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Thursday, September 29, 2016

What's German for Schadenfreude?

So Zerohedge is all aflutter about Deutschebank's systemic risk, and how it's Lehman all over again.

Except that 2008 was a general run caused by systemic mortgage origination fraud, while DB shares are dropping because of news that they have to pay a fine. Oh, and ten hedge funds moved money out of DB.

This is the same Russian-sponsored propaganda website, of course, that says Reuters is part of a conspiracy to give Clinton inflated poll numbers.

Anyway, Frances Coppola's also waded in, but you don't have to read that article either, since she usually doesn't know what she's talking about, and anyway Forbes expects you to allow over a dozen fucking third-party scripts to view their website.

The basic idea is:

1) Deutsche doesn't (effectively) have $14B.
2) Germany won't bail them out because reasons.
3) thus their shares are going to $0.
4) so they can't raise capital by share dilution, so they'll have to bail in creditors, which causes a systemic hypercollapse.

Which is all fine, except steps 1-4 are all utter horseshit.

Germany certainly can bail out DB. Yes, they've spent the past 5 years insisting that EZ governments aren't allowed to use taxpayer money to bail out their banks, but we know that that rule only applies to swarthy Mediterraneans. Coppola says it'd be "hypocritical" for Germany to bail out Deutsche: I retort that she obviously hasn't met a German in her life, because if it's one thing Germans love to be it's hypocritical.

Will a bailout kill the EZ's existing bank policy? Yes. But it's stupid anyway; it deserves to die. Anyone with sense knows that: just not Weidmann or Schauble.

But all that is moot anyway. The way I'd fix this, if I was the American in charge of collecting the fine, would be to offer Deutsche a payment schedule: say, $1.4B/y for 10 years, plus interest at half above prime.

Deutsche can certainly pay that and stay liquid, since they lose that much money a year on outright management stupidity and gross trading incompetence anyway; Merkel wouldn't have to bail them out; the EZ bank resolution mechanism would stay alive to continue destroying the Mediterraneans; the US gets to book the fine; and, best of all, Deutsche spends the next ten years limping around the banking system like a fat Irish asshole who got kneecapped for picking a fight with the wrong crowd.

And that last bit would be a great way to enforce compliance in the rest of the world's banking system. Cripple the fuckers for ten years and suddenly all the other banks will start paying attention.

Everyone wins.

But what'll probably happen instead is Merkel will bail them out with German taxpayer money, probably taken out of infrastructure spending and welfare payments; but not before their share price collapses, because after all if it's one thing Germans don't really do it's act promptly when a crisis hits, because it takes so long to pull such big, square heads out of such tight, constipated asses.

After that, she'll insist that yes, no other country is allowed to bail out their banks, just Germany, because they're special.

That's my bet.

In any case, quit piddling your fucking panties, everyone. This isn't Lehman, there's no trillion-dollar mortgage origination fraud.

Quit getting your fucking news from ZH.

DOOOOO... wait, what?

And now, the DOOOOOM news:

Calculated Risk - ATA trucking index increased sharply in August. Therefore, sell everything! DOOOOOM!

Bespoke - AAII still screaming a buy. Because individual investors get their news from Zerohedge.

Wednesday, September 28, 2016

Everything's alright forever

Calculated Risk - renter share of single-family market finally starting to decline. And again, that is a good forward indicator for the US economy.

Bespoke - confidence among low income consumers surges. That's because they're finally getting better jobs that pay more, plus a minimum wage hike in the first time since ever. And since consumption is driven by the bottom half of the income set, this also is a good forward indicator for the US economy.

Calculated Risk - chemical activity barometer indicates solid growth. Again.

Bonddad - Steve Hayward of Powerline is still a jackass. Well, he works for a site called "Powerline", so what do you expect?

Tuesday, September 27, 2016

Clinton and Texas: it is to be hoped

Oh, and by the way:

A recent poll showed Clinton getting competitive (i.e. within 5 points or so) in Texas.

This is something that some smart pundits warned about 8 years ago; the hispanic population in Texas has been growing, and it's staunchly Democrat.

And if the Democrats start winning Texas, man oh man oh man is that going to change the USA! Texas sets the idiotic school textbook standards for the US: among other things, Texas Republicans are the ones responsible for undergraduate economics textbooks being a worthless pile of Murray Rothbard horseshit.

A Democrat Texas will change the entire US mainstream political narrative.

And that would be very good for the world.

And now you understand why the Republican party hates Mexicans.

Trump/Clinton debate results

No, I didn't watch the debate. I had better things to do.

I'm reading thru various news sites looking for a handle on who the press has declared the winner, and I'm trying to avoid the sites that I know will be pro-Clinton.

But more than someone being declared the winner, what's important is who provided the lamestream media with new talking points and soundbites.


Because a debate only happens once, but a good soundbite can keep giving for weeks.

And I think Clinton won in the soundbite department. All Trump did was re-hash old Republicunt talking points; Hillary, however, scored some new ones that (you'd think) should tilt reality-TV newsmedia in her favour.

On the subject of his tax returns: "There's something he's hiding."

On women: "This is a man who has called women pigs, slobs and dogs."

On Obama's birth certificate: "racist lie".

On Trump's mental instability: "A man who can be provoked by a tweet should not have his fingers anywhere near the nuclear codes."

And Trump helped her too. On his not paying any taxes, he said "That makes me smart." That will certainly fly well with the Republican mass, who hate paying taxes; but maybe it loses him some votes with moderates.

Then again, the US might have reached the point of Greece, where the biggest tax-cheat is the most respected. The anti-tax narrative has had a long time to run.

Anyway, the big thing to watch over the next few weeks will not be the post-debate polls: after all, Trump still has two more chances to expose his genitals in public. The big thing to watch is going to be whether Hillary's soundbites get traction.

She's already won the Democrats' votes, and she doesn't have to bother trying to win the Republicans' votes: she just has to convince everyone with the possibility of sentient thought that they need to vote for her and quit with the "I like Trump because he's sticking it to Washington" nonsense.

Calculated Risk on new home sales

Calculated Risk - a few words on new home sales. I could quote from his post, but I'd rather just reprint his chart:

Housing this year is way better than it was last year, and the housing cycle is the US economic cycle. So quit being a pantywaist sissy and buy.

Saturday, September 24, 2016

Kraftwerk's "Hall of Mirrors"

And apropos to the previous, here's Kraftwerk's "Hall of Mirrors":

Nice when a TV show's soundtrack uses not just a Chromatics song, but also a totally forgotten Kraftwerk track.


In case you missed it, at the very end of season 2 of Mr. Robot, Elliot got shot because he thought Tyrell was another hallucination.

Turns out Tyrell has been alive all this time, and he's real.

So now all the people who didn't believe Reddit's "Tyrelliot" theory are getting all in our faces, saying they be all that and yo mama and such.

But ffs, it was the right thing to do to assume Tyrell was just a hallucination. All frickin' season, Sam Esmail has been screwing with our heads:

 - The "Elliot's been in prison all along" mindfuck of the first half of the season.

- For several episodes in the second half, he put "inconspicuous man" and "inconspicuous woman" in the credits, then purposefully put them in the blurry background of half a dozen scenes so that the more rabid fans would find them and start asking what was going on.

- Having Cisco and Darlene gunned down in the third-last episode, except the blood-spatter that seemed to come from Darlene was actually from an exploding ketchup bottle if you watched frame-by-frame, and when the sign on the diner blew up it went from reading "Lupe's" to reading "Lies".

- When Tyrell gets into the cab in the second-last episode, Elliot asks the cab driver if he's really there and the cab driver doesn't respond.

- A bunch of other stuff, I forget.

- Tyrell also looked different and talked different in that second-last episode.

- And most importantly, we were told several times that Mr. Robot killed Tyrell, and we've already got a lead character who hallucinates people.

Given all of the above, why shouldn't we have believed Tyrell was just a hallucination?

