Saturday, July 27, 2013

While I'm wrecking the load times of the clowns who still use dial-up....

Here's a bunch more videos, this time with my cousin Norm MacDonald.

Here's Norm MacDonald talking about Hitler:

"The more I learn about that Hitler guy, the more I don't care for him."

Here's Norm MacDonald on Dennis Miller:

"But now they're going to have to create some goddamn pill that makes women aroused at the sight of a fucking 70-year-old dude with a super hard cock."

Here's Norm MacDonald on Conan, with some chick who left Melrose Place to do a movie with some guy named Carrot Top, whose 9 and a half seconds of fame I must have missed:

"Wait a minute! She left Melrose Place to do a movie with Carrot Top?"

And here's Norm MacDonald wrecking Dennis Miller's millenium special by making every punchline "cock".

"Hey! You hit me in the cock again you dirty commie and I'll bury ya!"

Speaking of which, here's Carol Kane in Scrooged

If you haven't seen this movie either, I dunno what cave you're living in.

Here's Carol Kane as the Ghost of Christmas Present.

Since I have to explain pop culture....



is Inigo Montoya from the movie The Princess Bride.

Here is the trailer for The Princess Bride:

As you can see, among others the movie starred Billy Crystal, Andre the Giant, Mandy Patinkin (who played Montoya), Peter Falk, Carol Kane (who you'd remember as the crazy Ghost of Xmas Present in Scrooged), and even (holy shit I didn't remember this) Peter Cook, Christopher Guest and Mel Smith.

It's a nice sweet kids' movie worth watching.

Here's the Wikipedia article.

Here's the swordfight scene:

Here's the impeccably annoying Wallace Shawn, who I'm pretty sure I remember from some Star Trek TNG episode or other:

Here's Billy Crystal as "Miracle Max":

Uh-oh! Central banks selling gold reserves - is that a good thing?

Mineweb - some countries have begun selling gold from their reserves.

1. I wonder what happens to the price of gold if central bank selling becomes a thing?

2. Germany, and their lackeys the Czechs and Danes, have been selling gold. And Germany has 2 years' worth of worldwide gold production still in their vaults. Thus any goldbug with some sense should consider Germans the enemy.

3. Out of curiosity, when Germany logged 0.8 tons as "sold", did that mean they took physical gold and sold it? Or did it really mean that JP Morgan paid Germany in cash for some of the German gold that was sold out of the Federal Reserve which they'll never be able to buy back?

Oh boy.

Hoo boy.

So someone just posted this chart:

And said
Here is gold, not yet above the 1980 highs when measured in total public debt as a percentage of GDP.  Tell me, where is the bubble, in gold or in developed nations’ willingness and ability to launch new credit at every problem that crops up?
to which my reply is

Here, let me mark that chart up a bit for you.

Guy just made the case for gold being in a bubble.

Now you know that as far as I'm concerned, the price of gold has nothing to do with US debt, except as much as ignorant Wall Street meth-head traders make it so.

1. The price of gold has to do with the cost of producing gold, the availability of gold on the market, and demand from the developing world. The US does not buy gold in any significant amount whatsoever; it hasn't bought gold since Nixon removed the price control on gold.

2. Not only that, but the US doesn't print all the currency in the world, and neither does the US generate all the government debt in the world.

3. And no gold isn't a currency. Especially not one minted in the US or involved with the US economy in any way whatsoever.

So the "gold having anything at all to do with the US" argument looks to me suspiciously like one of those Hollywood disaster movies where the abject geographic & sociological ignorance of Americans is demonstrated conclusively when the movie represents the entirety of the world outside of the US by half a million Egyptians standing around a pyramid, an Indian scientist living in a jungle hut, and two guys in striped shirts drinking wine at a cafe beside the Arc de Triomphe.

Meanwhile the Americans are the ones who destroy the aliens/build the planetary arks/divert the comet, because the comet was going to destroy Manhattan/the aliens hate America most/the pole shift was only affecting America.

I.e. it's assuming the US has any importance to gold whatsoever.

Nevertheless, I found this chart so hilarious that I just had to comment on it.

A few newsbits for the weekend

Here's a few things I stumbled across last night:

BI - Jim O'Neill says no China hard landing. He's still an optimist on China, so maybe we should be too?

CNBC - JP Morgan quits commodity business. Is this why the base metals stuck one leg out over the precipice yesterday? After all, we've seen what happened when speculators exited gold - the price crashed down to below the cost of production. Now just imagine if all these investment banks had to get rid of all the zinc, lead, nickel and copper that they've been hoarding for years. - RoPaul does the "gold to infinity!1!" schtick on CNBC. I guess he has to think that, given the dismal state of his investment portfolio. Maybe the gold crash doesn't end til RoPaul himself gives up and dumps the tattered remains of his mining stocks? Or is it impossible to drive out the True Believers?

CNBC - Jurgen Stark says France will need a bailout next. It's a good thing that this idiotic right-wing neo-Nazi scumbag resigned from the ECB in 2011. Why do I say this? The fucking French 10Y yield is 2.28% right now. That's 5 points below the UK. That level of yield is not suggesting any need for imminent bailout.

So Stark's foaming-mouthed blather is not even consonant with reality: thus, it's obviously little more than right-wing propaganda (because ignorant doomsday fantasy always has a right-wing bias), aimed at the continued subjugation of Europe under the jackboot of the corrupt plutocrats in Germany.

