Saturday, November 9, 2013

Some weekend reading


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

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

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

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

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

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

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

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

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

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

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

So now, the news:


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

So quit wasting my time, Josh.

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

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

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

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

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

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

Pussy.


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

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


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

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

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


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

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


Friday, November 8, 2013

Friday Night Movie - Enemy of the State


Great movie.



Now I really do find Will Smith annoying, but this movie's also got Gabriel Byrne, Seth Green, Jack Black, and a fab performance by Gene Hackman.

It's got a fantastic surprise ending - not a cheap twist, more one of those things where it suddenly dawns on you what's happening and you're excited about the movie all over again.

Plus, if you're one of them anarchist types like Jeff Berwick, you'll really love the movie for its prescient warning about the coming totalitarian surveillance state.

It's really one of the great American movies of the 90s. Have fun watching!

Commerce and Industry Minister Anand Sharma spazzes out and cries like a little baby


This is a hilarious little article:

FT Alphaville - Commerce and Industry Minister Anand Sharma spazzes out and cries like a little baby.

Sharma dislikes the fact that Goldman Sachs has raised India to equal weight. Because they have done this in the assumption that Modi is likely to win the May 2014 election. Sharma dislikes this fact because he's Congress Party.

The funny bit is that Sharma, "Commerce and Industry Minister", decides to take his dislike to the press as if he were some snitty little teenager.

Indian politics.

Three bits of morning news


So apparently blah blah gold crashed again.

Other than that:

BI - jobs report ANNIHILATES expectations. Upward revisions to previous months, new jobs beat. Quote:
What's big about all this is that everyone expected October to be extremely weak with the government shutdown, and yet in all of the data, that weakness is not showing up.

Stocks are falling on the news, as people think that the Fed's "taper" could come sooner than expected.
Because apparently tapering is bad because it means the US economy is getting better.


Michael Shaoul - China October trade data. Quote:
Imports grew 7.6% YoY, again roughly matching stated GDP, and this is hardly surprising given that there is little evidence that domestic demand, and particularly that for housing, has diminished in recent months. The trade balance reached $31.1 bln, somewhat better than the $24.8 bln consensus estimate, thanks to the consensus beat by exports. This is slightly lower than the corresponding month last year, but the fact that 2013's data is rather less reliant on suspect Hong Kong activity means that this is a more reliable data-point.

FT beyond brics - China's exports are even better than they seem. Because last year's baseline included all that round-tripping from Hong Kong. Also, these numbers are more reliable because they're consonant with Taiwanese and Korean numbers. Also,
The US and Europe are taking up the slack. Year on year, exports to the US rose from 4.2 per cent in September to 8.1 per cent in October. Europe showed even more improvement, with exports up 12.7 per cent after a decline of 1 per cent in September.

Friday Videos - holy shit it's the Soft Boys


There was apparently a Soft Boys reunion tour many years back.

Here's "I Wanna Destroy You":



A pox upon the media and everything you read
They tell you your opinions and they're very good indeed



Thursday, November 7, 2013

Some midday sensible reading


Some things from the world of the sensible, because you really only need sensible commentary.

Calculated Risk - Q3 GDP growth ahead of expectations but weak personal consumption. Sensible and empirical examination of the trends from Bill McBride.

Bespoke - Jobless claims in line with forecasts. Sensible and empirical data analysis from Bespoke.

Michael Shaoul - ECB cuts refi rate to 0.25%. Sensible and empirical commentary from Michael Shaoul.

And gold does this....


Here. Here's a gold chart.


So gold pops at 7:45 on news of the ECB rate cut, which is an actual new decision that changes the playing field for forward growth assumptions.

But then it collapses at 8:30 on news of the US GDP growth rate popping up to 2.8%, which is something that's already been happening for the past quarter, and which masks decline in personal spending, and which is a noisier than usual data point anyway because of the US government shutdown.

Because robots or something.

And you wonder why I don't want to partake in this bullshit?

Quick morning Ottotrans: Nevada Copper


Oh, this one is so good we only have to do the headline:

Yahoo! Finacne - Nevada Gold Corp to expand board of directors and form a technical advisory committee to assist the company to be part of NEVADA'S LATEST GOLD RUSH!!1!

Translation:

Yahoo! Finacne - Nevada Gold Corp to expand board of directors and form a technical advisory committee to assist the company to be part of WILL YOU STOP SELLING OUR SHARES ALREADY!!1!