So now we find it's not true, Tyrell was alive all season and hiding out in a warehouse planning Stage 2 (which, as it turns out, definitely does not involve time travel). And Elliot got shot for reading Reddit. And Sam Esmail is cackling in the background.

Oh well. More broadly speaking, we were all worried before the finale that Esmail was piling on far too many twists and the show was turning into a bullshit mindfuck like Lost; so it's nice that Esmail did tie off so damn many loose ends in the final episode (Tyrell's alive, Scott Knowles was the one phoning Tyrell's wife and sending her presents, Darlene is alive, Stage 2 is blowing up the records building, fat guy and Iranian girl made it out of town alive, the inconspicuous duo were working for Whiterose and not the FBI). Even nicer, he tied much of it off in the first 15 minutes.

After cleaning up much of the old storyline, though, Esmail did still give us a few questions to ponder over the winter: is Leon about to kill fat guy & Iranian girl? Is Angela working for Whiterose now? Do the FBI have enough to arrest everyone? But at least the show hasn't turned into Lost. And there's no fucking time travel, thank god.

And personally, I think the Reddit drama of the past few weeks is proof that Esmail and his friends are on Reddit, anonymously posting mindfuck theories to drive their obsessive fans to watch the show over and over looking for clues.

Thursday, September 22, 2016

More news

Well, I made a quick ~12% shorting $VIX futures. But I dumped that position today because an intraday below 12 is where I sell, not where I hold or buy.

I mean, maybe I can make money shorting time premium, but I'd rather just put that money back into an S&P index ETF, now that I have 12% more of it. But for the time being, I think I'll hold cash til I can figure out whether the S&P wants to blow through its high, or turn back again.

Meanwhile, here's some news:

Calculated Risk - all the FOMC commentary you'll never read. Just read Ritholtz instead:

Ritholtz - income liftoff shows the recovery is real. This is all very, very good, so you should definitely buy S&P and hold right now...

Bespoke - bears rule the roost. That's even better. Working people are finally experiencing improvement in income, which means we're facing a good long period of consumer-driven growth - but yet bearish sentiment is still high. Damn, I can imagine we'll be getting one heck of a Santa rally this year!

Global Times - does high China debt signal an imminent crisis? He notes that Chinese debt is going towards different things from other countries' usual debt. I would add that before people shoot off their fucking mouths about $25T in Chinese debt, they should perhaps consider that this means somewhere there are $25T in savings collecting interest.

The Intercept - John Boehner now working as lobbyist for China. Which I guess is typical for Republicans: make a few million robbing the US, then go get a paid job committing treason against your nation.

BBC - Trump uses Skittles photo taken by refugee to argue against refugees. Good reason for kids to study Magritte, I say.

Monday, September 19, 2016

Chicks are better

Marketwatch - this ETF bets that women are better CEOs.

Its ticker is SHE, and it's made up of companies with female leadership.

And it makes sense, because if bourgeois money managers get away with poorer performance than proletarian ones because of their class advantage, then you'd think that women CEOs will also do better than male CEOs because they have to fight harder just to break through the glass ceiling, right?

Sunday, September 18, 2016

Some weekend news

Four bloody assignments in one week! Thankfully calculus is already half-done, I did stats at school on Thursday, I've got international trade done this morning, and so my only worry is a massive modelling assignment.

Speaking of which, I like that nowadays you can get help with your math homework online. There's many videos on YouTube covering first- and second-year topics; there's and; and you can use Maple to check if you have the right answer.

This makes life one hell of a lot easier than it was in the old days!

Anyway, here's some news:

Calculated Risk - Fed flow of funds Q2. Household net worth is still increasing. So let me ask you: if the stock market is a "bubble", then what about household net worth? HNW is just assets, after all, so if there's a stock market bubble then there must also be a generalized asset bubble. I mean, if logic exists in the universe you inhabit.

New Deal Demoncrat - weekly indicators. There is no real downturn, and long indicators are snazzy.