Basic rule: when your bullshit analysis disagrees with the fucking bond market, you are wrong, wrong, wrong, wrong, wrong. There is reality; that which agrees with reality is right, and that which blatantly and arrogantly ignores reality is wrong. That which blatantly ignores reality for political purposes is fucking evil and is meant to cause harm.

So shut the fuck up Jurgen Stark, and go back to the fucking black-market arms dealer or white child slavery ring that hired you away from the ECB, you vile fucking Nazi pig.

Friday, July 26, 2013

Article on Nevada gold from 1988

Was poking around, looking for info on gold stocks from 1988.

Found this article in the NYT archive:

NYT - gripped by gold fever.

It's amazing to see an article from 1988 talking about that newfangled idea of using leach pads.

There's no such thing as a free lunch, especially with Rick Rule

Rick Rule looks terrible as a woman, I'm only sayin'.

Oh boy! A contest! It says

One lucky winner will have the opportunity for a lunch meeting with Mr. Rick Rule, Chairman of Sprott Global Resource Investments and one of North America’s leading investment experts. During this high profile lunch, you will have the unique opportunity to ask Mr. Rule about things such as: his investment philosophy, economic questions, favourite companies to watch, and anything else that comes to mind.

It'll be a "high profile lunch"? You mean I'll get photoed by the paparazzi and everything?

I can ask Rick Rule about his investment philosophy? Ooh - I bet I'd also get to ask him about Ayn Rand and Objectivism! Perhaps Ludwig von Mises! The libertarian solution to the free rider problem and the tragedy of the commons? And maybe some questions about how he got to be so intelligent and witty! And exactly how much more intelligent and witty he is than other people!

Because I want him to do all the talking while I do all the eating and drinking.

If we're ever at a loss I'll perhaps ask him a few questions about leftism and socialism. Like, "but wouldn't it be better to live in a socialist state, where wealth is redistributed according to need?" That'll do the end-run around his self-control and get him rip-roarin' again.

Please, please, please don't enter me in this.

There's free airfare included, so my suggestion is to enter our wacky buddy who lives in that cave in Peru. Round trip to Toronto would be about $6000. Then maybe he and I could get together for beer afterwards.

Now, on the other hand, if any of you ever get a chance to enter me in a contest to win a free lunch with that irresistibly cute PM analyst sweetie Erica Rannestad, you go right ahead.

Or Yasmine Kittles from Tearist.

Either one.

Morning news

Only a few things today.

Bloomberg - China cuts capacity in some areas to reshape economy. This is encouraging; if they can kill the debt of these companies, as well as the productivity overhang, then maybe they can improve the quality of economic growth, which was supposed to be their intent anyway.

Bloomberg - lack of feminine hygeine holds Indian economy back. Seriously. Read this article. Twenty percent of girls drop out of school upon menarche. Women don't have separate toilets at work. This is the country that you think will overtake China in the second half of the twenty-first century?!?!?

Reuters - China gold demand to hit 1000t this year. It's the World Gold Council so it's worth reading.

Reuters - Asians stick with their gold funds even as others flee. Dunno if they realize that a gold ETF is nothing more than a security, with all the counterparty risk and political risk that entails. Is this just Chinese kids trying to act all modern?

Mineweb - shaky earnings for the top ten gold miners. I'd like to see a chart showing actual producer bare-bones costs of production per ounce without any exploration, capex expansion, writedowns etc.; it'd be informative.

Silver - was it a bear flag all along?

I'm sure people will be wondering today if silver was only in a bear flag all along.

Moment of truth, people!

As IKN notes, copper's also diving, and a boo at Kitco Metals shows aluminium, nickel and zinc also diving. And the S&P's diving too.

Is this the massive repudiation of something-or-other we've been waiting for?

Or maybe everyone's just decided they don't want to hold anything over the weekend.

Interesting thing about the China market....

So the China 25 doesn't look that great, cos I guess China is collapsing or something:

Not a chart I'd want to buy, especially right this moment.

But here's something weird: look at the China technology ETF.

Not bad, eh?

And on the weekly chart, this still looks like an ETF you would want to buy, not sell:

Does this mean China is transitioning? As in, they are seeing decent growth in technology and the advanced high-technology, consumer driven economy, while their old guard (the SOEs and the China 25) are dropping off?

I don't see how you can compare CQQQ to FXI and not feel positive on China.

Seeking Alpha hit piece on Sandstorm - feel free to comment

UPDATE: touche! The dude at Reeking Alpha was right. Sandstorm does indeed suck after all. Corrections below.

So Sucking Alpha did a hit piece on Sandstorm a while ago, and that might be part of the explanation for its weakness as the type of people who buy Sandstorm are the type of people who read Sucking Alpha.

Here's a link to the hit piece. I haven't read it in its entirety, since I don't want to register.

Someone posted the conclusion on Stockhouse, here's what it said:
We feel Sandstorm Gold is essentially a penny stock masquerading as a half billion dollar NYSE listed company. Since almost every streaming partner is listed on the pink sheets (all below $200m mkt. cap), we feel its partner alignment will prove to be an unsustainable business model later in the year. While on the surface it appears Sandstorm is making a small amount of money, we believe this is a temporary illusion due to the massive dilution used to finance risky streaming deals. Considering the risk adjusted dilutive capital used on the streaming projects, Sandstorm Gold is hemorrhaging cash on a year over year basis.
Now, caveat right at the start here, but Sandstorm is run by Nolan Watson. He's no a moron. And for god's sake he knows how to write a contract he's fucked up constantly.

