Hecla, though, stands out as one of the biggest losers after tumbling 59 cents per share or 11.5 percent. That fall slashed the company’s market cap by more than $100 million in a single day of trading. Speculators, it appears, ran for the hills after hearing unemployment claims bumped up for the fourth time in five weeks.

480,000 people sought jobless benefits last week, and that means today’s unemployment numbers for January aren’t going to be good. Indeed, economists are calling for a 10.1 percent unemployment rate. Not good.

Why did Hecla get crushed?

In January, Hecla Mining Company’s (NYSE:HL) execs decided to sell some $2.5 million in stock. That was enough for me to jump ship. They’re all about the money. If they thought the stock was going to keep climbing in the short-run, they wouldn’t have sold (even if the shares were a tax liability as they claimed).

Taxes are a witch, of course, and it’s understandable that they wanted to avoid them. Still, the reasons why the execs had a lot of shares in the first place is even more troubling: Hecla had to defer their salaries in the form of restricted shares.

This all comes after to eyes-are-bigger-than-my-belly acquisition of the Greens Creek mine from Rio Tinto PLC (NYSE:RTP). In the wake of that buy, Hecla was forced into a series of equity offerings after the market tanked in 2008. They’ve been paying for it ever since.

Just about everyone seems to think credit card companies are next in line for a crisis, but that doesn’t necessarily mean everyone’s right. Take the case of Ford Motor Company (NYSE:F), for instance. If you’d told me a year ago that they’d be trading at 4-1/2-year high, I’d say you were loony.

But, of course, that just means I missed out on a 494 percent surge in stock price over the past 12 months. See, when pessimism’s at its worst, it’s the time to buy, and right now, there are few other sectors besides credit card lending where pessimism’s still at high levels (real estate comes to mind and little else).

We’ll get a good barometer on credit card companies this week with the release of earnings from MasterCard (NYSE: MA) and Visa (NYSE: V). The two giant moons orbiting wallets across the country, the companies make their money off transaction fees. And just because people aren’t buying as much doesn’t mean they aren’t still paying fees.

As the world moves closer to a cashless society, Mastercard and Visa are perfectly poised to capitalize on the trend. And while they get all the attention, gems like Discover go unnoticed.

Discover Financial Services will report their earnings on March 18, 2010, before the market open.

Investors feel shaky. Nonetheless, there are glimmers of hope out there. A lot of them that shining though yesterday:

1) Amazon holiday profit beats, sees strong 1st qtr. From Reuters, we learned Amazon.com, Inc.’s (NASDAQ:AMZN) Q4 revenue was up 42 percent. That beat estimates, and the company sees an even rosier Q1 in 2010.

2) Samsung Jumps Back to Profit in 4th Quarter. South Korea-based Samsung Electronics Co. earned $2.6 billion in Q4 2009. That’s an improvement of nearly $20 billion over the year before.

3) New Windows helps Microsoft see profit jump 60%. “The software giant’s revenue climbs 14% in the fiscal second-quarter, boosted by demand for its Windows 7 operating system,” the LA Times reports on Microsoft Corporation (NASDAQ:MSFT) .

4) In a big turnaround, Ford posts a profit of $2.7 billion. Ford Motor Co. (NYSE:F) posted a $2.7 billion profit for the year. That’s 86 cents per share versus a loss of $6.50 per share in 2008!

Here are some more:

Kia 4Q Net Soars; Targets 3% Global Market Share In 2010
Nokia Profit Rises on Smartphone Sales and Cost-Cutting; Nokia Corp. (NYSE:NOK)
Its First Profit in 5 Quarters Pushes Kodak Stock Up 25%; Eastman Kodak Company (NYSE:EK) shares shot up 24.6 percent on the news!
P.&G. and Colgate Post Higher Sales in Quarter; The Procter & Gamble Company (NYSE:PG) and Colgate-Palmolive Company (NYSE:CL)
SanDisk posts 4Q profit on memory card sales; SanDisk Corporation (NASDAQ:SNDK)

What’s it all mean?

