Friday, April 4, 2014

Liz Ann Sonders on whether Rosenberg has a clue

Liz Ann Sonders - is a capital spending cycle imminent? She tackles the Rosenberg problem. Some problems I have with the analysis:

1. You may be getting old Liz, but you're still a sexy babe. Quit being a whiner.

2. I have a problem with this chart:

I do not think this chart means what you think it means, Liz. Fixed investment as % of GDP can't go up forever; at best it's a 1-e-(t/x) relationship. There's an upper limit, you can't go over 100% of GDP. And the increase from one threshold to the next is not a function of how great RNFI is; maybe it's a function of the relative level of industrialization, or a function of the relative dominance of industrial capital over personal capital. In any case, I'm pretty sure you should look at this in absolutes, not in % of GDP.

3. With that in mind, okay fine: this next chart does maybe support the SWAG that we'll see a capex surge:

But it's still only a SWAG til data comes in that proves we're not in a new secular fixation on cash.

4. Most of those corporate "liquid assets" are still being stored in numbered accounts in Luxembourg or the British Virgin Islands, aren't they? How does that factor into your analysis? Does the US first have to end tax havens for corporations, and force repatriation of corporate cash, before they will begin capex spending in the US again? Is it possible for that cash to ever come back into the US?

And hey, doesn't that suggest that US corporate tax policy causes secular bear markets? After all, if Bushes & Clinton have given the corporations a place to hide their cash outside the US economy, they effectively sabotaged the US economy by ensuring those corporations would never reinvest their cash in the US economy, right?

5. Sure US capital stock is getting old. But it got old in the corrupt Soviet Union as well. Maybe US corpolitical corruption is just as economically stagnating as Soviet corruption?

Maybe what's needed, again, is for corporations to see cash reinvestment as a better solution than a numbered account in Singapore.

Gerbils report

The jerbs report is out, and you can stay away from the blather of those click-whoring clowns at Business Insider because these two links here are the only two bits of analysis worth reading on the topic:

Bonddad - March jobs report. Quote:
This report had the best internals of any report in the last six or so months. Aggregate hours, overtime hours, and the manufacturing workweek, all of which had been weakening, made up all of their losses and in at least one case set a new high.  Counting by hours vs. jobs, almost all of the losses in the recession have been made up. Private sector jobs have now also made up all of their recession losses.

Calculated Risk - March employment report. Quote:
This was a solid employment report, and including revisions, in line with expectations.

We'll see how the market responds. The headline number was below expectations, so I assume the lemmings will buy it up under the assumption it means the taper is farther off.

Friday Videos - the Stranglers

While poking around the early 80s cupboard looking for music that's not completely fucking embarrassing, I found this:

Thursday, April 3, 2014

Is $TRAN lying or not?

IWM looks like teh suck:

And $VIX looks rather bottomy:

So was this a false breakout in the Transports?

It's one of those times when you can't reckon which way the market's going to go.

If it were up to me, I'd bet the predominant trend, which has been "up".

EEMs - is the buying done?

So there was talk this past month about how EMs were suddenly attractive. Apparently, nearly-uninvestable countries with terrible growth prospects and endemic corruption deserve higher P/Es than the market has been giving them.

Here is the investment thesis as commonly presented: rising rates and inflation and stagnating economies and massive capital outflows are good for EM growth, because potato.

So Wall Street Whitey bought EMs like crazy to close out the quarter, which means indiscriminately buying EEM.

So here's the chart:

Volume drove it +2SD and RSI(14)~70 for the last week of March. Now the indiscriminate buying is done, and reality sets in on the volume bars. I'd expect some sort of reversion to the SMA(50), but I dunno if you can make much money on it.

How's the weekly look?

Y'know, this actually doesn't look that bad - increasing volume thru 2012 failed to cave the price in. Now MACD has triggered up. Heck, maybe if it can get to $43-$44, it can go on a run?

I'm not particularly interested in going long EMs, with the caveat that I feel China shouldn't count as one anymore. Still, I'm interested in how these charts resolve.