I saw this last year where he managed to get Sandstorm Metals back up and running - essentially the company's streams were assets in default, and he marched in and just took over entire properties and companies. Sandstorm always wins. That should have been a clue about how shitty his due diligence is.

And generally you'd expect Sandstorm to make a fortune Sandstorm loses their shirt signing streams with companies that then go under like Colossus, unlike every other PM streamer who pays almost nothing for future deliveries of gold and silver. The "dilution", from what I recall seeing in the past, has been share issuance (a lot at a much higher price than today) to generate cash that then is spent buying future PM flows at a massive discount crap.

So I'm not sure about this article.

Any comments?

friday videos - Tenpole Tudor and their swords of a thousand men


One historical inaccuracy I see here is a Union Jack pennant being used by people in chainmail.

I suppose if you were into heraldry you could pick out a hundred other egregious mistakes in this historical re-enactment of... of... English blokes playfighting.

Thursday, July 25, 2013

Shout out for Sinocism

Just as an aside, Bill Bishop from Sinocism seems to be complaining again about how not enough people pay him for his news service.

If you like the info I pass on about China, most of it is coming from his blog, and if he shuts it down and goes pay-only, then

(a) he'll be slitting his own throat like Kiron Sarkar did. Honest, he's not going to make any more money going private.
(b) you won't be getting China news from me when he's gone, probably, unless I can figure out what's going on by myself, which I probably can't cos I don't read Chinese.

So, here's a special targeted message to my regular readers from the finance profession at M Partners, BMO, Carrelton Asset Management, Miller Tabak, SocGen, Credit Suisse, Stifel Nicolaus, and the dude in Panama whose company I forget:

If you think Bill Bishop's China analysis is at all valuable to you, then figure out what your company would pay in salary for a plugged-in China analyst, and send him one-tenth of that please.

You're not paying for me, so at least front him some money.

Otherwise, you hate capitalism, because you want people to give you things for free.

Do you hate capitalism? Do you want to live in a socialist world? What have you got against John Galt?

Also, if you don't give him money, it will prove to everyone that you have a tiny penis*. A very, very small, tiny, insignificant penis*.

If Bill Bishop goes off-line we'll all have to spend our time laughing about your penis*.

Do you have a tiny penis*? An itty-bitty little micropenis*? One so small that it should be written about in the medical literature?

No? Then send him money.

* - for the female readers, as if, please read "tiny penis" as "humungously fat ass, a real two-seater, one where people see you waddling down the street and shout 'put down the cake fatty!' behind your back".

Funny Lydian comment

Of course the few people left at Stockhouse, who are the ones most likely to put up with bullshit pop-under ads, are therefore not the sort of people likely to have listened to the Lydian conference call this morning.

So that was a useless ten seconds for me.


One guy posted in the comments section about Lydian's price collapse. He said:

another kick in the groin for Rick Rule

Oh god, if only! If only he had taken an actual kick to his real and actual groin! Indeed, what a world it would be if only Rick Rule took an actual momentum-enhanced steeltoed boot to his pendulous oblate spheroids whenever his stock picks went down!

In reality it's only a metaphorical kick in the groin for his investors.

But a man can dream.

Homebuilders suck now apparently

Ah I get it.

Barron's says that homebuilders suck cos two of them have reported poor earnings.

Also Doug Kass doesn't like them and he's apparently someone you should listen to now instead of a moron who plays with other people's money and loses.

Oh and a 4.3% mortgage rate means nobody will ever buy a house again.

The many facets of Carl Hering

Carl Hering isn't just an exploration geologist. Oh no.

On the side, he also travels back to the early 19th century to compose music for recorder.

With stocks like this, who needs junior miners?

With stocks like this, who needs junior miners?

I mean that in a good way.

Took a long wait, and I probably should have bought at the bottom of that base, and man I fucking hate dealing with US/CAN exchange rates in my stocks.

But still, finally looks like Santander is digging itself out of its hole.

Next stop infinity? Or something?

Homebuilders look done

Here's the daily:

If that $22 area looks important, here's why:

So there's a H&S, after a nearly 100% move in 2 years. It's a real H&S too - more volume on the right side, and the right side falls off faster than previous drops.

Dunno why they're tanking, given Bill McBride just told the world that US demographics require a lot of new homes to be built in the next few years.

I guess the hedge fund meth-heads don't care about demographics.

So fundies are great, but I'll stand back and watch this dog collapse - maybe to $20, maybe to $16.

The bigger question is what does underperforming homebuilders mean for the S&P 500 over the next while? Will August really suck for the broad market?

A note about EMAs, then I end up pimping Rio Alto

If you're one of them TA True Believers who looks at the charts that I post, you'll know by now I've been keeping my EMA set to 16. Why 16?

Well, the only reason I want to see a short-term EMA is because it'll tell me, quite simply, if the stock's price now is higher than it was a few days ago. That's useful info when you play the innovative market strategy of "buying things that go up".

And an EMA is nothing more than a (somewhat mathematically weird) sum of past prices. The mathematical weirdness comes in because older prices are less of the weighting than newer prices.

Now, the religion of TA-ism holds as part of its "deeper mystery" foundational metaphysics that everything on the chart is just a function of market sentiment. Basically, a chart tells you how much people like the stock.

