Saturday, November 1, 2014

BREAKING NEWS: glorious Libertarian warriors take back Galt's Gulch Chile

Jeff Berwick - Galt's Gulch Chile retaken in daring night raid, no really. The story's causing a lot of shits 'n' giggles in the newsletter world, but frankly I think they did a pretty good job, considering.

And I doubt they have to worry much about Ken Johnson giving them any trouble now. He seems like the type of person who (in diplomatic language) finds it difficult to determine and pursue future courses of action that are in his own best interests. He's probably moved on.

Still, it kinda sucks that to maintain their claim on GGC, it seems like they're now going to have to permanently station a bunch of people in an arid wasteland with no water rights and keep their fingers crossed that the local police and citizenry remain on their side.

Ah, lessons learned for Libertarians. I hope Jeff Berwick writes a series of informative articles about the lessons he's learned throughout this whole Galt's Gulch Chile crisis.

Especially the lesson that property rights depend entirely on the goodwill of your neighbours. Not the law, not contracts, not the State, but the goodwill of your neighbours.

Anyway, for utterly no reason here's Jeff Berwick being interviewed in his Las Brisas mansion about what it's like to hang out in Acapulco, and what sort of lifestyle you can expect to maintain there if you happen to have made millions selling Stockhouse at the height of the dot-com boom:

Again, he really is hilarious fun to listen to, so go ahead and listen to the interview. Otto in particular will have a brain-exploding moment starting at approximately 24:30.

Things I agree with, btw:

1. Yes, lawns are stupid, people should grow fruit.
2. Yes, people should calm the fuck down about Ebola.
3. Yes, the world is better with porn.
4. Yes, the world is better when you and your neighbours look out each other. I guess the social cohesion in Acapulco is quite a bit stronger than in the US.

And Jeff, you smoke too much, you're going to get fucking throat cancer.

Friday, October 31, 2014

The Wall Street Journal finally admits that Mila Kunis was smarter than them all along

WSJ Moneybeat - Moneybeat formally apologizes to Mila Kunis. Once again, my single-handed, rabid, unflinching, stalker-like quest for justice pays off, making the world a better place.

Steven Russolillo explains just how much of a fucking cunt he was to the sweet Mila Kunis:

Mila Kunis, we’re sorry.

In March 2013, Ms. Kunis — known for her roles in That 70s Show, Forgetting Sarah Marshall and more recently Oz: The Great and Powerful – told CNBC that she was buying stocks for the first time. She noted how risk averse she had been in the past, but figured the spring of 2013 was a good time to “take chances” and learn more about stocks and investing.

We were skeptical, to say the least.

In a blog post at the time, we worried about the tendency for mom-and-pop (and celebrity) investors to pile into stocks at the worst possible moments–at the top of the market, instead of the bottom. “The old adage is whenever shoe-shine boys, barbers, Hollywood types or former Fed chairmen start touting the stock market, it’s time to bail out,” we wrote.

We argued that the market’s relentless rally would have to abate at some point. We worried that the Federal Reserve wouldn’t be able to power the rally forever. We fretted about weak earnings growth, fairly-valued markets and low wages.

And boy, were we wrong.

The S&P 500 has rallied another 20% since Ms. Kunis gave that CNBC interview a year and a half ago, piling onto one of the biggest bull markets of all time. Aside from a few hiccups–including a pullback earlier this month–much of the rally has been smooth sailing.

Yes, Steven. You were wrong. The Wall Street Journal was clownish in its arrogant stupidity.

How the mighty have fallen, Steven! Once the WSJ was known for its economic commentary. Now? Now you're a bunch of fucking amateurish blogger clowns who constantly piddle your frilly little pink panties about the coming Obamapocalypse.

So even though you've admitted that Mila was right in March 2013, you're still trying to scare your readers out of a market that's still in the early stages of a ten-year bull:

In March 2013, when we tried to sound the alarm to Ms. Kunis, the S&P 500 traded at 13.7 times next year’s earnings. And the current price/earnings multiple matches where the S&P 500 traded in October 2007, when stocks peaked prior to the financial crisis. No matter how you slice it, stock valuations are rich.

