Saturday, March 28, 2015

Friday, March 27, 2015

Some evening news

Simon Wren-Lewis - defending the public from policy entrepreneurs. Why call them "policy entrepreneurs" when you should be calling them plutocratic disinformation agents? As Krugman notes, sometimes you've got to call a scumbag a scumbag.

FT Alphaville - Dette er nødder. Hvornår er styrtet? Apparently, there's a housing bubble forming in Denmark because of the crazy-low interest rates in the EU. Except it's not because of the crazy-low interest rates: it's because the Euro centre doesn't want to undergo internal up-valuation to balance money flows, instead using the devaluation at the periphery to fund its own fiscal austerity, and thus forming massive real estate bubbles.

Don't worry, Germany! Soon you'll get your own real estate bubble! I hope it fucks you all in the asses.

Radio Free Europe - here's where all Zerohedge's content comes from. Another story on Russia's troll army, a KGB-funded disinformation group who post the Russian propaganda you read on Zerohedge, Fox News, Infowars, Prison Planet, Yahoo and Facebook, as well as all the Russian websites.

Speaking of which, here's a video on the subject:

Funny thing is, the Republican echo chamber is full of these Russian agents.

But I guess Republicans are too fucking stupid to protect themselves from being used as puppets of a foreign fascist state.

Attention, I gets it

To wit:

Fun fact: 90% of the stuff I post is only a vain attempt to get a reaction from people.

In which I take pity on IKN and explain to him what he should and shouldn't do when surfing the intarwebz

IKN - in which IKN takes pity on Kitco and explains to them what they should and shouldn't do when taking a customer survey. Sigh:
Dear people at Kitco, here's some advice on how to bring your website philosophy kicking and screaming into the 21st century. Let's get the DON'T items out the way first:

1) Do NOT force a pop-up on visitors

OMG really? You're seeing popups, Mickey? OMG. WTF LOL BRB (YKINOK) (IANALNDIPOOTV). Are you still living in 2002? No wonder you like Radiohead!

Here's how to join me in the wonderful world of 2015:

1. Remove Java runtime from your computer. It's a massive security hole and you don't need it unless you're running a program where you know you need it, like Steam apparently. Popups + Java runtime = your computer has already been made someone's bitch.

2. Firefox. Install it. It allows plugins, is open source, and is not owned by an evil empire.

3. Adblock Plus. Install it for Firefox. It blocks all ads.

4. Ghostery. Install it for Firefox. It blocks tracking services, like google-analytics, whose reason for existence is to serve you ads.

5. Noscript. Install it for Firefox. It will block all scripts on all webpages unless you explicitly allow them. This will be a bit of a pain in the ass for the first few weeks (e.g. you don't know that you need to allow and a cloudfront site in order for Flickr to work), but eventually you learn which scripts to allow. But noscript will block popups because a popup starts with a script.

There. Now you have computer security.

Computer security by definition includes never seeing a popup, because computer security means your computer is never doing a thing you didn't ask it to do, and a popup means someone is making your computer do a thing you didn't ask it to do.

In conclusion, here's a picture of Mila Kunis and a kitten:

Nuff said?

Some Friday news, mostly China

Here's some news, mostly via Sinocism, which parenthetically is the only news source you should follow for China:

Brett Steenbarger - courage is the key to trading success. Basically, you make more money buying when $VIX is high and can't make a cent buying when $VIX is low. Um, in case you didn't know that.

NY Times - China's opinion of Lee Kuan Yew. Seems like a good background piece on Chinese leadership. For example:
Mr. Lee and his government came to offer successive Chinese leaders an idealized example, much visited and studied, of how the Communist Party could absorb market changes and exposure to the outside world without succumbing to public discontent and rampant corruption.

“What they’re looking for is ideological reassurance that they’re not falling into what we call the ‘modernization trap,’ that by advancing economically they’re not necessarily creating the basis of their own collapse,” Professor Thompson, who is the director of the Southeast Asia Research Center at the City University of Hong Kong, said in a telephone interview. The Singapore experience came to mean even more to Chinese admirers as other authoritarian Asian governments gave way to electoral democracy and fractious party competition.

“As political change occurred in South Korea and Taiwan,” Professor Thompson said, “increasingly it became only Singapore that combined for the Chinese leadership a very interesting model of effective economic governance, rapid growth, of state involvement with meritocratic rule, on the one hand, and, on the other hand, strict limits on political participation and democracy.”
Because Chinese leadership isn't stupid.

Qz, the middle Persian word for a joke which destroys the flow of a comedy programme - the Chinese slowdown is here for real this time. Er mah gerd! Chinese growth slowed to 6.8%? Sell! Sell!