Again, that means "buy things that go up". Cos if the chart is going down, there's (as that witty chirper likes to explain) "more sellers than buyers". And why the fuck do you want to become a buyer in a downtrend, when nobody else wants to take the job?

(Tangentially, humans, in fact all animals with brains, react more strongly to more recent info. In fact, I can't find a link for you right now, but scientists have actually been conducting experiments to calculate the psychological "discount rate" that animal minds operate by! Humans naturally discount future rewards at something like 50% per week or something, while a mosquito - really, they figured this out, I am not shitting you - has a psychological discount rate of something like 50% every 10 minutes.)


I've been using the 16-day EMA, instead of the 20, because it seemed to line up better with turning points (resistance, support the odd time that there was any) in miner stock charts.

The idea was that miners were dropping faster than other stocks.

I guess you could say the length of EMA needed is a function of selling pressure, which itself is a function of negative sentiment. The stronger the sentiment, the tighter the EMA needed.

Well, the EMA(16) hasn't been working as well the past little while - it's still kinda predictive, but the candles were no longer lining up against the EMA(16) properly.

So I switched my Stockcharts usage over to the EMA(10), and if you only pay attention to the last month or so of data hopefully it'll jump out at you as well as it does for me:

Especially in the RIO chart, the June dump was pushed downward by the EMA(10). The consolidation in the first week of July was stuck to the EMA. And the subsequent breakouts are obvious (in the last two charts anyway) by the jump up over the EMA(10). Retests are going down as far as the EMA(10) and then turning back.

So the drop to using an EMA(10) happens because there is more significant pressure. First there was more selling pressure, now there is more buying pressure.

I'd expect the miners to eventually slow down to a longer EMA (if there's some reason for emotions to cool off), but for the time being despite it being a hotter market it's still easy to see where the trend is with the EMA(10) - as well as when the trend gets broken - so I'll keep that.

BTW I'm especially interested to see what's going to happen with RIO's SMA(50). Dundee and BTO have already jumped it but Rio is still languishing.

So does RIO break down now? Cos if instead it punches through I'm assuming it can make a good fast upward move to catch back up to BTO, which is a comparable miner as far as being profitable and competent, with decent mines, run by people who know what they're doing.

We'll have to see.

Apparently RIO comes out with earnings or something in a few weeks. There's a loony with a vendetta website who says RIO is going to show a massive loss; on the other hand, there's a guy who can read a balance sheet and who called Rio a buy at 69 cents in July 2010 who says something different. I don't really know what to think right now, except that the next few weeks will prove one guy the winner and the other guy a loser.

Stay tuned, folks!

Lydian so far - not looking like a bad idea

Well, we've only just started, so things could turn dismal quickly, but so far it's looking like buying 10k LYD at around 94 cents yesterday was a good idea after all.

Or at least if I sold right now I'd make back the loss I created by dumping it at something like $1.27 yesterday morning.

Having some money sit in cash really does make sense. There's a significant, very non-zero opportunity cost associated with not having ready cash.

Some morning news

Gold didn't get assassinated overnight - just an attack on the $1310 stops, which has now turned around.

Now here's your news:

BI - Spain's unemployment rate falls. But yes, Polyone is still a better investment.

Bloomberg - Li vows support measures from rail construction to tax breaks. My guess is that the market will react positively to this and ignore China's ongoing debt productivity problem.

Reuters - Caterpillar is still positive on China and mining. I guess they have to talk their book, no? After all, it'd be stupid for CAT to admit that the future is in semiconductors, say.

Times of India - SBI chief lambasts RBI over rupee defense. Seems the Reserve Bank of India is choking off liquidity, China-style, except that there's no fucking reason to do this in India. It's India, the clowns are still in charge, moving right along....

Times of India - our vanishing dreams of growth. Well, maybe get rid of your stupid fucking caste system and spend some money on proper education like Jim O'Neill damn well told you to. The problem with Indians is they fucking whine too much.

Yahoo Finance - the case against commodities. These guys found that commodities become positively correlated with markets after 2008. No shit, eh? Everything became positively correlated after 2008. Did these clowns just figure this out now?

Mineweb - Kip Keen interviews Silver Wheaton CEO Naughty Tinytwig. It's actually a very informative article. And I enjoy seeing interviews of people who know what the fuck they're doing, like Randy Smallwood, instead of fucking idiot assclowns like Steve Forbes and Doug Casey. Nevertheless, you've got to make fun of Naughty's name. It's low hanging fruit.

Daily Beast - CFR just figuring out now that elections aren't democracy. Seriously. Originally I thought it was the stupidity of the Bush & Cheney Brigade that made them think Afghanistan and Iraq could be fixed just by holding a vote. Now it turns out the Council on Foreign Relations, who are supposedly the shadowy elite who rule the world, are only just now figuring out the basic sociological principle that elections don't bring about an advanced society - you need a ton of social capital already in place, otherwise the illiterate god-deluded peasants just vote for more ignorance.

When even the CFR shows themselves to be ignorant clowns, it gives me a better understanding of how stupid the world's shadowy elite really are. I mean seriously, guys - Sociology 101. Look the fuck into it.

Wednesday, July 24, 2013

Mike Judge interviewed about Idiocracy... by Alex Jones

So there's this great movie called Idiocracy.

