Saturday, June 1, 2013

Two more newsbits

Project Syndicate - Hey goldbug! Nouriel Roubini says you're a fucking pussy. Whatcha gonna do? Gonna cry, pussy? He's obviously not been paying attention to anything these past few months cos he's still even bringing up the supposed sale of gold by Cyprus someday. Nevertheless, he makes a few other good points and it's always good to ask your local goldbug for a counter-argument - then stand back and laugh.

BI - JP Morgan's Tom Lee on cyclicals. Bo-ring! Except for this chart:

I find this cyclicals vs defensives chart interesting. Why? That purple ratio at the bottom looks a lot like a gold chart.

Four bits of news for a Saturday

Four newsbits, happened upon this Friday night.

BI - it's that Hindenburg omen again. Because it was so uproariously predictive the last 5 times it appeared. Hey, maybe the new highs/new lows dichotomy is happening because banks and consumer discretionary have a positive outlook, while mining has a grossly negative outlook? Do they factor out ETFs when looking at NYSE performance? After all, 77 new lows could be short ETFs like FAZ along with shitty miner stocks. Has anyone done a sector analysis of this, or is it just Joey the Weasel being a click-whore again? And isn't it nice, this big wall of worry the US is building up?

FT Alphaville - rebalancing, maybe? Basically that's the entire point of the article - maybe Friday's market puke was just end-of-month rebalancing? Though I'm sure the local doomers will spin it into the Beginning of the End. Because if a crash is going to begin, it's most likely to begin at 3:45PM on a Friday at the end of the month. Especially since the Wednesday of the week before also saw a big selloff, and that's another time when institutional books-balancing takes place.

Permashave Dave - I just manipulated Santacruz Silver down 3.88% in one day. Doesn't surprise me; betcha you could do double that with Dundee Prrreciousss Metals. That one's a real bot orgy, it'll trade 100,000 shares and not one human among them. But does this tell us that there's much more profit on the table if you buy on the last day of a down market for PM miners, then sell on the last day of an uptrend? I.e., how can we steal our money back from the botlords?

WaPo - there may not be a shortage of American STEM graduates after all. Rather, most companies refuse to pay skilled in-demand labour a wage that's commensurate with their abilities; they'd rather purchase a serf from Bangalore who's happy to get $25k/year and unable to quit his job without losing his H-1B. Yet another way that American employers try to distort and circumvent a free market for labour. Because the employer class are not capitalists or free-marketeers.

Friday, May 31, 2013

Friday news

Calculated Risk - Personal income and spending decline slightly in April. He thinks a mitigating factor is the lower price of gasoline, and finds solace in the upward revisions for previous months.

New Deal Democrat - sorry doomers, really, seriously, we're not in a housing bubble kthxbye. Good point he makes - a few months ago the doomers were saying "oh housing sucks, there's no US recovery!" while now they're saying "oh housing's going up, we're in a bubble again!" It's that type of idiotic you-can't-win reasoning that you have to delete from your RSS forever. Especially when the doomers (in this case Zerohedge) post utterly faked charts with distorted data.

BI - German retail sales stink. Joey the Weasel says "Germany is weakening, and there's an election coming up in September." He can put two and two together cos he reads my blog, see.

Michael Shaoul - Japan industrial production, housing starts and job openings. He's still very positive on the Japanese economy. I'd personally be happy to buy back in to Japan once the market stops vomiting.

BI - India posts its slowest GDP print in a decade. It's getting to the point where US growth rivals India's.

FT alphaville - again with the India sucks.

FT beyond brics - Standard Chartered cuts profit forecasts for Chinese companies. Plus there's a fear that all the analysts are still too rosy on China.

FT beyond brics - EM funds: heading for the exits. The market seems to agree with me that the EM boom is over. Why? Cos I'm dumb and so are they? Is that it?

Bonddad - Australia sucks. If you want to see a market rolling over, look to the former little buddies of China.

Mineweb - Standard Bank says gold sucks. It's noted that the equity correlation is now negative; I'd like to add that a lot of correlations have moved recently, and I think it's a symptom of a secular shift.

Economic Times - Jim Rogers says gold sucks. Gold may touch a new bottom.