Wednesday, November 6, 2013

Economic Geologist: geological continuity vs. value continuity


Economic Geologist - geological continuity vs value continuity: don't mistake one for the other.

Seems to be a very important thing to people like Brent Cook, so why not read the article?

Also includes figures from the ripping-good read Applied Mineral Inventory Estimation, which it seems you can read at least parts of at Google Books.


Fine. News.


I was off having fun checking out kitten-play blogs on Tumblr, but no, you want news, you're always bugging me about news, so here you go:

Calculated Risk - framing lumber prices up 15% yoy. Because the US economy is collapsing.

FT beyond brics - Goldman Sachs likes Modi. They're speculating that the Indian market's recent pickup is because everyone already expects Narendra Modi to win next May. Well, if so, you should also be long gold, no? Eh, Goldman Sachs? Whaddaya think?

Wednesday AM miner charts


Let's dither over some charts today.


HUI looks interesting. Is this the perfect place to go short? Or did we see a downside fakeout, and it's about to fly up to the upside?




But for some reason, GDX's chart doesn't look quite as good: it's still got a way to go before challenging the EMA(16). Still, the retreat from the SMA(50) seems to have been stopped with conviction, so you could maybe still say this was a retrace to rebuild upward momentum.




And GDXJ looks even worse. Diminishing volume holding up that $36-$37 area. Failed to reach the SMA(50) on the last pop, so this looks like more of a petering out after a dead bounce.

Then again, most GDXJ stocks really suck. I mean they suck like hell. So you'd expect this chart to also suck, no?

As far as I remember, Yamana haven't done anything significantly retarded recently, so they're the best of the major miners. What's their chart look like?


 Well, it could go either way. It's a pennant under the SMA(50), so it could continue down; but each candle held onto the EMA(16) and Bollinger mean for dear life, so maybe this is another recharge before a move up, like GDXJ?



Sandstorm is more of a long-term gold price play; they have too little in common with other miners other than expectations for the price of gold. This chart does look like it's bottomed to me, and it looks like a chart that is about to shit or get off the pot in the next day or two.

Then again, the longer-term view also suggests a big long pennant compensating for the June puke before a harder move down.

On balance? Who the hell cares about any of these charts! It's all about the price of gold.


Tuesday, November 5, 2013

Geology porn - Supervolcano, the movie


So I was looking for tomography of the Yellowstone plume, cos I do that sort of thing, and I stumbled across this:



Supervolcano, the movie!

It's not as bad as a SyFy movie. It's a Discovery Channel movie.

Exploration geologists, gather round and have a fap to Supervolcano!

(Yeah I know, I fixed it. You're right, exploration geologists don't find anything sexy or interesting about volcanic tuff.)

Sao Paolo bottles Bieber


I'd say the people of Brazil have good judgment, except they were at a Bieber concert in the first place.



And meanwhile, on Bloomberg, Peter Schiff is still a loony


Bloomberg - Goldbug Schiff counters Goldman. Vicious, merciless hatchet job on Peter Schiff from Isaac Arnsdorf at Bloomberg. Mazel tov, buddy, you've made my favourites list!

I mean really, just read some of this:
He shows off $50 gold chips, to be used when paper money becomes worthless, a prediction repeated on his daily two-hour radio show broadcast from his basement studio to 68 stations in 30 states and 50,000 listeners online.
Hoo boy. Peter Schiff has a basement studio where he broadcasts about a coming collapse in paper money? Number one, I really should damn well set up a studio of my own if it's that easy (and yes I have the experience and training necessary); and number two, so this means Schiff is little more than another Alex Jones?
That’s just the beginning: Schiff said he would “be amazed” if the U.S. dollar didn’t collapse and gold failed to skyrocket before President Barack Obama leaves office in 2017.
Prepare to be amazed, Peter Schiff!
They also scoffed in 2006 when he predicted on television that housing prices would plunge, lenders would go bankrupt and stocks would plummet, as they did two years later.
Stopped clock etc.
“I’m waiting for the dollar crash, I’m waiting for the real crisis to hit that I know will benefit gold,” Schiff said Oct. 18 over lunch of spinach-and-beet salad and stewed rabbit in the sun room after the radio show. “The longer it takes, the longer I have to wait for that payday. But the longer it takes, the bigger that payday is going to be.”
Gee. It almost sounds like he's going to get off on other people's misery and despair.

