Saturday, November 24, 2012

Daniela Daniela Daniela! at the San Francisco Hard Ass Etsconference

Here's Daniela interviewing that smug dink Rick Rule:

And he actually brings up a good point about a bifurcated market. And he also talks about how "gold stocks" is a phrase that denotes companies that don't actually have any gold, which I've brought up myself in the past. And he asserts there should be about 20 takeovers in the next 2 years.

Daniela of course will have none of that smarmy prattle, and jokes about seeing a horde of fanbois following Rick Rule even into the bathroom.

And Ricky ends by saying he hopes the bear market goes on for another two years, so if you hadn't gone into this interview wanting to punch him in the face, you'll want to by the end.

More to post later....

A few good articles

Some weekend articles for you:

BI - the black market for gold. Gee, this looks good for gold demand, doesn't it?

ETF Trends - muni ETFs. Ouch. I don't know anything about the US, but are Munis some sort of tax-preferred investment? One whose taxation isn't going to be changed with the expiration of the Bush Stupid Tax Cuts? If so, the chart in this article belies a crazy bubble.

Sober Look - no matter how much junior miners have sucked, the hedge funds have outsucked them. Wow. Just... wow. I guess that illustrates that you don't find any particularly significant level of intelligence among the hedgies, eh?

BI - an interview with Bill McBride from Calculated Risk. I think I've always had a problem with Calculated Risk's RSS, and that's why I've never followed it. But I think I should try again, since I'm looking for more empirical agnostics to follow.

Friday, November 23, 2012

Some funnies

And one for the mining people:

a few morning charts

Yeah, I know, I haven't been putting up charts recently.

Basically, you can go over to Bull Market Run, they usually have better charts than me. Bonddad also does good morning charts for the broad markets. And JC Parets puts good things up too. Biiwii doesn't stick to any sort of schedule for regular market comment, but he also has charts.

Anyway, here's my own take on things:

S&P looks kinda healthy, but maybe it's just going up as far as the upper trendline before slamming back down?

$HUI looks less healthy. Then again, maybe this is another effect of the US dividend tax increase? After all, the story of 2011 and 2012 was that there was no real reason to hold the crappy majors unless they offered a dividend; now that the US is fleeing dividend plays maybe that means the $HUI gets puked back down to the slimy pit from whence it came.

GDXJ looks worse - sort of a "we know the puke to $21 was unwarranted, but now we also think any rise above $22 is also unwarranted". Quite unhealthy and not the type of chart to stimulate optimism. Pretty damn pathetic, that's for sure. Thankfully, the GDXJ is made up mostly of garbage stocks, so its moves aren't as important as the moves of your favourite stocks.

Well, let's look at the charts for 4 juniors who supposedly don't suck:

BTO looks like its rebound is pretty much done, unless we can get some strength in the market. Pretty weak.

DPM is actually rolling over.

NGD might have hit bottom at $9.50, which is good horizontal support, or it might be about to dive real hard.

PVG looks boring and not inspiring of optimism.

I dunno, am I supposed to want to buy any of these?

My own little hobby, CXB, looks like it has strong support at $0.215; then again you could have said the same thing at $0.25 a couple weeks ago. Difference is we know it's only 3-4 weeks max before we get results out on Primavera, we know BTO spent $1.5M there in Q3 (which was 60% of their Q3 expenditures at Otjikoto which is going to be a mine), and we know last time there were good results from Primavera the stock flew up to $0.50, and you wouldn't expect bad results from a property that BTO spent $1.5M exploring this quarter.

If I lose money on a bad exploreco pick, at least I'm not losing it on someone else's bad exploreco pick, right? I prefer having nobody to blame but myself.

Friday Videos - Kirlian Camera

Here's Kirlian Camera doing Blue Room in 1985:

And here's Kirlian Camera doing Blue Room live in 2011.

Elena Fossi was probably something like 5 when the song first came out.

Thursday, November 22, 2012

A few newsbits for a slow day

It's apparently US Thanksgiving, a day where happy Americans will give thanks to God for their victorious destruction of the Native people. Very Old Testament, ain't it.

As a result, there's no stupid in the Canadian junior mining market today. I'll be off doing shopping and so on.

Meanwhile, here's some news:

FT Beyond Brics - China flash PMI back over 50 now stop freaking out.

Dominic Frisby on Moneyweek - How demand from China could send the gold price soaring. No news there, he obviously reads my blog and has realized I'm 100% correct about the gold price being driven by Asian demand, not by US money supply.