Gene Arensberg - wah wah the gold takedown boo hoo Lizard People. A thoughtful analysis on the April 12 megapuke, actually. But nevertheless it begs the question: why would you have any confidence in a metal that can get bitch-slapped like that, and never make it back convincingly above $1400?

IKN - blah blah gold silver ratio. Why is GSR always only a gauge of fear, dude? Why isn't it a gauge of silver declining faster than gold? Cos it might be that silver is declining faster than gold. Because of the end of the EM boom. Don't get locked into thinking that what worked in 2009 works today.

Mineweb - Randy Smallwood has a funny name. Link to an interview about SLW and streaming. I still think streaming is a brilliant idea.

Western Graphite

Hey, check out this ad (at right of the image) that came up on

I'll leave any commentary on the topic to IKN. Or maybe Permashave Dave, who might also want to take an interest.

Friday videos - even yet more Mazzy Star

Ouch, Hope Sandoval. Just ouch.

Thursday, May 30, 2013

Four more bits of noos

A few bits of stuff found on the way home:

Michael Shaoul - on the US Q1 GDP revisions. He notes when you subtract out federal spending and defense, the US GDP is more robust than the headline 2.4% - which your goldbug newsletter writer buddy hasn't mentioned, has he? Hm? Has he said it was 2.4% in Q1? Did he tell you personal consumption was +3.4% and equipment & software was +4.6%? That guy who wants you to buy gold to protect yourself from the coming apocalypse? Did he?

Bonddad - no, we're nowhere near a housing bubble. And the amount of correcting that these bloggers have to do ("there's no housing bubble", "stocks aren't overvalued", "shut up about 'money-printing'") is yet more proof that we're climbing a nice big wall of worry. Think I'll buy more HSU on Friday. Then again, my JPM and F outperform the S&P 500. What to do?

India Reuters - no fast rebound for India's moribund economy. Brazil and China have hit a credit wall - India has simply hit a dumbass wall. - numbers don't lie, Aussie mining boom is over. Cecilia Jamasmie doesn't want to work at anymore, so she's called the end of the commodity supercycle.


Check out Semis:

It binged that little 470 TA target then backed off... but now it's pushing through and MACD is about to go back positive.

Now check out the weekly:

That 470 was resistance from 2011. Now that it's broken through, what's the target? Hm? 610?

Why is this happening if the EMs are faltering?

And has this got anything to do with gold and silver popping back up?

Curious. Busy rest of today, hope tomorrow is a down day so I can get into some of this fun.

Is this the recovery for the gold miners, or just overexcitedness?

Well today sure looks interesting. Remember yesterday I pointed out that a few of the senior miners (Kinross etc.) were starting to look strong?
Check this out!

GDX has popped decisively above its EMA(16), which was the first criteria I had set for ever getting interested in this market again.

And GDXJ has also moved decisively upward.

The problem I have is this:

Gold itself still looks questionable. It could indeed be little more than March all over again.

And silver still hasn't acomplished anything at all.

And here's the money shot:

Lease rates are ticking up again.

Now, maybe this time lease rates are going up cos the shorts are throwing everything they've got at gold, in which case we should see a massive upward spike in gold prices shortly when they give up their positions and stand out of the way.

Then again, maybe that's not happening (I don't even know if that paragraph made sense), in which case maybe the miners are ticking up because oil and steel are going down, which is a positive for their bottom line? Or maybe because the emerging markets are stagnating, which will be a net positive for miner labour and capex & opex costs?

Or maybe the flighty bastards who quit gold in disgust over the past month are seeing gold flirt with $1415 and have decided all over again that they want one more ride on the rollercoaster, hoping that this time it all works out for the best?

I have no clue.

So I'll sit back and wait for the miners to grab their SMA(50) and continue the upward trend, or for gold to make an explosive move upward. Til then it's nice and all to see the goldbugs having one day of happiness after 2 years of hell.

Some noontime noos

Yup, gold's up, GDXJ is up, all lookin' great. I'm going to wait for a trend to form before piling back in though. But at least my buddy at IKN doesn't have to fret over his port anymore.

JC Parets - USA Today gets bullish. Yes, let's top-call the market again like we did when Mila Kunis started buying stocks 200 S&P points ago. That worked out well. JC Parets, you're turning into a goldbug.