Samsung’s sales seem most promising. The company reported that most of their strength came from the sale of flatscreen TVs, cellphones and computer chips. In case we’re wont to forget in America, flatscreen TVs and computers are big-ticket, luxury items (even if they’re “marked down”). Once consumers start shelling out more cash for goodies at home, companies will start hiring, unemployment will fall, the GDP will rise and America just might feel like America again. That’s the theory anyway. And it just might be true – at least until inflation hits.

The stock’s gotten pummeled since distributing a 15 cent dividend on Jan. 13 falling 18 percent in eight trading days. That’s too far to drop in too short a time; particularly as gold prices have stabilized. Here’s three reasons then to give Freeport-McMoRan a look:

1) Profit-to-earning ratio. Freeport-McMoRan’s the third-biggest gold mining stock on the major exchanges with a market cap of $31 billion. The only mining companies with bigger market caps are Rio Tinto Plc. (NYSE:RTP) at $96.4 billion and Barrick Gold Corporation (NYSE:ABX) at $35 billion. Freeport-McMoRan is currently the only profitable company among them, though. And they’re trading at a P/E of 12.62.

2) Earnings Report. On Jan. 21, Freeport-McMoRan reported profits of $2.15 per share. That smashed analyst estimates of $1.73. That’s great news after FCX underwent an enormous restructuring last year at a cost of $11.3 billion. Tighter belts and well-lubed wheels mean they’ll likely outperform their peers in the years to come.

3) Copper showing signs of life. As several economies around the world rebounded last year, industrial demand for copper started climbing. A report released yesterday showed that orders for the metal rose 2.7 percent in Europe in November, and analysts are predicting it may hit record prices this year on that demand. More importantly, demand from China has shown little sign of diminishing. Copper prices doubled in 2009, and FCX is the world’s lowest-cost copper producer. The company’s positioned perfectly then if things truly due turn around.

Even if you think the TRE’s due for long-term gains, that steep uptick presents a great time to sell out and buy back in later.

Why the jump in price?

Investors started salivating over Tanzanian Royalty when the company announced they’d raised $3.14 million by selling 1,155,835 shares of stock on Dec. 22. The plan? Use the money to finance the equipment to do bulk sampling of the Kigosi Gold Project in the Lake Victoria Goldfields of Tanzania.

That could be a major step forward toward capitalizing on TRE’s outsize holdings in Tanzania. Indeed, TRE controls more than half of all the gold projects in the entire country, and they’ve got a 60 percent stake in the Lake Victoria region (Barrick Gold – NYSE: ABX – has the rest, and that’s a sign in itself that the mines there should be taken seriously).

Still, investors are fickle people. They might be interested in Tanzanian Royalty for a few months, but they’ll tire before the results of samples come in. And that’s when you can buy again. Still, if the results of the samples are positive, the stocks recent gains will pale in comparison to their future spikes and Tanzanian Royalty just might become profitable.

Update: The day after writing this story, stock in Tanzanian Royalty plunged 14 percent making it the biggest loser among gold and silver stocks on the day. Support seems to have clustered around $4.

Specifically, in a report posted on Zerohedge, they argue that gold will hit $990 per ounce in the second quarter of 2010. That’s a drop of $135 an ounce from current levels. They also forecast gold prices dropping further in Q3 to $980 before rebounding back above $1040 in Q4.

Why all the bearishness? “In 2009 we reasoned that the main drivers of the gold price were significantly linked to the trade weighted dollar, increased investment demand, central bank purchases and market sentiment. The increase in investment demand for gold ETFs, in our view, had an ‘accelerating and reinforcing effect’ on market sentiment and the safe haven status of gold which resulted in upward pressure on the gold price which rose 24.6% during 2009. We do not expect the 2009 rate of investment in ETFs to continue at the same pace in 2010.”

Of course, others (myself included) would argue that we’re not out of the water yet. All we need is one black swan to swoop in and suck the air out of the hyped-up, government-fueled rally we’re in. A major bank collapse, perhaps, or continued losses across multiple sectors in Q1 2010 would do the trick.

More likely than a black swan, though, is a series of gray swans – a gradual and steady accumulation of bad news that skirts along the edge of the mainstream media. Perhaps we’re already there. See, yesterday’s article at AmericanBankingNews.com: “Bank Closures in 2010 Begin in Earnest: Three More Closed, One with No Buyer.”

An economy can’t keep losing a net number of jobs and expect to grow. Jobs drive the economy.

Since there aren’t any jobs, though, its been the government’s job to provide growth. And that’s ballooning the federal deficit. So long as the trend continues, inflation is going to be a very real threat – more so than it was last year. And that’s what leads me to disagree with Credit Suisse.

The threat of inflation drove the rally in gold last year, and it’s going to keep driving it this year. It might be slow and riddled with sell-offs, but it’ll keep going (unless, of course, we meet another black swan).

All that said, why then might Credit Suisse publish a report that’s bullish on the economy and negative on gold. The writers at Zerohedge have one theory: self-interest.

“Such optimism, even as the global economy is poised on the edge of the double-dip?” they write. “We wonder who Credit Suisse recommends its clients sell their gold to? Could it be… Credit Suisse?”

I wouldn’t go that far, but I would argue that Credit Suisse’s analysis comes with an enormous glittering caveat: if there aren’t any disruptive events, bank collapses, inflation, bond defaults, bank runs, massive layoffs or housing crises, then, perhaps, gold prices will take a tumble.

Definition of the day

Black Swan: An event that is highly improbable (and unforeseen and therefore omitted from models) that nonetheless occurs and has a significant impact (Source: moneyterms.co.uk)

How to hedge against inflation

Check out the most popular article on my site, the How to hedge against inflation in 10 easy steps.

Shares could be under more pressure starting Tuesday after European finance czar Jean-Claude Juncker of Luxembourg intimated that more might need to be done in Greece to prop up the country’s finances.

“The Greek government is aware of the magnitude of the problems facing the country,” he said. “The measures are a step in the right direction. We’ll have to see whether they’re enough.”

Indeed, Greece’s finances are precarious. The government’s budget has ballooned in an attempt to stave off financial woes. They’re working on a solution:

“The Greek government’s latest proposals call for about 10 billion euros ($14.4 billion) of spending cuts and revenue increases this year to bring the budget shortfall from 12.7 percent of output to 8.7 percent by year end,” BusinessWeek reports.

But that’s not enough for some with the Dutch Finance Minister Wouter Bos who says that the program “needs to be more substantial.” Even the European Central Bank President Jean-Claude Trichet got in on the Greek-bashing, saying no nation can expect any “special treatment” when it comes to EU regulations.

Already, shares in National Bank of Greece are trading at 6 month lows. Keep an eye on the stock as EU pressure might increase fears of default on government bonds (likely the opposite result they’re looking for). The National Bank of Greece has heavy exposure to government bonds, and, if they had to write off losses there, shares in the bank would get crushed.

Formed in 2006, China Hydroelectric booked sales of $35 million over the past year. The company hopes to raise $50 million through the sale of ADRs (that entitle the holder to 1/3 of a share of the company). In all, 3.125 million shares will hit the market at a target price of $15-$17.

Here are some detailed facts on China Hydroelectric and their industry:

   •  China Hydroelectric owns and operates 11 small hydropower plants.
   •  Throughout 2007, the company’s installed capacity rose 367 percent thanks to acquisitions. China Hydroelectric is now capable of producing more than 271.0 MW annually.
   •  China leads the world in installed capacity in hydropower at 171 GW of installed capacity.
   •  Hydropower provides 20 percent of the world’s electricity (and nearly 90 percent of the world’s renewable energy).

“Installed capacity” refers to the full amount of hydropower a plant could produce if it ran at full capacity year-round.

Other Chinese companies planning IPOs in the coming weeks:

   •  Andatee China Marine Fuel (Ticker: NASDAQ:AMCF), Week of Jan. 18.
   •  Century 21 China (Ticker: NYSE:CTC), Week of Jan. 25.

The spat of Chinese IPOs on American exchanges follows the successful launch of China Wind Systems, Inc. (NASDAQ:CWS), a company that provides parts for wind turbines. See our post, Three reasons to buy China Wind Systems, Inc., (CWS), for more.

More China in the News

What Google’s Exit from China Means for the Markets

Charles Gradante, who co-founded the Hennessee Group, is a believer: “While we see both gold and silver as safe haven investments, particularly as a hedge against the longer term risk of hyper-inflation,” he wrote in a statement, “we believe gains in silver will outpace gold.”

Epoch Times also found newsletter writer Roger Wiegand, who’s calling for silver at $22 per ounce in the early part of this year.

I’ve talk at length about why silver looks more appealing than gold (see “Gold-Silver Ratio Points to Rise in Silver Prices” and “iShares Silver Trust (SLV) Vs. SPDR Gold Trust (GLD)“). That’s good to know, but what silver mining stocks in particular look better than their peers?

Best of the best silver mining stocks

My three favorites follow. As always, please use them as a jumping off point for further research rather than blindly buying them.

1) Silver Wheaton Corp. (NYSE: SLW). One of the majors, Silver Wheaton’s currently trading at the preposterous P/E ratio of 2,471.59. Recent dilutions in stock price mask future earnings for the company. Rather than being a pure silver producer, they’re more like deal makers, partnering with gold producers who need money to bring mines online.

Since silver is a common gold mining byproduct, Silver Wheaton helps companies start digging in exchange for lots and lots of silver down the road. SLW recently brokered a deal with Goldcorp Inc. (NYSE:GG) that cost them $625 million, in exchange for the rights to 250 million ounces of silver. Do the math. Even if you forget about all their other opportunities, you’ll see how they stand to make gobs of cash. If you want to learn more, check out my post “Five Reasons to Buy Silver Wheaton Corp (NYSE:SLW).”

Alexco Resource Corp. (AMEX:AXU). Much like Silver Wheaton, Alexco Resource Corp. takes a less-flashy approach to making money with silver; they go after closed or historical silver mines. In fact, they recently inked a $50 million deal with Silver Wheaton to develop Keno Hill – a Canadian mine that produced 40.5 ounces of silver per ton over 67 years. Alexco’s expert at finding overlooked silver veins, and Silver Wheaton had enough faith in them to write out a check with a lot of zeros. That is, in my mind, enough of a reason to take a serious look at the stock. Then, check out the fact that it’s shot up about 250 percent over the past 12 months.

Silvercorp Metals, Inc. (NYSE:SVM) Indeed, I’m saving the best for last. Silverccorp Metals has one of the best P/E ratios on the market, clocking in at 10.58 with earnings per share of $0.65. Averaging about 1.25 million shares traded per day, the stock seems as neglected as any silver mining stock on the market.

Of course, buying a stock when no one else is takes patience, but it’s also one of the hallmarks of great value investing. Based in Canada with mines in China, Silvercorp is China’s primary silver producer and the lowest cost silver producer. When people discover this stock, it’ll likely climb fast and furiously.

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Like precious metals? Check out my post on the “Top 10 Best Books on Gold Investing.”

That doesn’t mean Aurizon’s doomed. In fact, there are plenty of reasons to look closer at the company, and, perhaps, catch an upswing in prices.

Why Aurizon?

Aurizon’s production numbers of late have outstripped their own guidance, proving that their flagship mine Casa Berardi in Quebec has high-quality ore. All told, they dug 159,261 ounces of gold out of the ground in 2009. That’s a lot of gold, and they were able to do it at a cost of about $414 per ounce.

Here are some other reasons to look at the company:

  •  In all, Aurizon has more than 2 million ounces of provable reserves.
  •  The company has 80 claims in the Kipawa area of Quebec.
  •  The Joanna property near Casa Berandai has 1 million ounces of provable reserves (according to a study that focused on just one dense deposit of gold).
  •  Low debt. Aurizon’s long-term debt is hovering around $0.7 million.
  •  Aurizon shares are bouncing around their early 2008 levels – before gold spiked to record highs.

When the public interest shines their light on Aurizon again, the stock will rise again, too. Sideways trading only goes on for so long, when a company’s profits and potential keep going up.

Like Aurizon? You’ll like Taseko, too

Check out: “Taseko Mines Limited: The Most Under-appreciated Stock on the Market.”