And like he's certain that the greatest minds of US economics will be unable to avert a catastrophe. Maybe cos he knows he's so much smarter than them?
“They should take him seriously -- he was right with a lot of other ones,” Ron Paul, the former Republican Representative from Texas who has called for abolishing the Federal Reserve and auditing the U.S. gold depository at Fort Knox, Kentucky, said by phone on Oct. 23. Schiff was an economic adviser to Paul’s presidential campaign in 2007.
Endorsement from Ron Paul? That's another identifying characteristic of the typical right-wing Teatard wackaloon.
Gold bugs, investors who buy the metal as protection against a collapse in financial assets, fail to understand that the Fed’s pumping money into the economy only offsets banks’ tighter lending and stockpiling cash, Goolsbee said. Until credit conditions return to “normal,” there’s no danger of inflation, he said.
Not specifically about Schiff, but a great paragraph to add in here since it addresses the basic blind spot of the goldbugs: you don't get massive inflation from what the Fed's been doing.
Schiff began his radio show, which he calls “the gold standard in talk radio,” in 2010, around the time of his failed run for the Republican nomination for U.S. Senate from Connecticut. He finished third with 23 percent of the votes, behind Linda McMahon and Rob Simmons.
"I lost the Republican primary to the wife of the owner of the WWF, so I'll bounce back by making a radio show in my basement." Yup, still not surprising me.
Assumptions like [Goldman Sachs' Jeff] Currie’s on why investors have lost faith in gold as a store of value are false, according to Schiff. The economy is only growing because of government spending, so debt continues to swell, he said.
So Schiff's an austerian. Also, he thinks he's smarter than the head of commodity research at Goldman Sachs.
Schiff’s listeners call in wanting to know how to prepare. Mike from St. Lucia asked about a $1 trillion treasure allegedly hidden in a New Mexico mountain, that if found would make a dent in the national debt.
So Schiff's listeners are loonies. Got it.
Ellen from New York asked whether to save pennies minted prior to 1982 because the copper is worth more than one cent. “Can’t-lose investment,” Schiff replied.
That reminds me of the loonie from Doomsday Preppers who kept buying rolls of dollar coins from the local bank and fishing thru them to find ones that had been minted with some silver in them. Except with copper, which is 98% cheaper than silver.
Luke from Cincinnati asked if he should spend his $5,000 savings on gold or silver, bought through Schiff’s company. “I like both metals,” the host said.  
Use the force, Luke! The force of stoopid!
Schiff, who was born in New Haven, Connecticut, studied finance and accounting at the University of California, Berkeley, and began his career as a financial consultant with Shearson Lehman Brothers.
OMG, he doesn't even have an excuse for his ignorance.
In November 2011, Schiff visited Occupy Wall Street protesters in Manhattan’s Zuccotti Park to “represent the 1 percent [and] see if I can have a dialog with the other 99 percent.” The debate, recorded by the libertarian journal Reason, lasted almost two hours.
As an aside, what's it like to have sex with a Libertarian?

Terrible. It takes far too long, you lose interest after the first five minutes, he gets angry if you don't go along with absolutely everything he says, he never lets you finish, and it all leaves you profoundly unsatisfied.

Oh, plus the libertarian always invites other guys to join in.
Peter Schiff says he admires the Austrian school of economists including Friedrich Hayek and Ludwig von Mises
See? Invites other guys to join in.
In the dedication to the 2009 revision of his book “‘Crash Proof: How to Profit From the Coming Economic Collapse,’’ Schiff credited his father ‘‘whose influence and guidance concerning basic economic principles enabled me to see clearly what others could not.’’
Gee. You could have profited tremendously in 2009 if you'd simply gone long the S&P 500. Did he suggest that?
Irwin Schiff has long advised people that they didn’t have to pay income tax, and is serving a 13-year sentence in the Federal Correctional Institution in Fort Worth, Texas, for tax evasion.
Ah. I can see where the son gets it from.
“If I say this is going to happen and then it all happens that way, but the markets react differently because they don’t really understand what just happened, that was my mistake in overestimating the intelligence of everybody else to figure stuff out,” he said.
Ah! So the market is stupid for not following Schiff's grand plan! Well, that does make it very difficult for him to justify investing in the market, right? After all, the market is too stupid to do what he thinks it's supposed to. And thus, obviously, the problem is with the market. And not with Peter Schiff.