BI - financials are killing it. Cos a widening spread means they have a profitable future. And I bought JPM, the 9 PE one.

Bespoke - bullish sentiment drops back below average. Tell ya, all it took was that little klunk noise coming out of the Nikkei, and suddenly everyone was dumping shit overboard fearing the apocalypse. So are you still bearish?

JC Parets - again about the not bullishness. Here JC wises up about the USA Today bit. His post is so great that I have to quote nearly all of it, emphasis mine:

And there you have it folks. All it takes is a 1.2% correction from an all-time high close and the masses run away. Last week the American Association of Individual Investors poll had its largest weekly increase in bulls since March. But after this monster 1.2% decline in the S&P500, the latest poll not only erased all of last week’s increase in bulls, but is now well below its long-term average, again.

I write this blog post, not to document every twist and turn in this particularly noisy sentiment indicator, but to point out that the bears are ready to jump in on any pullback and the bulls are scared to death. Here’s what Jani Ziedins over at Cracked Market had to say:

“….another obvious short entry for the doubters and bears. I am sympathetic to their point of view given how long and far this market came without pausing, but doubting this rally is still the popular thing to do and is why more upside remains.

Recent volatility is shaking out weak holders and late buyers, as well as seducing bears to go short. The problem is much of this selling is already behind us. When everyone expects something nasty, they are either already out, or act quickly when they see the first cracks. Their trigger finger lead to last week’s stunning 2% intraday reversal. Even bulls are afraid of this market and are waiting for a pullback before buying more.

We must not confuse trend with sentiment. Just because the trend is higher doesn’t mean the market is overly-bullish. In fact the reason the market keeps going higher is because it was overly-bearish and there was an ample supply of traders out of the market available to chase it higher. At some point we will run out of buyers, but the supply remains plentiful as long as people keep doubting the sustainability of this market.”
Too bad I can't access that Cracked Market guy's blog from here at work right now, cos he seems like one of those scary geniuses I'd like to put on my RSS.

By the way, you can't read the market's psychology if the only opinions you're exposed to are assclowns from the doomer movement.

Barnejek - what I make of it all. One guy pondering the strange market signals.

Krugman - what I make of it all. His own theorizing about the strange market signals. Point of both is that those signals you've been watching no longer are giving you the information they used to give you. Maybe it's because we're moving out of the EM paradigm to a DM paradigm? Hm? Or maybe this is what happens when you move out of artificially-stimulated growth into organic growth? Hm? Or maybe fear isn't what it used to be? Maybe downside correlations are moving away from 1 now?

Pragmatic Capitalism - stop with the "money printing" bullshit. Again, has to be repeated.

BI - Japan pukes, then unpukes on the futures market. Speculation their big pension fund will start buying equities - which, if Abenomics is going to work, is the only intelligent thing to do, right? I mean, fixed income isn't the place to be when the market's moving into a secular bull phase, is it?

der Spargel - Germany will try to fuck shit up again. June 11 and 12: that's when Germany gets the opportunity to fuck shit up by destroying Draghi's innovative solution for enabling proper transmission of monetary policy. That, by the way, was the thing that ended the ECU crisis - not anything that Germany ever did. So put that date on your calendar as a place where, if the maket still believes its Euro Doom story, it'll try to puke a lung.

FT beyond brics - Brazil's Q1 GDP sucked. I keep telling you, we're seeing EM stagnation all around now, if you have any respect for Jim Rogers you'd accept it and move on. What's supposed to rescue the EMs anyway?

Bloomberg - China fails to grow with $1 trillion credit. Every $1 in credit is only producing $0.17 in GDP growth. Now, all you goldbugs out there who were bitching about diminishing utility of credit and how that meant the US was dead - are you all changing your tune now that it's really happening in China, which up til now has bought 25% of world gold production? - Rick Rule on paper vs. physical. And I do really agree with him that paper gold is not physical gold: the counterparties are different and gold's utility is lost when you turn it into paper. I also agree with his "weak hands to strong hands" statement - that gold ain't ever coming back into the market unless you get a flood of scrap caused by, say, a China debt collapse crisis. So if Hedge Fund Whitey decides to start buying investment gold again via GLD? He might find there's no gold left to buy.

