Why The Warriors And Cavs Are Still Big Favorites

1959-60Boston Celtics1,1051of8 1995-96Chicago Bulls2,0691of29 1984-85Los Angeles Lakers2,0332of23 1966-67Philadelphia 76ers1,0843of10 Los Angeles Lakers-2.8-3.4-0.6– 2014-15Golden State Warriors72915of30 1952-53Minneapolis Lakers8521of10 2001-02Los Angeles Lakers1,8303of29 2011-12Miami Heat1,7255of30 1982-83Philadelphia 76ers1,7781of23 2012-13Miami Heat2,7782of30 2008-09Los Angeles Lakers1,9763of30 1989-90Detroit Pistons1,8343of27 2005-06Miami Heat1,9103of30 Golden State Warriors+9.1+10.8+1.7– Los Angeles Clippers+2.2+2.1-0.1– Sacramento Kings-5.7-5.8-0.1– 1955-56Philadelphia Warriors598of8 2006-07San Antonio Spurs2,3631of30 1988-89Detroit Pistons1,4913of25 Brooklyn Nets-4.4-5.0-0.6– Show more rows* Average number of career playoff minutes, weighted by each player’s share of regular season minutes played.Source: BASKETBALL-REFERENCE.COM 1951-52Minneapolis Lakers4922of10 Charlotte Hornets+1.4+1.4-0.1– Memphis Grizzlies-1.9-2.0-0.1– 1965-66Boston Celtics1,7141of9 1991-92Chicago Bulls1,6844of27 Philadelphia 76ers-0.7-1.3-0.6– SEASONCHAMPIONSAVG. PLAYOFF EXPERIENCE*LEAGUE RANK 1994-95Houston Rockets1,3925of27 1954-55Syracuse Nationals6783of9 1996-97Chicago Bulls2,6181of29 1987-88Los Angeles Lakers2,8442of23 1998-99San Antonio Spurs1,4596of29 1985-86Boston Celtics2,2043of23 1981-82Los Angeles Lakers1,4363of23 1983-84Boston Celtics1,3813of23 New York Knicks-4.2-4.7-0.5– 1993-94Houston Rockets78312of27 Minnesota Timberwolves+3.4+3.3-0.1– 1957-58St. Louis Hawks9881of8 You might be wondering if we’re confusing cause and effect. For instance, Michael Jordan and the 1990s Chicago Bulls were really great; as a result of being great, they made deep playoff runs every year and won six NBA titles, accumulating lots of playoff experience along the way. Playoff success causes playoff experience and not the other way around, you might say.We’ve found, however, that there’s predictive power in accounting for playoff experience above and beyond other measures of team quality. In particular, playoff experience provides information beyond a team’s Elo rating, which accounts for its record, strength of schedule, and margin of victory or defeat in recent games. In the NBA postseason since 1980, the team with the higher initial Elo rating has won 74 percent of playoff series. But if a team has both a higher Elo rating and much more playoff experience,4A difference of at least 1,000 average lifetime playoff minutes played. that win percentage shoots up to 86 percent. Conversely, teams with the higher Elo rating but much less playoff experience have won just 52 percent of playoff series. These differences are highly statistically and practically significant.Based on past research on the topic, we were expecting to see teams reap some benefit from playoff experience, but we were surprised that the effect was this strong. What we’re less sure of is why this effect exists. Playoff basketball is a different beast than regular-season basketball, with much tighter defensive play, among other stylistic changes. It may simply be that nothing predicts playoff success quite like past playoff success. Or it may be that some players really are “clutch” — or can learn to be clutch with experience — and have the psychological skills to thrive under postseason pressure. It’s also possible that teams like LeBron James’s Cavs aren’t overachieving in the playoffs so much as they’re underachieving — or pacing themselves — in the regular season. The NBA season is exhausting, so it’s probably a good idea to pace yourself if your goal is to maximize your chance of a deep playoff run rather than to accumulate gaudy regular-season statistics.All we know for sure is that playoff basketball is different from regular-season basketball — different enough that it makes sense to maintain what amounts to two sets of ratings for each team, one for the playoffs and one for the regular season. And that’s essentially what our new system does: It keeps two sets of ratings. Below, you’ll find each team’s projected margin of victory or defeat against a league-average opponent in the regular season and the playoffs, respectively.5These margins of victory differ slightly from the average projected point differential on the “CARM-Elo” interactive graphic because those “CARM-Elo” point differentials account for the strength of a team’s schedule, whereas my calculations for this article do not. Note that the most experienced teams, like the Cavaliers, project to be 2 or even 3 points better per game in the playoffs than in the regular season, which is similar to the magnitude of home-court advantage in the NBA. So when an experienced team plays an inexperienced team in the playoffs, it has the equivalent of home-court advantage — more experienced teams don’t always win by any means, but the breaks tend to go their way. 2010-11Dallas Mavericks2,1534of30 1980-81Boston Celtics35913of23 1975-76Boston Celtics2,0881of18 2015-16Cleveland Cavaliers1,9072of30 1973-74Boston Celtics1,5662of17 2004-05San Antonio Spurs1,4811of30 NBA champs almost always have a lot of playoff experience 1967-68Boston Celtics2,2451of12 1990-91Chicago Bulls1,2456of27 1960-61Boston Celtics1,3791of8 2007-08Boston Celtics86610of30 2009-10Los Angeles Lakers2,5091of30 Milwaukee Bucks+0.8+0.4-0.4– Atlanta Hawks-5.8-6.3-0.5– Portland Trail Blazers+0.3+0.0-0.3– Indiana Pacers-3.5-3.9-0.3– Orlando Magic-1.7-2.3-0.6– 1992-93Chicago Bulls2,1342of27 Detroit Pistons-2.8-3.3-0.6– Cavs are boosted most by accounting for playoff experience 1999-2000Los Angeles Lakers1,7295of29 1986-87Los Angeles Lakers2,4962of23 1971-72Los Angeles Lakers2,4711of17 Oklahoma City Thunder+5.2+6.0+0.8– 1953-54Minneapolis Lakers1,0621of9 2003-04Detroit Pistons71513of29 2002-03San Antonio Spurs1,1956of29 Denver Nuggets+2.5+2.2-0.4– EXPECTED MARGIN OF VICTORY AGAINST A LEAGUE-AVERAGE TEAM 1970-71Milwaukee Bucks6267of17 1969-70New York Knicks6496of14 Boston Celtics+1.6+1.7+0.1– Phoenix Suns-3.5-4.1-0.6– Cleveland Cavaliers+5.0+7.6+2.6– 1976-77Portland Trail Blazers15222of22 Stop me if you’ve heard this one before: The Golden State Warriors and the Cleveland Cavaliers are favorites to win their respective conferences and reach the NBA Finals.That’s according to FiveThirtyEight’s “CARM-Elo” projections, which we’ve just launched for the 2017-18 NBA season. The Warriors and Cavs project to be the best regular-season teams in their respective conferences, although the Houston Rockets and the Oklahoma City Thunder — and perhaps the San Antonio Spurs — could represent formidable rivals for the Warriors in the West. Cleveland has less competition in the East. (Our projections are bearish on the Boston Celtics.) But Cleveland and Golden State could have an even larger advantage in the postseason.Apart from one new wrinkle, our methodology for making these projections is essentially the same as it has been for the past two seasons. So I’ll spend the bulk of time here