Saturday, January 5, 2013

5 newsbits for Saturday morning, with the mildly offensive commentary you've grown to tolerate

WaPo - IMF finally admits that austerity is buttfuck stupid. Too bad for all the third-world countries that they already assraped over the last 40 years, eh? But I guess the suffering of poor people isn't a significant or important kind of suffering.

The interesting part is, I've had a sneaking suspicion (for maybe the last 20 years) that the fiscal multiplier is far greater for the poor than it is for the rich. I.e., if you tax the rich more (or give them bigger tax breaks), the impact on GDP should be far less than 1, since rich people's money sits either in bonds, or in stocks, or in luxury goods or real estate, none of which actually adds much to the productive economy. On the other hand, if you tax the poor more (or give them more income), the GDP impact is far greater than 1, since every poor person's penny goes out the door as fast as they earn it; as well, the discretionary (non-rent) part of that money is usually spent on labour-intensive low-margin goods (cheap food, cheap clothes, home supplies etc), so that money spent also achieves a higher velocity in the economy. Heck, even rent money is probably higher-velocity, since the profit margin on rental housing is so tiny - most rent money seems to go toward building maintenance and municipal taxes.

Now, the point of the above is that if the plutocrats like the IMF realize that their theoretical GDP multiplier models are so wrong, how long does it take the thinker class to get from there to the further realization that the best way to boost GDP is to help the poor, not the rich?

Of course the kleptocratic elite will never admit that. But maybe some left-leaning economists of Krugman's ilk might point it out someday.

And then you get a shift in the class war.

But you'll also get a shift toward easier economic growth.

BC Lund - Will the big moves in 2013 come from these stocks? I'm not interested in his particular stock picks as much, but this caught my eye:

So for the first time in Fidelity’s history, equities are LESS than 50% of their holdings. To me this is a major contrary indicator and implies that there are a few trillion dollars (give or take a trillion) just sitting on the sidelines.
That money has to find return, and where will that return come from? Bank CD’s? Money market funds? Bonds? Real Estate? Justin Bieber collectibles? No, it’s going to come from the stock market.

A long-term view, but still an interesting one. Too bad the junior miners already shot their wad and proved they suck bad, otherwise people might want to buy their shares again one day, eh?

Bloomberg - Almost all of Wall Street got 2012 wrong. And y'know, related to this, ZeroHedge does engage in a lot of hero-worship (you could almost call it "cock sucking"). So why? I mean, the odd guy gets a call right once in a while; but who the fuck cares about what Paulson, Morgan Stanley, Buiter, Buffett and so on have to say if they're almost always getting it famously wrong?

And most of the time, these rich assholes get it wrong because they're letting their politics get in the way of their perception. Other times, they're simply putting blind like any retail hayseed.

Anyway, this Bloomie article is funny, mainly because the authors purposefully include the fact that they asked for comment from all the market smart-alecks, and got rebuffed every time.

Meanwhile, here's ZeroHedge's enemy number one, Lloyd Blankfein (strange, isn't it, how ZH always hates the Jews?) with the best quote:

“I tend to be a little more positive than what I’m hearing from other people,” the 58-year- old CEO told Bloomberg Television in an April 25 interview at Goldman Sachs’s New York headquarters. “One of the big risks that people have to contemplate is that things go right.”

Always remember that.

NFTRH - Long-term t-bonds are signaling inflation is on the way! Hurray! This chart is a variant of Gary's "most important chart in the world". Now, importantly, one day that 30-year trend channel shown by the blue lines has to break. But it doesn't have to be imminent. If $USB has begun dropping, it'll move to 125, and that move will be the chance to yet again play the inflation game (China, EMs, base metals, silver, fuck maybe even gold, and so on).

I can't stress enough that NFTRH's "most important chart in the world" is, truly and without a doubt, the most important chart in the world. It's why I stayed subscribed to his newsletter for the first 2 years even though I couldn't understand a fucking thing the cryptic loony was saying; I saw early on that that chart was important, and so I stuck with him. Now I vaguely comprehend almost a quarter of what he says.

Speaking of which... I suddenly realize that I should expect his writing to be that of a cryptic loony, considering he listens to a band with lyrics like "Money spines paper lung kidney bingos organ fun". I mean, seriously, these guys gave REM the idea of being incomprehensible.