Wednesday, May 29, 2013

Have a larf at Scotia Mocatta's predictions from November 2012

I was busy looking for China 2013 gold production forecasts - as an aside, their production has increased from 314 tons in 2009 to 403 tons in 2012 - and came across this fun little writeup from Scotia Mocatta, dated November 2012.

Let's run through some of the quotes:

the fact it has had to provide a third tranche of quantitative easing (QE3) highlights that the Fed was concerned that growth was flagging. The problem is that as QE1 and QE2 have not led to a self-perpetual recovery, will QE3? All the measures taken over the past five years have led to an explosion in public debt that now stands at $16 trillion and has been growing at over a trillion dollars a year during the past four years. The budget deficit this year is likely to reach $1.25 trillion.

Hey fucktard. #1, it's "self-perpetuating".

#2, this year the CBO revised their fiscal 2013 budget deficit estimate to a little over $600 billion. So you got that wrong too.

This, so called ‘fiscal cliff’, could be a major stumbling block for the US recovery next year and for market sentiment in general. Given the state of the US finances you have to ask whether the US will follow the EU into a debt crisis - albeit at a later date. This raises the question whether international investors will start to question whether the US is such a bastion of safety.

Hey fucktard. #1, go back to grade school and learn how to use a fucking comma.

#2, as it turns out the so-called "fiscal cliff" didn't do anything. Bit of a drag but that's it.

Also [the Chinese] government’s efforts to deflate the private sector property bubble have created credit tightness throughout the domestic market. The slowdown in the economy is a worry for global growth, as slower demand for imports in China has a worldwide impact on other countries’ exports.

Yeah that's bad and all, but what about the looming Chinese debt crisis? You miss that too?

Overall the EU is in a mess and will remain a threat to global financial stability for the
foreseeable future. Given the enormity of the debt problem the situation seems likely to get worse before a workable solution is found.

Guess what? It's gotten better now. Fucktard.

The situation in Asia needs careful monitoring as any deterioration in China’s economy is likely to spook global markets and that might well boost demand for safe-haven investments.

Ha! Ya pooched that one too! Turns out the imminent doom in China killed the market for gold.

Given all the QE, which in theory debases the value of money, we feel there is a high risk that developed markets move towards stagflation, where raw material prices rise as the value of the currency they are priced in devalues

Ya pooched that one too. Commodities are dropping. In a zero-inflation environment.

And the money shot:

Having consolidated between September 2011 and September 2012, we feel Gold prices have started another up leg that is likely to lead to new highs during 2013. How high prices go is difficult to gauge, we would not be surprised to see prices reach $2,200/oz. Should prices undergo another correction in the short term then we would look for good support around $1,600/oz. Eventually, once the bull market has run its course and the there is less need for safe-havens, then we would look for prices to retrace back towards $1,100/1,200oz as investment Gold is liquidated and supply surges, but we certainly do not expect that to happen in the year ahead.

And again, pooched.

And so on. I've got other things to do now. Just wanted to point out the type of fucktard Scotia has writing for them.

Eric Coffin at Cambridge House

Eric Coffin was at the Cambridge House thing, lending them an iota of legitimacy.

Here's an interview.

Most of the other interviews are at the level of Berwick talking about Bitcoin, or the various Sprotts pumping all the stocks they're trying to dump on the muppets to free up money for oil & gas. Don't waste your time.

A few bits of evening news

Bespoke - gas prices make another lower high. This is a positive for US growth.

Michael Shaoul - MBA refi index and bond yields. He thinks
reduction in refinance activity causes a significant slippage in demand for long dated treasuries by MBS holders seeking to hedge duration risk
Which means that doomer who's pointing to the IEF chart screaming "doom doom doom!" doesn't know what he's talking about.

Ritholtz - regarding the yield increases. He should just read Michael Shaoul.

WSJ Japan Realtime - volatility likely to fall on Nikkei. The suggestion is that the selling was exacerbated by (you guessed it) hedge funds, who had bought long calls and then had to hedge it on the fall by selling futures. Sorta like how they killed gold a while back. So I guess, despite Kotok's bullish feeling re Japan, that the market is dead until those calls expire worthless and the hedge funds have completed fucking themselves in the foot all over again.