Again, Isaac Arnsdorf, congratulations on a masterful work, and send me a link to a photo so we can build a shrine to you here at the blog. You are a wonderful young fellow, and I eagerly await your upcoming Bloomie article on Marc Faber.


Some newsbits


Some light reading:

Michael Shaoul - correction for yesterday's note on spreads. Not necessary for reading, just as a lesson: he looked into the spread between the Fannie Mae 10Y benchmark and the UST10Y benchmark, and realized that FNM debt is all 2017. Thus, its 10Y benchmark is not a 10Y benchmark, and thus it doesn't mean what you think it means.

And this is important to me because it shows Shaoul knows to look under the hood when something sounds funny. This is why he, McBride, and NDD/Hale Stewart are real analysts and most everyone else in the blogosphere is little more than a semiliterate clown with an internet connection and should be avoided.

Seriously, if you're following someone who spouts off meaningless data points and he doesn't even know to look under the hood to ensure he understands what he's actually talking about, he is an utter waste of your time.

(Come on, they teach this in first-year science: the last third of all questions at the end of each chapter are "trick" questions that you're guaranteed to get wrong if you don't realize that non-standard conditions given in the problem require modification or re-derivation of your formula. It's basic stuff.)

Sean Brodrick - US dollar strengthens. Sean can give us plenty of reasons why the dollar shouldn't rally. But if one of them is that everyone thinks the dollar shouldn't rally, then my money is on the dollar rallying.

Michael Shaoul - Spain unemployment seems to have bottomed and boy look at that UK services PMI. Both indicate meaningful changes in economies.

FT beyond brics - gold demand softens this Diwali. Is India truly out of the race for future gold demand? Well, Avantika Chilkoti hasn't proven himself competent at using data instead of anecdotes. And I fail to be convinced that they're truly gathering Indian gold demand data, and not just upper-class Bombay gold demand data. I'll wait for the next WGC publication, thank you.

PS Dave - Barrick bummer belies bottom, bold blogger bloviates. Essentially, he seems to suggest this must be a bottom because how much more can these companies suck?

IKN - chart of the day: GLD gold holdings. The important thing, to me, is this is gold that Whitey no longer has for his market.


The American Ladder Institute. It really is a thing.


There really is a thing called the American Ladder Institute.

Their safety training program meets OHSA requirements.

Even better, they seem to run laddersafety.org, which has "practical and accessible information for all ladder users".

My god, safety training is mind-numbingly dumb. But I guess that's what happens when your company doesn't care about your safety as much as it cares about covering its own ass.

E.g. I just found out that I need a fall arrest system if I am within 3m of a <6:1 slope. Which is basically everywhere I work.

Monday, November 4, 2013

The best of the 1980s, or not really


So, there's this website, and they have a list of the top 100 albums of each year in the 1980s.

I'm not going to say "alternative" because the word has become so perverted since then. But they do have Closer as the top album of 1980, and Faith as #1 for 1981.

However, they miss Scientists' This Heart Doesn't Run on Blood, This Heart Doesn't Run on Love; they miss Laughing Hyenas Come Down to the Merry-Go-Round; they even miss Swans' Raping a Slave EP.

So I guess it's more of a "top 100 pop albums that bordered on alternative-ish".

Go check through their list and you'll probably remember a few bands you've forgotten.

Slicing Up Eyeballs - Best of the 80s

A few reads


Some newsbits for this morning:

BI - on fuel costs. Seriously, how can you be bearish the US economy when gasoline prices are dropping?


Bespoke - bullish sentiment now 50/50. Lordy lordy, even the data-fetishist Vulcans running Bespoke are now casting a sneer at the bubble callers:
We've heard a lot of commentary from talking heads recently about the new stock market "bubble" that we're in, but a "bubble" is driven by investors, and so far investors aren't acting very bubbly.  As shown below, Bespoke Market Poll respondents were evenly split at 50/50 this weekend on the direction of the market over the next month.  Bullish sentiment dropped 6 percentage points week over week from 56% down to 50%, while bearish sentiment increased 6 percentage points from 44% up to 50%.

