Friday, July 5, 2013

A little note about this blog's alltime stats

In case you doubted me, here we go:

#1, yes this blog is indeed still little more than an antechamber where the IKN readers get sent for their second helping of sarcasm and abuse. Dumbasses.

And #2, yes, Daniela Cambone really is my second most important linkbait. And my third. There's your proof. Right there.

Now, here's the hasty conclusions:

Per #2 above, I guess I should mention her more to get more traffic... but I don't want any traffic. Especially not desperately single goldbugs who religiously watch Kitco News and really care about whether she's married. That is the exact type of traffic I'm regularly trying to drive away, here.

So maybe I'll just stop mentioning her from now on.

And per #1 above, maybe IKN should stop sending his readers (which even include his paying subscribers for god's sake) over to a blog that does nothing but make fun of the entire gold miner scene. I mean, it's not making him look very good, is it?

Seriously. He's doing this:

"If you think my estimate of the future growth potential of XYZ Mining isn't good enough, then pop over to for further commentary, which will include a "gold miners suck™" tag, weekly mockery of the stock's consistent downward price action, and possibly a recurring video of a vomiting cartoon dog."

Then again maybe he wants to become a novelist now.

Douglas Adams and Robert Anton Wilson are recently deceased, so that provides him with either a great opening to fill in the surrealist humourist department, or alternately a stern warning not to become a surrealist humourist.

Let's check in on that "epic opportunity" gold stock bottom-call

For about the nth time, the usual suspects identified an epic opportunity: a secular low in gold stocks.

Yeah, about that....

That looks like yet another of those rollovers that precede violent plunges.

Hey, maybe I'm wrong. But the past ten or twenty or god knows how many (who the fuck keeps track anymore) plunges were all preceded by rollovers.

Oh and speaking of which:

Mineweb - Indian government curtails credit-card use for gold purchases WTF OMG LOL. Seriously, this ventures beyond "wishing to reduce the trade deficit by discouraging gold purchases" to "sheer fucking bloody-minded attempt to wipe out 25% of world gold consumption".

A few more newsbits

Quotable at the end. God I'm so predictable.

Bonddad - June employment report. One of the only two people you should bother reading on the topic.

Calculated Risk - June employment report. The only other guy you should bother reading on the topic.

Social Europe - the flatness of the ECB learning curve. Great money shot:
Isn’t it easy to make sensible monetary policy in a context of low and falling inflation and high and rising unemployment? Only the mean of spirit would ask why the hell has it taken the central bank so long to do the obviously necessary?

Almost exactly one year ago I pointed out that the success of a dovish ECB announcement (“do what it takes”) in improving economic prospects only reminds us that it has actually failed in its duty, under its mandate, to consistently support recovery. And that was a reprise of a post of a year prior to that which said, well, exactly the same thing.

I am sorry to bore you, but how can one write original posts when the central bank’s learning curve is so flat?
Easy answer: because Germans are cunts is why.

America South and North - Wall Street Journal loves governments that murder thousands of people. Huh? I'm sorry? This is news? The WSJ editorial page is famed for being located on the political spectrum somewhere between Richard Nixon and Vlad the Impaler.

So what are you going to do? Hunt them all down, round them up at gunpoint maybe in a big soccer stadium, and then execute them one after the other, tossing their bodies into shallow graves?

I mean... well... actually, that sounds like a great idea, no? And the WSJ would probably be in favour of it as long as it was done by someone who supports American interventionism and Chicago School economics.

Yeah, about that 177,000 tons of gold about to hit the market

Someone in the comments section posted the old canard about 177,000 tons of gold that is still in existence and ready to be puked into the market, at a moment's notice, and therefore there's massive true oversupply, and so you can't think of gold on supply-demand terms.

I realized a few days ago that there's an analogous situation that proves how stupid this idea is.

Guess how much copper is out there, not-consumed, ready to be puked into the market? At least 5-10 years' worth of production. Oh god no sell sell sell!

My math assumes that a significant fraction (say around 50%) of all copper "used" gets turned into transmission wiring, that copper consumption has increased with a decent slope over the past 30 years (as more of the world gets power), and (from personal knowledge) that wiring's service life is around 20-50 years depending on who you're talking to.