Columbia Journalism Review - The "fiscal cliff" is just CNBC hype meant to protect their buddies in big business from higher taxation. Again, you heard it here first. I'm amazed at how my blog has become the dominant opinion-maker in the blogocube. And my god, it's almost like the stock market is developing a class consciousness! Is a glorious proletarian revolution right around the corner?

CBS News - Modern wheat a "chronic, perfect poison", doctor says. I've personally been very interested in the idea of a paleo-diet. The point of it is that the human body should be adapted to the diet that made this body.

So, if our chimpanzee-like progenitor species developed while eating fruit for millions of years (which is why humans evolved full stereo colour vision, and are unable to synthesize vitamin C unlike e.g. cats), we should have a lot of fruit in our diet. And guess what? Ripe fruit* is rich in vitamins, sugar (which our brain runs on), and fibre (which your fucking doctor always goes on about, doesn't he).

And if aquatic ape hypothesis is correct (which would explain why humans evolved dilute urine, no body hair, a dive reflex, a uniform layer of body fat and so on), then we should also eat a ton of seafood, because our ancestors ate seafood for hundreds of thousands of years. And guess what? Seafood is very rich in protein, fat (which our muscles run on), and omega fatty acids (which your fucking doctor always goes on about, doesn't he).

And then later on we became hunter-gatherers, so you can also add some greens to that diet, as well as berries, nuts (which are an awesome food), and animal meat.

And the last fucking thing you should ever do is eat any grains, since our species only started eating them 10,000 years ago. In fact, some grains (like corn) are already known to kill you. Also avoid any prepared foods generally. Your body isn't built to digest them. They'll therefore make you sick.

I haven't been able to go the paleo way just yet, since really bread is quite fucking ubiquitous in our diet - grains do have a benefit, in that they're the only way (short of modern refined products) to pack enough calories into your body to avoid starving to death when you're doing 5000 calories a day of hard labour on a farm (which we don't need to do anymore). As a result grains quickly became a staple, the central part of our diets, and now it's gotten to the point where e.g. if you're packing a lunch, it's only ever going to be a sandwich. It's hard to shake that off.

But it's something I fully intend to do at some point in the future.

* -unripe fruit, and unripe vegetables, have zero dietary value. This is because all the nutrients get synthesized and stored within the last few days of a plant's development. So if you're eating unripe veg or fruit, you might as well just eat cardboard. This is also why you should "eat local" - the stuffed picked local, for the local market, is picked riper than the shit that they ship from South Africa or Cyprus or China.

Wednesday, November 21, 2012

A couple morning news notes

BI - housing starts "go vertical". OK, the minute BI gets this hyperbolic on a topic, we can assume it's entirely baked into the market. Too bad; I was starting to like the idea of the S&P going up from here.

Reuters - China banks turn blind eye as bad corporate debts pile up. I put this forward because I still think the third crash of this secular bear will be caused by China. They have a demographic cliff coming up in just a couple years; the same kind of demographic cliff (short-term, which has since reversed) was associated with the US housing crisis. The Chinese banking industry is weak in the same way that the US banking industry was in 2005-6 when the prescient folks started warning of a US collapse.

This'll be the thing that caves in commodity prices, and heck maybe we'll even see $800 gold as the Chinese economy falls to bits. The only way to avoid this is if the new Chinese leadership can do something radical that purposefully violates the rules of economics.

Tuesday, November 20, 2012

Found a good place to put a giant skullfortress!

So there's this place called Lake Maracaibo.

Apparently they get a constant thunderstorm for half the nights of the year.

Here's a bunch of drunken communist backpacker hippies watching it:

Here's some chick from accuweather talking about it:

I think this'd be a fantastic place to put a giant skull-shaped fortress, no?

You could even put up a giant electrode and use the power of the lightning to power your whole fortress.

Even a giant "laser"....

The unemployment chronicles

So I'm temporarily laid off from work. There's been a big lull in contracts getting awarded in my industry, and as a result things slowed down at the office. I should be back to work in a few months, but in the meantime I'm on Unemployment Insurance - or as it's known in Stephen Harper Newspeak, "Employment Insurance".

Now, the gub'mint demands that you look for jobs when you collect UI. Because, y'know, getting a few weeks of money at 55% of your previous wage isn't enough to make people look for work.

(OK, I know I know, the real reason for it is that people who have become unemployed after years of working really feel helpless and incompetent at looking for work, so the government wants to give them a swift kick in the butt. And I guess that's necessary. When someone feels hopeless, it really takes some nasty tough-love to get them off their asses. And if you're not lucky enough to have a fucking bitch wife threatening to leave you and take the kids unless you "get off your ass and get a job, what the fuck else are you good for anyway, don't fucking look at me like that you fucking slob", then someone else has to step in and provide the motivation.)

