These are longer than normal as the call went on for a full hour and there were several questions from listeners. What I found most interesting is something I had not heard before - the impact of the Glencore IPO and its meaning on the commodity sector. I think I will have to do some research here as Don seems to think this was a big thing. If anyone knows anything about that, please do post it.

5/6/11 Don Coxe Call

· Been doing these calls since 1983 and can rarely recall a week when there’s been such good news. Very good news about Canada’s election – shows Canadians have a very practical approach to government versus just promises. Hard to remember a week when we have all had such great news to include Bin Laden take out, great payroll numbers across North America both in the US and Canada far exceeding expectations (Canada more than twice the expected growth). Canada is definitely on a good course.

· But then we have the commodity story this week starting with the breakdown/collapse of silver. But the big news is the Glencore underwriting where they have lined up $50 billion dollars for investment that was probably taken out of investments in commodities. The fact that money was removed from such a wide range of commodity strategies does make people wonder. So have Glencore sold out at the top? Glencore was begun by the biggest crooks at the time, Marc Rich, who was a US fugitive for years and had moved to Switzerland. Bill Clinton as one of his last great acts before leaving office was to pardon marc rich after receiving $1m for his charity/library. (This despicable act of Clinton was far worse in Don’s view than the Monica debacle.) In exile, Rich became an even bigger force in the commodity markets. You do need to hand his credit for making so much money in the commodity markets. Can understand then why people want to buy Glencore stock. This does signal that in the mind of these experts we are expecting some kind of pause here. Glencore people have unbelievable influence. Advised Putin to embargo wheat exports after they had taken a large position in wheat futures. This shows you the influence of the Glencore people and illustrates the immorality of the commodity markets. (Don made a point of mentioning that Glencore is not on his list of investments companies to work with.)

· Weekly jobless numbers increase in US was a breakthrough of the trend line. May indicate that US economy is at a point where the employable unemployable are being sopped up but that there is an underlying structural problem that is not being address.

· Silver break was really triggered by the raising of margins 5 times. He has never seen any margin requirement changes in such a short time before. This is what broke silver and this then had a negative impact on gold but gold was certainly not as impacted. The truly precious metal, gold did in fact outperform the tarnished silver. He has always expressed caution about silver as there were just too many bulls. That plus all the conspiracy theories made this market at risk for a bust. The sheer trading volume of the silver ETF was one of the biggest of anything on the US stock exchange. This tells you there is just too much participation by everyone.

· The fact that agriculture has held up the best illustrates that here there is still at play the law of supply and demand. Corn never really pulled back significantly. With corn and sugar we are getting part of this cross over effect between food and fuel. Now because of 40% of corn is going into fuel and Brazil doesn’t have enough corn for its ethanol so it is buying some corn from US, this gradual move of using food for fuel, means that the inflation of fuel and food will reinforce each other. (Food and fuel inflation used to be separate from each other.) IF fuel has the first call on the grains, then the poorest of the world will be even more at risk. The chances of a new rally into all new highs are more likely at the agriculturals then it is for the other commodities.

· PMs will continue to trade based on the problems in the Euro zone, the value of the dollar, actual inflation, etc.

· Copper is the pure play on the economy. Copper came right back to its 200 day average. People still think there will be industrial world buying of copper. Does believe that China is doing the right thing by imposing restraints to keep inflation there under control. China is doing what it needs to do to keep the game going.

· We believe the commodity story although bruised and bloodied remains intact.

· 1st quarter GDP growth shows that it will be a struggling US economy going forward.

· Feels the Canadian election will remove the overhang of whether investors should continue to invest in Canada. The biggest inflows recently was to buy Canadian bonds (versus in the past it was just resource stocks and banks.)

· Feels it is significant that on Thursday they did have a meeting with all the players on the budget. It may be that this could be the biggest good news of last week…that Americans are finally get together and try to deal with their woeful budget.

· Question for Don – From Mike Stack - the 5 moves by the exchange indicates possibly that same concern his firm has had is that we have been concerned by all the moves into the paper silver versus investment into real physical. Kind of alludes to conspiracy theme. Don’t you think the exchanges are concerned with all this paper silver? Don, said there could be a problem if an ETF ever broke because it did not have enough to back the money in it….this could be a serious financial concern although this is not tied to any conspiracy theory. There was concern as to whether when the contract matured, whether physical could be delivered on it. Tremendous volume in silver ETF shows that it was out of control. But this then fed over into all sorts of other commodities with people thinking other commodities were also in a bubble. (Don feels that we certainly were in a silver bubble). Doesn’t think the regulators were doing this because of the conspiracy theory.

· Question – Trading world is without a book of rules. $50 million drawdown with Glencore IPO and significant margin increase how does that impact trading? Sell off in oil has been truly scary as oil should be trading in much narrow ranges than what it has recently. Glencore has been such a gigantic factor in world markets might make regulators realize they need to better regulate markets. They have to intervene to make sure the rise is due to supply and demand and not just speculators. Glencore is a shadowy group that is trading outside the normal markets. Amazing when you think of it that they were so successful in getting Russia to institute wheat embargoes. This attracted a lot of capital into the foods. This was an extraordinary event and we never would have known this if they had not had to make that statement in order to get their prospective filed.

· Question – relating to US debt and whether the US can actually fix the problem. What impact would that success have on gold? Won’t this then also negatively impact the US growth if it had to honestly address the debt? Don believes that if the government were really to address this issue, it would be negative for gold. Thinks there will be a series of stop gap measures to make it through the next election. A huge part of current GDP is coming from the government. On the other hand, the industrial export part of the economy is stronger than anyone thought. US does have the great good luck of shale gas which holds down the cost of electricity and heating homes despite what’s going on in the oil companies.

· Question – Any views on the forestry sector? If you consider the rebuilding of Japan and southern US with its amazing tornadoes, there clearly will be a bigger demand for lumber than previously. Real short term demand for rebuilding on a big scale. But this will be short term, not long term which is why Don does not include forestry in his fund. He has taken a vow of silence about forestry companies.