(My math is not meant to be exact, but just a napkin calc. Order of magnitude is all I care about here.)

That transmission wiring is still all out there, and at a moment's notice it could all be torn down, sold for scrap (dunno the price right now, but I'm guessing you can still get about $1.50/lb for scrap wire), and be puked right back onto the market.

Why buy copper, then? Cos there's a massive overhang of supply out there, ready to get sold into the market!

Except it won't. Cos if everyone tore down their wiring and sold it for scrap, we'd go back to the 19th century where there was no electricity.

That 5-10 years' production worth of copper out there is not a commodity. It's now become an asset class, specifically (dunno if this is the precise word I should be using) physical capital. Basically, it's performing a function.

What is the 177,000 tons of gold that's out there? Around 20,000 tons or so is apparently in the form of jewelry owned by Indian women: good luck getting every one of them to sell that. Many more tons are owned by Muslims, Vietnamese, Chinese and so on - people who hold it as a hedge against very basic and real existential risks. Many more tons are kept in vaults by very rich men (including much of the klepto-fascist oligarchic class that rules over we the unwashed horde) who also recognize its utility as a hedge against existential risk.

Central bankers also hold gold as a hedge against existential risk, and they aren't typically stupid enough to puke their gold stores.

(Brown was an outlier, and there is the theory that he puked the BoE's gold to help out some major commodity trader who had been caught with their pants down in a large short position.)

So, analogous to those many years production worth of copper out there, most of those 177,000 tons of gold in existence is performing a job - hedging against risk. It's not a commodity, it's an asset.

So when someone pulls that "oh blah blah 177,000 tons of gold out there" argument, respond with "and there's 10 years' production of copper out there too. So what?"

Today's fad of the day?

And what's the fad of the day today?

The kids are really into barfing USTs today.

Municipal bonds also are hot in a negative way.

And all that Zambian municipal debt that was so rad just a few months ago? The new fad seems to be dropping it from a tall building and watching it splort at the bottom, sort of like David Letterman used to do with watermelons.

All because the US just turned out a stellar jobs report. So therefore EMs are doomed and nobody will want to hold their 10-year Treasuries to maturity, they'd rather puke them at a loss.

Cos Obama something something. I guess.


Here's a gold chart for you:

That, to me, suggests a massive repudiation of gold.


Newsbits for Friday morning

The US is still on vacation, so they've missed a stellar US jobs report, as well as dovish forward guidance from the ECB.

In addition, Mark Carney proved Canada still has the funniest comedians by giving forward guidance that he may in future provide forward guidance.

So I'll just give you three newsbits this morning.

Ritholtz - global CAPE: Europe cheap, USA dear. Oh my... does this mean buying Europe is now cool? Cos nobody seems to be doing it.

Michael Shaoul - May Japan leading indicator composite index. Quote:
At the very least we would see the surge in this index as justifying the strong YTD performance in the NKY and we are not surprised to see that after pulling back sharply in May the index has consolidated and forced its way back above 14,000.
Now say it again in Shaoul's baritone English accent and matter-of-fact intonation. Sounds even better like that, eh?

WSJ - investors pull back from Chinese assets. Large outflows from China right now. Probably a good idea. Then again, if it's so popular, what are the chances that it's the right thing to do?

Friday Videos - Van der Graaf Generator, from 1970

Holy crap. It's Van der Graaf Generator with a performance from 1970 of "Whatever Would Robert Have Said", from their second album for cripes' sake.

Those who complain about the impermanence of society upon the creation of the internet have it 100% the wrong way round.

Thursday, July 4, 2013

A few more bits of news

The Americans aren't blathering as much as usual today. Must be something going on down there.

It's especially funny cos CBNC didn't have their normal early-morning Euro market news program on today; I guess nobody cares about what just happened in Portugal and England if you can't trade it immediately on Wall Street?

Here's some more news:

FT Alphaville - Japanese consumption taxes rising. Should be negative for the Japanese market but it seems nobody who's been buying the Nikkei really minds.

Yale Global - get ready for the next China. On the China economic rebalancing. BTW, Bill Bishop at Sinocism has mentioned a few times that he thinks an upcoming government/CCP meeting/plenum/something will lay out the complete roadmap for reforms and be quite a doozy; maybe we get a big surge in EMs then. Don't remember when it is - you'll have to subscribe to Sinocism - but I'm under the vague impression right now that it'll come in time for a nice September market surge.