Some news, including Barry Ritholtz's latest doomsday porn fixation

Hasn't been much to say. Gold is again stinking, go buy S&P and US banking and shut up.

Reformed Borker (Bork Bork Bork!) - still waiting for that whole capex explosion thing. Still hasn't happened, Rosie says it's a given but he's been proven an ignorant clown before.

Ritholtzwill capex trigger the next rally? Maybe the corporations just don't want to spend on capex, because their CEOs don't give a shit what happens to the company 6 months out? After all, capex is longer-term investment with no immediate quantifiable payoff, right? And hey, we know that the US political culture is anti-capex: they don't want to spend on education or road construction, right? So why would you expect corporate culture to be any different? Think about that, Barry.

Marketcrotch - OMG it's 1987 all over againz! God Barry, why do you still have a hard-on for doomsday porn? Quit linking to fucking Marketcrotch articles. All I can say is, if people are still taking oogity-boogity fortune-telling bullshit like chart overlays seriously, then this market has a long way up still to go.

Actually, that's not all I have to say. I really think I should dust off my Enchanted Tarot, do a bit of refresher study, and start up another blog where I do daily stock market predictions based on tarot readings. Cuz obviously that's going to be a lot more popular than fucking empiricism and sensibility.

Bespoke - breadth hits 2014 high. Quit being a pantywaist and buy the S&P.

FT beyond brics - where is the BJP manifesto? Then again, will publishing a manifesto really do anything for them? They're better off buying votes, the way Indian politics is traditionally run.

Tuesday, April 1, 2014

Business offer: you too can be a space pirate

I was looking for articles about how "asteroid mining" is pie-in-the-sky bullshit, and unsurprisingly came across very little on the topic. The closest I could find was this:

Vice - the problems with asteroid mining.

They don't actually explain any of the technical problems with asteroid mining - how to extract and refine minerals in a zero-gravity zero-temperature zero-atmosphere zero-chemicals high-radiation environment - but they do go into some of the legal/sociological problems.

Which got me to thinking.

It must cost an awful lot of money to build a spaceworthy mining plant, send it out to space, tether it to an asteroid, refine the metals and then ship them back to earth, no? I mean, the only reason you'd do it is if it only cost (let's say) $100 billion to build and install the plant, but you could get maybe $200 billion in revenue from the metals.

Which would mean at some point you're going to try to land a $200 billion shipment of metals on the earth somewhere.

How much would it cost, do you think, just to intercept a $200 billion shipment of metals on its way to the earth? A lot less than it cost to mine and deliver those metals, no? I mean, it's less work involved. All you have to do is send a spaceship up (say) 100km into the atmosphere, deploy a net or grapple, and then direct the payload to your favoured alternate landing spot.

In fact, it's even been done before: certain intrepid British adventurers of old figured out pretty quickly that it's a lot better to just let the Spanish to all the silver mining and sugar refining, and then just nick the proceeds as they were shipped back across the Atlantic. They even had stories written about them.

So, in the fine tradition of Planetary Resources and Deep Space Industries, I propose that my humble readers and I form our own private joint venture company: The Brotherhood of Space Pirates.

We'll raise a pile of venture capital, and then apply it to developing the technology necessary to steal a $200 billion cargo of platinum in outer space. Hey, the law doesn't apply in space, does it? What can Planetary Resources do? Sue us in space court?

All in favour?

Breaking: Thom Yorke and Nirvana

It's just been reported that Thom Yorke will be fronting Nirvana for their performance at their induction into the Rock & Roll hall of fame.

Link (a copy of the news report is already up on YouTube)

Some news, including breasts

Here's a bit of morning news. Not much to report, now that March QE selling is done and the markets have taken off. Yet well-known panty-piddlers Josh Brown and Barry Ritholtz are strangely silent.

FT Alphaville - China growth slowdown the result of the anti-corruption campaign? If so, that's one heck of a lot of corruption for it to have a significant effect on GDP prints, no? - gold drops to 7-week low. Note the hedgies have been dumping gold - they've made (or lost) their 10%, now they're on to other pastures. If there's more selling still to come, there's going to be more pain for gold. Oh, and it's nice to see one goldbug website that actually admits when gold is down. - former Oakmont Resources CEO on trial for allegedly nicking $7M in shareholder money. Look at it this way... those $20,000 breast implants that he bought for his Brazilian fiancée with shareholder money are, by definition, shareholder property. Thus I suggest the Oakmont shareholders present a resolution at the next meeting to demand "tits oot".

Monday, March 31, 2014

Euro periphery checkup

Who were the guys who were calling for a guaranteed EZ breakup again? Hm? Do you remember their names? Because it turns out they were ignorant morons talking out their asses.

Here's the Italy chart:

Pretty stunning breakout, no?

Here's Spain:

Looks about to break out too, no?

Here's Ireland:

Came down to the SMA(50), should maybe pop back up to a new high. MACD is threatening to pop in the next few days.

Meanwhile the ten year Italian bond is at 3.29%, the 10-year Spanish is 3.22%. Oh and France btw is 2.08%. Compare that to the 2.72% yield on the UST10. Is that doom?

No, it is not doom.

Lana Del Rey video marathon day #5: Ride

I guess Bob Lefsetz wouldn't be impressed by me saying "here's a Lana Del Rey song that Suicide and The Jesus & Mary Chain both wish they'd have written", or me pointing out she gave Portishead a run for their money with the Great Gatsby song, because it's not as if any of them are popular or anything. No, just insanely influential people who changed the course of music.

So fine, Bob. Here's a song that Johnny Cash would have wished he had written, when he was alive, at least before he decided to turn into a hermit:

Oh and by the way, Bob. Production is a good thing. Production makes a song worth listening to - something I wish there was a fuck of a lot more of in your shitty US Billboard Hit 100, instead of payola and college-level audio work.

Some more significant data that are written about by the media

Here's more news:

Bespoke - bulls step up. Seems like today is the beginning of that. And leave it to the Bespoke guys to utterly cut the crap and focus on what counts:
March has been a month of rotation out of what had been working into what had not been working. As we head into April, the big question is whether this shift is a short-term mean reversion trade or the start of a longer-term trend.
You've simply been seeing rotation. Quit freaking out. This means you, sissy Josh Brown.

Reuters - US funds raise cash stakes. Why? Why is that a good idea right now?
"What we're seeing is that more investors are taking risk off the table. I know I am," said Alan Gayle, a fund manager at RidgeWorth Investments, who oversees approximately $400 million in assets.
Alan Gayle, maybe the reason you only manage $400M is because you're a moron. You don't take risk off the table at the start of a secular bull market in US equities.

Bespoke - gasoline rising, but less than normal. Lower gas prices means more money in consumers' pockets for other things. Quit being a pussy, Josh.

FT Alphaville - Mick Davis from X2 will begin buying small miners now. Far as I'm concerned, the better play is gold and silver long-term, not the base metals. Inaccessible capital has driven feasible PM projects down to a value of ~$0.

Geez Clive, just issue the NR already


IKN - IKN puts the boots to Clive Johnson.

IKN - IKN puts the boots to Clive Johnson, part 2.

IKN - IKN puts the boots to Clive Johnson III: Return of the Geordie.

OK, I know I've got a bunch of mining industry weirdos reading this blog. Can one of you guys at ANV or MUX or whoever please get Clive on the phone and tell him to just issue the damn NR about el Limon already?

Strap on a helmet cos I don't want to make a mess when I BLOW YOUR MIND: infinite monkey theorem

One of the neatest things I've ever come across was my own solution to infinite monkey theorem. It led me to both a fantastic sci-fi novel plot, and a possibility for starting a strange religious cult.

Infinite monkey theorem has been empirically tested, by the way, and proven to be false:
LONDON - Give an infinite number of monkeys an infinite number of typewriters, the theory goes, and they will eventually produce the works of Shakespeare.

Researchers at Plymouth University in England reported this week that primates left alone with a computer attacked the machine and failed to produce a single word.

A group of faculty and students in the university's media program left a computer in the monkey enclosure at Paignton Zoo in southwest England, home to six Sulawesi crested macaques. Then, they waited.