Anyway, Alex Jones interviewed Mike Judge about it.

Weiner's philosophical again

What happened to the dick jokes?

This guy's going to turn into Philip K. Dick, and we all know what happened with him.

Heh. Weiner. Dick. Heh.

Heh heh heh heh.

Evening news

Looks like the gold market tried to clear out all the $1320 stops today. I remain hopeful.

Here's a few more newsbits:

Bespoke - new home sales hit 5-year high but homebuilders struggle. And boy, do they! On the one hand, sure you can write it off as market fear of tapering destroying the housing industry (um... two years from now when the Fed finally comes off the zero bound?); on the other hand, they have already moved up 100%.

Calculated Risk - a few comments on new home sales. His response to the above:
And even though there has been a large increase in the sales rate, sales are just above the lows for previous recessions. This suggests significant upside over the next few years. Based on estimates of household formation and demographics, I expect sales to increase to 750 to 800 thousand over the next several years - substantially higher than the current sales rate.

And an important point worth repeating every month: Housing is historically the best leading indicator for the economy, and this is one of the reasons I think the future's so bright, I gotta wear shades.
So I guess homebuilders is still a good play?

Calculated Risk - architectural billings great in June. Suggests an increase in commercial real estate construction in the next 6-12 months.

Bonddad - deflation is the greatest risk to the economy. Yabut you might want to compare this EM-weak commodity-weak market to the similar one in the 90s, to see if the deflationary tinge to the data was similar. Sometimes deflation is good.

Reuters - gold moves closer to import quota to curb demand. Note to India: what do you think is going to happen to gold demand when your incompetent government causes the collapse of the rupee? Also, please tell your 1 million fucking fraudsters to stop calling my house pretending they're from Microsoft or some fucking duct cleaning service.

Reuters - banks hit by rupee defense. As above.

FT - Reserve bank of India tightening squeezes lenders. As above.

More on Lydian

So Lydian collapsed this morning, now at $0.91 or so.

Maybe people just dumped on the "oh no, not another political risk story" vibe.

After all, Cookie used to think LYD was a slam-dunk, yeah? Same with Rick Rule. Now it's not, and the market should be expected to react vehemently.

Here's the link to the NR.

Feel free to correct me, but looking at it again, the story is that the expansion of a catchment basin interferes with their leach pad location. Thus their FS is delayed.

But the government has invited them to a roundtable to discuss things, so they probably realize they're hurting LYD and want to ameliorate.

So I'd bought some LYD a few days ago on the gold breakout, then dumped at a loss first thing this AM; but I've now bought back the same position size (but more shares). Idea being that the mine still happens, and (maybe a concern) that moving the leach pad doesn't drive costs up too much.

Of course, all this assumes that Lydian aren't a bunch of lying scumbags like every other junior miner out there, and that you can actually believe what they say in their NR unlike with every other junior miner out there.

That is a big assumption, obviously.

Let's see how this works.

PS a big sorry to Permashave Dave for getting him into Sandstorm.

Today's news

Lots of stuff. Pick and choose what you want to read.

Dragonfly Capital - what if it wasn't the S&P 500? A point for all the TAs who call for an imminent collapse in the S&P: if this was a chart of some junior gold miner instead, would it be screaming a buy on the breakout to all-time new highs? Or would it be telling you to sell? On... the... um... breakout to new highs?

BI - European recession ending. Not really: more like the recession has stopped getting worse. Then again, that's step one in getting better.

FT beyond brics - Polish shares: time to buy? For my buddy there who's profited handsomely by unwittingly participating in the screaming uptrend in Polyone Inc. I'd be happy to buy PLND if it pops above $23; the end of the EZ recession would really boost that country's situation, I'd assume.

FT Alphaville - China flash PMI disappoints again, yawn. Yet Li says 7% is a hard floor for growth, so everyone is now expecting stimulus. Thus, bad news lifts the market on expectation of handouts of free crack.

Michael Shaoul - Indian financial stress rises. All the desperate anti-gold moves in India are being driven partially by the imminent collapse in the rupee. Shaoul says "the risks of an accident are growing in India at the current time". And that's to be expected at the end of a secular EM bull, no?

BI - Elizabeth Warren is going to destroy commodity prices. Sorry, but that's the interpretation I get from this story.

Bloomberg - copper rallies on European data. Hey... does Europe consume commodities too? Hm... what about Japan?

Bespoke - Gold back above 50 day moving average. They're paying attention to gold now, and so is (gasp) Ritholtz. Remember: if this turns out to be a false move, "from false moves come fast moves".

Mineweb - RBI move pushes gold to 1-month high. I'm wondering if this is only a temporary effect. And how many other temporary effects the Indian government is going to exert on gold.

Kid Dynamite - there is no gold conspiracy. He fails to name Jim Sinclair in his list of incompetents who have no clue how gold trading works.

BI - even Shedlock says the gold conspiracy is nonsense. He must have taken his meds today cos he reads lucid. Tell you the truth, I'm scared now that all the goldbugs who bought in yesterday are going to puke back out today, now that even the loonies like Shedlock and Acting Man have pointed out the nonsense of the "imminent collapse of the COMEX".

IKN - Lydian sucks. I'm really interested in what Cookie might have to say about LYD right now, considering it was always his slam-dunk can't-lose definitely-becomes-a-mine pick. After all, last thing you want to do is move a leach pad on enviro concerns. Or... well, even have enviro concerns after years of not having them. So, what's the call now, Cookie? A screaming buy at 88 cents? And how does Rick Rule feel now?