FT beyond brics - Indian borrowing rates stuck high. This is what happens when an EM has stopped growing.

IKN - The LME and warehouses. Story about copper inventories that IKN natters about every Sunday. Plus if you use that link and do some Google magic, you'll be able to get yourself the daily newsletters from Thomson Reuters until they change their server setup again.

Ritholtz - how gold lost its luster. Really, this article is simply a case of "white man's blindness": CTRL-F tells me the guy doesn't mention India or China once. So all he's talking about really is how white people are no longer important to the price of gold. I think I've already made that fucking point, cheese.

Some more sad-sack stocks for you

Let's look at some depressing and pathetic charts, shall we?

Dynasty's down over 80%. Actually, I thought this was around $6-$8 2-3 years ago, so maybe it's more like 90%?

This one, whatever the fuck it is, is also down 90%.

Can someone please ask Quinton Hennigh whether he thinks Dissolving Gold still has any justification for being listed on the TSX main board? I mean, aren't you supposed to have an economic deposit in order to get a main board listing? He worked there, so he should know.

This one's down over 95%. Again, why does it get a TSX main board listing?

This one's still around, but again, questions remain about how legitimate it was for them to get a TSX main board listing.

Over 90% down. Isn't uranium supposed to be worth something?

Poor Sheldon! Your stock's down over 90%! You suck!

Again down 90%.

So 'splain to this ol' hick here exactly how these shitty stocks will ever manage to come back.

And why they all deserve a TSX main board listing.

Seems to me The Kaiser Extinction, when it comes, shouldn't be limited to the Venture.

Some morning news

Some morning news for you. From last night of course.

Bonddad - vehicle sales almost back to pre-recession level. And the fleet is older now than its long term average age, and so should see a big replacement cycle.

Calculated Risk - employment preview. The big announcement comes at 8:30AM Friday apparently (go double check it yourself), so maybe the market will spike up on good news? Otherwise it'll spike down on bad news. Or spike down on good news, or spike up on bad news. Who the fuck knows. But at least you can be sure that the horrible descending C-wave of American hypercollapse isn't happening.

Bonddad - France economic update. Here's a chart:

What does that chart look like, to you? Oh and by the way: any opinion you may have about France's economy had damn well better be consonant with the uncomfortable but empirical fact that France's 10Y yield is lower than the US 10Y yield.

Economist - Chinese credit: look both ways. The argument here is that even simply trying to strangle unproductive credit will still have negative knock-on effects for the Chinese economy. I dunno... isn't the point of the exercise that the unproductive credit is unproductive? I don't care if he writes for the Economist, this guy is still little more than a fucking blogger. With a few charts from Nomura.

Mineweb - gold imports to India dive 90% in June. Oh my!

Wednesday, July 3, 2013

Oh and Mickey Fulp

I'm still on Mickey Fulp's mailing list, mostly cos I enjoy listening to him talk about weird shit like dysprosium.

Anyway, he promised that tomorrow he would come out with a special Fourth of July "mercenary musing" on the revelations about the American security & terror apparatus.

So I'm waiting eagerly to see what he has to say.

Tune in tomorrow!

Michael Shaoul on BNN

As noted in the comments section, our hero Michael Shaoul was on BNN today!

here's the link

He's smarter than you so shut up and listen to him.

He doesn't think regional banks and homebuilders are overbought. He thinks their breakout during this correction is a sign they're going to lead the next leg higher. So buy ITB and KRE.

He thinks the action in oil right now is just a blip.

He sees substantial possibility of disappointment in EM domestic demand.

He thinks the majority of selling of Europe already happened in 2011-2012. In fact he thinks the best place to "disinfect your portfolio" of bonds from interest rate risk would be to buy Euro sovereign debt.

He thinks (like I've been saying) that the worry about Brazil is "that it's going to be the template for other emerging markets". He thinks there's a "meaningful possibility" that Brazilian debt crashes lower like the equities already did.

Re gold, he says "never invest with Mister Angry".

Vancouver Venture & IKN on Atico, and a tangential discussion going on from there

A little plate of half-finished thoughts for you here.