I followed that link to "3D Printing Aircraft Carriers".

And I just discovered Trisha Hershberger.

If anyone wants me I'll be in my room.

Mickey Fulp The Uncaptionable

So I was watching That Dude Who's Not Daniela interviewing Mickey Fulp on Youtube.

Hey! There's closed captioning for the hearing impaired! I think I'll click on that button and see what happens.

This is funny:

Yup, he really is saying "platinum until plating embraced chill lesson too".

If I was a paranoid schizophrenic I'd be on YouTube all day looking for great secret messages from the Lizard People just like this!

As an aside, I'm most certainly going to watch that video about 3D-printing an aircraft carrier.

Gasp - are gold miners going to begin a prolonged period of not sucking™ as hideously as before?

Weird - check these charts out!

Dafuq? Barrick painted a higher low and is threatening to break above their EMA!

Holy crap! Kinross has actually broken above their EMA, which now has a positive slope!

Even Newmont has threatened to begin not sucking!

Is this the beginning of the end? Must I now dump my Ford and JP Morgan to chase a bunch of shitty miners? S&P 500 quality dividend-paying appreciating stocks, I hardly new ye!

Goldman Sachs says "The bond sell-off: it's for real". By this, they mean the bond sell off is for real.

Here's a link to Goldman Sachs' report "the bond sell-off: it's for real".

In it they argue for the reality of the bond sell-off. As opposed to the fever-dream imaginary nature of the bond sell-off or something, I guess.

Newsflash: SocGen creates a shart showing one thing moving in tandem with another thing

Haven't read PragCap in a while, went over to see what's up. Seems he's plugging the doomer scenario, giving time to permawrongster David Rosenberg and such.

Anyway, he's also got an article about a nifty SocGen shart:

Now I know what happened in those big dumps of 2010 and 2011. Those were market liquidity eevents that happened when everyone freaked out about how Europe was going to collapse. Everything temporarily went correlation=1 and dove together.

So, my dear regular readers at SocGen who never can get enough abuse from me, I ask you these questions:

1. Might this shart only be illustrating the correlation moves between 10Y treasuries and the S&P 500 as fear ebbs and flows?
2. What reason for causation is there supposed to be? Not correlation - causation. 'Splain that to me?
3. Are you suggesting with this shart that since 10Y breakeven was 2.4% in Mar 2010 and less than that now, that therefore the S&P has to go back down to 1200?
4. Those two diverging arrows at the end of this shart... might those be indicative of (oh no, he's going to do it!) The Great Rotation?

Ah know Ah'm just some dummy and y'all prolly be rollin' yo eyes at mah dumb questions but y'all jus' humour me now, hear?

(Yeah I know, someone else made this shart. But it's so fun beating up on SocGen.)

I have a sneaking suspicion this won't end well.

So CXO, the junior who popped from $0.15 to $1.50 on a sexxay drill result, could still fly up to $10 and beyond as they prove out a large decent-grade copper-gold resource in a friendly mining district blah blah blah.

But when someone creates an entire website around the other stocks that border CXO?


I'm starting to think that's quite a bit of froth for one hole.

Then again, maybe it's just some guy with html programming knowledge who bought $100K of Victory Ventures or something and is looking to unload?


Here's EWI's daily chart:

Kinda looks like it's rolling over, no?

But here's the weekly:

I like all that volume coming in, unless maybe it's someone trying to get out... but where did they buy in, then?

I like how $13.55 is closer to $10 than to $19, and Italy's economy musta have hit bottom by now, no? Sorta looks like a fundamental mispricing.

And I like how Michael Shaoul likes the Mediterranean. He seems like a smart dude!

Why do I not wanna buy this? Or do I wanna just wait and see if it gets above $13.80, a daily higher high that'd probably tick the MACD positive, and buy it then?

Or stay entirely in cash because POMO Fiat Weimar Zimbabwe Bernanke Doooooom?

This morning's vix

Posted 9:45 AM:

Yeah, that uptrend of the past week caught my eyes yesterday. I thought it was just an artefact of $VIX settlement tightness at the time.

