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“I believe that banking institutions are more dangerous to our liberties than standing armies.”

                                                                                                                                                             Thomas Jefferson

January 26, 2012

Global Markets

Generally speaking, yesterday’s comments from Fed Chairman Ben Bernanke, at the conclusion of the two-day FOMC meeting, were well received in the markets. After spending the early part of the day in negative territory, the Dow gained some momentum in the afternoon to finish 81 points higher. Futures are flat to slightly higher this morning, as investors turned their focus to an important round of economic data today.

Simply put, Bernanke committed to keep rates low for at least three more years, and hinted that the Fed stood ready to initiate further quantitative easing if necessary. “We need to be thinking about ways to provide further stimulus if we don’t get improvement in the pace of recovery and a normalization of inflation,” Bernanke told reporters at a news conference.

Asian stocks were but mixed overnight. InHong Kong, traders returned from holiday and bid the Hang Seng 1.63% higher. The Australian index also continued its upward momentum; adding another 1.11%. InTokyo, after reaching a three-month high this week, the Nikkei trimmed about 0.4%. A renewed rally for gold and other commodities helped boost resource stocks across the region.

Despite ongoing stresses at home, the European markets were lifted by Bernanke’s speech as well. At mid-day,London’s FTSE is up by about 1%, the German DAX has gained 1.2%, and the French CAC is lagging behind with a more modest upside of 0.4%. So far, banks and mining stocks have led the rally.

There seems to have been a little progress on the Greek debt swap deal. Reports have surfaced this morning that private bondholders have agreed to take slightly lower rates on the new long-term bonds they receive. They originally called for a rate of 4%, which European finance ministers essentially rejected. Private sector creditors will now put forth a proposal in which the average yield will be 3.75%.

The markets also breathed a sigh of relief afterItalysuccessfully placed €5 billion ($6.6 billion) of new debt. A majority of the placement was two-year, zero-coupon bonds, which when any yield of 3.76%; compared to 4.85% in a similar auction last month.

Gold & Precious Metals

Gold shot up vertically yesterday afternoon; finishing $44 higher at $1710. In a press conference following the conclusion of the two-day FOMC meeting, Fed Chairman Ben Bernanke extended his low rate pledge to 2014 and hinted at the possibility of further easing if necessary. This led to renewed interest in gold, on the prospects of a continuing easy money policy and the world’s largest economy.

Although the momentum is a little slower this morning, considerable weakness on the Dollar is still lending support, and gold has tacked on another $4 to $1714.

What we have here are growing prospects for long-term debasement of global fiat currencies, which is leading some investors to see gold is the only viable alternative for while. Bank of England Governor Mervyn King also hinted this week that the BoE stood ready to increase its bond purchases if need be, after new data in the UK showed fourth quarter GDP had contracted by 0.2% from the prior quarter.

The World Gold Council, in its quarterly commentary, pointed out that historically, a strong pullback like we saw at the end of 2011 typically precedes another strong rally for gold. The report also noted that gold holding exchange traded funds built up their positions in the fourth quarter.

Energy and Commodities

Commodities have received quite a boost from a falling Dollar this morning, as almost every regularly traded commodity has seemed comfortable gains.

Crude oil, for one, has bounced quickly this morning, with an upside of 1.24% to trade at $100.63. A weak Dollar, and Fed Chairman Ben Bernanke’s promise to keep rates low and do more to support growth, is given a slight boost to the energy markets this morning. The upside, however, is certainly being limited by disappointing inventory data this week. The EIA Petroleum Status Report showed a surprising decline 3.44 million barrels, after Tuesday’s API report showed an increase of 7.33 million barrels in US crude inventories. Gasoline stockpiles grew by another 3.72 million barrels; a third consecutive increase. The API numbers showed a drop of 573,000 barrels.

Once again,Iranhas threatened to close theStrait of Hormuz, after the European Union agreed on an embargo of Iranian exports. The agreement would immediately ban all new contracts and would honor current contracts until no later than July.Iranreportedly sells about 20% of its production toEurope. The three biggest buyers areGreece,Spain, andItalyall of which are also fighting fragile economies at home.