Vancouver Venture - Atico, good drill hole, cue crickets.

So maybe the problem with Atico is that the value of its property has a future impairment, in the form of requiring money ATY doesn't have? And the market expects them to have to get this money before Jan 2014 from a bunch of pump & dumpers who'll just vomit their free shares into the market to get the best deal for themselves?

Do the math as a pre-existing shareholder - you'll see the lower your price goes, the more you get diluted out. Til you hit zero. And there's little incentive for the pumpers to keep it from diving to zero either. And there's no fundamental lower bound to the stock price when your share price is backed up by Rick Rule's "inherent value of zero".

So you don't want to be a shareholder. Cos "shareholder" means "bagholder". So you won't buy if you don't already own, because that turns you into a shareholder. 

Or maybe this has been the problem with every junior for the past two years, ever since Brent Cook identified the fundamental supply-demand problem on the Venture - that there was a shit-ton of paper already out there with more about to hit market, and there was nobody left who wanted to buy any more?

Anyway. Long-term, the question you have to ask yourself is how exploration can happen at all under the TSX-V model.

Maybe it's as simple as killing off a lot of the paper? Then you'll have the necessary condition for share prices to go up - lack of supply, and (hopefully someday) increasing demand. For the paper, remember.

But if you need X amount of paper to replace Y tons of reserves per year (through successful exploration and identification of resources, then conversion to reserves), and the demand isn't there for X amount of paper, then you can't replace Y tons of reserves.

But if that happens, then longer-term the value of reserves has to skyrocket high enough to create enough demand for the paper that will produce new reserves, eh?

Question is, how long is that cycle.

And what happens when command economies like China and Russia barge in? After all, if reserves skyrocket in value and the demand for Venture paper doesn't respond, and the command economies don't need paper to fund the production of reserves, then there's a window of opportunity that the command economies can exploit to essentially corner the market in reserves.

Which might be nice for gold longer-term (if you assume China and Russia don't want to stock up on gold at $1000 if they're then going to force it down to $200 - China aren't idiots, but the same can't be said for the clownish subhumans in Russia).

But you won't be able to make money in juniors in this case, cos all the juniors you can buy will be impaired by the western "paper economics" model.

You can tell I really love Cookie's "supply and demand" theory for junior prices. I frankly hadn't given it nearly enough thought. How the hell does a rock-hound come up with ideas like these, anyway?

Or am I just making Cookie look clever with all my philosophizing?

Magna, Ford, GM

Wow, this is weird.

This says long-term Magna shares have a positive bias over GM. Like 50% in 2 years.

Similarly, Magna is a better hold than Ford.

Weird. Am I reading these charts wrong?

Both have the same P/E according to Google Finance, so I guess Magna just grows their business better?

Some news for today

Bespoke - better than expected employment data. This is an organic recovery.

Michael Shaoul - US new car sales for June. Again, organic recovery. He also points out that there's a shortfall in fleet replacement. So buy autos? I was thinking of buying Magna myself (already have enough US-listed crap right now); but I'm unsure because (not that I know anything about the industry) I'd expect Mexican parts manufacturers to exploit the boost in production more.

Reuters - auto, factory data hint at some momentum in economy. Organic recovery. But don't believe me: maybe you're better avoiding my blog entirely and consuming only the warped fantasies of economically-illiterate wackaloon doomers like Jim Kunstler, ZeroHedge, and King World News. That'll certainly help you position yourself in the market, I guess. Pft.

Bloomberg View - rising rates tie ivory-tower types in knots. Article recommended by Michael Shaoul. I like how it only takes her 3 paragraphs to point out that rates are governed by negative-feedback, and thus need to be analyzed differently. You need to read a good book on operational amplifiers to understand a lot of the real world. Oh, and also:
The confusion over long-term rates goes hand in hand with misconceptions about a steeper yield curve, which is a leading economic indicator and harbinger of stronger growth. A wider spread between banks’ borrowing and lending rates provides an incentive to increase their assets and expand the money supply.
And by the way: widening spreads have always been good for banks, because buying short and selling long is what they do. There's nothing clever about figuring this out.

Schwab - why stocks are rebounding. I've added Liz Ann Sonders from Schwab to my own reading list. A small consolation after losing Jim O'Neill to retirement.