Wonder how high $VIX goes this time? Each peak in this uptrend has been lower than the previous. Do we just get a dumb 1-day correction? Or does $VIX fly above 20 and we get a full week or two of wailing and gnashing of teeth as everyone decides things have suddenly gotten worse?

The point of the above paragraph being that I think any SP500 downmove would have to be constrained by the $VIX, at least unless the $VIX breaks its own bonds and flies up. Not that I know anything, but it seemed kinda logical to me.

Strangely nobody's selling Ford or Santander today so I'm not too worried. Fuck eh? Ford up 1.3%! Now watch, I'll get run over on the way to the barber's today.

Some morning news

Here's some stuff I stole from FT Alphaville and Sinocism:

Bloomberg - Japan's bond market. Read the details of the article and you'll see that home loan rates, corporate bonds and so on aren't acting in a volatile way - it's just JGBs. Probably because the hedge fund cokeheads can't penetrate the surface of the Japanese bond market.

Econbrowser - can Japan export its way to recovery? Answer: well it's certainly going to be a positive addition to their GDP. As long as they can solve their energy import problem.

FT Alphaville - the AUD is getting buttraped. This seems to me to be a chart of Dutch Disease:

Ex-mining has definitely shrunk, no?

NY Times - Tamping down expectations on China's growth. Bill Bishop from Sinocism on Li's juggling of a hundred... juggling thingies, and also on the leftward ideological shift as a preventative against Soviet-style collapse. If Mr. Li reads my blog, I'd like to suggest to him that he's got a long way to go to re-establish the legitimacy of the Party, considering the millions of thieves and bullies that it now harbours.

Bloomberg - Chinese stocks go up on developers and brokers. Just yesterday Bespoke pointed out China's $SSEC was looking like it was coming out of a downtrend. Well, this is why: more real estate speculation. Won't end well I think.

FT Alphaville - between cronyism and rebalancing in China. Bad: Chinese shadow banking is proving unregulatable. Good? A quote from Capital Economics:
The clearest immediate sign of new thinking is shown by the government’s decision not to introduce significant stimulus in the face of slowing economic growth. This marks a break from the behaviour of the last ten years when, despite high-level acknowledgement that growth was “unbalanced” and “unsustainable”, policymakers usually responded to slower growth by boosting investment. Premier Li Keqiang reiterated a fortnight ago that the government would rely on market mechanisms rather than stimulus to support growth.   
Bloomberg - Chinese credit bubble. Charlene Chu from Fitch is calling it, I'll be interested in seeing when the bubble pops and how nasty it will get for the rest of the world. Here's a quote:
Chinese banks are adding assets at the rate of an entire U.S. banking system in five years. To Charlene Chu of Fitch Ratings, that signals a crisis is brewing.

Total lending from banks and other financial institutions in China was 198 percent of gross domestic product last year, compared with 125 percent four years earlier, according to calculations by Chu, the company’s Beijing-based head of China financial institutions.[...]

“There is just no way to grow out of a debt problem when credit is already twice as large as GDP and growing nearly twice as fast,” Chu, 41, said in an interview.

Chu’s view puts her in a minority among those charting the future of the world’s biggest nation. She questions how long China can maintain the model of growth driven by bank lending that has allowed its economy to sidestep the global financial crisis. Fitch’s sovereign-debt downgrade to A+, the fifth-highest level has sparked a debate in which Chu’s calculations have been called “biased” by an Australia & New Zealand Banking Group Ltd. economist [me: probably secretly a Chinese agent] and a “misinterpretation” by Everbright Securities Co. [me: likewise].

Her views have struck a nerve. “Everyone is talking about credit -- about the credit cycle, leverage and credit-quality problems,” said Stephen Green, head of Greater China research at Standard Chartered Plc in Hong Kong, adding that there’s not enough good data available. “It’s a big black box, and it’s quite scary.”
Now do you understand why I'm not too positive on China and commods?

Tuesday, May 28, 2013

Five newsbits for the evening

BI - Citi reminds bears of their panic/euphoria model. Citi's Tobias Levkovich notes "bears are not using enough of our bullshit proprietary data to argue against the quite obvious upward price trend, and we've got a brand to maintain."

