Saturday, August 8, 2015

Some weekend news

Yay! A month with no homework, and getting paid $45/hr to do engineering.

In celebration, here's some news:

Bespoke - bullish sentiment sees slight rise. And still so many people don't want to be long the US market. My god the look of that sentiment chart is incomprehensible.

Moneyness - freshwater macro, China's silver standard, and the yuan peg. Yup, China once had a silver standard. A great article for luring in the silver-bugs and tricking them into reading some real economic commentary. - Canada Revenue targeting mining-sector tax cheats. Why, exactly, do you have to use an offshore tax haven if you're a mining company? It's not as if you're turning a profit to begin with!

New Deal Demoncrat - let's make fun of Automatic Earth. Here's a big long quote cos he's just such a damn good critic:

But to turn back to the article in question, as to which the Pied Piper of Doom touts a recent piece on the blog "The Autormatic Earth." What were they saying back in the Great Recession? Well, here's what they thought was going to happen as of December 12, 2008:

Last month I started warning of millions of lay-offs to come in the US economy. Since then, we've seen a November job loss of 533.000, as well as predictions of pink slip totals of a million and more every single month in 2009. ...

[S]upermarket shelves will be as empty as electronics stores ....

Banking and investing as we've known it won't be back for at least decades. The upcoming round of bank failures, which will leave very few, if any, standing, cannot be prevented.

Umm, no.

The stock market bottomed in March 2009. What were they saying then?

On March 2 they wrote:

The US Government throws 30 billion more pearls before the swine at AIG.... [note: the US actually made a profit on its AIG investment, which was paid back in full]
The downturn is nowhere near over, or at a bottom, or anything like that. It will not be a straight line down, but the trendline is certain. Many pundits now claims that a Dow at 5000 is some sort of bottom, but don't count on it. As for home prices, they will keep tumbling and lose at least 80% of their peak values.

[note: house prices bottomed at the beginning of 2012, about 30% under peak values].

On March 4 they wrote:

Almost 700,000 Americans lost their jobs in February, which is 100,000 more than in January. The revised versions of those numbers will be between 10% and 20% higher. .... So I assumed that for the rest of 2009 pink slips will rise by 100,000 every month compared with the month before. That is, for the sake of scribblings I pretend that the economy will not deteriorate exponentially. I know that takes a lot of pretending, but since the results are bad enough even when I pretend, I'll stick with it.

The total number of jobs lost would be about 13.7 million on December 31.

Peak job losses were recorded at -824,000 in April. While January was revised higher, February wasn't. Job losses didn't increase 100,000 per month, let alone exponentially, on average they *decreased* 100,000 per month after that. So they were only off by about 10,000,000 jobs in their "conservative" estimate.

And on March 9, 2009, the exact day of the stock market bottom, they wrote:

Warren Buffet says that stocks are the best investment ... It won't be for all of the millions of investors who take his advice. Why would anyone listen to [Buffet], ... it's beyond me.

And the two author of the piece today and the Pied Piper of Doom, who is touting The Autormatic Earth ? Here's their financial insight, only two months after the stock market bottom, on May 12, 2009,:

Pied Piper of Doom: "Shifted to 75% Cash/Bonds Friday!"

The author of the piece about the commodity crash today: "The rally is done. .... If you are buying now you are simply giving your money away. Now is the time to go to cash. Maybe in a few months things might be different."

Of course, instead the stock indexes have more than doubled since then.

I'm a bit embarrassed that I used to read that shitty blog a couple years ago. Thankfully I eventually got enough sense to turn my back on doomery. What freaks me out is that people can't tell the difference between this doomy bullshit above and their own favourite doomy blogger, who also just a couple years ago was predicting a "massive repudiation of debt as a dishonest system comes apart at the seams" instead of, say, a 50% advance in the S&P 500.

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