FT Alphaville - Portuguese turmoil. Between Portugal, Greece and Cyprus, I guess that explains the weakness in the Eurozone markets right now? Well, at least Spain and Italy's yields are still comfortably under 5%.

FT beyond brics - Turkish inflation adds to woes. See, this is what happens to an EM economy at the end of the EM cycle. Stagflation.

Mineweb - on silver and photovoltaics. Author asserts that the numbers show industrial demand is not the primary driver for silver price.

P2P Foundation - how the Bitcoin 1% manipulate the currency. Oh my... it seems those ex-goldbug libertopian neo-con anti-state wackaloons have made themselves the clueless victims of yet another massive fraud, eh? Wow! What were the odds of that!

Reformed Borker (Bork Bork Bork!) - my edge. I guess this explains why he reads every piece of internet crap under the sun - to try to anticipate what other people are going to take for the next fad. If that's the case Josh, why did you buy Materials?

Tuesday, July 2, 2013

One more post for today - the sell side consensus indicator

Ritholtz - Wall Street still lukewarm on equities. Who the fuck are these guys?

I mean seriously - what is their fucking damage?

Just a couple more newsbits

Just a few more things to pass on to you.

Bespoke - Ford truck sales rise to pre-crisis levels. Still no apocalypse in the US, still no "dishonest system coming apart at the seams".

Reformed Borker (Bork Bork Bork!) - 361 Capital weekly briefing. A couple charts:

That one basically means that the stock market almost always goes up.

And this one means the US will have lower gas prices, which encourage growth but show up as reduced inflation - or even DEflation!!!

WSJ - inside China's bank-rate missteps. I dunno if you'll be able to read this - I can't on my phone, but I can at work. I'll pass it on in case you get lucky. Bill Bishop at Sinocism called it a fantastic article about the situation.

So here's some REAL Greek news

Yeah, always question anything coming from Reuters.

Ekathimerini - EU denies reports of Troika ultimatum. John Stonestreet at Reuters looks like a dolt now.

Irish Times - getting young Greeks back to well-paying jobs will take Trojan efforts. As in, I guess, it will take the efforts of an ancient non-Greek civilization on the Bosporus who... um... built great walls, and had a fondness for wooden horses? Um... aren't the Irish supposed to be good writers?

Ekathimerini - Greece on the pipeline map. And we're done here! Greece won't leave the Eurozone now. Unless they want to, in which case they'll be begged to stay. Cos hydrocarbons trump all.

Morning items of concern

Calculated Risk - pace of construction hiring to increase in 2H 2013.

BI - Greece has 3 days to deliver on terms or face consequences. I'll be looking for some real news on Greece today, not stupid BI articles.

Michael Shaoul - Spain unemployment data for June. "For the second month in succession Spain reported a substantial drop in unemployment."

BI - how gold is mined. I am very concerned with the high level of interest people are all-of-a-sudden demonstrating in gold.

Bloomberg - hedge funds cut gold bets as Goldman lowers outlook. There, that's better.

Yahoo Finance - commodity investors fear supercycle end. No matter where you look, there's suddenly an opinion on commodities - either a good one or a bad one.

Monday, July 1, 2013

Yet more news

More things to read:

Reformed Borker (Bork Bork Bork!) - BAML says breadth still healthy. Sorry, but the collapse of the US stock market has been further delayed.

Calculated Risk - construction spending increased in May. Sorry, but the collapse of the US economy has been further delayed.

Bonddad - don't expect a bond market rout. There are reasons the UST10Y can't fly up to 4%. They have to do with lack of inflation, among other things.

BI - Italian PMI encouraging. As if they're turning a corner. I don't feel so stupid owning EWI now.

Michael Shaoul - Italy new car registrations. He thinks this indicates a bottom for Italy.

BI - Spanish PMI encouraging. As if they're turning a corner. I don't feel so stupid owning SAN now.

Michael Shaoul - on the Tankan. It's not conclusive yet, but he says the numbers so far and the trend produced look positive. I guess that means outside of the government screwing things up (or a major earthquake) Japan is a buy.

FT beyond brics - Indian industry looks dismal. That's bad cos they won't have the money to buy gold. Oopsie!