Reuters - Schäuble fears revolution. Though I don't know why - after all, the most likely revolutions would be in other countries, and I doubt he has the human decency to fucking care, the fucking Nazi pig.

Bloomberg - German housing boom as Europe stagnates. Good, now let's see Deutschebank fucking collapse when the German housing bubble bursts, and the Krauts get stuck bailing them out to the tune of a couple trillion Euros. Payback's a bitch fuckers, now go kill some old people to get that bailout-swollen budget deficit under control. It's also an interesting article cos it shows you what whiny fucking cheapskates the Germans are.

Bespoke - China coming out of downtrend? If so, it seems to me that without meaningful economic reform all it's doing is setting up an epic short opportunity.

Reuters - Brazil's long potholed road ahead. A good long article on what an emerging-market country looks like after it hits its middle-income wall. Is this China's near future? That's the question of this decade.

Yeah, the housing boom is an illusion because

The housing boom is an illusion. Just look at the performance of Home Depot:

Er, wait. What I mean to say is, the housing boom is an illusion, please don't look at the performance of Home Depot.

Noontime noos

Some things I stumbled across today:

FT Alphaville - Kuroding yields. The article reminds the market that the BoJ is going to be buying all their own bonds, thus driving down their yields. So quit freaking out.

der Spargel - German government finally mumbles something about stimulus. Is this the ruling German kleptocracy finally making their anger heard about how they can't make money in Europe anymore? Is it fear about the long-term viability of German business now that the rest of their trading bloc hates them and refuses to buy their goods? Or is it simply Merkel making a token gesture to try to raise her chances of getting re-elected in September?

JC Parets - why so many AUD haters? Hey JC, you know what? That chart looks a lot like a yen chart. Maybe the big hedge fund play has been long yen short AUD? I wonder what the snapback will be like, considering there's no reason for these currencies to have immediately hammerblowed to these new levels, other than speculative inflows.

Bloomberg - Copper climbs on demand in New York. Author pulls the following reason out of his ass: it's because of increased confidence in the US and Germany. Not China. This would be interesting, no? I mean, people getting bullish hard commodities because of DM growth, not China growth? I wonder what the consumption figures are for the EU and US, compared against China.

FT Beyond Brics - Indonesia's talent problem. Another example of the limiting factor of social capital in EM growth.

Shaoul - China's business cycle index. Quote:
it is interesting to note that the massive acceleration of credit granting over the last 15 months has not led to any appreciable pick up in this index, with April's reading being only slightly higher than the 87.30 reading of a year ago. Our growing belief is that outside of real estate and infrastructure construction conditions within the Chinese economy have weakened substantially in recent months and that any attempt to rein in credit granting will serve to restrict the one remaining engine of growth for the current cycle.

In other words, sorry if your investment thesis was predicated on continued strength out of China cos it looks like they're going where Brazil's been for the past year. EM end-cycle stagnation.

Mineweb - Russia, Kazakhstan central banks buy gold. A pessimistic takeaway is that central banks bought the most gold since 1964, yet prices are falling. I find it funny that the big buyers are the Soviet bloc. Funny, as in Russians are fucking morons.

Mineweb - silver prices to remain under pressure this year. Barclay's notes outflows beginning in SLV, which you'd sort of expect considering silver seems to be about a month behind gold in crashing.

Monday, May 27, 2013

Meanwhile, Kaiser is hopeful

Meanwhile, Kaiser doesn't think we're all dooooomed, he seems to think gold will go back up and soonish.

He scams my little idea about the hedge funds dumping gold. Does John Kaiser regularly read my blog?

UPDATE: whoops, no. At the end he admits that the PMs are also doooomed.

Here's a bunch of interviews about bullshit

Nag nag nag. OK, here's a bunch of videos. Though personally I don't see the fucking point of putting this bullshit up anymore, since even the talking heads agree that PMs are toast for the next 5 years or more.

Mickey Fulp admits he was uproariously wrong about the junior miners, and that they will suck forever.

Brent Cook says a major gold miner will go broke soon. And he has friends who work for the majors, so I betcha he's got an inside scoop. He also thinks the market is like 1997-2002, which means you may as well walk away and invest in the proper markets for 3 year, and any clown who's telling you otherwise should just get deleted off your contacts list forever.