discussing what has changed. The new wrinkle: Our forecasts account for the amount of playoff experience on each team’s roster. Throughout NBA history, teams with extensive playoff experience have often found a higher “gear” in the playoffs. Put more precisely, they have a tendency to win more playoff games than you’d expect from their regular-season performance. This group of teams includes the Cavs, a team that our forecasts have often underrated once the playoffs began — and that won 12 of its first 13 playoff games last year after a mediocre regular season.Indeed, it’s extremely rare for teams without at least an average amount of playoff experience to win the NBA title. We calculate a team’s playoff experience by averaging the number1Only playoff games from previous seasons count toward the calculation; we don’t give a player credit for the experience he’s accumulating in the current season’s playoffs until the next season. of career playoff minutes played2Minutes played aren’t available before the 1951-52 NBA season; for the earlier seasons, we estimate the number of minutes played based on the number of playoff games played. for each player on its roster, weighted by the number of minutes the player played for the team in the regular season.3For our 2017-18 projections, we use projected minutes based on our depth charts. (Teams don’t get any credit for signing a playoff-experienced veteran if they never play him.) For instance, last season’s NBA champions, the Warriors, entered the playoffs with a weighted average of 1,966 career playoff minutes, which ranked third in the league after Cleveland and San Antonio. By contrast, the Portland Trail Blazers — the Warriors’ first-round opponents — averaged just 493 minutes of playoff experience.Each of the past 36 NBA champions have ranked in the top half of their respective leagues in playoff experience. So have 62 out of the past 66 champions; the lone exceptions were the 1980-81 and 1956-57 Boston Celtics, the 1976-77 Portland Trail Blazers and the 1955-56 Philadelphia Warriors. San Antonio Spurs+3.5+5.1+1.6– TEAMREG. SEASONPLAYOFFSPLAYOFF EXPERIENCE BONUS 1997-98Chicago Bulls2,7521of29 Houston Rockets+6.2+7.0+0.8– 2000-01Los Angeles Lakers2,2583of29 2013-14San Antonio Spurs2,4362of30 1977-78Washington Bullets1,3832of22 Washington Wizards+1.5+1.5+0.0 1958-59Boston Celtics8492of8 Chicago Bulls-5.1-5.8-0.7– Toronto Raptors+1.0+1.1+0.2– Utah Jazz+1.9+1.7-0.2– Miami Heat-0.8-1.3-0.5– 1972-73New York Knicks1,8092of17 1962-63Boston Celtics1,6891of9 1963-64Boston Celtics1,6371of9 Dallas Mavericks-3.6-3.3+0.3– 1974-75Golden State Warriors5989of18 2016-17Golden State Warriors1,9663of30 Finally, just some general background on these projections. We call these “CARM-Elo” forecasts because they combine our CARMELO projections for individual players, which are used to set the initial ratings for each team, with our Elo-rating based method of simulating out the rest of the season. As part of this process, we’ve built depth charts for each team to estimate playing time over the course of the regular season. There is unavoidably some guesswork involved in creating the depth charts, which reflect a rough consensus of depth charts from RosterResource.com, ESPN.com and CBS Sports and account for injuries. However, CARMELO projects an expected amount of playing time for each player, and when building our depth charts, we usually stick fairly closely to this recommendation for a team’s rotation players. In fact, our model punishes players who are “forced” to play substantially more than their CARMELO-forecasted playing time by lowering their efficiency rating. For example, Doug McDermott of the New York Knicks is projected to play 20 minutes per game in our depth charts when CARMELO recommends that he only plays 15 minutes per game, so our forecast assumes that he’ll become somewhat less efficient as a result.Our CARMELO projections themselves underwent some changes earlier this year, which you can read about here. In particular, we’ve switched back to a system that rates players based on a combination of Real Plus-Minus and Box Plus/Minus instead of solely using BPM, as we did last year. Both RPM and BPM have their weaknesses, though: Neither is especially accurate at accounting for defense; both can struggle with players with extremely high usage rates (say, Russell Westbrook or DeMar DeRozan); and they don’t take much advantage of the NBA’s new wealth of player-tracking data. If it sounds like I have strong opinions about this stuff, it’s because I do; we’re working on our own player-rating metric, which we hope to unveil in the relatively near future.In the meantime, good luck to the 28 NBA teams hoping to knock off the Warriors and the Cavs. It’s never easy, and it won’t be easy this year, especially once the playoffs come around. 1956-57Boston Celtics5655of8 New Orleans Pelicans+1.1+0.9-0.2– 1979-80Los Angeles Lakers1,0785of22 1961-62Boston Celtics1,3941of9 1968-69Boston Celtics2,8051of14 1964-65Boston Celtics1,7071of9 Overall, the Warriors — who have the second-most playoff experience after the Cavs — have a 38 percent chance of repeating as NBA champions, according to our projections. If you’re not sure whether that is low or high, consider that the New England Patriots had only an 18 percent chance of repeating as Super Bowl champions at the start of this year’s NFL season, according to our NFL Elo projections. But 38 percent is somewhat lower than where Vegas odds have the Warriors, which imply more like a 45 percent or 50 percent chance that they’ll repeat.6The combined probability of the 30 NBA teams winning the NBA title is 132 percent, according to the odds listed at VegasInsider.com. Obviously, this can’t be right — the odds must add up to 100 percent exactly — but the inflated numbers reflect the house’s cut. The Warriors’ probability of repeating is 62 percent taken at face value but falls to 47 percent once you correct for this. The competition is a bit deeper this year, and the Warriors are no longer a young team. Still, the playoff bonus helps them — without it, their chances would be 34 percent.The pecking order behind the Warriors changes as a result of the playoff adjustment. In the playoff version of our ratings, there’s a fairly clear second tier after Golden State that consists of the Cavs, Rockets, Thunder and Spurs. The Cavaliers, who benefit from playing in the Eastern Conference, have the easiest path of this group, with a 21 percent chance of winning the title. (Without the playoff bonus, the Cavs’ chances would be 13 percent.)After that, there’s a pretty big gap before you get to anyone else. Teams such as the Minnesota Timberwolves might not be that far behind teams like the Spurs and even the Cavs in the regular season. But because of their relative inexperience, they’re less likely to take advantage of their playoff opportunity and make a deep postseason run. 1978-79Seattle Super Sonics9977of22 read more

