scarcity of scrap. Currently domestic gold refineries are operating between 25-30 per cent of their installed capacity as against 35-40 per cent around the same time last year.
"Used gold sales have declined steadily in the last one year as consumers are holding jewellery in anticipation of higher prices. Total recycled gold supply plunged to 89 tonnes in 2010 as compared to 122 tonnes in the previous year," said Ajay Mitra of the India and Middle East office of the World Gold Council.
Despite availability of other raw materials like "gold powder" and "dore bar" (raw gold), refineries can rely only on used gold from domestic sources for melting into coins and bars for further processing.

Gold powder cannot be imported due to security and storage reasons. Import of "dore bar" also faces high customs duty, which is unviable. Hence, domestic refineries generally procure used gold from local jewellers for running their operations.
The situation, however, is unlikely to change for domestic refineries at least for one more month. With the beginning of festival season in the south, especially in Kerala and Chennai, used gold sales increase. The April-May holiday season in the south coincides with Akshaya Tritiya, the most religious festival for buying gold. Also, during this period, most of non-resident Indians bring huge amounts of gold jewellery from abroad for sale in local markets, which increases availability tremendously.
"Therefore, we hope that gold scrap availability will rebound in early April which would encourage higher capacity utilisation of refineries," said James Jose, managing director of Chemmanur Gold Refinery Ltd.
"Lower capacity utilisation will surely hit refineries' topline and bottomline. But we are used to it. This has been the scenario for the last couple of years. Hence, we have re-adjusted ourselves to cope with this situation," he added.
The next season for higher used gold availability in India is December-January, which ended this year on a disappointing note due to volatile prices.
In the last budget, basic customs duty on gold ore and concentrates was reduced from 2 per cent ad valorem to a specific duty of 140 rupees per 10 grams. The excise duty on refined gold made from such ore or concentrate was reduced from 8 per cent to a specific duty of 280 rupees per 10 grams. The import duty on raw gold was cut from over 400 rupees per 10 grams to 280 rupees per 10 grams. But an excise duty of 140 rupees per 10 grams was also levied. In effect, the overall duty was raised to 420 rupees per 10 grams, as against 300 rupees per 10 grams on pure gold.

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Mining Interactive: Zeal Intelligence Weekly - "Junior Correction" by Scott Wright

Dear Friends:
Adam Hamilton has posted his weekly Zeal Intelligence Newsletter on the Mining Interactive Website. Click here: 

Brought to you by


MarketWatch: Weekly Roundup - The week's top 10 videos on MarketWatch.

Weekly Roundup
FEBRUARY 26, 2011

The week's top 10 videos on MarketWatch

By MarketWatch

In case you mised them, here are the 10 most popular videos that appeared on MarketWatch for the week of Feb. 21-25:

Deaths confirmed as earthquake strikes New Zealand

Multiple deaths were confirmed Tuesday after a 6.3-magnitude earthquake struck Christchurch in New Zealand's south, leaving scenes of destruction across the city that had barely recovered from a massive quake last September.
 Watch Video Report.

Oil won't derail stocks

Companies have gotten more accustomed to oil volatility, according to David Ranson at Wainwright Economics. But stock investors have other worries, such as what the multidecade run in gold prices says about the dollar's stability. Laura Mandaro reports.
 Watch Video Report.

How cell phones affect your brains

Shirley Wang has details of a just-released study indicating that cell phone use does have a direct impact on brain activity.
 Watch Video Report.

Best places to stash your cash now

With interest rates so low, where should you put your cash?'s Greg McBride offers some ideas and talks about why a long-term certificate of deposit might be a good strategy, even at these rates. Andrea Coombes reports.
 Watch Video Report.

Four Medicare myths that could cost you

Misconceptions about Medicare, the popular health program for seniors and the disabled, are rampant. Kristen Gerencher breaks down four that could hurt your pocketbook.
 Watch Video Report.

The unremarkably remarkable Volt

Richard Rescigno test drives Chevrolet hybrid Volt. He finds it hits the mark and shows General Motors can still build something innovative, clever and first-rate.
 Watch Video Report.

Xoom takes on iPad in tablet wars

Is the Motorola Xoom tablet the first formidable competitor to the iPad? Its high price is its Achilles heel, says Walt Mossberg, but the Google Android Honeycomb operating system delivers. Plus: a market for cell phone re-sales emerges.
 Watch Video Report.

Homes that help you take aging in stride

More homes are being built with "universal design" features that will help boomers stay in their homes as they age. But these features no longer evoke a hospital room — and they're appealing to a younger demographic, too. Amy Hoak reports.
 Watch Video Report.

Eyeing inflation with Liz Ann Sonders

Liz Ann Sonders, chief investment strategist at Charles Schwab & Co., gives her view on inflation in the U.S. now and inflationary signs to look for in the year ahead. Veronica Dagher has the interview.
 Watch Video Report.

Filing taxes online? Is it safe

Many of us are getting ready to click "send" to electronically file our tax return, but are we putting our private data at risk? The experts say online filing may be safer than mailing it in — if we take some precautions. Andrea Coombes reports.
 Watch Video Report.

NYT: Morning Business News: Graying Audience Returns to Movies.


Graying Audience Returns to Movies

An older audience has made a reassertion of its multiplex power, giving Hollywood a glimpse of its graying future.

3 Banks Warn of Big Penalties in Mortgage Inquiries

Bank of America, Citigroup and Wells Fargo are the subjects of state and federal investigations into abusive mortgage practices and how the banks conducted home foreclosures.

Sheen Tantrum Likely to Cost in the Millions

Halting production of "Two and a Half Men" after Charlie Sheen's antics may cost CBS and Warner Brothers $250 million.