Then there’s all of the global tumult. Geopolitical turmoil in the Middle East and Ukraine have the potential to roil markets at any moment. The specter of deflation continues to hang over markets around the world. Slowing economic growth in Europe and China could be problematic for the U.S. and the global economy in the weeks, months and years ahead.

Bottom line, there’s plenty to be worried about.

You're still a worthless cunt, Steven Russolillo, and your worries make you look pathetic. I'm happy you're leaving the WSJ.

If that shithole Murdoch rag had any brains, they would fire the whole worthless amateurish lot of you and replace you with the one person who's called the market right for the past 18 months:

Mila Kunis is smarter than you.

And by the way, we're still waiting for apologies from Josh Brown, Barry Ritholtz and Joey the Weasel.

Count Floyd

Because it's Halloween, and because those goldbugs still out there need some soothing after getting bumloved to the tune of 10% today alone as their crappy mining stocks collapse, here's some Count Floyd, with Doctor Tongue's Evil House of Pancakes:

Japan breakout has already happened

So Japan blew up today:

A few short weeks ago, when people were grasping for fundamental explanations for the hedge fund position adjustments that caused world markets to drop, everybody was so damn sure that that Japan was still mired in deflation and the sales tax hike was going to destroy the country.

I didn't worry, because Michael Shaoul was providing proper empirical commentary on Japan that showed it was still recovering and the tax hike has caused no damage.

By the way, nowadays Shaoul is really showing his spots as a sadomonetarist hard-money inflationista. He has some strong underlying biases that are not intelligently informed by economics. But his commentary is still useful. I just have to remember to ignore parts of what he says.

Anyway, today the US Japan ETF gaps up and suddenly the threatened 18-month channel fail turns around to a threatened 18-month channel breakout.

I'm tempted to sell, because a 4% pop in one day is silly and (looking at this chart) I really think the breakout can't happen in the next couple days. Too fast too soon.

But I won't sell. Because I don't own EWJ, I own this:

This TSX-based ETF hedges out CAD/JPY forex distortions. And it says Japan already pretty much has broken out in CAD terms.

Target? I dunno. But just in case the US markets have little upside left in them for this year, and I do like to aspire to beat the performance of SPY (or anyway), I'm going to hold half my money in Japan instead.

Friday videos: Curve's "Horror Head"

Again, here's Curve, with some Halloween music:

Thursday, October 30, 2014

WHO IS OTTO ROCK? Now the FBI wants to know. No really.

Oh dear, oh dear. The FBI has come knocking, and they want Otto Rock.

Click to enbiggitize:

Otto, run! You're in danger!

I can tell because someone at the FBI typed "Who is Otto Rock?" into Google while logged in!

Wikipedia says:

The mission of CJIS is to reduce terrorist and criminal activities by maximizing the ability to provide timely and relevant criminal justice information to the FBI and to qualified law enforcement, criminal justice, civilian, academic, employment, and licensing agencies concerning individuals, stolen property, criminal organizations and activities, and other law enforcement related data.

Dude, maybe you shouldn't have pissed off that dude. Now the fucking FBI is googling you.

If my blog goes silent, you guys now know that it's because I've been stuffed in a bodybag and flown off to a CIA-run torture facility in Syria. I'll be spending tonight snorting coke and caressing my guns in my panic room, that's for sure.

Who knows? Maybe I don't even make it out alive, but at least I'll take a few of the bastards with me! Which reminds me, I should probably arm the mines around my house for tonight. You can never be too safe.

Speaking of which, here's a Siskel & Ebert review of a great documentary on the topic of fascist governments who spy on their citizens:

Recommended by Jeff Berwick. The guy's got great taste in movies.

Oh the humanity!


Oh the humanity!

Premier Gold:

Oh the humanity!

Primero Mining:

Oh the humanity!


Yeah, well, not much of a surprise there.

Seems like the end of QE has been interpreted by the market as the cue to give up on silver and gold forever.

I eagerly await my chance to buy B2Gold shares for 50 cents.

Sprott Globule interviews David Harquail

Sprott Globule - an interview with Franco Nevada's David Harquail. Hey, Nolan! Since you read my blog, maybe you should check out this interview with David Harquail about streaming. See if you can maybe learn something from one of the masters.

The gold silver ratio means nothing except that dividing one number by another is possible, which most of us already learned in grade 4 math

Hey, remember when the GSR was going to turn around at 68?