Beyond Brics - what does the end of QE mean for EMs? What I think is significant here is this comment from Mike Riddell, a no-name clown from some tiny little investment house whose opinion is not even worth noting, so god knows why they give this guy a podium on FT:

“People ask whether this is a repeat of 1994, where the Fed hiked rates and all hell broke loose. I’m positioned defensively. We’re now in a situation where the dollar is very cheap. If the Fed starts hiking rates, it makes much less sense to invest overseas. The huge wave of money going into EMs could come to a halt or worse reverse.”

So that's why everyone's scared about the Fed ending QE? Despite the fact that they have explicitly stated that they're not taking away the crack pipe unless it's because the US economy is healthy enough to grow on its own? They're all saying "OMG 1994"? Is that it?

Fuckhead. You go and position yourself defensively, you no-name loser. You've just told me what the wrong positioning is! Now it'll be easy to find the right one.

PS, buy Calibre Mining! To da moon Alice!

Friday, January 4, 2013

Funny thing about the pennycrappers

I've found it's interesting to look at the L2.

Just as an example, looking at CXB, NGE and AQM, in each case there's not really a lot of near-the-bid asks. You get some small number, and then a huge gap: the 10th ask point for AQM, for example, is somewhere north of 60 cents.

It's almost as if any particular stock from the beaten-down pennycrapper world could take off quite quickly on good news, or even just any kind of buying interest.

Then again, it could also mean that anyone who ever wanted to buy or sell a pennycrapper has left the building, and as Cookie says, they're probably never to return.

Anyway, just wanted to point out an interesting thing.

Velly eentellesteeng!

GDXJ went from 3SD up to 1SD down, in 2 days.

Right now it's spending end Friday retaking the EMA(16) and bollinger mean. That looks positive.

Almost as if everyone realized that I'm right and they're wrong - that silver demand is governed by electronics production and therefore dependent on developed countries' consumer demand which can only go up from here, while gold demand is dependent on wealth creation in the EMs which should only improve from here now that the developed world has bottomed.

I.e., quit fucking looking at the fucking 30s/2s.

And here's something weird:

Guyana Goldfields is up 10% today.


I dunno.

Nevada Copper's also up strongly these past few days, but I don't care cos I don't fucking do business with Russians.

And while we're on the subject of the Cookie Monster....

I don't know if I linked to this before, but here's a free writeup by the Cookie Monster, from around the end of last year, on the dismal state of the gold scene.

He puts forward some important math to keep in mind for people wondering about the supply/demand situation for gold. Important to keep in mind at all times.

And here's a photo of Cookie doing the math:

Cookie Monster on the Gold Report

Here's the Cookie Monster on the Gold Report, talking about how to turn money into rock. Or something.

Here's the accompanying photo:

Great gobs of news

The newsdesks are all coming back from vacation, so it's back to information overload.

Also, because the market pooped its pants yesterday, it's back to sifting through the muck to find an explanation of whether or not the narrative is changing before our eyes.

So let's get to it.

FT Alphaville - Spanish 10Y falls below 5%. Wonder why I stopped writing about Europe? Because it's fixed. Thank Mario Draghi. Moving along....

JC Parets - small and midcaps are outperforming. Again, important if you want to clue yourself in about the state of the US economy. Quit watching the S&P and Q: they're nothing but Apple, Google, and a couple huge megacorps who make money on the basis of government corruption.

Beyond Brics - India and gold. Minor article, but useful info.

Reformed Borker (Bork Bork Bork!) - the predictability of wealthy white people. Good to remember his point, and while he's gloating like nuts he deserves it cos he did read it right: those who own the world can be depended on to always do what's in their best interest, even if they're represented by lunatic neo-Nazi social darwinist closeted homosexual Randroid boy-diddlers from the Tea Party.

WSJ (not paywalled) - The tax deal is a crony capitalist paradise. Yes, you read that right: the FUCKING WALL STREET JOURNAL is calling the tax deal a crony capitalist blowout. They blame it on Osama Fartbongo, of course, but it's still funny to see the WSJ veer into neomarxist criticism of the thieving plutocracy.

David Kotok - even Kotok thinks the deal is chickenshit. But more importantly, the Cumberland position is this:

Meanwhile, global stock markets are headed higher. We have written about the whys and wherefores repeatedly. Now we can add that the risk of a fiscal cliff-induced recession is eliminated. That is a bullish development.
We will stick with our slow-growth, gradually accelerating recovery forecast for the United States. We like the housing sector recovery and the energy sector growth. We remain fully invested in our ETF accounts.