Up until recently, everyone was calling this "the most hated bull market in history," and all of a sudden it has turned into a "bubble." It seems to us that it's the same people that have yet to even acknowledge we're in a bull market that are now calling it a "bubble."
When even emotionless robots snigger at the bubble calls, that makes it very apparent how wrong the bubble calls must be.

But it's true, no? You have no right to call something a "bubble" until you first define it as a bull market; anyone who fails that test is simply an insincere clown. Probably one with political motives.


Mineweb - Chinese gold consumption to drop after this year. Seems they predict this by saying "people bought too much gold this year". And by "they" I mean the Vice GM at China Gold Group speaking in Tianjin. Which leads me to think this is another story plant by the Lizard People, trying to keep the gold price down so they can load up.

Sorry, but just because I'm paranoid doesn't mean nobody's out to get me.


Sunday, November 3, 2013

Two more newsbits


One for reading, the other for laying down and avoiding:

Calculated Risk - will the Fed taper in December? Bill McBride was the only guy who bothered to pay attention to the quite specific roadmap laid out by Ben Bernanke: your favourite pundit ignored it, most silly goldbug bloggers failed to even comprehend it. So McBride has decided to repeat for us the exact market data which will bring about a December taper. Unfortunately, I guess a December taper will also mean an idiotic 20% crash in the S&P 500.

Ritholtz - that clown Mauldin is talking bubbles. Don't read it. As well, I checked BI, and apparently some queer from Blackrock is also blathering on about bubbles. If not for the taper danger above, all this taper talk would inspire me to go double long S&P 500 on Monday morning. Because there's no bubbles. And Mauldin's such a fucking loser that now he's even hitched his wagon to the Casey gang. He will never get off the ignore list with that level of poor judgment.

Massive changes with Korelin since last I bothered to look


Check this out:

Korelin - John Kaiser with some comments on gold price.

Not only that, Kaiser's been on Korelin's podcasts a lot recently.

Does this mean Korelin's realized that the right-wing, Tea Party, theocratic narrative of the goldbugs is so fantasy-based that anyone who tries to invest based on it will simply lose his shirt? I mean, Kaiser's all about empiricism, and Great Thinkers like Rick Rule (well... Rick Rule anyway) have called Kaiser a stinkin' leftist. Is Korelin now swinging to the stinkin' left?

No, not really; he still interviews permaloser clowns like Faber, Casey, and Mauldin.

So maybe it's just Korelin's attempt to bring new people to his blog after the carnage of the past two years.

But it's nice to see him let Kaiser put the boots to the clowns from the Republican party on his podcast.

By the way, Al: the reason your few remaining readers are now interested in "quality" miners is because you were one of the many pundits getting them into shitty miners.

Two Sunday reads


A bit of news for the weekend:

New Deal Democrat - US weekly indicators. Here, let me sum it up for you: the US economy isn't slowing down.

FT - strange GOFO cry heralds trouble for gold. I'd ignore it if it was published on ZeroHedge, but instead here it is in the Financial Times. A quote:
As one of my gold refiner friends puts it: “The negative gofo is just a shortage of kilo bars. It is, technically, a backwardation, but I call it the convenience yield of having gold immediately available for physical delivery. Look at the huge premiums in the Shanghai exchange and in India. You think maybe the market will normalise and the premium will disappear soon. So you pay up for immediate delivery.”

The 400 oz bars, though, are the only acceptable form of backing for gold ETFs, not to mention the London market. There is a shrinking supply, which have been gradually flown from London to Switzerland, where they are further refined, cast into kilos, and sent on to China, India, the Middle East and elsewhere.

Say, what if there is a rise in the world gold price that leads to an increase in demand for gold ETFs and exchange traded futures? Could the gold flow back from those kilo bars to recasting as good delivery 400 oz bars?

Not easy, my refiner says: “Much of that has been converted to jewellery. It would be a lengthy process. Those are pretty sticky hands.”

He continues: “This could turn into a very violent wake-up for (screen-traded gold). People talk about ‘fiat currencies’, but we also have fiat gold. Volatility is too cheap right now.”
Of course the gold price needs a trigger before it decides to do something. I'm still not sure Modi is it, but something might be. Then, how high does gold have to go before Whitey sees what's happening and switches to long? It'll be interesting when it happens.

Then again, the ETFs might just decide to change the rules so that they don't need 400oz London Good Delivery. If... y'know... they wanted to suppress the gold price.