Uranium Investing

At least one industry expert, Thomas Drolet, President of Drolet & Associates Energy Services, says he sees a supply crisis in the uranium industry by about 2016. He points out that long-standing supply is already dwindling and will be a growing issue in the next year or so. In 2010, 118 million pounds of uranium was mined, while global consumption was about 190 million pounds.

Uranium spot prices remain generally unchanged at around $52, but there continues to be a lot of deal activity within the industry.

China Guandong Nuclear Power Corporation has upped its stake in Kalahari Minerals to nearly 30% as it slowly moves toward a complete takeover

Elsewhere, Gold One International has finally completed its $250 million acquisition of Rand Uranium in a deal that was first announced back in May 2011. Gold One received approval fromSouth Africa’s Department of Mineral Resources in late December 2011.

Elsewhere, Rio Tinto is wrapping up its Hathor Exploration acquisition, by buying up the small percentage of shares it did not already own.Riosaid it will then de-list Hathor from the Toronto Stock Exchange.

Shares in Russian-owned miner Uranium One are on the rise after the company announced it had produced a record 10.7-million pounds of the nuclear fuel in 2011, which is a 45% increase from the prior year.

China’s Ministry of Environmental Protection has put together a draft of new safety rules for its nuclear industry. Once approved by the government,Chinamay be ready to move ahead with new nuclear projects. No details of the draft have been released, but the ministry says that the new safety rules are “tougher” than earlier regulations.

Rare Earth Investing

In an effort to support softening rare earth prices in the marketplace,Chinahas announced another cut in its rare earth export quotas. The Commerce Ministry announced a 27% reduction in exports for the first half of 2012. It should be noted, however, thatChinaactually fell short of its quota last year, as weakening global economic conditions also reduced demand.

A new Energy Department report, however, suggested that several critical rare earth elements would remain in short supply in till at least 2015. The report highlighted dysprosium, terbium, europium, neodymium and yttrium as the key elements to watch.

China’s Ganzhou Qiandong Rare Earth Group has signed a joint venture agreement with Great Western Minerals Group to develop a rare earth separation plant inSouth Africa.

Germanyis also getting into the game. German miner Deutsche Rohstoff has said it will develop an estimated deposit of 38,000 tons in easternGermany. The subsidiary set up for the rare Earth project received €2.2 million from German investors and plans a public offering later this year. Exploratory drilling is planned in the Spring. This

Molycorp recently announced that about 78% of its Phase 1 rare-earth production at itsMountain Pass,Californiamanufacturing facility has been committed. Having a product sold before it’s reduced is certainly a positive development for any company. One thing that remains in question for Molycorp is whether they will be able to process the critical heavy rare earths that are likely to be in the greatest demand.

The future of rare earth profits will lie largely in the heavy rare earths. This does pose a problem for some would-be manufacturers, as the refining process is complex and expensive and, as such, prohibitive to many junior miners. Molycorp, for one, has solid potential in this arena but does not, as yet, possess the capability to process the “heavies.” It could pose a $500-$600 Million problem that has not been discussed openly.

Public Finance and Fixed Income

USTreasuries are climbing for a second day; pushing yields to their lowest in two weeks. At the conclusion of the two-day FOMC meeting, Chairman Bernanke pledged to keep rates low for at least three more years, and hinted that the Fed stood ready to initiate further quantitative easing if necessary. “We need to be thinking about ways to provide further stimulus if we don’t get improvement in the pace of recovery and a normalization of inflation,” Bernanke told reporters at a news conference. Prospects for the Fed purchasing more bonds, the markets have bid Treasuries higher.

InEurope, there seems to have been some progress on the Greek debt swap deal. Reports have surfaced this morning that private bondholders have agreed to take slightly lower rates on the new long-term bonds they receive. They originally called for a rate of 4%, which European finance ministers essentially rejected. Private sector creditors will now put forth a proposal in which the average yield will be 3.75%.

The markets also breathed a sigh of relief afterItalysuccessfully placed €5 billion ($6.6 billion) of new debt. A majority of the placement was two-year, zero-coupon bonds, which when any yield of 3.76%; compared to 4.85% in a similar auction last month.