FT Alphaville - on Chinese market exceptionalism. The basic idea is that the Chinese A-shares market is in a disastrous bubble waiting to burst. Oh, and that the Chinese political leadership are incompetent fools, which is a bit presumptuous of Keohane. I mean, it's not as if he's successfully leading a country of 1.3 billion people.

My own perspective on biotech

Here's a chart of IBB:

Why was it news this week?

I see 3 previous times in the past 6 months where biotech dropped to its SMA(50), and once in October (during the Ebola epidemic) where it dropped below.

So why the fuck does anyone care what IBB did this week?

Is it because it was insanely overbought last Friday and people thought it would go up even faster than it has done over the past few years?

The biotech chart is a non-story and anyone who talked about it this week as if it was news is a fucking clown who you can ignore from now on.

Wake me when it pukes to the SMA(200). That's about 15-20% below today's price. Til then shut up about biotech.

Crackberry, Royal Bank, ha ha Verdmont, and so on

I decided to be like any other ignorant blogger who thinks he has a clue, and I bought some Blackberry yesterday on its morning drop. Nothing major, just $5K worth.

I didn't even know they would be reporting after the close. What a dummy! What a maroon!

At this second they're up 5% from yesterday's close.

It's a grossly volatile stock intraday, and heck for all I know the past 2 weeks' price collapse had nothing to do with humungous shorting heading into earnings, but I think I'll hold on to see how far it might go back up today.

The only real reason I ever buy it is because a few months ago I saw some old guy with a smigden of business sense (unlike most talking heads today) somewhere like CNBC saying he thinks this young Chen fellow is turning the company around.

Who knows, maybe I'll sell my and plow my money into Royal Bank again. About time for me to mock Verdmont some more.

Oh, speaking of which, my own bank just sent me a folder explaining all the places they're going to be jacking up costs for account holders again. And Royal Bank upped their interac charge for cross-bank ATM withdrawals to $3.

Again, Verdmont, the Canadian banks don't care about the tar sands. They make all their money fucking over Canadian peasants, just as they have done for decades.

Friday videos: The Residents' "Whatever Happened to Vileness Fats?"

Here's an entire Residents album with the original video:

Thursday, March 26, 2015

The difference with high-yield this time


The difference this time is that today HYG isn't under existential threat from the miniscule percentage of its holdings that are associated with the oil patch, since oil has been going up these past few days.


Union Pacific, whitey? SERIOUSLY?


The last time the world's greatest ever railway* was trading this low, Ebola was threatening to kill all Americans by making them poop out their own liquefied and bloody intestines to teh deaths omg buy gold.


It got better.

* - by which I mean that if you just bought UNP in 2000, and then went away for 15 years and lived your life, you'd have made a 1200% gain plus dividends. In fact, the dividends alone are today yielding 25% on UNP's Y2K purchase price. You fucking tool. God, you're such a fucking tool. How can you be such a fucking tool?

But if you want my opinion on gold

Well, this is interesting:

I was worried because the SMA(50) for gold ex-US is about to drop off and it was still hugging the line.

But as it turns out, it seems to want to pop upwards now.

After a 50% retrace, that's pretty good.

So if you want to try the strategy of owning shitty miners in April, that's fine by me.

Market comment

OK, so yesterday morning I sold my HSU, and then the market went lower.

But this morning I bought back half at 4-5% less. I figure the market should be at a higher price someday, and me earning an extra 4-5% over a SPY buy-and-hold strategy is good.

As well, NSC is -3SD and $TRAN is <-2SD, so this is a bit of a silly selloff.

And the economic surprise index is low and we already know there was bad data in February.

And we already had four selloffs to S&P=2000 in the last 3 months. So there's fresh money in at that point.

And this selling this week might just be end-quarter rebalancing. Plus some fear of the biotech selloff, which is silly, plus some repositioning now that Whitey's scared he might be on the wrong side of the US dollar trade.

I still have cash, so I can always double down to fill my S&P long if things go 3-4% lower. Also, because VIX futures are still strongly contangoed, I even have the option of waiting and then buying a short VIX ETF later in a selloff if $VIX goes significantly higher.

I see SPY just had a 9:50AM reversal. Good, go lower and I'll buy more.

I'm agnostic on gold.

But yeah sure I still own some Dalradian.

BREAKING NEWS: Jeremy Clarkson fired from Top Gear

BBC - we fired Jeremy Clarkson because WHAT THE FUCK WERE WE THINKING. Clarkson loses his job because he punched Oisin Tymon in the face for giving him a sandwich and salad after a hard day of filming.

I would have punched Oisin Tymon in the face just for looking like Oisin Tymon, personally:

Even better, he's supposedly "Irish" yet he whinges cos someone gave him a split lip.

Notably, May and Hammond's contracts are up, and they've already made it apparent they're not coming back to Top Gear if Clarkson isn't there. Probably because they realize he's the funny one (well, May is alright too).

So, BBC, good luck next year with The Oisin Tymon Show. Let's hope it makes you £40 million a year, because that's what you've just given up by killing off Top Gear. And I'm sorry but replacing Clarkson, May and Hammond with Malcolm Hebden, Johnny Vegas and Russell Brand is not a winning strategy.

Though actually Hebden and Vegas would be funny together. But for fuck's sake not Russell Brand.

As for Clarkson, he gets a free lifetime pass for punching Piers Morgan. He can sacrifice children to Satan while clubbing baby seals with the skulls of koala bears in the Islamic State of Iraq and the Levant for all I care.

As for BBC Canada, I guess they can fill the space left by Top Gear by airing yet more fucking Holmes on Homes. Great BBC programming there, BBC Canada. Yet another reason your shitty channel will be going off-air next year when the CRTC's pick-and-pay is brought in, along with all the other shitty extended cable channels that just show the same fucking 5 hours of programming on loop all day and night, which nobody wants to watch, which only existed so that you could nick a larger share of my cable bill. Twats.

Wednesday, March 25, 2015

midweek video stravaganza - Henry Cow

Some wanker with a Radiohead fetish brought up Renaldo and the Loaf in a conversation with me today, so here's a song by Henry Cow, who are significantly better than Radiohead:

Some noontime noos

Here's some news from IKN's favourite evarrr blog:

Bespoke - big fat 0 for CPI. Shit or get off the pot, guys: either core is important or it's not.

Medium - shut up about bubbles in the bond market, you know-nothing white-ass honky crackers. Here is the central quote that each of you should burn onto your forearm with a soldering iron:
But does holding bonds entail accepting large long- and fat-tailed risks? Only if you must sell your bonds in the future. If you have the option to hold them to maturity, your risks are bounded and very small. What you are complaining about is not risk, but rather lousy expected return. And even if you cannot hold them to maturity, the fact that others can hold them to maturity provides a pool of demand that limits how far bond prices can crash.
To sum: a bond guarantees your capital and pays you a coupon. It is not an equity.

Brad Delong - the assumptions behind the Fed's 2% inflation target are erroneous. Very good point - always check under the hood to see why anything is the way it is. Um, Brad... should you perhaps email your post to Janet Yellen? Y'know, in case she's a dumbass who doesn't know anything about inflation targets?

Bonddad - has the EU finally turned the corner? If so, dude, I'm sure the Germans will find a way to fuck it up for everyone else. Oh and quote:
Although recent news releases point to better growth in the year ahead, we still only have a few months of positive data, which isn’t enough on which to base a long-term projection. But, there has been sufficient positive news to state that a real turnaround may be in the works.
Or, Hale, whatever small turnaround happened was due to the USD-EUR move, which is probably over by now. Remember, there's never been an EU stock worth owning over the past twenty years save Nokia for a while.

FT Alphaville - this is nuts, Chinese equities edition. If you're saying it's nuts, Keohane, then it's not a bubble. Quote:
The reality is that there’s simply quite a bit of money in China and a limited number of places for it to go. Particularly with the property market suffering. In fact, while the stock surge is a product of a very mechanic process, there is an argument that the Chinese government potentially sees (saw?) the stock market as a way to replace the wealth being lost in the property market.
Or, it sees capital invested in business equity as being much more economically productive than capital invested in real estate. Did you think of that? Meanwhile, have you checked China's equity P/Es to see if they're really "nuts"?

IKN - Iwnattos is the most amazing person ever, PS buy Dalradian. Quote:
After following the dude's blog for many moons I can say that some of his stuff I agree with, some leaves me agnostic, other times I think he's spouting pure crap and gets me wondering what he'd been smoking just before hitting send. But he never fails to get me thinking, which is the number one thing I want from any regular reading material. His viewpoint of the market isn't just different from mine, it's different from just about anyone I've come across and that's the reason above all others that he's nothing short of must-read material in my working life. You can read all the bias-confirming cookie-cutter market prose and commentary that you want, I'll go with the original brainwork every time no matter if I agree with the specific daily content on show or not.
Since when am I ever full of crap? You're full of crap, Mickey.

Polemic's Pains - yet another goddamn stream of consciousness. Haven't managed to make it through yet, but maybe it's vaguely useful to someone.

Another little 3-5% dip imminent?

Transports looked like crap for two days, but finally this morning the QQQ decides to join in on the towel-throwing:

And $VIX is finally popping:

$VIX under 13 seemed dumb to me, but then again, things can always get dumberer.

Anyway, funny nuff, you can't make a cent shorting $VIX with ETFs right now because the front interval apparently has a 10% contango. A fine example of the market screwing the most people.

Speaking of the market being the biggest bitch it can at the most inopportune times, it'll be fun to watch this:

Fun to watch because all QQQ investors got washed out in the early-March correction and have just made it back to where they were. So QQQ should have good support, since it's the second time through that price interval.