Ritholtz - link to a huge article at the Atlantic on the big banks. It's a doozy. Again, if you're one of them IKN readers who shakes his head at the scams and corruption of the Moss Isley Exchange, after reading this article you will wonder why supposedly intelligent (and not at all coked up) investors would hold any position at all in the big banks. Read the whole article; it'll take half an hour but you've got nothing else to do today.

The Guardian - dust off the Bakunin and Malatesta, there really is an integrated corporate-state repression of dissent. I really don't know why we don't see armed rebellion against this sort of chickenshit. Seriously, America - I've been charitably listening to the pro-gun position, and it seems to me this is precisely why you're asserting you own your guns. So why are you killing schoolchildren and Sikhs instead of the kleptocrats and the attack-dogs of the fascist state?

Beyond Brics - Peru to prepay debt as currency soars. Peru seems to be doing well. I think I predicted this 2 years ago when everyone else was screaming "China China China!". I made no money on that call, of course, but am thankful for the cheap and plentiful source of minneola oranges. Keep sending 'em up, guys.

Kiron Sarkar - his update. Especially important is his view on Portugal:

Austerity fatigue in Portugal. The Portuguese President has ordered a legal inquiry into the austerity measures implemented by the current administration. Countries such as Portugal have seen the much better deal offered to Greece and not surprisingly want the same. this year, pressing further austerity will result in push back from peripheral countries and, indeed, may well result in material social unrest starting in Spring. Furthermore, the impact of fiscal multipliers suggests to me that an austerity only policy will just make the situation worse in these countries – unemployment has risen to 16.3%, from 13.7% at the start of last year. GDP is expected to decline by -1.8% this year, according to the OECD (I believe by over -2.25%), with debt to GDP rising to over 135% – unsustainable. Growth policies will be needed.

IKN - why miners should use gold as currency. The idea sounds a little fruity and Doug Caseyish to me. But I'm linking to it here cos I couldn't download it on my mobile last night.

Gold and silver smackdown - reiterating what I've been saying

First, on the gold and silver smackdown.

So the Fed says the US economy is improving faster than they thought, so they might have to cut back their asset purchases sooner? To start, fine and dandy; I figured they didn't need to QE into 2014-2015 to begin with. No reason for it. You QE to rescue your economy from a depressionary spiral; if 2012's EU crisis didn't kill the US economy, nothing will, and it's all up from here. So fine, back off on the QE.

So cutting back on QE should tank gold? Why? OK, the treasury spread will widen; but as I've said, the whole 30s/2s argument is fallacious in this case. If you look under the hood you'll realize that this time is different from what the 30s/2s model describes. The reason to sell gold in a normal 30s/2s widening is because the Fed would be trying to stop the economy from transitioning from healthy growth to a bubble. In that environment, gold should go down because emerging markets will take a negative hit, while inflation expectations will drop. (Gold demand is actually dependent on EM wealth growth, but is supposedly also dependent on inflation expectations.)

But right now, the 30s/2s widening is indicative of a transition from artificial easing to a healthy economy. We should expect, with a strengthening of the US recovery, that EM wealth will take a positive boost, and inflation expectations should increase (does anyone fucking bother to follow Japanese and EU economic news anymore?). Gold demand is truly dependent on EM wealth, but is supposedly also dependent on inflation expectations.

The giveaway is that silver also went down. Silver is an industrial metal. World industrial production should improve when the US growth expectations improve. Yet silver was also smacked down.

So what happened? Again, my theory is it's all up to the coked-up hedge fund fools who don't understand what's going on, working on gold/silver pricing models they scammed from ZeroHedge, puking into an undersized paper market.

As usual. Meth-head elephants in the wading pool.

We'll see what happens with gold and silver next week. No need to panic right now.

Though I'm a bit embarrassed, insofar as the weakness in gold and silver is making me think that the gold/silver producer play is dépassé. John Kaiser really does make a good point that the best place to put your money this year is in the exploreco plays - after all, you can't expect much of a boost in the price of BTO, RIO or FVI this year, as long as gold and silver remain rangebound; but as I've been seeing in (e.g.) PLG, you can expect a fuckton of appreciation on exploration results. As long as, of course, you buy the ones that have good results.

Is this the year of the exploreco? Should we be buying the penny stocks that absolutely everyone hates? Isn't it smart to buy what's despised, and sell what's loved? Is IKN going to fucking hate me forever for suckering him away from explorecos and into the producers, right before producers tank and exporecos take off?