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Meyer other Big Ten coaches welcoming challenge of nine conference games

OSU Coach Urban Meyer sounds his whistle before the first game of the 2016 season against Bowling Green on Sept. 3 at Ohio Stadium. The Buckeyes won 77-10. Credit: Mason Swires | Assistant Photo EditorIn 2013, the Big Ten Conference released the 2016-17 schedules for football, along with plans for a nine-game conference schedule for each of its 14 teams. The adoption of the schedule brought the Big Ten in line with the Pacific-12 Conference and the Big 12 Conference, and brought about discussion of the rest of the Power 5 conferences adopting a similar conference.Nebraska coach Mike Riley praised the approaching nine-game conference schedule at Nebraska’s Monday press conference according to Brian Rosenthal of Huskers.com. Riley is familiar with the format, after spending time with the Pac-12 as the head coach of Oregon State.“I like it this way,” Riley said. “I know you have to play everybody in your division, and since our conference is so big, I think having those other league games that aren’t in your division are good games for everybody to play in and to watch.”With the addition of an extra in-conference matchup, the resume for a team vying for a spot in the College Football Playoff can be bolstered by a win against a team within its league. The spot taken by the extra Big Ten game will replace one out-of-conference opponent.The three previous opponents of the fourth nonconference game for OSU have been Florida A&M, Cincinnati and Western Michigan. All games resulted in wins for the Buckeyes.When asked about his viewpoints on the Southeastern Conference and Atlantic Coastal Conference adding an extra intraleague game, OSU coach Urban Meyer felt Riley had a point. However, he also said he doesn’t worry much about anyone other than the Buckeyes.“I’ve given it zero thought. I think coach (Mike) Riley’s got a good point there,” Meyer said. “But I couldn’t tell you what conferences do and what conferences do not.”Unlike recent years, including this season, the change in the number of conference games has also changed the format of the schedule. Most Buckeye fans are used to having all out-of-conference games to start the season before opening Big Ten play, but this isn’t the case anymore.For instance, OSU will open against Indiana in Bloomington before returning to Ohio Stadium for a matchup against Oklahoma. In 2018, OSU begins the year against Oregon State before facing Rutgers in the second game of the year.With the new format and longer Big Ten schedule looming, Meyer knows how important the next nine games will be. With five teams currently ranked within the top 20, the difficulty level is high for the Buckeyes.“I think our conference is very strong right now,” Meyer said. “Our division is, has to be one of the strongest if not the strongest in college football.”OSU opens Big Ten play after a bye week. The first in-conference foe for the Buckeyes is Rutgers at home next Saturday at noon. read more

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Ohio StateMichigan rivalry moves to outdoor ice rink come January

Growing up, Ohio State men’s hockey coach Mark Osiecki would play outdoor hockey regularly. He would gather with neighborhood kids at a local pond and play pick-up games, and even play outside with his high school team. “Eventually, you moved indoor and played in the rink,” Osiecki said. “But, even our high school team, we practiced outside once a week.” On Jan. 15, the OSU men’s hockey team will get to experience the type of hockey its head coach grew up playing, as the No. 9 Buckeyes will face No. 11 Michigan in Ohio’s first outdoor college hockey game. The game, billed as the “Frozen Diamond Faceoff,” will be played at Progressive Field, home of the Cleveland Indians, in Cleveland, Ohio. Playing outdoors is something that most OSU players haven’t done, Osiecki said. “These kids, none of them played outdoor hockey, so they don’t really understand,” he said. “You want that feeling of kids that don’t want to leave the ice.” One of the few Buckeyes who have played outdoor hockey is sophomore forward Alex Lippincott, who said it’s the best way to play the game. “That’s the fun of the game, playing with your buddies outside,” he said. “There’s nothing better than outdoor hockey. It’s the most fun and the best way to enjoy the game.” OSU first played in an outdoor game on Feb. 11, 2006, at Lambeau Field in Green Bay, Wisc. The Buckeyes faced off against Wisconsin in the “Frozen Tundra Hockey Classic” in front of 40,890 fans. Osiecki was an assistant coach for the Badgers at the time, and OSU lost, 4-2. Michigan played Michigan State last December in “The Big Chill at the Big House,” when more than 100,000 fans watched the Wolverines defeat the Spartans, 5-0, at Michigan Stadium in Ann Arbor. The game set a world hockey record with an official attendance of 113,411. Even though the game is almost two months away, the Buckeyes are already excited. “There is a lot of buzz, and there should be,” Osiecki said. “It’s a unique situation, that our players, our fans, the state … will never forget.” Lippincott said his excitement for the game stems from watching the Winter Classic every year, an annual NHL outdoor game played on New Year’s Day, and also because the game is being played at the home of his favorite professional sports team. “When we first heard it was a possibility, I was real excited,” he said. “That’s my favorite sports team, the Indians. It’s a great feeling to be able to play (at Progressive Field).” The fact that the game will be played against rival Michigan adds to the hype of the game for some OSU players. The Buckeye-Wolverine hockey rivalry might not be on the same level as the football rivalry, but with recent OSU hockey uniform changes, the game will look similar to ones played on the gridiron. OSU has new uniforms this season that include a helmet barring similar resemblance to the silver-striped headgear worn by Buckeye football players. “It will probably look like a football game out there,” senior forward Danny Dries said. Osiecki said the uniform change was made, in part, after seeing Michigan’s winged-shaped hockey lids, which resemble the helmets worn by the Wolverine football team. “When they walk in an arena anywhere, people know who they are. It’s Michigan,” he said. “I thought it was a great idea from them whenever they started it.” The Jan. 15 game could also have great importance concerning the CCHA. The No. 9 Buckeyes, 10-3-1 on the year, moved into first place in the CCHA with a 7-2-1-1 conference record after beating Michigan in back-to-back games last weekend. The series sweep was the first for OSU in Ann Arbor since 1986. Michigan is currently tied for seventh in the CCHA with a 3-5-2-1-conference record. The No. 11 Wolverines are 7-5-2 overall this season. The Buckeyes will face Michigan in Columbus at 7:35 p.m. Friday, Jan. 13 and then travel to Cleveland to play at Progressive Field at 5:05 p.m. Sunday, Jan. 15 in what will be a home CCHA game for OSU. read more

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Football Cincinnati Bengals draft Ohio State center Billy Price 21st overall in

Ohio State senior center Billy Price (54) practices a snap during warmups prior to the start of the 2017 Cotton Bowl against USC on Dec. 29 in AT&T Stadium in Arlington, Texas. Credit: Jack Westerheide | Photo EditorA torn pectoral muscle was not enough to prevent former Ohio State center Billy Price, who was selected as the No. 21 overall pick in the first round of the 2018 NFL Draft by the Cleveland Browns.After redshirting his freshman season, Price started at guard for the National Championship-winning Buckeyes in 2014, earning second-team freshman All-American honors.After being names to the third-team All Big Ten in 2015, Price was named a team captain in 2016, being named as a first-team All-American and first-team All Big Ten.Following in the footsteps of former Ohio State offensive lineman Pat Elflein, who was selected in the third round of the 2017 NFL Draft by the Minnesota Vikings, Price, in his final season, moved from guard to center. He was awarded the 2017 Rimington Trophy, given to the best center in college football. With unanimous first-team All American honors and first-team All Big Ten, Price was also named as the Rimington-Pace Big Ten offensive lineman of the year.Price helped Ohio State become the best rush offense in the Big Ten last season. Averaging 5.8 yards per carry, the Buckeyes recorded 243.2 rushing yards per game with 34 touchdowns on the ground. In pass protection, Price was one of the leaders on the offensive line that allowed an average of 1.6 sacks per game. While participating in the bench press during the NFL Combine, Price tore his pectoral muscle. He underwent surgery for the injury and is not expected to be back until after the draft. read more

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Thoughtprovoking plays at 15th Old World Theatre Festival

first_imgTheatre enthusiasts across NCR region are in for a week-long treat with some of the classic plays from the Indian stage set to be performed at the upcoming 15th edition of Old World Theatre Festival. Organised by Old World Culture, the festival that is scheduled to begin on October 8, will host a spectacular assemblage of the finest theatre in the country with plays that not only entertain but also pose a challenge to some of the pressing issues in the current times.  Also Read – Add new books to your shelfTen thought-provoking plays that question and span a gamut of issues from relationships, freedom and gender stereotypes, religion and faith, eroding ecosystems and assaults on sustainable agriculture and rural livelihood, will be performed at two venues – India Habitat Centre (IHC) here and Epicentre in Gurgaon.“By creatively adapting the complex concerns of human race, the plays are certainly going to be unsettling in a deeply satisfying way, capturing humanity at the cross roads, often struggling to break out of the backbreaking conservative content of both ‘tradition’ and ‘modernity’,” says Vidyun Singh, who has curated the festival.   Also Read – Over 2 hours screen time daily will make your kids impulsiveThe festival will open at IHC with Jaibala Vaidya’s iconic one-woman contemporary rendition of the Indian epic “Ramayana” as a tribute to her husband and theatre doyen Gopal Sharman, who passed away earlier this year.At Epicentre, Barff featuring veteran actor-director Saurabh Shukla and theatre artist Sadia Siddiqui, will raise the curtains on the festival. Plays dealing with family dynamics and issues of gender disparity include Ila Arun’s adaptation of Henrik Ibsen’s timeless classic Doll’s House with Ira Dubey of M Cream fame in the lead and Purva Naresh’s Ladies Sangeet.  “The discreet lives of drag kings, a subculture that is not too well known will play out in The Gentlemen’s Club AKA Tape. Kaizad Kotwal’s widely debated Agnes of God and Tadpole Repertory’s Tees on the collapse of traditional agriculture are notable selections that give a whole new dimension to the festival’s scope,” says Singh. The directorial debut of light designer Argya Lahiri titled, Wild Track, the much-anticipated solo White Rabbit Red Rabbit and Anish Victor’s choreographed solo Koogu will also be part of the festival. A series of theatre workshops titled, “Cycloroma 2016” will run parallel to the festival with some of the greatest faces form the field conducting classes. Session leaders will include artistes like Anurupa Roy, Anahita Uberoi, Sudhanva Deshpande, Puja Sarup, Sheena Khalid, Arghya Lahiri, Jaimini Pathak, Purva Naresh, Gopal Dutt and Neel Chaudhuri among others.“Theatre lovers and students have much to gain from these workshops with sessions ranging from acting to light design, scripting, playing with material to the use of music and song, children’s theatre. Participants have the option to attend either specific sessions or go for the complete workshop calendar, and the full day sessions include a ticket to the evening plays!” Singh said.last_img read more

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Elderly woman dies after being hit by karate trainer

first_imgKolkata: An elderly woman was killed after being hit by a karate trainer following an altercation between children from both of their families. The incident took place at Ekbalpore on Monday.The police said the victim was the karate trainer’s neighbour. Initially, an altercation broke out between children from their families over some issue. The victim, Mina Devi Sharma, intervened to settle it. Later, the karate trainer, Dipak Rajbangshi, also got involved in it. Also Read – Rain batters Kolkata, cripples normal lifeThe situation took an ugly turn when an argument broke out between the victim and Rajbangshi. Some residents came forward to settle the matter but in vain. The victim was allegedly hit by Rajbangshi on her chest. She fell unconscious and was declared brought dead when rushed to the hospital. The body was sent for an autopsy. The victim’s family members alleged that Rajbangshi was well versed with various techniques of karate and knew that if they were applied on somebody’s chest, it would lead to death. A case has been initiated and the police are probing the incident. Police have arrested Rajbangshi and two others in this connection.last_img read more

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Source Karen Roche and JT Long of The Gold Report

first_imgSource: Karen Roche and JT Long of The Gold Report  (5/4/12) A “paralyzed” Federal Reserve Bank, in its “final days,” held hostage by Wall Street “robots” trading in markets that are “artificially medicated” are just a few of the bleak observations shared by David Stockman, former Republican U.S. Congressman and director of the Office of Management and Budget. He is also a founding partner of Heartland Industrial Partners and the author of The Triumph of Politics: Why Reagan’s Revolution Failed and the soon-to-be released The Great Deformation: How Crony Capitalism Corrupts Free Markets and Democracy. The Gold Report caught up with Stockman for this exclusive interview at the recent Recovery Reality Check conference. The Gold Report: David, you have talked and written about the effect of government-funded, debt-fueled spending on the stock market. What will be the real impact of quantitative easing? David Stockman: We are in the last innings of a very bad ball game. We are coping with the crash of a 30-year–long debt super-cycle and the aftermath of an unsustainable bubble. Quantitative easing is making it worse by facilitating more public-sector borrowing and preventing debt liquidation in the private sector—both erroneous steps in my view. The federal government is not getting its financial house in order. We are on the edge of a crisis in the bond markets. It has already happened in Europe and will be coming to our neighborhood soon. TGR: What should the role of the Federal Reserve be? DS: To get out of the way and not act like it is the central monetary planner of a $15 trillion economy. It cannot and should not be done. The Fed is destroying the capital market by pegging and manipulating the price of money and debt capital. Interest rates signal nothing anymore because they are zero. The yield curve signals nothing anymore because it is totally manipulated by the Fed. The very idea of “Operation Twist” is an abomination. Capital markets are at the heart of capitalism and they are not working. Savers are being crushed when we desperately need savings. The federal government is borrowing when it is broke. Wall Street is arbitraging the Fed’s monetary policy by borrowing overnight money at 10 basis points and investing it in 10-year treasuries at a yield of 200 basis points, capturing the profit and laughing all the way to the bank. The Fed has become a captive of the traders and robots on Wall Street. TGR: If we are in the final innings of a debt super-cycle, what is the catalyst that will end the game? DS: I think the likely catalyst is a breakdown of the U.S. government bond market. It is the heart of the fixed income market and, therefore, the world’s financial market. Because of Fed management and interest-rate pegging, the market is artificially medicated. All of the rates and spreads are unreal. The yield curve is not market driven. Supply and demand for savings and investment, future inflation risk discounts by investors—none of these free market forces matter. The price of money is dictated by the Fed, and Wall Street merely attempts to front-run its next move. As long as the hedge fund traders and fast-money boys believe the Fed can keep everything pegged, we may limp along. The minute they lose confidence, they will unwind their trades. On the margin, nobody owns the Treasury bond; you rent it. Trillions of treasury paper is funded on repo: You buy $100 million (M) in Treasuries and immediately put them up as collateral for overnight borrowings of $98M. Traders can capture the spread as long as the price of the bond is stable or rising, as it has been for the last year or two. If the bond drops 2%, the spread has been wiped out. If that happens, the massive repo structures—that is, debt owned by still more debt—will start to unwind and create a panic in the Treasury market. People will realize the emperor is naked. TGR: Is that what happened in 2008? DS: In 2008 it was the repo market for mortgage-back securities, credit default obligations and such. In 2008 we had a dry run of what happens when a class of assets owned on overnight money goes into a tailspin. There is a thunderous collapse. Since then, the repo trade has remained in the Treasury and other high-grade markets because subprime and low-quality mortgage-backed securities are dead. TGR: Walk us through a hypothetical. What happens when the fast-money traders lose confidence in the Fed’s ability to keep the spread? DS: They are forced to start selling in order to liquidate their carry trades because repo lenders get nervous and want their cash back. However, when the crisis comes, there will be insufficient private bids—the market will gap down hard unless the central banks buy on an emergency basis: the Fed, the European Central Bank (ECB), the people’s printing press of China and all the rest of them. The question is: Will the central banks be able to do that now, given that they have already expanded their balance sheets? The Fed balance sheet was $900 billion (B) when Lehman crashed in September 2008. It took 93 years to build it to that level from when the Fed opened for business in November 1914. Bernanke then added another $900B in seven weeks and then he took it to $2.4 trillion in an orgy of money printing during the initial 13 weeks after Lehman. Today it is nearly $3 trillion. Can it triple again? I do not think so. Worldwide it’s the same story: the top eight central banks had $5 trillion of footings shortly before the crisis; they have $15 trillion today. Overwhelmingly, this fantastic expansion of central bank footings has been used to buy or discount sovereign debt. This was the mother of all monetizations. TGR: Following that path, what happens if there are no buyers? Do the governments go into default? DS: The U.S. Treasury needs to be in the market for $20B in new issuances every week. When the day comes when there are all offers and no bids, the music will stop. Instead of being able to easily pawn off more borrowing on the markets—say 90 basis points for a 5-year note as at present—they may have to pay hundreds of basis points more. All of a sudden the politicians will run around with their hair on fire, asking, what happened to all the free money? TGR: What do the politicians have to do next? DS: They are going to have to eat 30 years worth of lies and by the time they are done eating, there will be a lot of mayhem. TGR: Will the mayhem stretch into the private sector? DS: It will be everywhere. Once the bond market starts unraveling, all the other risk assets will start selling off like mad, too. TGR: Does every sector collapse? DS: If the bond market goes into a dislocation, it will spread like a contagion to all of the other asset markets. There will be a massive selloff. I think everything in the world is overvalued—stocks, bonds, commodities, currencies. Too much money printing and debt expansion drove the prices of all asset classes to artificial, non-economic levels. The danger to the world is not classic inflation or deflation of goods and services; it’s a drastic downward re-pricing of inflated financial assets. TGR: Is there any way to unravel this without this massive dislocation? DS: I do not think so. When you are so far out on the end of a limb, how do you walk it back? The Fed is now at the end of a $3 trillion limb. It has been taken hostage by the markets the Federal Open Market Committee was trying to placate. People in the trading desks and hedge funds have been trained to front run the Fed. If they think the Fed’s next buy will be in the belly of the curve, they buy the belly of the curve. But how does the Fed ever unwind its current lunatic balance sheet? If the smart traders conclude the Fed’s next move will be to sell mortgage-backed securities, they will sell like mad in advance; soon there would be mayhem as all the boys and girls on Wall Street piled on. So the Fed is frozen; it is petrified by fear that if it begins contracting its balance sheet it will unleash the demons. TGR: Was there some type of tipping that allowed certain banks to front run the Fed? DS: There are two kinds of front-running. First is market-based front-running. You try to figure out what the Fed is doing by reading its smoke signals and looking at how it slices and dices its meeting statements. People invest or speculate against the Fed’s next incremental move. Second, there is illicit front-running, where you have a friend who works for the Federal Reserve Board who tells you what happened in its meetings. This is obviously illegal. But frankly, there is also just plain crony capitalism that is not that different in character and it’s what Wall Street does every day. Bill Dudley, who runs the New York Fed, was formerly chief economist for Goldman Sachs and he pretends to solicit an opinion about financial conditions from the current Goldman economist, who then pretends to opine as to what the economy and Fed might do next for the benefit of Goldman’s traders, and possibly its clients. So then it links in the ECB, Bank of Canada, etc. Is there any monetary post in the world not run by Goldman Sachs? The