FT beyond brics - bringing banking to the poor. Interesting - it points out only 40% of Indians have bank accounts. I thought that this meant 60% would store their wealth in gold, and that therefore the government's encouraging the spread of banking to the rural areas would be negative for gold. But apparently the areas with best banking penetration are in the south, and it's also apparently the southerners who buy the most gold! So I guess I can flag that theory "incorrect and needs further refinement."

FT beyond brics - EM stocks not necessarily cheap. Good point about EEM - it's market cap weighted, so it's really just a chart of China. And Brazil, which is also China.

Ritholtz - is gold overdue for a bounce? Funny when all these gold-haters start looking anew at gold, eh?

My promise to you, the reader

BTW, I made a promise in a private email, and want to repeat it for the readers:

I will not, never ever, start up a pay stock recommendation service until I have read at least one economics textbook.

I think this will distinguish me from the vast majority of freakishly ignorant junior gold stock touts out there, whose economics education ended at "Jesus loves gold and hates Democrats (especially black ones)".

However, I will probably never learn to read a balance sheet, because I don't want to turn into this:

PS please give generously to the League For Fighting Chartered Accountancy.

B2gold popped but Otto obviously doesn't use the Google Finance newsfeed

IKN's all excited cos BTO's US ticker popped today.

Dude, they got plugged on the Forbes website this weekend. That's why.

I'm sure they'll all sell it back down when they realize that your commie buddy Ortega is a major shareholder, two mines are in commie Nicaragua, and a third is being threatened by the Philippines with massive tax hikes.

Nice company, shame about the market.

Why Friday's goldminer pop story isn't awesome

So the juniors all popped real awesome-like on Friday.

Should you be excited?

1. One dude was saying that the pop in gold (that probably was a positive contributor to the stocks moving up) was an orchestrated attempt to bring gold to $1250. I think the story stretches credibility, except maybe as a big player's Livermorean short squeeze on some other dude who he knows is overstretched-short gold. In which case this is a short-term market move only, unless of course it causes a big enough short squeeze on everyone else to move the market more generally.

2. Another dude was saying that it was just a case of some funds buying gold miners on the last day of the month so they don't have to report it to clients (settlement not being til Q3). That might explain the dumping on June 24-26 as well, right? So maybe they zeroed their miner holdings for end-Q2 reporting, then bought them right back?

3. Personally, I am not impressed when (e.g.) BCM pops 30% on only 150% normal daily volume, on a fucking Friday for fuck's sake. The instos were off starting their long weekends. A big chunk of the pop happened in the last minute, after the robots got shut down for the weekend and the book was thinned out. And any retail who was watching on a Friday would probably have been lured in on the buy side, scared to miss The Supposed Bottom. It's too easy for this just to be manipulation.

But if those observations ain't good enough for you, how about my good ol' 16-day EMA?

BCM broke the EMA, but only because some smart-ass at CIBC painted the tape after 3:57.

DPM still hasn't broken above its EMA.

LYD still hasn't broken above its EMA. 

OGC still hasn't broken above its EMA. 

And RIO still hasn't even gotten anywhere near its EMA. 

So it seems nothing more happened than grossly oversold positions became somewhat less grossly oversold.

I'm not going to play any stock in a downtrend - worse, an accelerating downtrend - with the hope that tomorrow my grossly oversold, probably underwater position might become somewhat less grossly oversold and underwater. Especially when it's most likely the result of a few tards gaming the market with other people's money. I'm sorry, but I've been watching the juniors for years and this isn't a new plotline, they've been acting like this for what seems like forever.

Now, smart guys like Sperandeo say it's a good idea to let some other fool make the first 20% in an uptrend. In this case, there's not even an uptrend yet, not on any of these charts, and whoever might make the first 20% is probably underwater by more than that to begin with. So I'm really not interested right now.

Canada Day news

The rest of the world doesn't stop for Canada Day, so here's your holiday reading:

Reformed Borker (Bork Bork Bork!) - how baseball's greatest hitter can teach you to make better decisions. It's all about waiting for the right pitch.

BI - Morgan Stanley on mid-cycle correction. That's reasonable and rational and all, Maury & Stan, except that the tapering isn't starting til at least September, probably December. So let's rehash that article when it actually matters, eh? I think this weekend's PMIs and the upcoming earnings are more important to today's S&P.

WSJ Real Time Economics - Dudley says markets wrong to think tightening imminent. And Dudley should know.

Reuters - Tankan shows Japanese manufacturers feeling positive. So buy some Japan.

Reformed Borker (Bork Bork Bork!) - EMs: the hardest trade on earth right now. Quote:
Among the hardest trades on earth to put on right now, long emerging market stocks is perhaps the hardest.

First, because there's not a single country chart in the EMs of any size that looks even remotely promising. Most of them look like falling knives, some falling faster than others.

Second, the sheer volume of the anti-China, anti-Brazil, anti-Russia, anti-India sentiment is at screeching levels right now. US stocks seemingly go up everyday while EM stocks couldn't find a bottom in a Sir Mix-A-Lot video. US stocks are benefitting from central bank largesse while emerging economies are being hobbled by the resulting inflation. The optics of allocating there instead of here are bad enough, let alone the explanations you'll have to make should current trends persist. "Pain Trade" doesn't even begin to describe it.
Problem is, Josh, there's some proof that this could be the end of the secular EM bull. And in that case you don't want to own EMs and wait 10 years for a turnaround, just like you personally don't want to buy gold stocks and wait 10 years for the next secular commodity bull.

Reuters - China HSBC June PMI slips to 9-month low. If the PBoC is strangling liquidity at least partially to identify and close the inefficient businesses that are causing their massive industrial overcapacity, then it might take a few months of contraction to play the story out, no?

NY Times - dire warnings that did not come to pass. There's something interesting in the subtext of this article. Quote:
A group of 43 economists, including former aides to Republican presidents and presidential candidates, published an open letter to the Fed’s chairman, Ben Bernanke, saying [QE] should be “reconsidered and discontinued.” The planned bond purchases “risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment,” the economists wrote.
Sound familiar? Does this sound like the creed of goldbug newsletter writers, perhaps? So were Americans buying GLD because they bought in to the hyperinflation warnings of these economists? So are they now puking GLD because they've come to realize that the Republican worldview is fictional and ignorant? Is GLD a Republican investment? And is the GLD crash an artefact of the collapse of the Republican party? Interesting. - Jim Cramer says gold is a buy...?!?!? This even "discombobulated" Peter Grandich. By the way, if you had to choose between the two, who would you rather get investment advice from?

Sunday, June 30, 2013

Erica Rannestad doing sketch comedy?!?

Erica Rannestad from CPM Group doing sketch comedy in university??!?!?!?!?!?!!??!?!!?

Now I want to go look for a video of Jeff Christian playing the banjo in a bluegrass band.

Daniela Daniela Daniela! and Erica Rannestad on PGMs

Here's my blog's second most favourite search term of all time, interviewing Erica Rannestad on PGMs:

And personally I think Erica's much more of a cutie than Daniela is; then again, nobody ever searches my blog for "Is Erica Rannestad married?", so I guess mine is a minority opinion. Whatever.

In any case, it's an interesting discussion - partially because platinum has sucked almost as bad as gold and silver, even though South Africa's PGM mining is going to shit and Russia waits in the wings to pull a China REEs with their remaining world supply, and even though if the world is going to see more cars it's also going to see more PGM annihilated into a fine particulate by a billion catalytic converters.

So why should PGMs be going down?

Cos the commodity speculators who bid it up on the "China will buy 100 million cars a year" story are now puking it on the "OMG China iz teh doooomz" story, I guess.

Anyway, Erica Rannestad actually knows her stuff, both in commodity economics and in commodity consumption, which is a refreshing change from most of the people interviewed on Kitco. And she's also a cutie.

And just for the hell of it all, let's make the goldbugs' heads explode with another interview, this one of Benedict Arnold meets Satan himself, Jeff Christian:

The Magic Christian hands out a major bitch-slap to Nouriel Roubini, saying "I don't particularly listen to those types of guys, they don't understand the fundamentals; we tend to look at actual reality". Oh yeah Roubini, you just got served!

Magic Christian is not a cutie, however.

Speaking of which, here's Hamlet's soliloquy from The Magic Christian, starring Peter Sellers and Ringo Starr: