Friday, October 3, 2014
First, here's a picture of dooooom:
Seems like there's still a lot of plummeting left in the tank too, eh?
Boy, do gold miners suck™!!!
So here's a music video that'll help all you sad goldbugs keep your chin up this weekend as you stare at a screen full of red and try to puzzle out how to spin this chickenshit to your subscribers - or if you're not a newsletter writer or blogger, to your soon-to-be-ex-wife and soon-to-be-ex-children:
"Heaven's got a plan for you" = buy the S&P 500
"A guy of a different kind" = Ron Paul
All out of date, all funny in hindsight:
Bloomberg - hyperinflation wankers, four years on, reject reality and insist they got it right. Krugman has the right answer to these clowns, and he's had the right answer all week, and here it is:
The truth is that the quiescence of interest and inflation rates was predicted by everyone who understood the obvious — that we had entered a liquidity trap — and thought through the implications. I explained it more than five years ago. When central banks have pushed policy rates as low as they can, and the economy is still depressed, what that tells you is that the economy is awash in excess desired savings that have nowhere to go.One of the people in this debate is a real economist who has a fucking clue what he's talking about, and his name rhymes with Sprugman.
Calculated Risk - September employment report and later that same day. I guess one good employment report completely outweighs fears over Ebola and the Ukraine and Hong Kong, eh?
Reuters - stock funds post $10B outflows this week. So... is that money never coming back? Or is it doing a fucking U-turn this afternoon?
It's broken below its governing EMA on news of fuck I dunno what.
It's still only at the EMA(14) right now, so we still don't know if the fear is done. But HYG is also looking healthy again:
And all this despite the US dollar still flying upwards today:
So I guess suddenly the market's no longer worried about the Pimco outflows or an Ebola pandemic on American soil or the Ukrainian civil war or an impending massacre in Hong Kong or the fight against the Islamic State or the fucking Rage Virus or whatever.
The hard drop in the Nikkei on Wednesday and Thursday seemed really stupid, so I guess that was the bell that rang the bottom.
So the party's back on.
Thursday, October 2, 2014
WSJ Realtime Economics - US inflation data is built around a survey people are refusing to take. Quote:
The Consumer Expenditures Survey is the only federal survey that documents the full range of consumers’ expenditures and incomes, and is used to determine the weights in the CPI. The survey’s data is built around an interview survey where workers from the U.S. Census Bureau ask households about their expenditures on big-ticket items, and a diary survey in which people are asked to track all their purchases over the course of two weeks.
In recent years, the response rate has gone from slow deterioration to free fall. In 2011, more than 70% of people responded to both surveys, but as of 2013 the response has dropped to 66.7% for the interview survey and 60.8% for the diary survey, both the lowest on record.
Non-response to surveys has been a growing problem in social sciences — in 2004, the Office of Management and Budget said government surveys with response rates below 80% needed to study if the lack of response was biasing the survey — and the collapsing response rate to the expenditures survey has gone far below that threshold.
Y'know, I think I see the problem here.
The Census Bureau is expecting serfs to give them a pile of information for free. That information is being used to guide economic policy, which is worth several trillion dollars a year.
It might just be that the serf class has decided that, since they haven't seen a raise in real income in a generation, and they don't get a damn penny from participating in this survey, that they have nothing to gain by providing the Census Bureau with free information.
Sure, it's probably not really as much of a Marxist class civil disobedience thing as I've made out: it's probably just that people are sick and tired of giving information over the phone and getting nothing in return.
So in any case, if this information is so damn important to the government, why not pay each respondent $500 to participate in the survey? It's not a massive sample size, so $500 per person won't be expensive. And hey, since it's the corporations that ultimately benefit from the government policy driven by inflation data, how's about maybe adding 0.01% to their tax bill, and distributing that money directly to the serfs who respond to the survey?
Non-response to surveys is not a social science problem; it's an economic problem. Either the information is worth nothing, or it's worth a lot. Why expect the masses to subsidize the collection of this information with free labour? Ain't it the capitalist plutocrats themselves who are lecturing us that nobody should get anything for free?
at 9:25 AM
Wednesday, October 1, 2014
Josh the Panty Piddler - another shoe drops. Now the Midcap 400 is - gasp! - below its SMA(50). Aw, if only Mister Piddles bothered to read my blog, he'd see this chart:
Calculated Risk - ISM "declines" to 56.6. I'd expect the low-rent end of the internet to mistake this ISM for a bad one. In contrast, a certain swarthy gentleman of English extraction made these points today:
- 15 of 16 industries surveyed reported growth;That's the kind of analysis you get when you go to a pro and not someone looking to get a job writing doomer headlines for Zerohedge.
- the 12-month average of the ISM is presently at 55.5, so it's still above average;
- the new orders strength in August was unsustainable, so the drop to 60 is still great;
- 12 of 16 industries reported stronger orders;
- employment was still above its 12-month average of 54.4.
FT Alphaville - Russia ups defense spending. Therefore sell gold! That's some mighty fine economics work there, Lou.
FT beyond brics - on the EM carry trade unwind. Like I said: now the capital flows out of the EMs, and they get ten years of hunger and despair. Again, you should have read Louis Gave.
BI - oil is getting ANNIHILATED. Hey, uh... is that good for the American economy? Y'know, for transportation costs and consumer spending and manufacturing and stuff?
IKN - ha ha, RBC's stuck with $14M in Franco Nevada shares that they can't shift. I'm sure everyone's holding them up as a shining example of what not to do. So... um... so I hope you don't own any junior miners in need of financing, dude.
It's the Emerging Markets currencies ETF from Wisdom Tree.
It's -3SD and threatening to pooch support at $19.50 or so.
By the way, what was that thing I keep harping on about, with the Jim Rogers and the "DM bull market is EM bear market" stuff? Were you listening?
Here's the up-to-the-minute for the $VIX weekly chart:
It's now +3SD on the weekly, which is silly.
However, past silliness is not predictive of future silliness, so I'm willing to sit here and smugly wait. Partially because of this:
I count 7 white candles in a row above the US dollar weekly +2SD line. That's definitively abnormal.
My thinking right now is that the recent $VIX has acted strange because the US dollar move has been >+2SD abnormal. So maybe people will want to buy downside protection on their equities until they see some proof of what's happened to corporate profits with the dollar move?
Thus, it might not be wise to short $VIX just yet.
There's no imminent market crash, but now that currencies are acting weird people are going to be scared and continue buying downside protection.
A UUP breakout above $23.20 or so would be very interesting. If it happens, that is.
I'll answer my own question: THIS is the "stock market" website that clowns like Josh Brown still take seriously
Zerohedge - How bad could Ebola get in the US? US government order of 160,000 hazmat suits gives a clue.
Josh Brown, Barry Ritholtz, the Financial Times, all you hobbyist econobloggers out there who still take Zerohedge seriously should begin questioning your continued loyalty to a racist, anti-Semitic, neo-Nazi disinformation website that's funded by Russia.
Now that Ebola is officially in the US on an uncontrolled basis, the two questions on everyone's lips are i) who will get sick next and ii) how bad could it get? We don't know the answer to question #1 just yet, but when it comes to the second one, a press release three weeks ago from Lakeland Industries, a manufacturer and seller of a "comprehensive line of safety garments and accessories for the industrial protective clothing market" may provide some insight into just how bad the US State Department thinks it may get. Because when the US government buys 160,000 hazmat suits specifically designed against Ebola, just ahead of the worst Ebola epidemic in history making US landfall, one wonders: what do they know the we don't?Nuff said.
National Review - solar panels drain the sun's energy, experts say. Ermagerd!:
“Put into laymen’s terms, the solar panels capture the sun’s energy, but pull on the sun over time, forcing more energy to be released than the sun is actually producing,” WIT claims in a scientific white paper published on Wednesday. “Imagine a waterfall, dumping water. But you aren’t catching the water in buckets, but rather sucking it in with a vacuum cleaner. Eventually, you’re going to suck in so much water that you drain the river above that waterfall completely.”Suck on that, Brent Cook! With your "global warming" enviro conspiracy talk and all!
WIT is adamant that there’s no immediate danger, however. “Currently, solar panels are an energy niche, and do not pose a serious risk to the sun. But if we converted our grids to solar energy in a big way, with panels on domestic homes and commercial businesses, and paving our parking lots with panels, we’d start seeing very serious problems over time. If every home in the world had solar panels on their roofs, global temperatures would drop by as much as thirty degrees over twenty years, and the sun could die out within three hundred to four hundred years.”
If Radius Gold was such a steal at 11.5 cents, Mr. Ridgway, it must be the deal of a lifetime at 8.5 cents, eh? Better back up the truck!
Even better, sell the truck, and back up your wheelbarrow!
Tuesday, September 30, 2014
Granita & Brioche - the US dollar breaks out, by Louis Gave.
Read it, it's good.
at 5:00 PM
Here's some evening news, in case anyone ever actually reads it:
BI - casino stocks surging on ignorant fantasy that China will stop its anti-corruption drive. The fuck? Do people actually believe that China's going to end its anti-corruption drive? Let me rephrase that: do people actually think the party leadership have all suffered strokes, and now the kleptocrats are again free to launder stolen money through Macau casinos? Linette Lopez, you're a fucking moron for submitting this.
Reuters - Indian monsoon ends with double-digit rain deficit. So the grain harvest will be smaller this year. But at least it's not a failure. Let's see what happens with el Nino next year.
Yahoo News - Iceland to host UN conference on women and gender equality - no women allowed. I don't see the innovation here: there have been men-only conferences on gender equality for a good five thousand fucking years.
The signals you're following are all lies.
This is so good that I am going to force you to click through. Those who don't click through are going to miss a good one.
Busy at work, but now I'm waiting for someone to correct their mistake on this oh-so-important job that they can keep me hanging.
So here's some news:
New Deal Demoncrat - stagnation in housing. He expects it to feed through into deceleration in the broader economy over the next few quarters. Stick that in your pipe and smoke it, Michael Shaoul and your inflation fear!
Reformed Borker (Bork Bork Bork!) - nobody's actually panicking yet. Sure, and I knew that already because $VIX is only 16 and the term structure isn't even inverted yet.
FT Alphaville - holy cow does Santander suck. They're paying out 1.5x earnings in divvies, thus the 9.2% yield. But Europeans are happily taking their divvies in shares, so the company instead is simply diluting itself. And you call European investors conservative?
FT beyond brics - EMs are bad, LatAm is the worst. Do any of those "buy EMs" bloggers out there ever look at the underlying weakness in the economies, and do any of them know that EMs die when the US goes into a secular bull market?
New Deal Demoncrat - Ed Yardeni is a wanker. Yup, he's set his sights on a higher level of economoblogginating clown now. Keep it up, ya pinko!
OK, I wrote this post back in June and scheduled it to show up today.
Climateer Investing - expect $875 gold by end 3Q14. Quote:
In summation, we are still looking for $875-ish by the end of Q3
Today is now end 3Q14; what is the gold price?
How did this blogger perform?
Monday, September 29, 2014
This chart tells you that it's been perfectly normal, as in five occasions over the past 2.5 years, for $VIX to spike +3.5SD on the weekly chart.
The present statistical set puts that target at 19; but the bands are widening, so maybe 20 will be the ultimate target.
I doubt we can get to a 2011-style outlier without a global panty-piddling of Eurodoom proportions.
I still don't get what's driving this present crotch-wetness: fear of Catalunya independence? Fear of a Hong Kong massacre? Or fear that Gross leaving Pimco will collapse the world bond market?
This chart helps you keep everything in perspective, trendwise.
But it also suggests that a decline to say $3 below the SMA(50), say $88.50, is a fully reasonable downside target. Happened June 2013, no big.
the last big pop in Q was early 2012, which was followed by a descent towards the weekly SMA(50), which on this chart would be maybe $91 or so.
Dunno if what we're seeing today is Pimco liquidating tens of billions, or people selling in anticipation of Pimco liquidating tens of billions, or simply everyone saying "hey, people are selling, let's do that too."
I'm mostly cashed up, but still excited at the possibility of a real (10%) correction that I can short volatility at the end of.
FP - junior miners starting to disappear as grim reality takes hold. I guess at least Peter Koven went to the the Cambridge House clownfest in Toronto last weekend, if nobody else. Me personally, I couldn't be arsed, since most of the speakers were utterly worthless; and I'd never actually want to meet IR clowns from a shitty exploreco, nothing they say is ever going to be informative to me.
Here's Kaiser with his hopeful message:
“It will be hard to raise capital for several years,” analyst John Kaiser warned in a presentation. He said there are around 700 mining companies on the TSX Venture Exchange with negative working capital, and the total number of small miners is shrinking. “They are starting to disappear,” he added.
Dammit, John! You've been saying this for a year now. When will they disappear already? Or are they just going to continue polluting the Venture?
This part was funnier:
The Cambridge House show has always been a gathering point for some of the world’s most outspoken gold bugs, and they continued to pound the drum for bullion on Thursday despite a bear market that has pushed it down to around US$1,220 an ounce.
“The U.S. dollar is on its last legs,” predicted John Ing, president and gold analyst at Maison Placements Canada. Others echoed that view.
And that's the sad part: these idiotic scamfests are still full of hard-money wackaloons whose message is still crafted towards the unwashed toothless morons who have been wiped out by buying shitty explorecos. Don't they realize this is part of the problem?
What Cambridge House needs, and what the junior gold world needs, is to cut loose the podcast & blogger crowd and start featuring real analysts with an iota of common sense.
I mean seriously. Listening to "analysts" at a goldbug conference is just like wandering into a fundamentalist prayer meeting. The informational value is zero, you'll never learn anything; it's nothing more than a fantastical prayer-ritual full of magical thinking, mythologizing about imaginary demons, and fantasies about a future heaven where God gifts his Chosen people with a gold-backed dollar and Ron Paul in the White House.
If 700 juniors are truly about to expire, that means 700 fewer scammers. The industry should no longer need to scam people with clownish presentations that have zero informational content and zero connection with empirical reality. Let's quit with the goddamn scams and become a serious industry, no?
NY Times - Democrats go on the offensive in the culture war. I'd been wondering over the past few years how the hell the Republicans can even continue to exist as a party if they're so strongly anti-women - after all, doesn't the US let women vote?
How do you win even one female vote in Virginia after advocating transvaginal ultrasounds, for example? How does your party maintain even a shred of honour after it attacks Sandra Fluke for campaigning for birth control?
So maybe the true shift in the American culture war is the sudden understanding that women make up 50% of the political debate.
Anyway, it's an interesting subject from a sociological perspective, and it'd be neat to consider the wider economic environment in which this is going on - the theory being that economic good times bring a swing to the left, while economic bad times usually cause a country to swing hard right.
Emerging markets are beyond -2SD. Big risk-off move, batman. It's even <-2SD on the weekly.
High-yield is -3SD. Again with the risk-off.
And $VIX is +3SD, with big Bollinger bands too.
Widening Bollinger bands with 3SD moves is pretty interesting, I'll give you that. Dunno what's going on here, but it probably involves a lot of piddled pink panties.
Here's some reading to start the week:
New Deal Demoncrat - weekly indicators. Some deceleration from the heady days of Q2, but he thinks a Q3 of 3% is not out of the question.
Reformed Borker (Bork Bork Bork!) - do we need to fire Pimco? Seems there's a lot of concern that the firing of Bill Gross will result in a large movement of capital - on the order of hundreds of billions of dollars. So I guess that counts as a major market rebalancing, which suggests this market goes nowhere for a few months.
BI - Pimco is already bleeding billions. Large outflows on Friday alone. If nothing else, this should send screwy signals that confuse the bots.
Gavyn Davies - labour underutilization in America. Here's another item of debate right now. Shaoul in particular thinks the labour numbers suggest incipient wage inflation, since some regions and labour sectors are already at full employment; doubters are responding to him by asking if he's actually seeing any wage rises anywhere right now.
Mother Nature Network - dogs don't like to be hugged. Well, piss on 'em then.