IKN - ITH sucks even more. If there were an actual leak that caused people to pile in, thus losing >50% when the real info came out, I wouldn't be worried about the SEC; I'd be worried about death threats, the inability to ever show face in public (either for the company or for its officers), and even never being able to work in any professional business setting again. I mean, this ain't your typical run-of-the-mill pie-in-the-sky bullshit, but an allegation of willful fraud costing people millions. That sort of thing, if true, ends lives and careers.

Tuesday, July 23, 2013

Let's all masturbate to a fantasy of $50,000 gold now

Here's a nice article for you, about the coming fapgasm in gold, reprinted from ZeroHedge in its entirety.

Because we love to fantasize don't we.

Today’s AM fix was USD 1,326.75, EUR 1,007.10 and GBP 864.84 per ounce.
Yesterday’s AM fix was USD 1,313.75, EUR 998.21 and GBP 859.22 per ounce.
Gold climbed $39.30 or 3.04% yesterday and closed at $1,333.70/oz.
Silver surged $0.97 or 4.98% and closed at $20.46.

Gold Prices/Fixes/Rates/Vols - (Bloomberg)

Gold surged over 3% yesterday due to what appears to be have been significant short covering due to concerns about gold backwardation and the continual haemorrhaging of gold inventories from the COMEX.

Concerns about a default on the COMEX, once the preserve of a few observant market watchers, are becoming more widespread  as we appear to be witnessing a run on the highly leveraged bullion banking system.

Very robust physical demand from the Middle East, Asia and particularly China and a decline in the dollar also helped prices log their biggest one-day gain in over a year and their first close above $1,300 an ounce in nearly five weeks.

Gains in silver futures, meanwhile, outpaced gold’s rise, with silver surging 5%.

Gold may have been higher also due to the weak U.S. dollar which is under pressure from poor U.S. home sales and comments from Bill Gross, PIMCO co-chief investment officer, who said he expected the Fed won't tighten policy before 2016.

Gold has recovered nearly $150 or more than 12% in less than a month since hitting a three-year low of $1,180/oz on June 28th. Gold has made the strong gains due to robust physical demand as seen in the still high premiums in Asia.

Respected investor and precious metals guru, Jim Sinclair has again warned of a risk of a default on the COMEX and said that gold prices will rise to $3,500/oz and that gold at $50,000/oz is “not out of the question.”

Sinclair, the successful gold and silver investor and a former adviser to the Hunt Brothers in their liquidation of silver from 1981 to 1984,  said in a posting on his blog that was emailed out to subscribers that:

“The cause of today’s spectacular rise in the gold price is the reality that with Friday continues large drops in the Comex warehouse gold inventory. No cogent argument can be formed against the reality that because of the continued fall in gold inventory that within in 90 days or sooner the Comex must change its delivery mechanism.”

Sinclair, said that the COMEX would have to move to cash settlement as they do not have nearly enough gold bullion to make deliveries and warned that owners of futures may be forced to accept payment in the form of the SPDR GLD ETF. This which would make them unsecured creditors of the bullion banks who are the custodians and sub custodians of the SPDR GLD.

He said that this could lead to the GLD ETF being “destroyed” and said that “it is a truism in gold that which is convertible into gold will in fact be converted over time.”

Comex Gold Inventory Data

Sinclair was likely alluding to a form of Gresham’s Law where bad money drives out good and where ‘bad’ or more risky gold investments are driven out by ‘good’ or safer gold ‘investments’ such as physical bullion in your possession or allocated in a vault outside the banking system.

Gold rose yesterday and Sinclair said, “because those knowledgeable know the inevitability of the changing of the Comex contract.”

“There is no question this is the emancipation of physical gold from the fraud of no gold, paper gold. The emancipation will cause physical gold exchanges to take birth and to be the discovery mechanism for the price of gold. This is the end of the ability to use paper gold future contracts as a mechanism to make the gold price sing and dance at the will of the manipulators.

With manipulation coming to an end the true value of gold will be discovered by the cash exchanges that are now taking birth. The advent of the cash spot exchanges around the world is the natural demise of the Comex.

GOFO (Gold Forward Offered Rate) is screaming this truth. The warehouse inventory of every futures gold exchanger is screaming this. The fact that there is no meaningful above ground supply of gold is screaming this. The fact that most of the central banks supply of gold is leased is screaming this.

There is no reason why gold cannot move up hundreds of dollars a day when the Comex changes their spot contract settlement, as they must, as they will, very soon.”

Support & Resistance Chart - (GoldCore)

With regard to price, Sinclair said that “gold will trade well above $3,500/oz and those who have lived in the gold market like me for now 53 years know it”.

The respected investor said that “a price of $50,000 for gold is not out of the question as a result of its emancipation from 'fraudulent paper, no gold, paper gold.'”

Mr. Sinclair has a good track record and it is believed that he has insider knowledge due to his family history and relationships with key players on Wall Street.

He predicted back in the early 2000’s with gold below $300 an ounce that gold would reach $1,650 within a decade. Now he is talking about “quantitative easing to infinity” and a similar trajectory for gold and silver prices.

Sinclair is highly respected amongst precious metal buyers due to being extraordinarily generous with his knowledge and his time in recent years. His writings on his website  JSMineset and his free email have protected tens of thousands of people around the world.