International Currencies

The Dollar has extended its decline this morning as the markets react to comments from Ben Bernanke yesterday. At the conclusion of the two-day FOMC meeting, Chairman Bernanke pledged to keep rates low for at least three more years, and hinted that the Fed stood ready to initiate further quantitative easing if necessary. “We need to be thinking about ways to provide further stimulus if we don’t get improvement in the pace of recovery and a normalization of inflation,” Bernanke told reporters at a news conference.

The Dollar has recovered from its earlier lows this morning, but remains about 0.3% lower on the Euro and 0.2% down on the British Pound.

Bank of England Governor Mervyn King also hinted this week that the BoE stood ready to increase its bond purchases if need be, after new data in the UK showed fourth quarter GDP had contracted by 0.2% from the prior quarter.

Economic News & Corporate Earnings

The assembled information disseminated in the Morning Call is for information purposes only, and is neither a solicitation to buy nor an offer to sell securities. All assembled information within the Morning Call is subject to change without notice. The assembled information within Morning Call is based on information believed to be reliable as of the date of the report but no representation, expressed or implied, is made as to its accuracy, completeness or correctness.

Forward Looking Statements:
Information in the Morning Call will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. All readers are advised to conduct their own independent research into individual stocks before making a purchase decision. In addition, investors are advised that past stock performance or portfolio performance is no guarantee of future price appreciation or performance

__________________________________________

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“In all that the people can individually do as well for themselves, government ought not to interfere.”

                                                                                                                                                                                    Abraham Lincoln

January 25, 2012

Global Markets

US stocks saw a small dip at the opening bell yesterday and traded sideways from there; leaving the Dow with a 33 point loss on the session. The S&P 500 also finished fractionally lower, while the NASDAQ managed to finish two points to the upside. It looks to be the same story this morning, as futures point slightly lower and traders wait things out with an eye towardEuropeand ongoing economic data. Investors will also anxiously await Ben Bernanke’s press conference after today’s conclusion of eight today FOMC meeting.

President Obama made the economy, jobs, and protecting the middle class major themes of his State of theUnionaddress last night. He also struck a harsh tone toward Wall Street, saying there will be no return to “the days when Wall Street was allowed to play by its own set of rules.”

Once again, many Asian markets remain closed for New Year celebrations, including Hong Kong andShanghai. InTokyo, the Nikkei turned in a respectable gain of 1.12% on the back of a weaker Yen. The Yen reversed to the downside after new data showing thatJapansaw its first annual trade deficit since 1980. In December, Japanese exports slowed by 8% annually, while imports rose 8.1% from the prior year. As would be expected, exporter shares were among the biggest gainers inTokyo. InSydney, strong performance among bank stocks helped the Australian exchange finish 1.11% higher.

The momentum in Asia, however, has failed to carry over intoEuropethis morning, as investors there seem to be growing more impatient with the lack of resolution in the sovereign debt crisis. Mid-morning, the major indices across the region all find themselves lower by about 0.7%. InLondon, declining bank stocks are having the biggest impact, after new data showed fourth quarter GDP had contracted by 0.2% from the prior quarter. Yesterday, the IMF also cut its forecast forUKgrowth in 2012 down to 0.6% from its prior estimate of 1.6%.

Germanyhas not released its GDP data as yet, but analysts predict a slight contraction there as well.

An irresistible side note: The ECB is strongly opposing the idea of taking any losses on it’s holdings of Greek debt.

Gold & Precious Metals

Gold trimmed nearly $10 yesterday, and has given up another $12 this morning, to trade at $1654. A stronger Dollar and weaker Euro are certainly part of the current pullback, but some traders are also assessing the outcome of the Federal Reserve’s two-day policy meeting, after which Chairman Ben Bernanke will hold a press conference today. The obvious outcomes for gold would be a flat to lower performance if the Fed remains tight-lipped and a leg higher if Bernanke gives the slightest indication of further easing ahead. With economic data relatively strong as of late, it would appear very unlikely that we will hear a consensus for further action from the central bank. Traders, therefore, will look deeply into individual opinions to see if any FOMC members are showing a bias one way or the other.

Physical demand is also an issue for gold right now, as major markets inChina,Taiwan, andHong Kongremained closed for holiday.

The World Gold Council, in its quarterly commentary, pointed out that historically, a strong pullback like we saw at the end of 2011 typically precedes another strong rally for gold. The report also noted that gold holding exchange traded funds built up their positions in the fourth quarter.

Word fromIndiais that gold purchases during the wedding season have been at least as good, if not better, than this time last year.Indiarecently announced it is raising its import tax on gold and silver to slow the rate of imports into the country.India’s gold imports are expected to reach about $55 billion this year. The effect of the tax will be higher domestic prices but may also slow demand somewhat.

Energy and Commodities

Commodities are holding up rather well, considering we are seeing a bit more strength on the Dollar this morning. Although metals and the energy group and moved slightly lower, agricultural commodities are considerably mixed.

Crude oil has turned lower by 0.88% this morning down to $98.08; extending its losses into a second session.

Although data yesterday showed an increase in consumer demand for gasoline, this was largely overshadowed by a surprising rise of 7.33 million barrels inUScrude inventories, according to the American Petroleum Institute. For gasoline, consumption climbed 1.3% last week, while inventories fell by 573,000 barrels.

Once again,Iranhas threatened to close theStrait of Hormuz, after the European Union agreed on an embargo of Iranian exports. The agreement would immediately ban all new contracts and would honor current contracts until no later than July.Iranreportedly sells about 20% of its production toEurope. The three biggest buyers areGreece,Spain, andItalyall of which are also fighting fragile economies at home.

Uranium Investing

At least one industry expert, Thomas Drolet, President of Drolet & Associates Energy Services, says he sees a supply crisis in the uranium industry by about 2016. He points out that long-standing supply is already dwindling and will be a growing issue in the next year or so. In 2010, 118 million pounds of uranium was mined, while global consumption was about 190 million pounds.

Uranium spot prices remain generally unchanged at around $52, but there continues to be a lot of deal activity within the industry.

China Guandong Nuclear Power Corporation has upped its stake in Kalahari Minerals to nearly 30% as it slowly moves toward a complete takeover

Elsewhere, Gold One International has finally completed its $250 million acquisition of Rand Uranium in a deal that was first announced back in May 2011. Gold One received approval fromSouth Africa’s Department of Mineral Resources in late December 2011.

Elsewhere, Rio Tinto is wrapping up its Hathor Exploration acquisition, by buying up the small percentage of shares it did not already own.Riosaid it will then de-list Hathor from the Toronto Stock Exchange.

Shares in Russian-owned miner Uranium One are on the rise after the company announced it had produced a record 10.7-million pounds of the nuclear fuel in 2011, which is a 45% increase from the prior year.

China’s Ministry of Environmental Protection has put together a draft of new safety rules for its nuclear industry. Once approved by the government,Chinamay be ready to move ahead with new nuclear projects. No details of the draft have been released, but the ministry says that the new safety rules are “tougher” than earlier regulations.

Rare Earth Investing

In an effort to support softening rare earth prices in the marketplace,Chinahas announced another cut in its rare earth export quotas. The Commerce Ministry announced a 27% reduction in exports for the first half of 2012. It should be noted, however, thatChinaactually fell short of its quota last year, as weakening global economic conditions also reduced demand.

A new Energy Department report, however, suggested that several critical rare earth elements would remain in short supply in till at least 2015. The report highlighted dysprosium, terbium, europium, neodymium and yttrium as the key elements to watch.

China’s Ganzhou Qiandong Rare Earth Group has signed a joint venture agreement with Great Western Minerals Group to develop a rare earth separation plant inSouth Africa.

Germany is also getting into the game. German miner Deutsche Rohstoff has said it will develop an estimated deposit of 38,000 tons in easternGermany. The subsidiary set up for the rare Earth project received €2.2 million from German investors and plans a public offering later this year. Exploratory drilling is planned in the Spring. This

Molycorp recently announced that about 78% of its Phase 1 rare-earth production at itsMountain Pass,California manufacturing facility has been committed. Having a product sold before it’s reduced is certainly a positive development for any company. One thing that remains in question for Molycorp is whether they will be able to process the critical heavy rare earths that are likely to be in the greatest demand.

The future of rare earth profits will lie largely in the heavy rare earths. This does pose a problem for some would-be manufacturers, as the refining process is complex and expensive and, as such, prohibitive to many junior miners. Molycorp, for one, has solid potential in this arena but does not, as yet, possess the capability to process the “heavies.” It could pose a $500-$600 Million problem that has not been discussed openly.

Public Finance and Fixed Income

US Treasuries move higher again after declining slowly for five consecutive sessions. The bond markets will be waiting for the Fed’s first-ever long-term interest rate projections, which will come out later today at the conclusion of the two-day FOMC meeting.

The US Treasury will auction $35 billion of five-year notes today and another $29 billion of seven-year debt tomorrow.

Another factor hanging over the marketplace is the lack of progress on a debt swap deal forGreece. European finance ministers met earlier this week but failed to produce a final plan. The ministers are said to be pushing for more concessions. The group is reportedly looking for investors to accept a lower rate on the longer-term bonds received in exchange for their short-term holdings.

In theUK, new data showed fourth quarter GDP had contracted by 0.2% from the prior quarter. Yesterday, the IMF also cut its forecast forUKgrowth in 2012 down to 0.6% from its prior estimate of 1.6%.

Germanyhas not released its GDP data as yet, but analysts predict a slight contraction there as well.

International Currencies

The Dollar has slowly built upward momentum throughout the morning, and is now higher against all of its major counterparts. The Euro began to slip early on investor impatience for a resolution to the debt crisis inGreeceand across the region. The Euro is now lower by about 0.68% against the Dollar, while the British Pound is down by about 0.33%.

New data in theUKshowed fourth quarter GDP had contracted by 0.2% from the prior quarter. Yesterday, the IMF also cut its forecast forUKgrowth in 2012 down to 0.6% from its prior estimate of 1.6%.

Bank ofEnglandGovernor Mervyn King said the BoE stands ready to increase its bond purchases if need be.

Germanyhas not released its GDP data as yet, but analysts predict a slight contraction there as well.

Economic News & Corporate Earnings

The assembled information disseminated in the Morning Call is for information purposes only, and is neither a solicitation to buy nor an offer to sell securities. All assembled information within the Morning Call is subject to change without notice. The assembled information within Morning Call is based on information believed to be reliable as of the date of the report but no representation, expressed or implied, is made as to its accuracy, completeness or correctness.

Forward Looking Statements:
Information in the Morning Call will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. All readers are advised to conduct their own independent research into individual stocks before making a purchase decision. In addition, investors are advised that past stock performance or portfolio performance is no guarantee of future price appreciation or performance

_____________________________________

_____________________________________

“I find that the harder I work, the more luck I seem to have.”

                                                                             Thomas Jefferson

January 24, 2012

Global Markets

Lacking any major reason to buy or sell yesterday, US stocks drifted along the flat line all day. The Dow and NASDAQ finished 0.09% lower, while the S&P 500 managed to finish fractionally higher. Futures indicate a cautious tone again this morning and we’re likely to see a slight pullback at the opening bell.

It’s another slow day for economic data but investors will have a solid round of earnings news to ponder. Traders will also anxiously await details from the Fed’s two day FOMC meeting, which begins today. Some are hoping for an indication of more quantitative easing ahead, but that would appear very unlikely in light of generally positive economic data over the past few weeks.

Any sense of confidence ahead of yesterday’s meeting of finance ministers inEuropehas since worn off, as the ministers push for more concessions. The group is reportedly looking for investors to accept a lower rate on the longer-term bonds received in exchange for their short-term holdings. With another day of talks planned for today, it looks as though the group may not get a final package together ahead of a wider summit next week.

Asian stocks stayed in a relatively tight range again last night. With the market still closed inShanghaiand Hong Kong, the Nikkei gained 0.22%, while trading inSydneyturned slightly lower. The biggest movement came inIndia, after the Reserve Bank ofIndiaheld rates steady but lowered its capital reserve requirements for banks to improve liquidity.

The Bank of Japan, on the other hand, lowered its lowered its growth forecast for 2012. After predicting slight growth just a few months ago, central bank now says it expects to see a contraction of about 0.3% to 0.4%.

The case of jitters has settled into the European marketplace, after finance ministers fail to come to terms on a debt swap deal forGreece. At mid-day, all of the major European indices are lower by roughly 1%, as bank stocks lead the decline. This comes after several French banks, including Société Generale and Credit Agricole,  saw their credit ratings lowered by S&P.

Also impacting the markets this morning is word thatPortugalmay need another round of bailouts, as it faces maturing debt over the next year.

On a more positive note, new data showed thatEurope’s manufacturing and services sectors both expanded to five-month highs in December.

Gold & Precious Metals

Gold had pushed to its highest level in about six weeks before pulling back slightly this morning. Early trading has seen a decline of about $9 down to $1667, after testing above the $1680 mark yesterday. We may see a relatively flat day today as traders regroup after what has been a solid rally for gold so far.

Several factors have impacted gold over the past few weeks and traders will be watching the Fed’s two day FOMC meeting, which starts today. Some are hoping for an indication of more quantitative easing ahead, but that would appear very unlikely in light of generally positive economic data over the past few weeks. Any sign of accommodative efforts by the Fed could fuel another leg up for gold.

The World Gold Council, in its quarterly commentary, pointed out that historically, a strong pullback likely sorry at the end of 2011 typically precedes another strong rally for gold. The report also noted that gold holding exchange traded funds built up their positions in the fourth quarter.

Word fromIndiais that gold purchases during the wedding season have been at least as good, if not better, than this time last year.Indiarecently announced it is raising its import tax on gold and silver to slow the rate of imports into the country.India’s gold imports are expected to reach about $55 billion this year. The effect of the tax will be higher domestic prices but may also slow demand somewhat.

Energy and Commodities

A shift higher for the Dollar has impacted commodities this morning, as most sectors move modestly lower. Equity futures have also weakened, mostly on a sense of concern for the debt talks inGreece. Otherwise, the majority of recent economic data has been generally supportive.

Crude oil has given up some momentum this morning; drifting about 0.36% lower to $99.22. Greek debt concerns are, for now, overshadowing the ongoing tension betweenIranand the West.

Oil regained some of its lost momentum yesterday, after word that the European Union had agreed on an embargo of Iranian exports. There was some doubt late last week as to whetherEuropewould move ahead quickly with the plan. The agreement would immediately ban all new contracts and would honor current contracts until no later than July. Now, oil traders are essentially at the edge of their seat, awaitingIran’s response.

Iran reportedly sells about 20% of its production toEurope. The three biggest buyers areGreece,Spain, andItalyall of which are also fighting fragile economies at home.

Uranium Investing

Uranium spot prices remain generally unchanged at around $52. While the marketplace remains somewhat uneventful, there has been a increase in the deal activity within the industry as of late. Among them, Gold One International has finally completed its $250 million acquisition of Rand Uranium in a deal that was first announced back in May 2011. Gold One received approval fromSouth Africa’s Department of Mineral Resources in late December 2011.

Elsewhere, Rio Tinto is wrapping up its Hathor Exploration acquisition, by buying up the small percentage of shares it did not already own.Riosaid it will then de-list Hathor from the Toronto Stock Exchange.

Shares in Russian-owned miner Uranium One are on the rise after the company announced it had produced a record 10.7-million pounds of the nuclear fuel in 2011, which is a 45% increase from the prior year.

China’s Ministry of Environmental Protection has put together a draft of new safety rules for its nuclear industry. Once approved by the government,Chinamay be ready to move ahead with new nuclear projects. No details of the draft have been released, but the ministry says that the new safety rules are “tougher” than earlier regulations.

One change is supposed to be a limit on the number of reactors built along the coast, as a result of concerns tsunami-related disaster inJapan.Chinacurrently is operating 15 nuclear reactors with 26 under construction. A total of 171 additional reactors are either in the planned or proposed stage.

