barrick / Fekete revient à la charge

avec un angle d'attaque de barrick interessant
ce que fait barrick n'est pas du hedging mais des préventes illimitées gagées par de l'or qui n'a pas encore été extrait.. et ds certains cas ne le sera pas avant une quinzaine d'année !

l'article paru chez midas est savoureux et vous pouvez le retrouver ici

à la suite de cet article, Rob Kirby lance carrément un défi à Jamie Sokalsky vice président de barrick


Our friend Rob Kirby on "A Public Challenge:"


Professor Fekete;
I admire your candor and initiative in inviting the academic community to an honest and sincere debate about the merits of "hedging" – and particularly your comments regarding a public challenge to Barrick Gold Corp. [the gist of which is appended] [full article is available currently at Bill Murphy’s lemetropolecafe.com]

Public challenge to Barrick

You might say that I was issuing a private challenge to Jamie through Doug so that, from his elevated position as Executive Vice President of the company, he could authoritatively refute my charges that the hedges of Barrick are fraudulent, and state his reasons why Barrick did not take my advice, in setting up proper bilateral hedges that would not commit speculators to the bear side of the market unilaterally and permanently. If it had, Barrick could have avoided horrendous losses and would have spared its shareholders from unending agony.

Jamie Sokalsky has not deigned to answer my private challenge for half a year. So I take this opportunity to re-issue my challenge, this time in the glare of full publicity.

I demand an answer why Barrick ignored my recommendation of ten years ago which I personally presented in writing to the then Chief Financial Officer Jamie Sokalsky. During those ten years my worst fears have materialized. It turned out that the hedging policy of the company was, as I had stated, deeply flawed. It was an unmitigated disaster of the first magnitude. It resulted in horrendous losses to shareholders. It is not clear why Jamie Sokalsky, widely rumored to be the author of Barrick’ hedge plan, got rewarded with a promotion for executing a disastrous policy, and why his new boss, Greg Wilkins, has stated in public that the company is standing by its original hedging policy, if only on a reduced scale. I categorically state that Jamie Sokalsky had been thoroughly familiar with the alternative, what I called the correct principles of hedging, already ten years ago. He and I discussed the subject together at great length, and he received from me a Memorandum spelling it all out. This Memorandum found its way into the book of the late Ferdinand Lips entitled Gold Wars and can be seen there by any interested party.

Two world-class companies, Barrick and Newmont, cannot be both right when one insists that unilateral and unlimited hedging is a valid management tool, and the other insists that it was a mistake from start and puts its money where its mouth is: it covers all net short positions, by taking the loss while it is not too late.

An appeal to analysts and accountants

I hereby invite all gold share analysts and public accountants conversant with the dispute to help adjudicate. We must know the truth. Shareholders have the right to this information. Other people who are still vacillating between so-called hedged vs. unhedged gold mining companies also have the right to know the answer. It is not beyond science to provide an unambiguous answer to the question what constitutes a valid hedge and what does not. I pledge my sincere cooperation in this dispute and inquiry. I am staking my reputation as a monetary scientist in this challenge. I am willing to declare in advance that I shall abide by the verdict of a committee of unbiassed experts with impeccable credentials, even if it rejects my claim that unilateral hedging (perpetual net short positions) means taking of unacceptable risks with shareholder capital, while bilateral hedging (balanced forward sales and purchases) is limiting risks and could be potentially profitable. In fact it is the only permissible way of hedging, since it does not permanently line up the very considerable speculative following in the short camp, thus imparting an unacceptable bias to the bear side of the gold market. The chips shall fall where they may only if the hedge plan is bilateral and limited.

Writers and those connected to the alternative / contrarian’s community is a great place to start. We need a list of names that are willing to stand together and DEMAND exactly this type of investigation / debate. Let’s use the internet to assemble this list. I’m willing to keep a tally of the names. Anyone [writer/analysts/accountants/mining exec/bankers] that wants their name ADDED to the list can express their desire by contacting me at rkirby@kirbyanalytics.com . If we are able to assemble a large enough list – we will take it to selected media outlets and plead our case.

I am sending this invitation off to a limited number of individuals with whom I have had the privilege of communicating in the past. PLEASE pass this along to other interested parties in your own spheres of influence and let’s see just how powerful the internet really is.

Hope to hear from many of you soon.

Best,
Rob Kirby