Buy Calibre Mining!

News is up next....

Friday videos - more Still Corners

Here's more stuff by Still Corners, who I really do like.

Thursday, January 3, 2013

PSA by the US Navy on bath salts

Part of what I do here is educate the old farts on what the young kids of today are doing.

Here's a Navy PSA on this new "bath salts" thing.

Several things:

1) Well, apparently people eat faces cos of bath salts. Also, John McAfee nuff said.

2) Nevertheless, remember those 80 fucking years that the Bilderberger-controlled LameStream media has lied to us about marijuana? It makes you insane and turns you into a heroin addict and is a deadly drug? And then ecstasy was supposed to warp your spine and kill you and drive you insane and turn you into Genesis P. Orridge? Well, given the powers that be have lied to us about drugs before, why bother listening to anything they say now?

Nevertheless, you do still deserve to be informed, if badly. So there's your PSA for today.

More news

Some morning news:

BI - Super-rich win the fiscal cliff deal. And here I thought Obama was going to accomplish something; I'll just keep it simple and say the American people got fucked in the ass by their so-called "liberal" president. He accomplished little on the revenue side, and still has to fight a battle on the defense sequester, medicare and social security, and the debt ceiling. Plus, there's all the side-deals that steal money from America to give to corporations - a Nascar subsidy, a film industry subsidy, and so on.

At least it means that a US secular equity bull is still years away. Because you can't have a secular equity bull when a corrupt plutocracy is robbing the country blind.

Gold Report - Stefan Ioannou from Haywood is a base metals bull. I don't know if he's that great an analyst, and I don't know if Haywood is a bunch of crooks and idiots like most houses. But it pays to read his opinions on copper and zinc, at least so you are prepared in case they do take off.

Buttonwood - markets and demographics. The two are closely intertwined, more than you'd expect.

Bloomberg - Molycorp a takeover target? Meh... they forget there is no rare earths shortage, and Moly and Lynas together are going to be flooding the market. That's the price you pay for breaking the Chinese stranglehold on REEs - you make them cheap for everyone, but make the companies less profitable in the process. I think the time to buy MCP was at $6, not now.

Wednesday, January 2, 2013

Just a couple news items

Just a couple stories, more interesting than actionable:

FT Alphaville - Chinese communist party thieves repatriating cash to Canada. Because they know they've been dishonourable, so they abandon the land of their ancestors before their ancestors get their revenge.

Ritholtz - the doomsday gene, or just awful trading? Basically it's a fun little skewering of ZeroHedge.

North Korea is Best Korea!

OK, this is fun.

This is video of a military parade in North Korea.

But wait, there's more!

Well, that was about half their GDP blown right there.

At least the announcers are fun to listen to.

Market's taken a big dose of Viagra today.

OK, remember the ZeroHedge indicator?

That's when the market is crashing, so you go to ZeroHedge to see why - cos if it's one thing you can be sure of, if there's a car crash, they'll be first on the scene to gloat at the disemboweled corpses - and you can't get there because ZeroHedge is down.

When that happens, you can be sure the fear has reached manic proportions.

Similarly, when you can't access your fucking discount brokerage account to check prices, that's also an indicator.

I can't access my fucking discount brokerage account to check prices.

Well, off to get a haircut then.

Here's a post on how crazy it is this morning:

Let's check in on the cray-cray:

JNK is 3SD up, RSI 70 and MACD trying to trigger up from too strong a position.

Yeah, the China 25 is strongly 3SD up, because if it's one thing this glorious solution to the US fiscal cliff has done, it's radically improve the profitability of Chinese state-owned enterprises. Because... fuck I dunno why.

Same with EEM. Seriously, teh stoopid it burns.


People seem to be ignoring NBG, the risk-on play of risk-on plays. It's really tempting....

And... they're off!

Yeah, the price at 9:30 AM is a bit misleading on the best of days, but still:

GDXJ is now above the EMA(16). It is above the bollinger mean, about 1SD up. Its EMA(16) has turned up. Its MACD has triggered up.

By definition it's no longer broken.

And $HUI?

It's 3SD up, EMA(16) has turned up, MACD is triggered and is widening.

I actually don't like this, it's too excited-looking; maybe it bungs the SMA(50), then backs down to retest the bollinger mean before going back up? Sounds logical, since nothing has changed in the past 24 fucking hours to (for example) suddenly make Kinross profitable; it's an overexcited state that has to back down to emotional normalcy.