point is, this is not the free market at work. This is central bank money printers and their Wall Street cronies perverting what used to be a capitalist market. TGR: Does this unwinding of the Fed and the bond markets put the banking system back in peril, like in 2008? DS: Not necessarily. That is one of the great myths that I address in my book. The banking system, especially the mainstream banking system, was not in peril at all. The toxic securitized mortgage assets were not in the Main Street banks and savings and loans; these institutions owned mostly prime quality whole loans and could have bled down the modest bad debt they did have over time from enhanced loan loss reserves. So the run on money was not at the retail teller window; it was in the canyons of Wall Street. The run was on wholesale money—that is, on repo and on unsecured commercial paper that had been issued in the hundreds of billions by financial institutions loaded down with securitized toxic garbage, including a lot of in-process inventory, on the asset side of their balance sheets. The run was on investment banks that were really hedge funds in financial drag. The Goldmans and Morgan Stanleys did not really need trillion-dollar balance sheets to do mergers and acquisitions. Mergers and acquisitions do not require capital; they require a good Rolodex. They also did not need all that capital for the other part of investment banking—the underwriting business. Regulated stocks and bonds get underwritten through rigged cartels—they almost never under-price and really don’t need much capital. Their trillion dollar balance sheets, therefore, were just massive trading operations—whether they called it customer accommodation or proprietary is a distinction without a difference—which were funded on 30 to 1 leverage. Much of the debt was unstable hot money from the wholesale and repo market and that was the rub—the source of the panic. Bernanke thought this was a retail run à la the 1930s. It was not; it was a wholesale money run in the canyons of Wall Street and it should have been allowed to burn out. TGR: Let’s get back to our ballgame. What is to keep the U.S. population from saying, please Fed save us again? DS: This time, I think the people will blame the Fed for lying. When the next crisis comes, I can see torches and pitch forks moving in the direction of the Eccles building where the Fed has its offices. TGR: Let’s talk about timing. On Dec. 31, the tax cuts expire, defense cuts go into place and we hit the debt ceiling. DS: That will be a clarifying moment; never before have three such powerful vectors come together at the same time— fiscal triple witching. First, the debt ceiling will expire around election time, so the government will face another shutdown and it will be politically brutal to assemble a majority in a lame duck session to raise it by the trillions that will be needed. Second, the whole set of tax cuts and credits that have been enacted over the last 10 years total up to $400–500B annually will expire on Dec. 31, so they will hit the economy like a ton of bricks if not extended. Third, you have the sequester on defense spending that was put in last summer as a fallback, which cannot be changed without a majority vote in Congress. It is a push-pull situation: If you defer the sequester, you need more debt ceiling. If you extend the tax expirations, you need a debt ceiling increase of $100B a month. TGR: What will Congress do? DS: Congress will extend the whole thing for 60 or 90 days to give the new president, if he hasn’t demanded a recount yet, an opportunity to come up with a plan. To get the votes to extend the debt ceiling, the Democrats will insist on keeping the income and payroll tax cuts for the 99% and the Republicans will want to keep the capital gains rate at 15% so the Wall Street speculators will not be inconvenienced. It is utter madness. TGR: It is like chasing your tail. How does it stop? DS: I do not know how a functioning democracy in the ordinary course can deal with this. Maybe someone from Goldman Sachs can come and put in a fix, just like in Greece and Italy. The situation is really that pathetic. TGR: Greece has come up with some creative ways to bring down its sovereign debt without actually defaulting. DS: The Greek debt restructuring was a farce. More than $100B was held by the European bailout fund, the ECB or the International Monetary Fund. They got 100 cents on the dollar simply by issuing more debt to Greece. For private debt, I believe the net write-down was $30B after all the gimmicks, including the front-end payment. The rest was simply refinanced. The Greeks are still debt slaves, and will be until they tell Brussels to take a hike. TGR: Going back to the triple-witching hour at year-end, if the debt ceiling is raised again, when do we start to see government layoffs and limitations on services? DS: Defense purchases and non-defense purchases will be hit with brutal force by the sequester. As we go into 2013, there will be a shocking hit to the reported GDP numbers as discretionary government spending shrinks. People keep forgetting that most government spending is transfer payments, but it is only purchases of labor and goods that go directly into the GDP calculations, and it is these accounts that will get smacked by the sequester of discretionary defense and non-defense budgets. TGR: I would think to unemployment numbers as well. DS: They will go up. Just take one example. According to the Bureau of Labor Statistics monthly report, there are 650,000 or so jobs in the U.S. Postal Service alone. That is 650,000 people who pretend to work at jobs that have more or less been made obsolete and redundant by the Internet and who are paid through borrowings from Uncle Sam because the post office is broke. Yet, the courageous ladies and gentlemen on Capitol Hill cannot even bring themselves to vote to discontinue Saturday mail delivery; they voted to study it! That is a measure of the loss of capacity to rationally cognate about our fiscal circumstance. TGR: In the midst of this volatility, how can normal people preserve, much less expand their wealth? DS: The only thing you can do is to stay out of harm’s way and try to preserve what you can in cash. All of the markets are rigged or impaired. A 4% yield on blue chip stocks is not worth it, because when the thing falls apart, your 4% will be gone in an hour. TGR: But if the government keeps printing money, cash will not be worth as much, either, right? DS: No, I do not think we will have hyperinflation. I think the financial system will break down before it can even get started. Then the economy will go into paralysis until we find the courage, focus and resolution to do something about it. Instead of hyperinflation or deflation there will be a major financial dislocation, which means painful re-pricing of financial assets. How painful will the re-pricing be? I think the public already knows that it will be really terrible. A poll I saw the other day indicated that 25% of people on the verge of retirement think they are in such bad financial shape that they will have to work until age 80. Now, the average life expectancy is 78. People’s financial circumstances are so bad that they think they will be working two years after they are dead! TGR: Finally, what is your investment model? DS: My investing model is ABCD: Anything Bernanke Cannot Destroy: flashlight batteries, canned beans, bottled water, gold, a cabin in the mountains. TGR: Thank you very much. [Stockman was the keynote speaker at last weekend’s Casey Research Recovery Reality Check Summit. This event featured legendary contrarian investor Doug Casey, high-end natural resource broker Rick Rule, New York Times bestselling author John Mauldin and 28 other financial luminaries. Over the three-day summit, they provided investors with asset-protection action plans and actionable investment advice. And even if you were unable to attend, you can still hear every recorded presentation in the Summit Audio Collection. Learn more here.] David Stockman is a former U.S. politician and businessman, serving as a Republican U.S. Representative from the state of Michigan 1977–1981 and as the director of the Office of Management and Budget under President Ronald Reagan 1981–1985. He is the author of The Triumph of Politics: Why Reagan’s Revolution Failed and the soon-to-be released The Great Deformation: How Crony Capitalism Corrupts Free Markets and Democracy. [Stockman was the keynote speaker at last weekend’s Casey Research Recovery Reality Check Summit. This event featured legendary contrarian investor Doug Casey, high-end natural resource broker Rick Rule, New York Times bestselling author John Mauldin and 28 other financial luminaries. Over the three-day summit, they provided investors with asset-protection action plans and actionable investment advice. And even if you were unable to attend, you can still hear every recorded presentation in the Summit Audio Collection. Learn more here.] Want to read more exclusive Gold Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Exclusive Interviews page. Disclosure: From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.last_img read more

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Its always the timing thats hard to predict…and

first_imgIt’s always the timing that’s hard to predict…and what JPMorgan Chase et al will do when it occurs.It was pretty much a nothing day for gold again on Friday.  The low price tick [just under $1,705 spot] came about 11:30 a.m in London…and the subsequent rally was never allowed to get above Thursday’s closing price in New York.  Once the London p.m. gold fix was in at 10:00 a.m. Eastern time, the gold price traded more or less sideways into the 5:15 p.m. electronic close.Gold closed at $1,713.70 spot…down $2.40 on the day.  Net volume was exceedingly light, as only around 108,000 contracts were traded.Of course the silver price action was far more ‘volatile’.  The London low came about the same time as gold’s low price tick…and the subsequent rally into the London p.m. gold fix [the high of the day at $32.72 spot] was more defined…as was the engineered price decline that immediately followed.The low of the day [$31.96 spot] came at precisely 11:30 a.m. in New York.  The rally that followed wasn’t allowed to get back above it’s Thursday closing price…and got sold down into the close.Silver finished the day at $32.31 spot…down 29 cents.  Net volume was only 26,500 contracts.Here’s the New York Spot Silver [Bid] chart on its own, so you can see the wild price gyrations that occurred during the Comex trading session.The dollar index opened at 81.04…and then rallied about ten basis points by 8:30 a.m. in New York.  Then away went the index to the upside, with the high tick of 81.44 coming just before 11:30 a.m. Eastern…and it was all down hill from there until about 3:45 p.m…and the dollar index traded sideways from there into the close of trading, finishing up 16 basis points on the day at 81.20.A casual glance at the gold chart shows no co-relation whatsoever between the dollar index and the gold price.  The only co-relation I could see was that the index topped out about the same time as silver hit its low price tick…and even then it’s a real stretch to get any co-relation with the rest of the trading day.The gold stocks followed the tiny price gyrations of the gold price pretty closely during the time the equity markets were open…except for the smallish rally going into the close of trading that began before 3:00 p.m. Eastern time.  That was certainly unrelated to the gold price action at the time, which was comatose.  The HUI finally had a positive close…the first time in six days…up 0.87%.Despite silver’s lousy price performance, most of the silver stocks finished well into the plus column…but the seven large cap silver stocks that make up the Silver Sentiment Index only closed up 1.39% on average.  A lot of the juniors did much better than that.(Click on image to enlarge)The CME Daily Delivery Report was quiet once again, which has been typical all month, as November is not a regular delivery month for either gold or silver.  Yesterday they reported that only 1 gold contract was posted for delivery on Tuesday.The GLD and SLV went in separate directions again on Friday.  GLD reported that an authorized participant added 96,887 troy ounces of gold.  It was a different story over at SLV, as another 1,452,117 troy ounces were reported shipped out.  This amount was within 20 troy ounces of the amount that was reported shipped out on Thursday.  A reporting error perhaps?  I don’t know, but if it was, we’ll find out about it on Monday.I just want to note here that it appears that we are at an all-time record high for gold in GLD…which is 43,166,879 troy ounces.  And now that I check back through the records, we’ve been at these new record highs for many months now.  SLV has a long way to go…at least 40 million ounces.The U.S. Mint had another decent sales day on Friday.  They sold 8,500 ounces of gold eagles…1,500 one-ounce 24K gold buffaloes…and 70,000 silver eagles.  Month-to-date the mint has sold 56,000 ounces of gold eagles…8,000 one-ounce 24K gold buffaloes…and 2,265,500 silver eagles.  Based on these sales, the silver/gold sales ratio so far this month is a bit over 35 to 1.Over at the Comex-approved depositories on Thursday, they reported receiving 845,435 troy ounces of silver…and shipped nothing out.  The link to that activity is here.Well, I wasn’t at all surprised by the Commitment of Traders Report.  The big rally that began early last week got capped in the usual way, as JPMorgan et al went short against all comers…and that is certainly reflected in the increases in the Commercial net short positions in both metals…especially gold.In silver, the price increase over the reporting week wasn’t that great…and the Commercial net short position only increased by 1,283 contracts.  The total Commercial net short position now sits at 254.8 million ounces.The ‘Big 4’ bullion banks are short 251.5 million ounces of silver which, on a net basis, represents 44.0% of the entire Comex futures market in silver.  [A brief glance at the previous paragraph shows that these ‘Big 4’ traders are short almost the entire Commercial net short position all by themselves.]The ‘5 through 8’ big traders are short an additional 51.3 million ounces of silver, or 9.0% of the Comex futures market in silver on a net basis.Straight math shows that the ‘Big 8’ are short 53.0% of the entire Comex silver market on a net basis…and these are minimum numbers!In gold, the Commercial net short position increased by a chunky 17,053 contracts…or 1.7 million ounces…and is now back up to 22.48 million ounces.The ‘Big 4’ traders are short 34.1% of the entire Comex futures market in gold on a net basis…and the ‘5 through 8’ traders are short an additional 13.2 percentage points.  The ‘Big 8’ are short 47.3% of the entire Comex gold market on a net basis…minimum.It’s obvious that the bullion banks have the precious metals market in a vice…and aren’t about to let go anytime soon.  