GSR weekly:

Morpheus meme:

Now what if I told you that the gold-silver ratio can go to 100?

But there's something in your eyes that says "never"!

Never say never!

More Sheldon Inwentash news

Sheldon and Pinetree have been dumping a heck of a lot of stock in pennycrappers these past few days - witness 10.7M shares of Coro Miming* dumped yesterday alone, of course not all sold by him - so he has now become interesting.

So here's some Sheldon news:

TD Waterhouse - U3O8 announces resignation of Sheldon Inwentash from board. Oh, and quote:
"The fundamentals of U3O8 Corp. and its projects remain solid," said Dr. Richard Spencer, U3O8 Corp's President and CEO. "We are currently being swept along in the market-driven sell-off in commodities and a broader liquidation affecting a number of exploration companies, which is further aggravated with end-of-year tax loss selling. Of further note, shares of uranium producers and juniors alike have traded down although uranium prices have risen over 25% since the summer. These market-related events highlight the disconnect between our share performance relative to the value that we are creating in our projects."


U3O8 Corp. also announces the resignation of Sheldon Inwentash, Chairman and CEO of Pinetree Capital Ltd., from the Company's Board of Directors.

"On behalf of U3O8 Corp. and the board, I would like to thank Sheldon for his support of the company over the past four years. Sheldon was instrumental in the acquisition of the properties in Colombia and Argentina that constitute U3O8 Corp's lead projects on which positive preliminary economic assessments have now been completed," said Mr. David Constable, U3O8 Corp's Chairman.

Terreno Resources - announcing the resignation of yup you guessed it. Quote:
Terreno Resources Corp. (TSX-V: TNO) (the "Company") announces that Sheldon Inwentash has resigned as a director of the Company effective October 28, 2014. Terreno thanks Mr. Inwentash for his contributions and past service.
I guess the two resignations will give him some extra time that he can spend on better things. Like Keek?

Stockcrotch - Keek enters into loan agreement. Quote:
Keek Inc.'s board of directors has authorized the company to seek financing through the issuance of secured notes of up to $5-million. The company intends to use the proceeds from the notes for general working capital purposes.

The notes will bear interest at a rate of 12 per cent per annum on the principal amount outstanding and will be repayable in 12 months from the date issued. The notes will be secured by a general security agreement over all present and future assets and intangibles of the company. In consideration for the notes, the company has agreed to issue an aggregate of up to five million common share purchase warrants. Each warrant will entitle the holder to purchase one common share of the company at an exercise price of 10 cents per share at any time up to three years after the date of issue. The warrants will be subject to a statutory four-month hold period.

Pinetree Capital Inc., a significant shareholder of the company, has agreed to subscribe for $3-million of notes. Sheldon Inwentash and Gerry Feldman, directors of the company and management of Pinetree, abstained from voting in connection with the approval of the issuance of notes to Pinetree. The initial closing of notes to Pinetree is expected to occur on Oct. 31, 2014, with one or more additional closing to be held in November.
Eugh. Dumping tens of millions of shares of a pennycrapper like Coro to plow $3M into a hail mary loan for a social media company? I don't see the attraction.
Keek also announced today that it is in the final stages of its previously announced divestiture of its oil and gas assets.
Wait... what? A social media company with oil and gas assets? Gee, I hope they're worth $5M!

Wikipedia - Keek. Quote:
Between March 2013 and June 2013 Keek added 24 million users to bring its network to a total of 45 million registered users.

On May 17, 2013 Keek added a new private messaging feature, allowing users to privately chat using video or text with up to 36 people at once.

Keek launched a developer portal with API access on June 14, 2013. The new API program will allow developers to access public keeks, search functionality, user profiles, Klusters and more.

Keek launched a Windows phone version of their app on June 27, 2013.

In August 2013 Keek reached a total of 58 million users growing at the rate of 250,000 new users a day. Keek has been the top video app in 18 countries globally.

However, by October 2013 Keek was struggling to raise more venture capital funding through investment firm Morgan Stanley and was forced to downsize its operation to half a dozen staff members.

By November 2013 a reverse takeover bid was announced by oil company Primary Petroleum. The reverse takeover would see Primary Petroleum sell off all of its oil holdings and change its name to Keek Inc, effectively merging the two companies, and bringing Keek to the public stock market. During this time co-founder and CEO Isaac Raichyk left Keek to found a new mobile dating platform called Clover of which he is now CEO.
Um... a social media petroleum RTO?

Sheldon Inwentash is apparently a smart investor who has money to spare. So I'm scratching my head and wondering what's going on here.

More from Wikipedia:
The second round of venture capital funding was led by Cranson Capital Securities with participation from Pinetree Capital Ltd. (TSX: PNP) and Whitecap Venture Partners. This round of financing raised $7 million (US) bringing the total investment financing to more than $12 million (US) as of September 18, 2012.

The third round of venture capital funding was led by AGF Investments Inc., Pinetree Capital Ltd. (TSX: PNP) and Plazacorp Ventures, with Cranson Capital also participating. This round of financing raised $18 Million dollars (US) on January 17, 2013 which brings the total investment financing to $30 million (US).
Um... he must really like Keek.

* - yes, that was a spelling mistake but I think I'll keep it.

Wednesday, October 29, 2014

Hedge funds and XIV


So what reason did you guys have for that massive glob of short $VIX selling at 2PM?

Was there something in the Fed minutes that you didn't know was going to be there? Or do you just kneejerk sell at 2PM because reasons?


GDXJ weekly:

Ask your local goldbug TA what the downside target is for a break of the horizontal support line.

Go ahead, ask him.

No really, ask him.

Was that the bottom in gold?


Wednesday news

Not much news, buy the damn S&P.

Ritholtz - OMG the market crashed in 1929! Heavy sigh.

Liz Ann Sonders - market perspective. She tells the market to quit piddling its frilly pink panties.

Mineweb - Russia buying more gold. This is bullish, you say? What about the fact that Russia is now eating through their currency reserves, of which they have less than a year's worth left? I suspect that at some point they're going to have to dump their gold too.

The Guardian - The Jesus & Mary Chain on Psychocandy, 25 years on. They got ahead on their motorbike, they felt so quick in their leather boots.

Pharmasave Dave's prescient Pinetree post from previous

PS Dave - Pinetree we have a problem. Let's just quote the first half of this, then you can click through to Vancouver Venture for the rest:

Back in the spring of 2011 when gold was trading at $1500 and on it's merry way to $1900 and the talk of $3000 gold was all the rage, Pinetree Capital opted to leverage their seed generator model via a $75 million 8% debenture offering.

Part of the covenant of the offering was that the debt to net asset value ratio will not exceed 33%, which was not a problem at the time of the offering. In May 2011 Pinetree had approximately 136,389,000 shares outstanding with a net asset value of $4.30, the assets were worth $586,472,000 so $75 million was just a mere 13% debt to equity. Well within the covenant.

How things have changed in the summer of 2013. Pinetree is now under pressure as CEO Sheldon Inwentash is now finding out that the bank is his new boss.

Pinetree Capital Ltd., as at June 30, 2013, was not in compliance with one of the debt covenants contained in the convertible debenture indenture dated May 17, 2011, as supplemented by the first supplemental indenture dated Dec. 11, 2012, in each case, between the company and Equity Financial Trust Company, as trustee, which govern Pinetree's 8 per cent convertible unsecured subordinated debentures due May 31, 2016. The debt covenant at issue prohibits the company's debt from exceeding 33 per cent of the total value of its assets, as reflected on its (unaudited) consolidated balance sheet as at the last day of each month. As at June 30, 2013, Pinetree's debt-to-assets ratio was 36 per cent. Pinetree has attempted to manage its debt-to-assets ratio throughout the year, primarily by retiring in excess of $14-million principal amount of debentures under normal course issuer bids (representing approximately 19 per cent of the debentures originally issued), however, the downturn in both commodity prices and the junior resource space generally has eroded the value of the company's investment portfolio.

Pinetree will continue to monitor its debt ratio, which it estimates to currently remain at a similar level to the June figure.

Pinetree has pared the original $75 million debentures back down to $60,864,000 as of June 25 2013 through a series of buybacks. Unfortunately Pinetree's main source of income is based on capital gains and with interest payments of approximately $4.9 million a year, a declining portfolio value and the need to buy back debentures to stay within the covenant guidelines the pressure is on the portfolio.

As of June 30th Pinetree declared a NAV of $0.76/share and with 143,819,000 shares outstanding giving Pinetree's portfolio value of $109,302,440 net of debt. So Pinetree is faced with a double edge sword, as the margin calls come in from Equity Financial and the interest payments rack up Pinetree would have to sell its portfolio into a very illiquid market further depressing their portfolio and putting more pressure on their covenant.

Here is a list I compiled from Pinetree's website, Pinetree's disclosure policy is to disclose the public positions over $1,000,000, this is as of March 31, 2013. I have adjusted for reverse splits, takeovers and spinoffs to the best of my knowledge. The prices where as of August 2nd for valuation with the original cost provided.

This is a pretty large portfolio and anyone of these companies could be under further price pressure given Pinetree's circumstances, although the most liquid companies could be sold first.

FWIW I grabbed some of Sheldon's Coro shares at 3.5 cents. Smokes money, nothing major, I'd still rather own the S&P 500.

On the one hand, it's been beaten down by a seller who is far too large for the market in this stock, and who seems to be selling at gunpoint. That seems to be a good time to buy, not sell.

On the other hand, just because a drive gets forced with a heavy torque doesn't mean it'll be able to bounce back one the torque leaves. Sometimes the torque is enough to break the drive entirely. Does Coro get broken just because it's now at 3.5 cents? We've seen that before with other juniors. Hopefully Coro doesn't need to do a dilution, for example.

Anyway, PS Dave's post has a list of the companies that Sheldon owned as of last year. So go read that if you're shopping for bargoons the way Dave's hero Rick Rule does.

A humourous story about junior mining stocks

A guy is driving around the back woods of Montana and he sees a sign in front of a broken down shanty-style house: 'Talking Dog For Sale'. He rings the bell and the owner appears and tells him the dog is in the backyard.

The guy goes into the backyard and sees a nice looking Labrador retriever sitting there.

'You talk?' he asks.

'Yep,' the Lab replies.

After the guy recovers from the shock of hearing a dog talk, he says 'So, what's your story?'

The Lab looks up and says, 'Well, I discovered that I could talk when I was pretty young. I wanted to help the government, so... I told the CIA. In no time at all they had me jetting from country to country, sitting in rooms with spies and world leaders, because no one figured a dog would be eavesdropping.'

'I was one of their most valuable spies for eight years running. But the jetting around really tired me out, and I knew I wasn't getting any younger so I decided to settle down. I signed up for a job at the airport to do some undercover security, wandering near suspicious characters and listening in. I uncovered some incredible dealings and was awarded a batch of medals.'

'I got married, had a mess of puppies, and now I've just retired.'

The guy is amazed. He goes back in and asks the owner what he wants for the dog.

'Ten dollars,' the guy says.

'Ten dollars? This dog is amazing! He worked for the CIA and won medals! Why on earth are you selling him so cheap?'

'Because he's such a bullshitter. He's never been out of the yard.'

Tuesday, October 28, 2014

Tuesday morning news

The argument that the Federal Reserve has "faked a recovery by printing money and handing it over to investment bankers to buy stocks to artificially float the stock market" has one big problem:

Hard economic data.

Here's two examples for today:

Calculated Risk - ATA trucking index up 3.7%. Forget the "unchanged from August" bit, it's a noisy data set. Trucking is up 3.7% yoy and that means growth. Unless, of course, you're some low-grade fucking moron who insists that the US Federal Reserve is renting out trucks to fool mom & pop investors into believing in a non-existent economic recovery.

Calculated Risk - SAAR predicted to be up 5% yoy. Unless of course you think the Federal Reserve has expanded its balance sheet by buying a few dozen million cars over the past 5 years in order to trick Wall Street into buying shares of Ford.

Transports breakout


Please copy the link for this post, and forward it to every single clown you know who was suggesting just a couple weeks ago to puke equities. Send it to every blogger and every market "professional" and every stupid "journalist".

Because what this chart is showing right now is an upward breakout in transports.

An upward breakout in transports doesn't lie: it is confirmation that the bull market is continuing and the US economy is still growing.

Congrats to all of you who increased exposure 2 weeks ago, and all of you who simply stayed fully invested because you saw the stupidity of the selloff.

Union Pacific and how every hedge fund is run by morons

A recap.

Back in mid-October, Union Pacific was a piece of garbage stock that needed to be sold because:

1. deflation
2. collapse in world trade
3. Ebola
4. poor future for shale oil because oil prices went down
5. wharrgarbl.

All perfectly intelligible reasons to puke UNP, right?

So splain this to me:

That's not just a recovery, but an accelerating upward breakout.

So here's an interesting idea for all of those financial professionals reading my blog:

If you were to track down every person in your office who was in favour of dumping UNP at $100, and then you beat each of them to death with a hammer, it would be illegal. In some states, you might get the death sentence. No good and sane person would ever do such a thing.

And that is why your stupid firm will never outperform SPY. Give up.

Gold is gettin' it good

Gold certainly is getting smacked down hard in the US this morning, eh? I guess someone needs the price back down for options expiry, eh?

Monday, October 27, 2014

Hey Nolan!

Hey! Nolan!

Have you figured out what the problem with Sandstorm is yet? Cuz I'm thinking this chart would inspire an ambitious lad like you to seize the reins and take control, y'know?

This chart here says that the value of Sandstorm has shrunk by two-thirds, relative to Franco Nevada, in just two years.

Wow, that sucks.

Is Pierre Lassonde really that much smarter than you, Nolan? Maybe you should quit your Sandstorm job and go work for Pierre for 5-10 years and get an education in how a streamer is supposed to be run.

Interesting gold price chart

Check this out, it's really not a bad chart at all:

Hey, all this talk about $1230 gold, and yet it's actually worth $1388 right now? What gives, man?

It's worth that much to me because I'm not an American.

Actually there's about 6.809 billion people out there who aren't American, but who's counting?

Keep selling, Whitey!

Monday news and socialist agitation


BI - Hussman thinks the stock market is crashing. Well of course this clown thinks the market is crashing, he's always thought it's crashing. Blodget, you douchenozzle, I'm deleting the BI link off my cellphone: since your website continues to feature ignorant fruitcakes like Hussman, you've now become a waste of my fucking time.

FT Alphaville - Goldman's new take on the oil selloff. $70 oil would be good for the US economy, no? Maybe for Europe, China and Japan too! Not so good for the Middle East or Russia though - hey, that's even better! What's not to like? Even Alberta gets fucked. That's awesome.

Chronicles of Brodrick - winners and losers from low oil prices. Hey Sean, you forgot to put "oil and gas newsletter writers" in your list. How's the junior oil and gas stock market been looking recently?

Gavyn Davies - is worldwide economic growth permanently lower? When are these pundits going to realize that Krugman and Piketty have it right? The economy needs a balance between rentiers and the proletariat: if you confiscate all the income of the poor and hand it to the rich, the rich will suddenly have a whole pile of excess savings and nobody to lend it to.

And that's what's been happening for the past 50 years, and that's why the worldwide economy is now confronted with deflation: the rich now have all the money, and nobody left who they can lend it to.

That's the endgame of the war against the proletariat. All that's left for the rich is to dissolve all democratic institutions and rebuild the feudal system.

Asanko Gold sucks


I was under the impression they had cash and a viable mine site that's fully financed to production, which will produce 400kozt/y by 2017 at under $750/ozt operating cost.

So it seems they're trading for something like $50M plus cash.

OK good, carry on then....

Cam Hui's weekend market update

Hum Blestuden Tofthemar Kets - weekend update. Credit where credit is due, he admits he may have missed a bottom call, and figures out why in excruciating detail. Very good read, explains why the market did go down, explains why it was silly to worry.

Nothing wrong with a market commentator who not only admits when he was wrong, but then is motivated to do significant research to arrive at a new understanding.

As far as Merkel and Draghi are concerned, yes it seems Draghi spent a good deal of time explaining to Merkel how she is an asshole for thinking monetary policy can accomplish anything when fiscal policy does nothing but get in the way and sabotage his best efforts.

And yes, it seems Merkel made some friendly cooing noises to the press, probably because Draghi told her he's fed the hell up with being shat on by ignorant blockhead politicians.

But when the rubber hits the road, I wouldn't expect more than a cupcake from Merkel on the topic of fiscal expansion. Whenever a German gives you something out of the microscopic kindness of their own robotic heart, you should always expect it will be profoundly unsatisfying.