But still, the golds ain't broken anymore.

Probably because the coked-up fucktards in the hedge funds have done dry-retching stocks for another 2 months.

Freaky start to the day

Yes, you're not hallucinating. Silver's up $1, gold is up 1%.

Check your premarket L2 on the juniors and you'll find a few of your favourites who are already bid up 5% from the previous close - that's the close that was already was up 5-10% from its own previous close.

WTF, eh?

Is it just that a couple dumbfuck hedge funds puked perfectly good stocks into oblivion before end Q4, and only now are they adding the same fucking stocks back?

Or is the problem that there really never was a "fiscal cliff" catastrophe, the world economy is still the world economy, and silver will still see industrial demand increase while gold will still see supply constraints and strong investment demand from emerging Asia?

Here's how I'm starting the year:

I still have a fat ton of dough in CXB. Its bid/ask is looking less stupid right now - there's big holes up to the 35 cent point. If somebody wants to buy it up in the lead-up to the Primavera drill program results NR, they won't find much to buy.

I have a decent bit of money in a bombed-out pennycrapper copper play, which should see a strong boost to its price now that its JV partner should be backing out of Schaft Creek. Its bid-ask is so skewed that it really looks like it could go up 50% on a sneeze.

I have a bit of money in NGE, just cos its chart looks intriguing, and since that looney John Kaiser's been screaming from the rooftops (i.e. publicly so I'm not giving anything away) about how it's a potential 20-bagger and they're completely changing the geological understanding of the Carlin Trend and to da moon Alice and yada yada.

I have a bit of money in one producer that's badly beaten down.

Pretty much no cash.

Let's see if we get any more than a one-day pop, eh?

Tuesday, January 1, 2013

Hey, did you notice the $VIX?

The past two weeks have been very boring market-wise. Europe is fixed, the US bullshit is overhyped, and all the Lizard People-controlled hedge funds took the past 2 weeks off work.

So I haven't been paying attention.

Then today I saw something interesting:

Yeah, there was a $VIX spike these past 2 weeks.

I think, given this chart, that we saw all the $VIX pop that we're going to see. I.e., 22 was it. Things will be better going ahead.

Now look at this:

Looks like, if my $VIX thesis above holds, then the $140 we saw in SPY was a bottom. You should have been buying.

Why weren't you buying? Too busy listening to the Bilderberger-controlled Lame-Stream media?

Quit listening to them.

Oh and by the way... looking at these two charts right now, I wonder.

If you charted SPY+$VIX, would it give you basically a straight line? Cos it looks like the only time SPY drops is when $VIX goes up.

That might sound obvious... but it's not, to me. Because if SPY+$VIX is constantly going up, that means the only time SPY goes down is when people are scared of shit. But that means SPY doesn't go down because of the "margin compression" bullshit that certain coked-up famous stock bloggers were freaked out about this fall. Cos there is no margin compression. Everything is slowly and steadily going up, and if you got your snout out of the coke bowl you'd see that, Barry.

Monday, December 31, 2012

What an interesting day.

Heh! I didn't know the TSX was going to be open all afternoon!

It was an interesting day - a lot of junior mining stocks went up, a lot of junior mining stocks even went up 5%-10%. Go check your account, it'll look good.

Why? Is it because, once you take out the Joo-controlled Bilderberger-influenced institutional selling, the market starts acting healthy again? That the only people selling are the hedge funds that are driving the price down?

My God. The Zerohedgers might be right.

Time to buy more gold and silver bullion, I think....

Short, meaningless comment

Today's a short day, and possibly a meaningless day.

Nevertheless, I have one little comment to make. I forget where I read it, but apparently a few major funds were behind much of the junior mining dumpage that we saw a week or two ago - Dec 20-21, according to the chart.

GDX and GDXJ are not struggling since then, and do seem to have the odd buying surge behind them. It seemed to be a bit of a volume spike too.

So unless a major economic catastrophe hits (and I don't count the failure of US budget talks as a "catastrophe" - it should have very little effect on US GDP, and this'll come at a time when the broader US economy and the world economy are improving), I'm suspecting right now that things should look up from here.

I'm actually worried about whether or not the PDAC curse will even hold in 2013.

But anyway... I dumped some BTO, in favour of that other producing miner stock IKN mentioned this weekend that should have a better bounceback to it.

I have a few thou in tinycap multibag plays (kinda hard not to when a 1.5-cent gain can make you $1000), and of course my Calibre Mining.