I'm not sure if I'm required to look for another permanent job, since I'm only on layoff for 2-3 months. In any case, I can't find a replacement job exactly in my field, because there's perhaps 20-50 people in the entire GTA who do my line of work. And their employers are also all feeling the pinch right now too. Except Dillon who are undercutting everyone.

Now, I can branch out into broader fields in a job search, but I have zero experience there in the past 12 years; so while I could apply for a job in manufacturing/industrial engineering, the only true experience I have is 8 months of co-op in a factory over a decade ago.

But anyway. The government has something called a "job bank", which I guess takes the place of the tragic post-it board they had at the UI office 10 years ago. Basically, you have to be truly desperate to take the types of jobs they advertise. For example, the "job bank" will be very light on lawn-mowing jobs now that winter approaches.

There was one job listed for my field, and it shows how hilariously worthless the "job bank" is, and how grossly desperate you have to be to take that work.

Basically, some company was looking for an electromechanical technician (that's not my field, but I guess I'm supposed to branch out, eh?). Here are some of the job requirements/description they had listed on the government website:
  • CEGEP/college/trades education
  • 5 years experience
  • "attention to detail", "ability to work under pressure", "works well with others"
  • full-time and on call, shiftwork
  • bondable
  • Secret clearance (WTF!!!)
  • criminal record check
  • seemed like you'll work both in installation and in design & CAD.
And the pay rate? $12/hr for 35hr/wk.

That's $2 over minimum wage, apparently; I haven't actually collected anything near a "minimum wage" for over a decade so I have to admit I don't know what it is, but apparently it's around $10.

It's also maybe $50/wk more than my UI check is going to be.

Now, I don't have the experience, I know utterly nothing about installation work, and I'd quite possibly fail the Secret clearance (and criminal check). Srsly if my various past associations with peaceniks, Greens and skinheads, including a "wanted terrorist", aren't enough to get me a CSIS file, then my early-90s Unabomber fansite (voted the best Unabomber news aggregator of that time) probably did.

(Of course CSIS was very busy back then, establishing and funding the largest Canadian neo-Nazi organization, so maybe they never got around to little ol' me.)

But still, $2 over minimum wage for someone with technical training who's bondable, on call, and has more skills than mopping floors? Are you serious?

It might just be that employers access the job bank to list jobs, and then they tick off every fucking box on the form; maybe they think that since job bank viewers are desperate for work, the employer will have the pick of the crop?

Or maybe the employers who use the job bank are so bad to work for that they don't have a huge pile of resumes in the office that they can look through whenever they're looking to hire. And the employees they do have would never recommend that company to their buddies and their old associates from school.

But that's an illustration of how worthless government "job banks" are to people who have, for example, any employment prospects at all.

Anyway, just wanted to kill some time spouting off. Market doesn't know what to do today, probably waiting for the next Fecal Cliff* news. Oh look, Nevada Copper's back down to $3.30. GDXJ went too high yesterday for no good reason, probably has to backfill now. Wow I love Calibre Mining. And so on.

* - because it's such utter shit

Just a couple premarket notes....

Bespoke - US bank and broker default risk. I'll save you the time: there is no risk. Thus came my suspicion that last week's selloff was just a plutocratic snit and not justified by any real danger in the market.

Biiwii - Junk to investment grade says bull market lives. Again, as above. And this even with the caveat that any ETF with yield would also be sold off in this market, because as I said before, it's just an anti-taxation snit.

Things reversed since Friday afternoon, since the American plutocracy interpreted the politicians' statements as meaning the dividend tax increase was off the table. If it turns out they're wrong, watch the markets sell off again in earnest. Because the plutocrats are stupid enough to desire to hold money in cash instead of collecting a dividend.

Because snits make you act counter to your own best interests.

Monday, November 19, 2012

Various readings

I'm busy today with getting laid off from work, so let's see if I can quickly slap together a list of the various newsblobs that have cought my eye:

Seeking Alpha - Basel III and gold. Originally noted by (I think) Gary Tanashian, a very interesting idea: gold could now become Tier I instead of Tier III. Is it true? I dunno, it could just be yet more of the fucking stupid misinformation spread by idiot goldbugs; I'll wait til I see confirmation in a real news outlet. And will Basel III even get implemented? If so, Deutsche Bank is immediately bankrupted; that's why there's been talk in Europe about delaying Basel III implementation, like, indefinitely. But if it is true it's an interesting new factor in the gold supply/demand dynamic.

der Spargel - a story on the Greek 1%, who are nothing but parasites and thieving robber barons.