At first, said researcher Mike Phillips, “the lead male got a stone and started bashing the hell out of it.

“Another thing they were interested in was in defecating and urinating all over the keyboard,” added Phillips, who runs the university's Institute of Digital Arts and Technologies.

Eventually, monkeys Elmo, Gum, Heather, Holly, Mistletoe and Rowan produced five pages of text, composed primarily of the letter S. Later, the letters A, J, L and M crept in — not quite literature.

The notion that monkeys typing at random will eventually produce literature is often attributed to Thomas Huxley, a 19th-century scientist who supported Charles Darwin's theories of evolution. Mathematicians have also used it to illustrate concepts of chance.
So here's a bit of postmodern fiction on the topic:

The "skills zombie" - catching up on my Krugman

Krugginator - the skills zombie. I'd simply point out to Dr. K that everyone on the capital side of the argument is always going to complain about skills shortages.

Because the ruling class doesn't want to participate in a free market in labour.

So, e.g., Gates was complaining years ago (publicly, in the media, to government) about how he needed hundreds of thousands of worker visas immediately or else he'd move Microsoft to the technological and intellectual backwater of Bombay. It's not that he couldn't find enough software engineers in the US; it's that he didn't want to pay them what they were worth to Microsoft.

This sort of capitalist kleptocrat blather should be thought of as nothing more than propaganda and lobbying.

Business leaders are always against a free market in labour. Note, I'm not saying just that they're against unions; they're against a free market in labour. Thus, and I didn't think this still existed til I read it, some US employers actually have a rule that you're fired if you tell your fellow employees what you're being paid.

The employers want to maintain information asymmetry, which goes against having a free market.

That's why you never see a job listing that tells you how much the job offered is going to pay. They want you to waste your time on a job interview, and they hope that the sunk cost of your valuable time and the half-hour of loyalty brainwashing that comprises the interview will force you to accept a bullshit wage offer.

You want 100,000 new machinists, USA? Then pay the ones that you have enough money (and let it be known they're paid enough money) that young people suddenly realize what a great career it is to get into. It might take 5-10 years, but eventually you're going to get a swarm of new machinists.


Here's some stuff to ponder:

Reformed Borker (Bork Bork Bork!) - so far so meh. He thinks 2014 is 1994 redux, and the broad S&P may do nothing this year. He thinks this because a couple weeks of sector rotation made the chart look bad. Quit being a pantywaist and buy the S&P, Josh.

FT Alphaville - the capex call. Investigating Rosenberg's thesis. Remember, just because Rosenberg clued in that permabearing had cost him a fortune in lost opportunities over the past 5 years does not mean that his new capex call is any better. But other houses seem to be happy to ride his coattails for now.

New Deal Democrat - weekly indicators show US doing well. Quote:
This week was the best week in quite a while, with continued improvement in recent trends.  It appears that much of the recent weakness was due to the unusually severe winter, and now growth is springing back.  Even consumer spending is improving.  Whatever concerns there may be as to 2015, the soft patch of early 2014 appears over.

BI - Japanese consumption tax will DESTROY THE WORLD. Typical hyperbolic article to get the muppets to sell Japan (and earn Joey the Weasel some extra clicks). Michael Shaoul doesn't seem concerned, since Japanese unemployment has hit a big low and commercial construction has picked up.

FT Alphaville - is Abenomics working? To Joey's consternation, yes. It's made Japanese output explode. Unfortunately the market seems to have already priced in a few years of Japanese success.

USGS - OH SHIT YELLOWSTONE IS ABOUT TO EXPLODE. This is why we own gold, people! When Yellowstone blows USTs go to zero, USD goes to zero, equities go to zero, and a lot of other things go to zero. This is why (if you're rich) you're supposed to keep 5-10% of your wealth in gold. - Rick Rule says "you survived the pain, why not stick around for the gain?" And he says this very, very heterosexually.

