Saturday, January 3, 2015

MONEY-MAKING IDEA: you'll never guess what it is!

I was just watching this year's Christmas episode of QI, and saw the flint axe that Bill Bailey had, and decided to look for one on Amazon.

Lo and behold, I can't find flint axes for sale.

Look, I know that some people out there know how to knap flint, so why aren't any of you making Homo erectus style stone axes and selling them on Amazon?

Cos I wanted to buy one and they weren't available.

Wall Street Whitey's continued love affair with emerging markets

Oh and by the way:

US dollar denominated EM ETFs have gone utterly fucking NOWHERE since 2011.

OK fine, India had a good year this year, because Wall Street Whitey mistakenly thinks a Thatcherite can build a modern economy in India, where the majority of the population lives the same life they lived 2000 years ago.

But that pop this year only got your India investment back to where it was in early 2011. Wow your India pick sure sucks, Whitey!

And if you were broadly invested across EMs, that win in India would have been offset by the loss you'd have taken in Russia. Wow, you suck even more now.

Hey, don't get me wrong - I'd love it if the Piketty/Krugman/Summers "secular stagnation"/"oversupply of capital" story keeps worldwide rates and inflation artificially low while the unstoppable force of globalization continues to lift billions of people out of poverty, generating tremendous worldwide wealth and ushering in a new age of prosperity.*

But the past 4 years of market performance kinda makes that look like a pipe-dream, no?

If I were long EMs right now I'd be worrying that maybe they're about to do a cliff-dive the way Russia and oil already have. Expecting them to go up from here is sorta like fighting the last war, isn't it?

How did that work out for the short S&P crowd and the long inflation crowd and the long oil crowd and the long iron ore crowd? Did it work out well?

* - mostly because all those less-poor people will be buying more and more gold. So if you're investment thesis is still bullish EMs, Whitey, you'd better get good and long gold and prepare for a wild ride, no?

Some weekend goldbug charts, and then a rant

Well, these are all interesting:

GDX has broken above its SMA(50). That looks positive. Are we going to get another January pop like Mickey Fulp promised?

If so, let's just remember to sell by PDAC. I can't count the number of times I've been going down that escalator to Moria on Friday morning, checked my phone, and saw a sea of red as gold gets instantly monkey-hammered down $100 and the junior miners all get puked into an empty book.

GDXJ's chart isn't as inspiring. Then again this ETF is full of garbage.

B2gold has popped above its own SMA(50). Still, the problem I have with B2 is that everyone who bought this stock in the past 4 years is now underwater; why would people be buying at $2 if they can sell at $2 and get out at a wash?

DNA's been acting very interesting. Does the cup in December target $0.90, or does the H&S since September target $1.15? I think the H&S target is illegitimate because the right shoulder is too large and doesn't have enough volume. But $0.90 is apparently a fair price for this stock.

I would just warn Dalradian investors, though, that they are operating in a country famous for its leprechauns. Leprechauns use magic, can turn invisible, and love gold: how is Curraghinalt ever going to make money after the leprechauns find out about all the gold there?

Seriously, buddy, this looks like fucking Lydian all over again, except instead of the Russians stealing the gold, it's the leprechauns.

Gold ex-USD is still healthy, and a break above 4.9 here should still mean we're off to the races. If that comes Monday, man that'll be interesting.

By the way: remember how all those people have been blathering about gold being "dead"? And how about those clowns who puked gold on Friday morning along with oil, only to see gold crawl back to $1190 by the end of the day?

When do you think Wall Street Whitey is going to realize that gold is not oil?

Actually, when do you think Wall Street Whitey is going to realize that nearly 4000 tons of physical gold is still bought for consumption every year, and only 1000 tons of that comes from recycling?

Seventy five percent of all the gold bought every year has to come from a mine.

The fucking US TIPS yield isn't magically creating three thousand tons of physical gold a year.

The 30s-2s spread isn't magically creating three thousand tons of physical gold a year.

The S&P 500 bull market isn't magically creating three thousand tons of physical gold a year.

The appreciation of the US dollar isn't magically creating three thousand tons of physical gold a year.

Three thousand tons of gold every year has to come from a mine.

You'd think that Wall Street Whitey, still plowing money into Emerging Markets despite them having gone nowhere for 4 years, would see the better story in gold.