This year he has undertaken conferences where hundreds of people have turned up in Los Angeles, London and New York City for highly informative, interactive, question and answer sessions and is holding more conferences around the world in the coming months.

Some fun t-shirts for Cambridge House

Of course the neoconservative popaganda t-shirts at Zazzle are all hideously fucking expensive.

Thier politics is just an excuse to take money from fools, after all.

But here are some good ones I've found:

This one's a bit obvious. Personally I think Bernanke has more brains than any fucking clown I'll meet at TRIC, so I won't go with this one.

I like this one. And if Berwick is there he'll definitely give me a fist-pump. He doesn't seem to like cops much.

Again, not my thing, but it's nice to see Obama up there with Mao and Stalin. The yanks will love this one.

By the way, I fucking hate the faux-Russian font, using д (letter d) for a "a" and я (letter ya) for an "r". Oh, and look! They even used ш (the letter sh) for a "w"! How clever! Oh and I almost missed the и (letter ee) being used as an "n"! And Euro signs which aren't even Russian letters!

Very simple and to the point. Cute stick figures are always easy to comprehend. And even though anyone who goes to TRIC has by definition lost all their money, they'll still identify with the sad rich guy in the dapper suit who's getting his money bag taken away.

If only the dudes with the money bags ever really did get arrested at gunpoint by the police. Normally they only arrest and shoot poor people.

This one's great, very much my type. Pro-Berwick, pro-real liberty and not the bullshit of the right wing wackaloons - and any idiot clown will think I'm his buddy cos the deluded fool believes that he really does think for himself.

Plus at least you're getting real artwork for the HOLY SHIT THIRTY FIVE DOLLARS?!?!?!?!?!?!?

Cambridge House Toronto is still happening this year

Cambridge House Toronto is still happening in September, despite the relentless slaughter of the junior miners and the abject disgrace suffered by all the inflationistas and goldbugs.

Here's the speaker list.

You'll see I'm not on it.

They tried to get me, really they did; but they didn't even want to pay for my Go ticket and lunch. Said they couldn't even afford that. Cheapskates. So I'm stuck being a spectator.

I'm definitely going to want to see Coffin, who I've gained a lot of respect for; Kaiser maybe too, and Ned Goodman would probably be a fun listen.

Other than that? I dunno, I guess Glen Jones from Intierra might be good? I've never paid enough attention to Lawrence Roulston, so maybe I should see him. I know some of you guys like Schaefer, but I frankly couldn't care less about oil and gas.

Then again, I guess you guys don't want me to review these guys, right? I bet you'd prefer I post reviews of Marin Katusa and Peter Grandich and David Morgan and Jay Taylor, right? After all, you don't come here for the useful information, you come here for the cutting wit and insightful commentary, right? So maybe I should quit with the ego and just give you guys what the hell you really want.

The exhibitors list is essentially a windswept wasteland; FVI, VGQ, AR, and then there's the 20 explorecos who think they'll be able to kite a cheque by September.

Anyway, I'll probably go, but I need to get some help with assembling a suitable wardrobe. I'm thinking about wearing some sort of grey sweatpants, preferably with a drawstring; running shoes too. (I don't think Sheraton allows crocs or flip-flops.) But as for the rest of my wardrobe, I need help finding something suitable for a junior miners conference.

Feel free to go into the comments and post links to t-shirts you feel suitably capture the zeitgeist of the goldbug scene. Anti-Obama, pro-gold, that sort of thing. Politically charged headwear will also be appreciated.

Just nothing that could be construed as advocating violence, of course - I don't want security to kick me out.

If it's cold out in September (might be, it's been generally a cool summer) I'll also need a jacket, but I think a "wolf howling at the moon" number would work perfectly, and where I live those jackets are popular to begin with so I'll probably be able to get one down at the Walmart.

Let me know in the comments.

Junior mining hall of shameful charts, part several gazillion

There's nothing better than shaming people.

Cardero Resource Group:

From $2 all the way down to 7.5 cents. That's something like a 97% loss.

You're sure doing a great job making money for the shareholders, guys!

The obviousness of Corvus' chart

Here's a chart. Let me know if you see something:

Really looks like someone's happy to dump all the shares they can at 80 cents, no?

The morning news

The royal baby's portfolio now includes a bunch of shares in Geologix and Sabina Silver. Buy buy buy!
And now, the news:

BI - Spain is surging. For my little Spain doubter dude in the comments section.

FT beyond brics - India crushes and destroys gold like the fist of an angry god. Same story has been carried everywhere. However, someone posted this gem in the comments section:

The situation has been completely misunderstood. This is far from the tightening of controls it has been presented as, in fact is it is probably the opposite.

The most important thing, not mentioned in the article, indeed in few articles on the subject except as an aside, is that the RBI has rescinded the old controls on consignment and letter of credit imports. This is what had led to the huge decline in imports. The unintended consequence, however, had been the destruction of the Indian jewellery trade.

Hence the new rules allow for imports to resume, but with a wishy-washy notion of reexport. How difficult is it to reexport gold? Not very to the creative mind with a financial incentive. This is asking for trouble and one should expect gold imports to resume at a higher level than in the last few weeks.

The fact is the RBI and government are losing control of the situation. Rules change daily and still the Rupee is weak.