And here's Rick Rule with how he's able to buy loads of shares over a long period of time because he's got a constant inflow of cash, unlike the average investor. He wants to see a spasm of 2 weeks with absolutely no bid. And he compares this market to 1990-92.

He thinks PMs are in a cyclical decline within a secular bull market, but then he blathers on about Ayn Rand bullshit that has nothing to do with gold.

Meanwhile here are some useful presentations from CPM Group.


Monday morning news

Sorry, I had better things to do this weekend than post here, or even read the news.

Anyway, here's some of the neat stuff I happened on Sunday night while clearing out my RSS:

Reformed Borker (Bork Bork Bork!) - A reminder: shit gets better. The natural tendency in a properly functioning liberal free-market capitalist economy is towards improvement. Rejection of this fact is a hint that one's mind has become clouded with the antifuturism of paleo-conservatism.

Calculated Risk - US states are now flush with cash. The drag on the economy from restrained state spending now disappears - thus a big headwind disappears. Now go ask your doomer newsletter writer to explain why he's bearish US.

Reformed Borker (Bork Bork Bork!) - The stupid idea of timing the Fed. Quote:
The Fed's last tightening cycle consisted of 17 consecutive 25 basis point rate hikes carried out over the course of more than two years. And this was with an economy that was absolutely firing on all cylinders with unemployment near record lows. We're not even close to being in that situation here in 2013 and people are running around acting like the Fed is about to pull a f***ing trap door lever in the middle of the night.

The idea that this sort of thing needs to be front-run by investors is completely rate-tarded. If you're running OPM based on this terrible misreading of the situation, I feel bad for the people listening to you.
And yet Josh, who I'm told reads my blog religiously, every time Bernanke's beard gets withing 3 inches of a microphone there's some part of the market somewhere (gold, bonds, equities) that spikes >1%. As if the algos are tied into a fucking voice recog program being fed a live audio feed.

BI - investors talking differently about Greece. It's like buying BP after the disaster in the Gulf of Mexico. Everyone hates the idea and it's a guaranteed money-maker in the long run. 

Reuters - two things missing on Spain's road to recovery. Nevertheless, Spain and Greece probably still have a lot of upside over the next year. So do you wanna be a momo and buy Japan, or mister clever bottom-fisher and buy EWP and GREK?

NY Times - China plans to reduce the State's role in the economy. Probably won't work because there are far too many entrenched interests; it doesn't surprise me that China's gone all aggressive in the South China Sea, since Xi probably will need the military on his side to "encourage" the kleptocrats to resist reforms a little less. Still, the capitalists in the US will take this as a positive sign.

Bloomberg - China rule changes may halt copper financing deals. I dunno what it means, but maybe IKN (who seems to have an interest in the copper market) can explain.

The Guardian - orange kitty beats analysts at stock-picking. Meet the new star stock analyst!

Still more braincells than the average hedge fund manager
And related to that,

Reformed Borker (Bork Bork Bork!) - the paradox of dumb money. Yes, if Mr. "dumb money" retail investor just put his money in SPY he'd have beaten the majority of hedge funds. As well as pretty much every goldbug newsletter writer, of course.

io9 - Star Trek into Darkness is utterly destroyed for you with one single review on the internet. I don't want to watch the movie now. Here's an excerpt:

So we’re done?

By no means. The Enterprise is pretty much dead and has entered Earth’s orbit, meaning it's falling really, really fast. The problem is that the warp drive is misaligned, so —

Wait a minute. I know what’s happening here.

— so the ship can’t stop falling, but the warp drive room is full of radiation and —

Goddammit. GODDAMMIT

— so Kirk runs into the Warp Drive room and kicks it back into place —


— and then Spock realizes what’s happened and he runs down to the room where he sees Kirk dying behind the locked glass door and —


— and Kirk puts his hand on the glass and Spock puts his hand on the glass and he makes the Vulcan salute and Kirk dies and —


— Spock —


You'll have to follow the link to read the rest. Suffice to say, spoiler alerts plenty, but it doesn't matter because it turns out the movie is truly stupid and the entire franchise has been utterly destroyed.