Sunday, March 30, 2014

Lana Del Rey video marathon day #4: Born to Die

Again, here's another song that Miley Cyrus would never be able to pull off, even if she quit the salvia-smoking retard schtick and decided to grow the fuck up:


I went to Heavy Metal Highschool back in the 80s - no really, even the preppies at my school liked heavy metal - no really, we had one gay guy who listened to Erasure and Skinny Puppy and that was it - so this whole 21st century thing is kinda neat for me.

To wit: teenage girls playing heavy metal guitar.

Back in my day, this was unthinkable - no girl would play electric guitar (there was one girl, but she played acoustic folky shit) and no girl would ever play metal. It was simply unheard of. I actually don't know what the average girl at Heavy Metal High listened to - I hung out with the freaks - but I only remember 1 rockchick at school (and yes she was my tomboy crush).

In fact I remember in the early 90s, putting on a show for a prog/punk band from... Waterloo, I think? at a place downtown, and I had 2 opening bands on the bill that happened to each be 2 guys and 2 girls. The Waterloo band said "wow! weird! you guys down here have girls in your bands?!?" In fact, both bands had girl drummers, which was pretty patriarchy-challenging for the early 90s.

So to come across all these chicks on YouTube nowadays playing heavy metal guitar is weird and interesting to me. I watch these girls play and just wonder - what if one of these girls went in a time machine back to the 80s, enrolled at my school, and then said "oh yeah, I play guitar, y'know, Metallica, Ozzy, that sort of stuff".

I wonder if they would have instantaneously become treated as living goddesses at my school, worshipped by headbangers as they walked through the halls.

Who knows? Maybe the headbanger guys would have felt threatened by a chick who can play metal better than dudes?

Anyway, so here's what I found at YouTube. Note, I've limited the field to girls who play standing up, because any idiot can play sitting down. (Actually, it's because if you play standing up I can see if you're holding your guitar loose; if you're not playing loose you don't really have a handle on playing guitar.)

First, Juliana Vieira from Brazil with "Crazy Train":

Total rockchick, obviously feels the music, stunning solo, give her a 10 for "rockchick" but then deduct several points for playing that shitty Strat. Later videos show her with a proper guitar with humbuckers, so we won't hold this Strat business against her too much.

Next, Cissie from the Netherlands with "Master of Puppets":

Not as much stage presence as Juliana above, but give her full marks for guitar sound. Left hand technique is great, but it seems to me her right hand is too slow for the chuggy fast bits. Hard to tell for sure cos the audio doesn't perfectly track the video.

And finally, my favourite, Juliette Valduriez from France with "Ace of Spades":

Picking "Ace of Spades" (and OMG WTF BRB she also covers the Stooges) earns her extra infinity billion rockchick points. Great guitar solo. She's my personal fave.

EDIT: whoops, turns out that Juliette is 24, so she doesn't count as a highschool-age rockchick. Well, even still, she rocks more than the others as far as I'm concerned. She was probably a highschool rockchick once.

Today is "interesting youtube videos day", apparently

So, while still screwing around on YouTube instead of doing anything useful today, I came across a large number of bluegrass covers of metal songs.

Now pappy made sure I'd grow up to know my bluegrass, and this is pretty good bluegrass. I'm sure that ol' legendary down-home boy Brent Cook will agree, this is prime whiskey-sippin' music.

First here's Iron Horse, doing "Enter Sandman" with picture-perfect bluegrass 3-part harmony the way my granpappy used to like it:

You wouldn't even think it was a metal song, would you?

Here's Hayseed Dixie (get it?) covering a young person's version of "Ace of Spades", with Phill Jupitus introducing them for some reason:

That kind of mandolin solo ain't easy to play, y'all.

And here's the Cleverlys, doing a more down-home bad-boy bluegrass version of AC/DC's "Thunderstruck":

Which is a lot better than their cover of "Gangnam Style".

John Peel goes to an Extreme Noise Terror show

I always wondered what Extreme Noise Terror sounded like, since they have a great band name.

So here's a video I came across of John Peel going to an Extreme Noise Terror show in Ipswich.

I like the idea of the Ipswich punks accusing a band of selling out just because they did a Peel session.