As I’ve always said, on any rally, the bullion banks are going short against all comers.  This past reporting week’s activity is a case in point.It’s these obscene and grotesque short positions that Bart Chilton was discussing with Lauren Lyster on Capital Account on Monday.  It’s obvious even to Bart…and it’s just as obvious that he can’t/won’t do anything about it…at least not at the moment.Here’s Nick’s “Days of World Production to Cover Short Positions” in graphic form.  The “obscene and grotesque” portions are on the far right of this chart.  For a historic perspective of the COTs for both gold and silver…click here for gold and here for silver.(Click on image to enlarge)A couple more ‘critter’ pictures that Nick extracted from a Powerpoint Presentation I received from reader William Gebhardt several weeks back.The first is a Hoopoe feeding its young, or the female sitting on the nest…This photo is a pair of hedgehogs…It’s a Saturday column…and I have a fair number of stories for you today…and quite a few must reads.[The] 1901 [Bull market] was…speculative demonstration based…on the assumption that we were living in a new era; that the old rules and principles and precedent of finance were obsolete; that things could safely be done today which had been dangerous or impossible in the past. The illusion seized on the public mind in 1901 quite as firmly as it did in 1929.  It differed only in the fact that there were no college professors in 1901 who preached the popular illusion as their new political economy. – Alexander Dana Noyes (1930)I have two ‘blasts from the past’ today…one pop, the other classical.  The pop song is from 1969…and that’s forty-three years ago if you can’t/don’t want to do the math.  The group…and the tune…are instantly recognizable.  The link is here.The short, and also instantly recognizable classical piece, is an old Berlioz chestnut from The Damnation of Faust which was first performed in Paris on 6 December 1846…and the link is here.Well, there’s not too much to say about Friday’s performance in the precious metals that I haven’t already said just about every day this past week.  The roll-overs out of the December contract continue unabated…with the ever-present fear of an engineered price decline by JPMorgan Chase and probably Scotia Mocatta…et al.Between now and the end of the month, I just have no idea how this is going to unfold…and as I’ve said too many times already, I could make a strong case for an up-side price break out…or a down-side smash.  I wish I could be more helpful, but it’s impossible to really know…and nobody else knows for sure, either.  These markets are totally within the grip of the big bullion banks…and will remain that way until they either give up control, or get over run.You may have noted further up in this column that there was another story about a price break-out above the $2,000 mark in the not-too-distant future.  That will only happen if “da boyz” allow it…or some ‘black swan’ event with a big “fat tail” makes an appearance…and in today’s economic, monetary and political environment…it’s highly likely at some point.  But it’s always the timing that’s hard to predict…and what JPMorgan Chase et al will do when it occurs.The other thing that’s worth mentioning…and that Ted Butler has been going on about for about two years now…is the frantic physical silver in-out activity in the various warehouses and ETFs all around the world.  This past week’s activity was totally off the charts…and smacks of desperation by the insiders.  If I had to pick a place where the train might go off the rails, this would be it.  We’ll see.That’s it for another week…and I’ll see you here on Tuesday…Wednesday west of the International Date Line.I’m off to bed. Tosca Mining Corporation’s goal is to acquire advanced stage projects that can be placed into production quickly. The company’s primary asset is the Red Hills Molybdenum/Copper project located in Presidio County, Texas. A program to confirm, and expand the considerable size and potential of the project and evaluate various economic scenarios was completed in 2011. Tosca recently received results from the 13 remaining holes from its phase two, 16,000 M (4,873 m) diamond drill program. Per Tosca’s Chairman, Dr. Sadek El-Alfy, “the drill program has successfully verified historic drill results of the shallow Copper-Molybdenum cap and confirmed the presence of a deeper, well mineralized Molybdenum Porphyry deposit.” The results of 21 holes drilled through the copper/moly cap in Tosca’s 2011 drill program give a weighted average grade of 0.39 % Cu over a core length of 113 feet (34.5 m). Since the copper cap is subhorizontal, the average core length can be interpreted as being approximately equivalent to true width. The copper/moly cap is crescent shaped, approximately 4,000 feet (1220 metres) long and 400 feet (122 m) to 1000 feet (305 m) wide.The 2011 program encountered numerous thick  Molybdenum mineralized intervals including Hole TMC-25 wich  intersected 1,189 feet (362.4 m) averaging 0.089 per cent Mo including 830 feet (253 m) of 0.1 per cent Mo from 359 feet (109.8 m) to the bottom of the hole. Hole TMC-29 cut 989 feet (301.4 m) averaging 0.09 per cent Mo including 139 feet (42.4 m) of 0.16 per cent Mo. The molybdenum grades are similar and in some cases higher than those of projects currently considered of potential economic interest.”Aggressive plans are in place for 2012 to conduct metallurgical tests, produce an updated resource estimate and  Pre Economic Assesment. Tosca is operated by an experienced mine development team, operates in Texas, a  mine-friendly jurisdiction and its property iseasily accessible with infrastructure in place to advance operations. Please visit our website to learn more about the company ad request information. Sponsor Advertisementlast_img read more

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