Saturday, November 9, 2013

Some weekend reading

I had the weirdest night. I couldn't stay asleep, so I was up reading from about 2:30-5AM. Then I went back to bed.

Then I had a dream which seemed to go on for days, with one incredibly convoluted plot. As far as I can remember, I got sent down to Windsor to do some sort of air and water monitoring at a dam, or something. But while there, my overnight bag was stolen, and I had to buy new clothes.

Well, it turns out the bag was stolen by the daughter of the guy who ran the power plant or whatever, for whatever reason, and the guy who runs the power plant is some sort of super-rich criminal, played by Jeremy Irons. But I didn't get to actually see him much cos his kind of people doesn't have any reason to associate with my kind of people. And somehow I ended up with a copy of a rare 19th century book on the history of Toronto that he had stolen from their public library system - he was trying to bleach off the library stamps.

And anyway, I'd basically gotten wound up in something, and was pretty much kept a prisoner there by this rich dude til my company's CEO I guess got me out, but he told me I'd been used by the FBI or whoever to gain information on this rich evil dude.

And a friend of my brother-in-law, who had fatal nose cancer (not in reality), had given me a ride down to Windsor, cos he was going there for medical treatment, and afterwards he passed me some gold jewelry he'd stolen from this rich guy.

And in turns out the little tatty penthouse he had, which abutted this rich guy's penthouse on the same roof, was actually an OP set up by the spooks to observe the rich dude.

And at some point I got a phone call from some Indian dude who thought I was someone else probably cos someone had called him from a cell which had cloned my number.

Eventually I got out of there, and my brother-in-law's friend gave me a ride most of the way home, and this girl I used to know was coming along with me but at some point we stopped off at a highschool in town and sat in a dingy room watching I dunno some sort of Warner Brothers cartoon festival? Til finally I begged off cos I hadn't slept in days and wanted to just get the fuck home.

Oh, and at some point in the long denouement I met Dennis Miller, and he wasn't a cunt. And we'd joked about how we'd started to chat after he saw me expertly flaming some Teatard on Miller's chat board or something.

Anyway, that's only a small part of it. 'Twas a big long crazy dream.

I thought about splitting off all that into another post, since you only came here to read the news. Then I remembered Nietzsche's position, which I'm in agreement with, that the author's pot of gold is only deserved by those people who have the patience to wade through everything else he writes. Frankly, if someone stopped reading this post a while ago, fuck 'em, they're cunts.

So now, the news:

Reformed Borker (Bork Bork Bork!) - breadth has been deteriorating. He notes at the end that breadth measurement doesn't predict anything at all; it's simply a condition of the market, and conditions of the market can change in any direction.

So quit wasting my time, Josh.

In this case, the number of S&P500 stocks above their 150MA has dropped from 468 at the May peak to 398 now; 398 is still a great number, and if you've followed the intermarket you damn well know the drop-off has been in things like homebuilders, for obvious perception-related reasons - while things like base metal miners have rotated into the above-150 group since May, believe it or not.

Hey, some sectors get ahead of themselves and have to back up, right? Look at peripheral Europe right now, or Japan a few months ago, or even homebuilders or autos. I'd be more concerned if the big 30% thrust we've had over the past 12 months wasn't itching to consolidate right now.

And Josh, you guys are only looking for a 10%-20% correction because you've kept having them the past few years. And all those corrections ended up proving themselves to have been without any rational basis: remember the threatened Euro currency collapse and EZ dissolution? Or the US debt default? The US ratings downgrade? How'd those world-ending disasters work out?

Where's my Mad Max post-apocalyptic wasteland with the giant wardroids rolling over piles of human skulls?

How long before the market quits paying attention to doomer bullshit? - Well, the S&P went up 3% during the October Republican terrorist campaign to destroy America, so maybe the market's already quit paying attention? Hm?

Frankly you bunch are exhibiting something analogous to the classic adult response to abuse as a child. Always looking over your shoulder, always mulling over past terrors, always expecting some guy around the corner to jump out and attack you. Harden the fuck up, go long SPY, and take a vacation for the next 15 years.


Michael Shaoul - on the October NFP. Quote:
The Unemployment rate increased slightly in October, but this was caused by a highly dubious plunge of -735K in the Household survey (and then partly corrected by another reduction to the Participation Rate). Those hoping for a gradual reduction in Unemployment (ie most of the bond market) should take little comfort from this nudge higher, since the Household survey is likely to correct powerfully over the next couple of months, bringing the specter of a 6 handle into view sometime in Q1 2014.

In summary this report goes a long way to justifying our stubborn insistence that employment remains on track for a much more robust recovery than current FOMC policy and communication allows for.
A 6-handle for unemployment in 2014 would mean no December taper. Because one explicitly and clearly stated Fed taper criterion is a 6-handle.

Liz Ann Sonders - why worry about a melt-up? She's one of my absolute favourite analysts, yet I don't keep up to date on her writings as much as I should. This article of hers is a classic of market analysis, and I strongly suggest you read it, bookmark it, and then read it again every morning. Included is a comparison of the economic background of now with that of 2000 and 2007:
...most of the negative comparisons are more macro in nature and heavily skewed toward debt and employment statistics.

...most of the positive comparisons are more fundamental in nature and show that earnings, valuation, dividends, rates/inflation and the market's technical conditions all look favorable.
Oh - and as far as that S&P500 forward PE chart that a certain individual loves throwing in our faces, saying "ha ha the market's overvalued we're at a top"?
Notice that valuation has never stopped at the median and immediately turned back down. In fact, the market doesn't spend much time at all at the median; instead it tends to well-overshoot on the upside in a bull market and to well-undershoot on the downside in a bear market (or when earnings growth exceeds market appreciation, like during 2009-2011).
(And, of course, where's the newsletter writer who recommended buying the S&P500 at its forward PE bottom in early 2011, hm? Or even at the market bottom in March 2009, hm?)

Anyway, Liz Ann Sonders is awesome and you should read her more often as yet another voice of reason to drown out the pandemonium of vacuous opinion that is the media.

Mineweb - India mulling easing gold import restrictions. Read the whole article. Shivom Seth does a good job covering India. Interesting thought I had while reading this - can the Congress Party really go into the next election with gold in short supply throughout the country? I'd think that would make them look bad. Maybe restrictions get eased between now and next May?

What do you think that will do to the price of gold? Hm?

1 comment:

  1. Dude - stay away from Rekall before you get yourself lobotomized!