Rare Earth Investing

In an effort to support softening rare earth prices in the marketplace,Chinahas announced another cut in its rare earth export quotas. The Commerce Ministry announced a 27% reduction in exports for the first half of 2012. It should be noted, however, thatChinaactually fell short of its quota last year, as weakening global economic conditions also reduced demand.

A new Energy Department report, however, suggested that several critical rare earth elements would remain in short supply in till at least 2015. The report highlighted dysprosium, terbium, europium, neodymium and yttrium as the key elements to watch.

China’s Ganzhou Qiandong Rare Earth Group has signed a joint venture agreement with Great Western Minerals Group to develop a rare earth separation plant inSouth Africa.

Germanyis also getting into the game. German miner Deutsche Rohstoff has said it will develop an estimated deposit of 38,000 tons in easternGermany. The subsidiary set up for the rare Earth project received €2.2 million from German investors and plans a public offering later this year. Exploratory drilling is planned in the Spring. This

Molycorp recently announced that about 78% of its Phase 1 rare-earth production at itsMountain Pass,Californiamanufacturing facility has been committed. Having a product sold before it’s reduced is certainly a positive development for any company. One thing that remains in question for Molycorp is whether they will be able to process the critical heavy rare earths that are likely to be in the greatest demand.

The future of rare earth profits will lie largely in the heavy rare earths. This does pose a problem for some would-be manufacturers, as the refining process is complex and expensive and, as such, prohibitive to many junior miners. Molycorp, for one, has solid potential in this arena but does not, as yet, possess the capability to process the “heavies.” It could pose a $500-$600 Million problem that has not been discussed openly.

Public Finance and Fixed Income

Treasuries have been drifting lower for several days, as the equity markets tried to build some momentum and confidence. This meant that yields had ticked slowly higher, to their highest level in about weeks. The momentum has changed a bit this morning, however, as any sense of confidence ahead of yesterday’s meeting of finance ministers in Europe has since worn off. The ministers are said to be pushing for more concessions. The group is reportedly looking for investors to accept a lower rate on the longer-term bonds received in exchange for their short-term holdings. With another day of talks planned for today, it looks as though the group may not get a final package together ahead of a wider summit next week.

Concern over the Greek debt talks has also pushed German bunds higher and caused Italian and French bonds to retreat.

Sentiment was strong inIndiaafter the Reserve Bank ofIndiaheld rates steady but lowered its capital reserve requirements for banks to improve liquidity.

The Bank of Japan, on the other hand, lowered its lowered its growth forecast for 2012. After predicting slight growth just a few months ago, central bank now says it expects to see a contraction of about 0.3% to 0.4%.

International Currencies

The currency markets are in a state of flux once again, as the Euro lots its momentum from yesterday and a jump in safety demand has pushed the Dollar much higher. The greenback is now up on the Euro by 0.15%, but remains slightly lower on the British Pound.

An initial sense of confidence ahead of yesterday’s meeting of finance ministers inEuropeturned sour after the ministers pushed for more concessions. The group is reportedly looking for investors to accept a lower rate on the longer-term bonds received in exchange for their short-term holdings. With another day of talks planned for today, it looks as though the group may not get a final package together ahead of a wider summit next week. This quickly impacted the Euro.

The Greek debt talk, and the general mood towardsEurope, will be a driving factor throughout the next two weeks. European leaders continue to try to develop a coherent plan ahead of the European Union summit next week.

Economic News & Corporate Earnings

The assembled information disseminated in the Morning Call is for information purposes only, and is neither a solicitation to buy nor an offer to sell securities. All assembled information within the Morning Call is subject to change without notice. The assembled information within Morning Call is based on information believed to be reliable as of the date of the report but no representation, expressed or implied, is made as to its accuracy, completeness or correctness.

Forward Looking Statements:
Information in the Morning Call will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. All readers are advised to conduct their own independent research into individual stocks before making a purchase decision. In addition, investors are advised that past stock performance or portfolio performance is no guarantee of future price appreciation or performance