Wednesday, December 31, 2014

The twelve videos of Christmas: Don't You Worry Child

Here's a full set, Don't You Worry Child is at the end.

Now go out and get fucked up.

US market rollover?

Yet again,

 junk is threatening to roll over,

and that means $VIX might pop yet again.

I felt stupid selling my XIV over the past week, but feel less stupid now. Also dropped my double-long Nasdaq, but both of these actions were inspired more by wanting to take leverage off when S&P hit new highs. I'm happy to leverage a retrace, not so happy in blue sky.

Partly interesting is that IWM and banks have stood up fairly well, and they're the breakout sectors.

What's more interesting here is the lows in HYG have been deeper on each spike. December's $VIX pop wasn't as severe as October's, but then again if this one bottoms out at only 14 that makes the future look a bit more scary from the $VIX perspective.

Though, just as a reminder of my position on the topic, I think $VIX is acting funnier than it should be because so many people short it through XIV, which they never used to do before, and someone on the internet said that XIV's market cap is a significant proportion of the size of the outstanding front-end $VIX futures positions, which means that buying and selling XIV will have an outsized effect on the intraday $VIX indicator, which will then drive the algos nuts and inspire more selling than is rational.

Which is good for traders but mortifying for buy and hold.

The long-term higher lows in $VIX that we've seen, and longer-term underperformance of XIV versus SPY that we've seen since June, makes me feel justified in my beliefs. Maybe XIV is now so large that it's killed the beta of shorting $VIX: but what would a XIV that size do to $VIX futures and volatility of $VIX, do you think?

Anyway, food for thought for you.

Tuesday, December 30, 2014

Ha ha, now even Russian hockey is going down the toilet (UPDATED)

Globe and Mail - Russian hockey league on verge of collapse. Ha ha you Russkies suck. Also,

Foreign Policy - Pooty-poot's dream of a Russian NHL collapsing as his economy tanks.

Don't think for a second that hockey players are going to stick around in a shithole Nazi dictatorship now that their paycheques have been cut by 50% with the collapse of the ruble, with more collapse yet to come. They avoided signing to Canadian teams for years when our dollar was at 70 cents and below; they're going to get the hell out of Russia now for sure.

Putin and Russian hockey players are a good match. Hockey players are generally regarded as tough, unrelenting, and willing to play through pain.

Yeah, except for the Russky hockey players, who are generally recognized over here as being little sissy prima-donnas who act childish when they don't get their own way and who choke at the first sign of playoff hockey. Plus they import all their little personal problems with them, so the team always has to deal with the Russian mafia extorting money from these pussies.

Players have channeled their resentment into a bromance with Putin. In recent months, this generation’s Russian stars like the Washington Capitals’ Alexander Ovechkin and the Pittsburgh Penguins’ Evgeni Malkin have expressed support for the Russian president’s actions in Ukraine.

Ovechkin, who is set to play in the NHL’s signature outdoor Winter Classic at Nationals Park on New Year’s Day, posted a picture of himself on Instagram holding a placard that said #savechildrenfromfascism, a common Russian justification for its actions in Ukraine. Ovie has even made a cameo as a little green man in a mural that shows him skating over Ukraine under text that reads “We returned what was ours.”

Oh fuck, will someone please low-bridge this twat and get him off the ice for good? It's not like the Capitals need him, they always choke in the first round of the playoffs anyway.

Over ten seasons, how many playoff points has this overpaid pussy got? 61. Patrick Kane got more than that in 5 seasons, but then again Kane's not a sissy Russian and his team doesn't choke in the playoffs. Drew Doughty's got 50 points in 5 seasons and he's a defenseman for fuck's sake. Send Ovechkin off the ice on a stretcher and hopefully he doesn't come back.

Other Russian NHL players have also expressed support for the Russian president. The Montreal Canadiens’ Sergei Gonchar posed with Malkin and a few others wearing t-shirts that showed Putin in full combat gear.

What the fuck is Gonchar doing playing for Montreal? He's washed up, why do they need him? They have PK Subban. Cut that clown Gonchar and give Jarred Tinordi some playing time. His name's Tinordi for fuck's sake.

Yes, his dad is that Tinordi. The big nasty one. The good Canadian boy who made all the Russkies want to be at the opposite end of the ice from him for a whole decade.

Colorado Avalanche goaltender Semyon Varlamov also posted a photo of him in a t-shirt with a picture of Putin and the phrase, “Crimea is ours.”

Colorado doesn't need him. Calvin Pickard has already made him obsolete. Send Varlamov back to Russky-land and tell him to pick up a gun and fight the Ukraine himself if he's so tough, the little pussy. He's pretty mundane at stopping pucks, maybe he can do better stopping bullets.

And what the fuck is Jokerit doing in the Russian league? Finland, what the fuck are you doing?

By the way, interestingly I'm not getting any more blog traffic from Russia. I wonder why?

And there goes gold ex-USD

And there goes gold ex-USD:

1. Early December pop through resistance.

2. Mid-December drop to the $4.75-or-so pivot and a fat churning retest.

3. Now a pop back up: how high does it go?

And everyone who's long-USD-short-gold or long-Nikkei-short-gold is probably asking the same thing.

Because this chart could turn out very scary for them:

Because the weekly chart for gold ex-USD is forming a very orderly upward channel, despite gold being sold heavily, which means if it stops being sold heavily it could become a very disorderly upward channel quite quickly in exactly the way the goldbugs would enjoy.

This is all off what is admittedly a bullshit chart, except people seem to pay attention to bullshit, and this bullshit chart actually does determine whether some people are making money.

Watch out for 4.88 on the chart.

And someone else is playing peek-a-boo

Hey, look at silver:

Even trashy ol' silver is peeking over its Bollinger mean and SMA(50).

Even though silver's in a production surplus.

Even though it's a throwaway byproduct metal of zinc and lead mining.

And even though it's an industrial metal, and supposedly worldwide industrial production has collapsed, what with Chinese GDP only growing in 2014 by about $650 billion this year and US GDP this year growing by about the same amount.

Cuz y'see that's what a collapse in industrial production looks like.

Anyway, metals are interesting again.

Too bad it's December 30th and we can't trust these sorts of bullshit moves on a low-volume day like today.

Oh well. Mickey Fulp, if you're reading this, we're all counting on your prediction of a Jan-Feb miners bounce! Prepare for a very sore nose at PDAC if you turn out to be wrong!

Tamblyn's away, brave boys!

Tamblyn's away, brave boys!

That's another break above the SMA(50) and Bollinger mean, after printing a higher low. So I guess gold is going to go up again for a few days.

So here's Tamblyn, an old English folk song from the transition-age when Christianity still stood side-by-side with the old gods, that strangely parallels the tragedy of the goldbug world:

  1. Lady Margaret, Lady Margaret, was sewing at her seam
    And she's all dressed in black.
    And the thought come in her head to go to the merry greenwood
    to pull flowers to flower her hat, me boys,
    to pull flowers to flower her hat.
  2. So she hoisted up her petticoats a bit above the knee
    And so nimbly she'd run o'er the ground.
    And when she come to the merry greenwood,
    Well, she pulled them branches down, me boys,
    Well, she pulled them branches down.
  3. Suddenly she spied a fine young man,
    He's standing by a tree.
    He says, “How dare you pull them branches down
    Without the leave of me, my dear,
    Without the leave of me?”
  4. Well, she says, “This little wood, oh, it is me very own,
    Me father gave it to me.
    I can pull these branches down
    Without the leave of thee, young man,
    Oh, without the leave of thee.”
  5. And he took her by the milk-white hand
    And by the grass-green sleeve,
    He pulled her down at the foot of a bush,
    And he never once asked her leave, me boys,
    No, he never once asked her leave.
  6. And when it was done she twisted about
    To ask her true-love's name.
    But she nothing heard and she nothing saw
    And all the woods grew dim, grew dim,
    And all the woods grew dim.
  7. There's four and twenty ladies all in the land
    and they're all playing at chess.
    Except it was the Lady Margaret
    And she's green as any glass, me boys,
    Oh, she's green as any glass.
  8. And there's four and twenty ladies all in the land
    Grow as red as any rose.
    Except it was the Lady Margaret,
    She's pale and wan, me boys,
    Oh, pale and wan she goes.
  9. Up then spoke the little servant girl,
    She lifted her hand and smiled,
    Says, “I think my lady has loved too long
    And now she goes with child, me dears,
    Oh, and now she goes with child.”
  10. Up then spoke the second serving girl
    “Oh, ever and alas,” said she,
    “But I think I know a herb in the merry greenwood,
    It'll twine thy baby from thee, madam,
    It'll twine thy baby from thee.”
  11. So Lady Margaret she got her silver comb,
    Made haste to comb her hair,
    And then she's away to the merry greenwood
    As fast as she can tear, me boys,
    Oh, as fast as she can tear.
  12. And she hadn't pulled in the merry greenwood
    A herb but barely one
    When by her stood the young Tamblin,
    He says, “Margaret, leave it alone,
    Oh Margaret, leave it alone.”
  13. “Why d'you pull that bitter little herb,
    The herb that grows so grey,
    For to destroy that fine young babe
    That we got in our play, my dear,
    That we got in our play?”
  14. “Well, come tell me now, young Tamblin,” she says,
    “If an earthly man you be.”
    “I'll tell you no lies,” says young Tamblin,
    “I was christened as good as thee, me dear,
    I was christened as good as thee.”
  15. “But as I rode a-hunting on a bitter, bitter night,
    It was from my horse I fell,
    And the Queen of Elfland she caught me
    In yonder green hill to dwell, to dwell,
    Oh, in yonder green hill to dwell.”
  16. “But tonight is Halloween, lady,
    The Elven Court will ride.
    And if you would your true love win,
    By the mill bridge you must hide, me dear,
    By the mill bridge you must hide.”
  17. “And first will run the black horse and then will run the brown,
    And then race by the white.
    You hold him fast and you fear him not,
    For he's the father of your child, my love,
    Oh, he's the father of your child.”
  18. “They'll turn me all in your arms, lady,
    Into many's the beasts so wild.
    But you'll hold on fast and you fear no ill,
    For it's the father of your child, my love,
    It's the father of your child.”
  19. So Lady Margaret she got her silver comb,
    She made haste to comb her hair.
    Then she's away to the old mill-bridge
    As fast as she could tear, me boys,
    Oh, as fast as she could tear.
  20. And about the dead hour of the night
    She heard the bridles ring.
    And oh, me boys, it chilled her heart
    More than any earthly thing it did,
    More than any earthly thing.
  21. And first run the black horse and then run the brown
    And then race by the white.
    Well, she hold it fast and feared it not,
    For it's the father of her child,
    Oh, it's the father of her child.
  22. The thunder rolled across the sky,
    The stars blazed bright as day.
    The Queen of Elven gave a thrilling cry,
    “Young Tamblin's away, brave boys!
    Young Tamblin's away!”
  23. And the very first thing they turned him into
    Was a lion that runs so wild.
    But she held him fast, she feared him not,
    For he's the father of her child, me boys,
    Oh, he's father of her child.
  24. And the very next thing they turned him into,
    It was a loathsome snake.
    He says, “Hold me fast and fear me not,
    For I'm one of God's own make, my love,
    Oh, I'm one of God's own make.”
  25. And again they changed him all in her arms
    To a red hot bar of iron.
    But she held it fast, she feared it not,
    And it did to her no harm, no harm,
    And it did to her no harm.
  26. And the very last thing they changed him into
    Was like any naked man.
    She flung her mantle over him,
    She cried, “My love, I've won, I've won!”
    Oh, she cried, “My love, I've won!”

I left out the last verse where it all ends horribly.

Here's Current 93's beautiful version of the song:

The twelve videos of Christmas: yup

Here it is live again.

Monday, December 29, 2014

It's been a long time since I posted cute kitten gifs

Well, it's been a long time, so here's some cute kitten gifs:

Bad dictionary humour

irrelephant (n):

Mark Thoma on what economics got wrong

Mark Thoma is an econ prof, and I was considering watching the video podcasts of his lectures soon.

Anyway, he wrote this:

Fiscal Times - why the next recession will be different.

And he picked out a lot of areas where not just politicians, but actual serious economists screwed up.


Prior to the Great Recession, I thought central banks could create inflation pretty much at will, even in a deep recession. All that was needed was to crank up the printing press, get the money into the hands of people who will spend it, and the extra demand will drive up the prices of goods and services. At the same time, inflationary expectations would increase driving down the real interest rate, and that would increase demand even more. If the increase in the money supply is sufficiently large, inflation would be the inevitable result.

But the Fed doesn’t create money directly, it increases bank reserves and it’s possible for those reserves to get stuck in bank vaults or in deposits held at the Fed. When that happens, the money supply doesn’t increase – balances held within the Federal Reserve System are not part of the money supply – and the desired increase in demand doesn’t occur.

The lesson for me is that if you want the inflation rate to increase, demand has to increase. That requires more than simply creating a bunch of reserves that sit idle in banks.

Seems like mainstream economics has to pull its invisible hand out of its monetarist animal-spirits ass and realize that politics and economics work together.


If monetary policy alone cannot turn things around when the economy is spiraling downward, it’s up to fiscal policy to come to the rescue. Increases in spending combined with targeted tax cuts can make a big difference in how quickly the economy recovers.

Prior to the recession, I never would have dreamed that Congress would all but turn its back on the unemployed, let alone turn to austerity, but that’s exactly what happened. Yes, there was a stimulus package just after Obama was first elected, but it was far from sufficient and more was needed to help the millions and millions of households struggling to make ends meet in the face of unemployment or reduced hours. Instead, we got budget cuts that made the problem even worse.

You could, like Krugman, say "well that's what happens when politicians don't understand economics". Then again, maybe they understand "economics" all too well, but just the silly kind - after all, the right-wing neocon think-tanks are whispering in their ears all day and night, and there's a whole heck of a lot of members of congress who've read Ayn Rand, right?

Maybe the problem is that serious economics isn't engaged with the public? Maybe economics needs something similar to the public sociology movement.

And third:

Recessions Affect Long-Run Growth: Prior to the Great Recession, many economists – myself included – believed that monetary and fiscal policy would have no impact on the full employment or natural level of output in the long-run. Policy could change the severity and duration of a recession; these actions were thought to be completely independent of our long-run productive potential.

The experience of the Great Recession shows that this is wrong. First, long-term unemployment has been a huge and persistent problem, and many workers have responded by dropping out of the labor force permanently. The decrease in the workforce lowers our potential output level. Second, public investment in infrastructure has fallen behind, and that hurts our long-run growth potential. Third, teachers and social services have been cut, and to the extent that our children are less educated, less healthy, less well-adjusted because of these cuts in the name of austerity, our long-run potential will fall.

Yup. So let me know if that permanent output destruction and degradation of human resources are ever included in economic models.

Mickey Fulp on BNN

BNN - Mickey Fulp on tax loss selling.

As he notes, every year out of the last decade except one, the Venture bounced back well from December tax loss selling. And certainly there have been good companies sold down horribly over the past month.

The question always remains, which stocks will the market want to buy back in January, and which are going to stay down because they stank to begin with.

BTW, you guys at BNN: your newsletter sign-up function doesn't seem to work.

The twelve videos of Christmas: Don't You Worry Child

Here it is live:

Sunday, December 28, 2014

U2 just announced a world tour

U2 just announced a world tour.

I'm confused. Do I have to buy tickets, or are they just going to break into my house and start playing?

Sure, a bit more news why not

Here's some more weekend reading:

Bespoke - R2K finally breaks out. After a long 8-month consolidation. With gasoline prices dropping. So therefore sell your US stocks and go to cash! Because reasons!

New Deal Demoncrat - weekly indicators. Everything looks fine, quit piddling yourself.

BI - investors always miss rallies. Just buy the S&P 500 and walk away. It's in a secular bull thrust and we've already had a few nearly-10% corrections in the past couple years: quit trying to dodge the next puke, buy the damn thing instead.

Bonddad - an entire year of incompetent economic analysis from Powerline. A particularly snarky chain-debunking of every incompetent bearish comment there is. By the way, the S&P is up 13% this year: how is your favourite stock analyst's performance for the year, in comparison?

Zerohedge - let's quote George Orwell on orthodoxy. This is rich coming from a website funded by the KGB, which regularly praises a Fascist country where all dissent has been silenced and enemies are executed in the streets.

The twelve videos of Christmas: dammit quit with the whining Child or I'm giving you the back of my hand

This one's just piano and trumpet: