Wednesday, May 27, 2015
Here's QQQ's chart, including that oh so horrible red candle printed on Tuesday:
And it turns out yesterday was no big deal after all, and QQQ is moving right back towards its recent highs.
So whatever reason everyone had for selling the US yesterday, it turns out it was an utterly stupid reason.
Here's more news for you:
Liz Ann Sonders - market perspective. She (or more likely that panty-piddling sissy Kleintop) expects more volatile prices moves as the US gets closer to a rate hike. She (or more likely that panty-piddling sissy Kleintop) has forgotten entirely about "corrections in time" and how they replace corrections in price.
Yanis Varoufakis - austerity is the only deal-breaker. And because the IFKAT are still demanding austerity, despite Olivier Blanchards years-old mea culpa, indicates that the best thing for Syriza to do is to call all bluffs and go nuclear. Because as the Krugginator says,
Kruggers - Grexit and the morning after. Quote:
What I would urge everyone to do is ask what happens if Greece is in fact pushed out of the euro. (Yes, Grexit — ugly word, but we’re stuck with it.)But to be a German, you have to be pig-headed and continue suicidally racing toward the abyss, instead of admitting your errors and apologizing to the people you've hurt. That's yet another lesson from 1933-1945 that they still haven't learned.
It would surely be ugly in Greece, at least at first. Right now the core euro countries believe that the rest of the euro area can handle it, which might be true. Bear in mind, however, that the supposed firewall of ECB support has never actually been tested. If markets lose faith and the time for ECB purchases of Spanish or Italian bonds arises, will it really happen?
But the bigger question is what happens a year or two after Grexit, where the real risk to the euro is not that Greece will fail but that it will succeed. Suppose that a greatly devalued new drachma brings a flood of British beer-drinkers to the Ionian Sea, and Greece starts to recover. This would greatly encourage challengers to austerity and internal devaluation elsewhere.
Think about it. Just the other day the Very Serious Europeans were hailing Spain as a great success story, a vindication of the whole program. Evidently the Spanish people don’t agree. And if the anti-establishment forces have a recovering Greece to point to, the discrediting of the establishment will accelerate.
Mining.com - China be buyin' up all them miners. Zijin buys properties from Ivanhoe and Barrick, which must mean the Chinese intend to keep accumulating gold for the foreseeable future. Smarten up, you white-ass honky crackers!
Reuters - China sets up $16B gold investment fund as part of Silk Road initiative. Again, that must mean the Chinese intend to keep accumulating gold for the foreseeable future. But you go ahead and keep puking gold into thin bids, honky. Build yourself a big massive short position. Cuz you're right and China's wrong.
Evan Soltas - is growth understated? Sure. At work, we save a lot of money on site visits by looking at the project area in Google Maps street view. But the money saved goes into the pocket of the capitalist exploiter, as the guy in the comments section noted, so it'd still be measured.
John Quiggin - opportunity cost is a Fabian idea. This is what Friedrich von Wieser said when he invented the term "opportunity cost":
Instead of the things that would be more useful, there are things that pay better. The greater the difference in wealth, the more striking are the anomalies of production. The economy provides luxury to the capricious and greedy, while it is deaf to the needs of the miserable and poor. It is therefore the distribution of wealth that decides what will be produced, and leads to a consumer of a more anti-economic variety: a consumer wastes on unnecessary, guilty enjoyment that which could have served to heal the wounds of poverty. —Friedrich von Wieser, Der Wert Natürliche (The Natural Value), 1914.That is not something you're going to see reprinted in that Nazi pig Mankiw's intro economics textbook, now, is it?
Question for economists:
Using whatever model you like for an economy, ideal or real, determine what proportion of wealth generated per year will go into the hands of labour, and what proportion will go into the hands of the owners of production.
If you can't give an answer, then what you have there is not a science.
Tuesday, May 26, 2015
Not much to see today... gold dropped below US$1200, but only because USD popped. The subsequent further drop in gold is Americans selling because they still don't understand what this chart means:
And I'm through spainin'.
And of course the US markets have to dump 1% because nondefense capital goods gave us a good print. They must think this is the first of many good prints, just like last year after winter, and therefore sell because reasons, and even because potato.
You don't really need the news when you've got the stupid.
So, in place of the news, I've made a shocking discovery that I'd like to share with you.
Monday, May 25, 2015
No afternoon smackdown in gold today, because the Americans are off. I wonder when they'll clue in that they're the only people selling?
Anyway, here's the news:
New Deal Demoncrat - weekly indicators. Quote:
The US economy remains in a shallow industrial recession, but the remainder of the economy, as shown by housing permits and initial jobless claims remains quite positive. This has been driven by a 16% appreciation of the US$ globally, and secondarily by the effects of the collapse of commodity prices on raw materials producers. I expect the US$ to continue to retreat due to coincident weak economic performance, and the underlying past positivity of the US long leading indicators will come through.
WSJ RTE - inequality hurts growth, but how? It's only significant in that the WSJ, the bastion of the Nazi plutocracy, is talking about it.
Krugginator - on technology's lack of boost to growth. Maybe, Krugger, it's because the productivity gains produced by technology were confiscated as new rents for the rich? I mean, what the hell do you think is paying for all those NASDAQ stock buybacks?
Sunday, May 24, 2015
Raising the minimum wage does not create unemployment, despite what that Nazi Mankiw is trying to teach us in his first-year textbook.
Empirical evidence (from the US even) proves this, and in any case Mankiw is outright disingenuous (read: he's an outright liar) by asserting that you can use a perfect competition model to find the equilibrium wage rate.
Anyway, here's an article on a fascinating experiment about to unfold throughout the US:
New Yorker - a fascinating experiment is about to unfold.
Friday, May 22, 2015
Friday videos: when we invest in junior miners we do it right, gettin' slizzer'd, sippin' sizzurp in my ride like 3-6
Because apparently, that 808 bump make you put cho hands up:
And apparently there's no such jet as a G6. What happened was, they found out there was a Gulfstream G4 that was "fly", and so they figured a G6 would be 50% more fly.
Which, y'know, is sorta logical in its own way. And in any case, as noted in the song, ladies do like his style, at his table gettin' wild, so that gives him the right to take artistic license.
Off to work, here's stuff:
BI - Rosie says this is the sweet spot for stock returns. Quote:
In periods when real GDP growth is running between 2% and 3% at the same time that core inflation is between 1% and 2%, the average annual advance in the S&P 500 is 14.4%.Checkmate, doomtards. Now buy SPY and quit your panty piddling.
Note that if growth were to move up a notice to a 3% to 4% range while maintaining core inflation between 1% and 2%, that average annual stock price gain rises to 22.6%.
Fore the bears, the only periods when the stock market enters negative price territory — and this is true under any inflation scenario — is when real GDP growth is 1% YoY or lower (thankfully we are just under 3% right now).
At no time, under any inflation segment, did the stock market fail to rise with real growth minimally at 2%. That is reassuring.
Krugman - conservatives and Keynes. Quote:
We’ve noted that after World War II there was a concerted, disgraceful effort by conservatives and business interests to prevent the teaching of Keynesian economics in the universities, an effort that succeeded in killing the first real Keynesian textbook. Samuelson, luckily, managed to get past that barrier — and many were the complaints. ...You already know what it is, Kruggers: conservatives want to destroy the social safety net and enslave the poors. The way you do that is by using a non-Keynesian pro-cyclical strategy with the business cycle to ratchet down benefits year after year. Reagan's crew explicitly said this 35 years ago.
What’s it all about, then? The best stories seem to involve ulterior political motives. Keynesian economics, if true, would mean that governments don’t have to be deeply concerned about business confidence, and don’t have to respond to recessions by slashing social programs. Therefore it must not be true, and must be opposed. ...
If you think I’m being too flip, too conspiracy-minded, or both, OK — but what’s your explanation? For conservative hostility to Keynes is not an intellectual fad of the moment. It has absolutely consistent for generations, and is clearly very deep-seated.
Bron Suchecki - Indian gold monetization scheme doesn't make sense. Well, he works at the Perth Mint so I guess he'd know:
Another issue is that “there is no guarantee that tax sleuths will not come calling hot on deposit, asking for the source” of funds that purchased the gold, as First Post notes. In addition, they note that the need to melt the jewellery “is abshagun, inauspicious and a strict no-no”.Then he goes into a lot of detail about how the system won't actually mean a drop in gold imports at all - unless, of course, the banks go naked short gold in rupees, which would be scary but it's not as if I'd put that past India. Bron, Rajan is an economist: I think he knows how lending works. So he must want the banks to go naked short gold in rupees, there's no other explanation.
The melting issue comes up a lot in the comments to the draft, but one helpful suggestion to “change the draft to deposit jewellery and get monthly interest on it” seems to miss the point of the whole scheme, which is for the gold to be used by jewellers. It also shows the difficultly in marketing this idea when people can’t see why it makes no commercial sense for a bank to pay interest on stored jewellery which it cannot use.
It is also a bit of a concern that the Government’s draft says that “banks may sell the gold to generate foreign currency. The foreign currency thus generated can then be used for onward lending to exporters / importers” which is basically saying the bank will go naked short gold (and no, they couldn’t hedge it as the cost of the hedge would eliminate the profit on lending cash – hence why the call for subsidies).
Thursday, May 21, 2015
I just got a letter notifying me that the Aurcana class action suit has been settled.
So now I have to check my files to see if I owned shares and/or warrants between 24 June 2011 and 19 December 2013. If so, maybe i get money or something?
OK, so $2.6M after costs, distributed across >500M shares and warrants, equals...
Gold got slammed this morning, probably for no reason. It doesn't seem to have been the result of a US dollar move. We'll see if it can break down below $1200 again.
Anyway, here's the news:
BI - Myles Udland was dead wrong about the Fed. Yes, Myles, you were dead wrong with your June interest rate rise prediction. Might you have been wrong, Myles, because the people who run the Fed are professional economists with an advanced education in economics, while you have a BA in English from U.Conn? Perhaps, Myles, you should shut the hell up and limit yourself from now on to reporting what the smart people are saying, instead of offering your own worthless opinions?
WSJ RTE - Fed's Evans says natural jobless rate may be below 5%. BTW, is our favourite TA still making fun of "Fed jawboning"? Because he could learn a lot from these people at the Fed if he actually paid attention, instead of sitting there feeling superior in his ignorance.
New Deal Demoncrat - the most important positive data of the year. Housing permits and housing starts both reached post-recession record highs in April, he says. Investment spending (housing, corp capex) has grossly underperformed ever since the crash, so it'd be nice to see a turnaround, but I'm not holding my breath.
WSJ RTE - The Portuguese are the next to tell the IMF to go fuck themselves. It seems everyone is finally realizing that the IMF purposefully and negligently destroyed economies with what they themselves later admitted was utterly faulty austerian policy. I'm happy, cos rebellion against the established plutocratic elite is a necessary condition for world improvement.
Mining.com - Whitey's buying gold again. Quote:
According to the data, long-time top investor in GLD is still US billionaire John Paulson’s hedge fund with a holding worth a shade over $1.2 billion.So I guess gold doesn't suck anymore?
But the big news is out of Toronto where Canadian asset manager CI Investments purchased a whopping 6,117,900 shares worth $703.6 million during the first three months of the year. It has become the second largest holder of bullion in the fund with total holdings of $735 million.
Goldreporter says that corresponds to 7.7% of the entire portfolio of CI Investment and made GLD the biggest single holding of the asset manager in Q1 2015, an even bigger position than shares of Apple Inc. ($626.7 million).
Swiss investment bank [which one, Frik?] also picked up a large number of GLD units in Q1 increasing its position 490% to just over 4 million shares worth $474 million.
The two weren't the only firms to make bullish bets – Lazard Asset Management doubled its holding to just over 2 million shares and Morgan Stanley (+18.3%) and Blackrock Group (+167%) were also huge buyers.
Reuters - India's gold monetization plan lacks lustre. Or planning, or co-ordination, or forethought. Here's an illustration of the problems still unsolved:
"Banks need to propose at least 3 to 4 percent interest rate to attract gold depositors," said Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation. "Otherwise they will not come forward to go through the cumbersome process of testing, melting their jewellery and opening bank accounts."So, the banks are going to have to assay, melt, refine and distribute the gold. And they want the Indian government to subsidize these costs. Which I can see happening, sure: the Indians are great at throwing money away. Still:
Current gold deposit plans offer up to 1 percent interest.
While the proposed scheme does not spell out the rate to be offered to depositors, it is unlikely banks will be able to pay much as they would struggle to deal with costs of refining, assaying, distribution and other potential risks.
An issue for depositors is that they might be asked to show proof of ownership of the gold, which will be difficult for many Indians because the precious metal is often passed on from generation to generation.And thus an important difference between gold and paper: gold doesn't care who owns it or where they got it from. As proven by the thousands of corrupt Chinese officials, third-world dictators, drug lords and libertarians (oh snap!) who use gold as a store of wealth. Again, this illustrates how pie-in-the-sky the gold deposit plan is, and how little we have to worry about it for now.
Stumbling and Mumbling - another reason economics isn't a science. Just because you can say evidence is "consistent with" your theory doesn't mean your theory is correct: another theory could also be consistent with the evidence. Again, you economists would do yourselves a favour by generating temporal domain versions of your models and testing them against real-time changes in the economy. Good luck learning the math.