Incidentally, jewellery shares such as Titan in fact rallied. Gitanjali has been collapsing in price for as long as I can remember. The fact, on the other hand, that the latter is a deposit taker (!) paying nearly 15% for 3 year deposits is something that is worth looking into.

The problem for India is that the appetite for gold is an expression of the current account malaise and not its cause. India has a current account deficit because it is wholly uncompetitive and not because its citizens have a penchant for gold. Gold buying is merely a reflection of the enormous overvaluation of the rupee and the lack of faith in policy makers.
I find the above far more enlightening than any bullshit that's been written on the topic of India and gold by white people in the past long while. - copper costs up, grades down. And so it goes with the miners. Here's a link to the actual pdf.

BI - Art Cashin and the gold backwardation conspiracy. My own take? I'm thinking the explanation is simple. Some traders have seen there's overextended shorts in the market, they see little downside risk in gold, they've done the math, they've seen most commodity gold vanish into Asian vaults recently - and so they smell blood and want to make some dough crucifying the shorts. Thus all the pro-gold and anti-gold news stories getting planted: the war is partially being fought in the media.

It's funny btw that Jim Rogers never talks about the gross corruption and bloodthirsty scheming in the commodity markets. Hell, you can read all about it in the Livermore autobiography.

Monday, July 22, 2013

William and Kate, the Royal Baby, etc

Prince William and Princess Katherine, the Duke and Duchess of Cambridge, are happy to announce the birth of their new baby boy, and speculation as to his name is leading some to consider investing in Canadian gold exploration company Santa Barbara Resources.

Prime Minister David Cameron, on being apprised of the situation, noted that "the Santos drill program with Rio Alto Mining, whose initial announcement saw SBL vault 600%, has now been entirely discounted by the market. I look at the surface trenching results and can't believe my good fortune at being able to buy this exploreco at a $1M market cap."

Bank of England Governor Mark Carney, when asked, suggested not only that you buy SBL, but also look into Corazon Gold (CGW), whose price has lost 99% from its peak in early 2011 and now offers tremendous value on the back on their upcoming hail-mary drill program. "With gold obviously now resuming its bull market," he said, "the trick will be to find explorers that offer 10-fold or 100-fold profits. I'm betting on Corazon Gold."

HRM Queen Elizabeth has been quiet on the issue of naming the third in line for the crown, but speculation is mounting among royal-watchers that she is one of the people loading up on Minera IRL in London and Toronto.


GDX and GDXJ weeklies

Here's the weekly candles:

 GDX has popped above its weekly EMA(12). MACD triggered up. Hasn't done that in 2013, so that's promising.

Last time it did that, by the way, was around this time last year. Seasonality?

GDXJ ain't there yet but might be if this keeps up.

By the way, here's a little thought experiment for you: are you still taking seriously the possibility that gold can go to $800?

Franco Nevada chart

FNV's stronger than either gold or the miners:

It might be because anyone trading based on a valuation model realizes that a streamer's guaranteed cash flow has already been bought and paid for, and extends 20+ years into the future - where gold prices will probably be higher.

Thus the streamers have been puked, but not as much as the miners - they seem to have a bit of low-price disbelief baked into their charts.

Noon newsgasm

BI - everyone's talking about the huge stampede of cash back into the stock market. Ugh... does that mean we're going to top out for a while?

Schwab - the budget deficit's plunge. Liz Ann Sonders on how the US budget deficit is disappearing pretty darn quickly. Thanks Obama! Also, a pretty important aside that US GDP ex-government spending is actually pretty good - it's the clown-car that is the Republican Congress which is holding back US growth.

Michael Shaoul - existing home sales data. He's not worried by the headline "drop". I'm sure Bill McBride will eventually add that existing home sales don't actually add to GDP the way new home sales do.

NY Times - election win signals change in Japan. Hooray! News cycle done. So I sold my CJP.

Reuters - China's rate reform might be to rescue indebted state firms. Good point - rate reform means lower interest rates... except none of the banks have ever handed out low interest rates before. - is this the EPIC SHORT SQUEEZE that everyone's waiting for? I'd discount this article as the raving of a wackaloon, except it's Frik Els, and he's never identified himself as a nutcase before. Total short contracts are supposedly at a 12-year high, according to some goldbug website. Maybe someone's finally going to exploit the opportunity?

Reuters - gold futures hiccup indicates demand outpacing supply. Dunno who this Mike Kentz is, and some of the people he interviews for the article seem... special, but here's a Reuters article suggesting a short squeeze is imminent. I suppose it was bought and paid for by some guys who want to make a ton of money squeezing shorts.

IKN - the sound of $1322 gold on a Monday morning. Fap.

Well, that's a faptastic move for the miners

As IKN readers have already found out, we're in the midst of a fapgasm for the junior miner scene:

Gold popped up on god knows what... maybe the Shinzo Abe win in Japan?

As a result, the senior miners have OMG popped above their 50-day moving average!

The juniors have almost done the same, and on decent volume.
The charts all still suck, but now significantly less so.

I'd assume most people disbelieve this move as anything more than a counter-trend rebound. After all, the fundies (India and China and ETF flows) still suck, and the whole goldbug world has been burned uncountable times by this idiot scene.

It seems patently obvious to even the most casual observer that this should go absolutely nowhere.

Which is why I'd be interested in seeing if this rally gets some legs, and then draws in a fuckton of people by generating fear of missing the entirety of the rebound.