A Dash of Insight - weighing the week ahead. I've dumped several people off my reading list and am thinking of adding this guy back to it.

Ritholtz - meta questions. This is essentially a response to the conspiracy theory that the Fed "sends Janet Yellen to the mic" whenever the market needs a boost. To wit:

Why does it always seem that when markets become deeply oversold, politicians and the Fed seem to react? Are they closet technicians or is it something else?

Its something else: The most likely answer is that similar factors drive all these events simultaneously. Politicos note when markets are in a distressed phase; that shows up in all sorts of other psychological measures from Consumer Sentiment to Capex Spending and broad hiring trends. When markets go into freefall, politicians sit up and take notice. Even a milder correction of < 10% such as we have had recently adds pressure to public officials’ decision-making behavior.

No, Bernanke is not watching his Bloomberg concerned about the 200 day moving average, nor is he watching the DeMark indicators nor doing MACD studies. But the same sort of pain that leads investors to capitulate and puke up stocks is also at work on decision makers. We saw that at work in March 2009, when both groups overreacted to the market collapse. And we are seeing shades of that now, with the reaction (and over reaction) to this pullback.
Correlation does not prove causation, Gary.

NY Times - investors rush to beat threat of higher taxes. As noted in previous news updates. In fact, they all rush out the door in 2 fucking days. Then they buy everything back next week when Obama sells out Main street for Wall Street and maintains the low tax rates for dividends.

Bespoke - weekly BIG reader poll shows bullishness spiking. Maybe cos I'm just an average intellect, and every fucktard in the market can see that all the selling was silly? Question is, does this last for one day only, or is it the mark of the broad market bottom?

BI - The Homebuilder Confidence Jump Is Foreshadowing A Huge Boost To GDP. Maybe that's the answer to the question!

Anyway, I'm sure this blog will soon turn into a load of screaming about the lunacy of the Canadian employment insurance system over the next few weeks, so enjoy the sanity while you can.

Sunday, November 18, 2012

The most important takeaway from Gary's newsletter this week

The most important takeaway from Gary's newsletter this week is this: US thanksgiving is the end of this coming week.

That's important because it has a seasonality. The thesis is that eating lots of turkey makes you happy; they've more recently realized it has nothing to do with the turkey and pumpkin pie, it's just that overeating makes you happy, generally.

Then when you're happy you buy stocks.

This year, if you're happy, it might mean you quit pulling a fucking snit and dumping all your money out of dividend stocks so you can what, put it all in cash?

We'll see.

And as for Gary: quit buying IAmGold. You're just going to keep getting killed til you learn your lesson.

Sunday reading

First off is this article, which I think explains everything right now:

BI - In 6 Weeks, A New Dividend Tax Will Smack Rich People Upside The Head. Now, it's probably safe to assume that the rich will get their way and Obama will cancel these moves when he makes his fecal cliff deal. Still, at present, the idea is that capital gains tax goes from 15% to 20%; while, most significantly, dividend tax rate goes from 15%, all the way to 39.6% plus a 3.8% surcharge for the AHA.

It's my working thesis right now that this is what's driving the move; people want to dump their dividend stocks right now. (As opposed to a week or a month from now. Because people are fucking morons and always love rushing for the fucking exits.) That money won't go into other stocks until the effect on the broader indices is completed (i.e., all the selling is done).

So if you're a TA, keep all that in mind. Hell, you don't even have to, if you're the type of TA who dogmatically ignores fundamentals - instead, just explain how the hell utilities can go 4-sigma down. OK? Explain that.

Speaking of which, I don't know how a real bond coupon is taxed in the US; but if most money holds bonds via ETFs, whose payments are treated as dividends, then these fecal cliff tax hikes would also explain the drop we're seeing in junk bonds and EM bonds. People would sell bond ETFs too, and probably any stock or ETF which is owned for the yield rather than the capital gain.

Where's that money going to go? Cash for fuck's sake? OK, that explains USD. But what about US Treasuries? How is a Treasury coupon taxed in the US?

Now, for the rest of the news:

Bonddad - here's NDD's weekly summation. Importantly, re Hurricane Sandy:
Between the NYC and Philly metro areas, about 30 million people, or 10% of the entire US population, had More Important Things To Do in the last few days of October and the first part of November than produce and consume goods and services. Almost all of the data reflects that reality. Since the effects of Hurricane Sandy are overwhelming almost all the other signal in the economic data, it will be impossible for the next month or so for the actual underlying strength or weakness to show up in the monthly numbers. We'll begin to see what is really going on in the weekly numbers, but probably not until next week.
New Deal Democrat is my one single most important go-to source for the pulse of the market: not Tanashian, not Reuters, not the charts. Because he's all about the data.

Speaking of which,

Derek Hernquist - Nate Silver Knows “Nothing”. This means that Nate Silver makes no assumptions, he just looks at the data. Which is why Nate Silver was able to predict the US election results and the pundits couldn't. To wit:
By a) not imposing their own biases, b) accepting new data as information, not a threat, and c) letting the consensus of outcomes dictate their judgment, [Silver et al] simultaneously let go of a need to judge every anecdote(noise) and end up with a more reliable forecast(signal).

This mix of humility towards what we can really know, and confidence that we can lean on the footprints of others, is much closer to the right recipe than anything being cooked up by media pundits. The aggregators have real information in the form of dozens of polls. We have real information in the form of price, why not use it?

And yes, I believe that observing the evolving footprints of active stocks is the closest we can get to measuring the true intent of the crowd…and that Nate Silver and his fellow aggregators would approve of this message.
So don't rely on fundamentals, technicals, or sentiment; look at the sum of all three, with a totally open mind, simply accepting what the market is telling you. With the assumption that you might be wrong and you need a hell of a lot of convincing before you accept any thesis. And any and all convincing must be done entirely with empirical data.

Dragonfly Capital - Gold Looks Great if You Live in Japan. To translate, gold in Yen is in a massive cup-and-handle that's now breaking upward. Of course this could mean that gold in USD crashes, but not as fast as Yen in USD will crash. (That's something people forget about ratios.) Nevertheless, if goldbugs need encouragement, there's some right there.

Hey, speaking of which... remember when it was all the rage to demand that gold miners pay dividends? Well, with the US's (possible, probably unlikely) tripling of income tax on dividends, it no longer looks optimal to put money in dividend-paying miners, eh? People are dumping dividend stocks now, right?

Now tell me which miners pay dividends: the GDX, or the GDXJ? And if people really will be driven to dump dividends in favour of chasing capital appreciation (Cap Gains tax rate only goes to 20% remember), then who benefits: the GDX, or the GDXJ?

I'm only putting that out there as a situation that could possibly develop in the next few months. Might not. Cos of course junior gold miners also suck™.

Next, here's an interesting idea:

BI - The balance sheet recovery? It's a hopeful concept. Here's Weezy:
But for the U.S. there are two reasons to be hopeful.

One is that the bloodshed at the state & local level of government seems to be coming to an end, so that's some regular monthly job losses that should dissipate.

The other big factor is what we'll call The Balance Sheet Recovery.

By now you should know the term Balance Sheet Recession, which was invented by Nomura economist Richard Koo to characterize the long slump in Japan, and which also nicely explains a lot that we've seen in the U.S. Basically, during these periods, the primary motivation of the private sector is balance sheet repair (paying down debt, savings, etc.) and if you want to avoid major pain then the government needs to go deep into debt to offset that (which is exactly what the US has done to pretty good effect).

So if a Balance Sheet Recession is a downturn characterized by aggressive debt paydown, then a Balance Sheet Recovery is one characterized by releveraging, a process that's begun, but which has a ways to go.
Be right or be poor, people. He notes it really is different this time, insofar as the typical recession and recovery don't have the same public and corporate debt profiles.

And now, about trading philosophy:

Joe Fahmy - Just take your bat and ball and go home if you don't like the market. Yeah, he says it differently, but I'm interpreting it from the standpoint of a guy who hasn't yet learned to get the fuck out of the market when it goes sour. But it would have worked fucking wonders for you, wouldn't it? Like, over the past 2 years in the junior miners? Just get the fuck out and play video games for 2 years?

And finally, some politics:

NSFW Corp - Libertarianism Was Created by Big Business Lobbyists. Which is true: "libertarianism" before the 50s was more of an anti-authoritarian, hyper-liberal, anti-law, anarchist movement. ("Libertarian" originally meant "I'm an anarchist but I don't believe in assassinating politicians.") And the Strauss/Rand/Nietzsche/Stirner axis was confined to a dank basement in the Philosophy faculty, as a poorly-reasoned hyper-emotional substrand of the study of Ethics: basically a straw man for real Ethics to use as a punching bag.

The modern "libertarianism" that Americans think about today (which is apparently still foreign to people in Europe) was, truly, invented by big business as a kind of philosophical retconning of America, in a clever attempt to eliminate the State's power over big business.

It's evil, and it's not libertarian.