Meanwhile, Wall Street Whitey's been thinking he's so damn clever by overweighting R2K these past couple weeks because blah blah US dollar; now that the US dollar chart is reversing, the "market will be the biggest bitch" law suggests that whitey's IWM position is gonna enjoy some intense bum-love for the next few days.

Dalradian cup & handle targeting some much higher number

Dalradian chart:

If the handle doesn't break down, that pattern targets something like $1.60-$2.00.

Tuesday, March 24, 2015

Conflicting signals in the market

This is annoying:

High yield is still going up. So there's no fear.

But transports are really sucking, so by Dow theory the US is eminently sellable.

And $VIX is already awfully low.

But yet RSIs for QQQ, IWM and SPY are still all reasonable.

So I have no idea what's going to happen next, but my antennae are twitching.

RICK RULE ADMITS HIS URANIUM CALL SUCKED - my uranium call sucked is postponed. If you're so smart, Rick, my didn't you see the collapse in LNG that forestalls an improvement in your anium demand?

Sounds like yet another call where you skated to where the puck was instead of where it's going to be.

Y'ain't no Gretzky, Rick. At best you're an Alexandre Daigle.

As for the rest of his chat:

With regards to a gradual lessening of faith in the dollar, I believe it would not be event-related but arithmetic-related. There are trillions in sovereign bonds worldwide that trade at negative real yields. For instance $1.7 trillion of European debt maturing in more than a year paying a negative yield.2 There are also many US bonds trading for a negative yield, after you adjust for inflation. You lose money, guaranteed, by investing in these bonds. This is important for gold investors.

First of all, your cost of holding gold is the lost yield from not owning bonds. When you could make 5.5% or 6% in bonds in a supposedly riskless fashion that was the cost of owning gold. But that cost is now gone. Your holding costs for owning gold are nil.

Yet - despite the negative real rates environment that Summers, Krugman and Piketty have identified as a secular condition - whitey still says, every day, that there's an "opportunity cost" to holding gold.

I think the rates/opportunity cost argument is bullshit, of course, because nobody in the real world holds physical gold instead of USTs. But it's still hewed to by the lamestream media because they were taught it by some old dude who last traded gold during Nixon, or maybe Carter. Here are some of Whitey's conceptual errors:

1. The futures market doesn't hold physical gold. They hold contracts that over time have to net back to 0.
2. The GLD ETF doesn't really have an opportunity cost: carrying cost of GLD is nonzero but tiny.
3. Central banks can't dump gold holdings for USTs because it breaks their risk rules.
4. Indian peasants won't dump gold for USTs because what the fuck about the word "peasant" don't you understand, cracker?
5. Indian temples won't dump their gold for USTs because USTs are not the physical incarnation of the goddess Lakshmi.

But sure, you can still talk about the "rates/gold" narrative because although it's wrong and stupid, people still believe it.


I have felt extremely frustrated by the lack of issuer capitulation.

By that, I mean that Sprott’s ability to invest money on behalf of investors in projects that are suitable has been constrained. The mining industry wails and moans about the lack of capital and their inability to go forward. Those same people in the mining industry aren’t willing to offer equity or debt at market-clearing prices.

The last time we saw capitulation was in the summer of 2000. That was concurrent with issuer capitulation. The very best issuers decided that they had to raise capital at almost any terms that they could. The attractiveness of the returns they could get from deploying capital at a market bottom overcame the near-term pain that they suffered to their egos for issuing at prices below previous issuance prices.

In the issuer market today, you see these really luminary financiers, like Robert Friedland, willing to issue full warrants in order to attract capital. Financiers and promoters with, let’s say, less established reputations than Mr. Friedland’s, aren’t willing to do that.

Here we get to Rule's "capitulation" argument.

In reality, he's not looking for "market capitulation", which has been happening for the past two years anyway: and in any case, look at the 2000-2003 Nasdaq chart for an example of complete capitulation over time instead of over price. There was no final puke in the QQQ, nor in most of its stocks - rather, there was a marginal lower low in the survivors, with an eventual collapse in volume (so if you wanted to load up on an appreciable quantity of Nasdaq stocks at the "bottom", you had to do it on the downmove because the upmove started with miniscule volume).

V-bottom capitulative pukefests don't happen in bubble pops: they happen in panic crises.

But it doesn't matter anyway cos what Rule really wanted to see was "issuer capitulation". And he didn't see it cos nobody's offered him full warrants, good for them.

But issuer capitulation should also have involved 500 stocks leaving the V for the NEX (which Canadians can still trade through discount brokerage accounts), and nobody's seen that happen either.

Boo hoo, Rick. No free lunch for you. You're going to have to work for your money, bitch.

In all seriousness, I can imagine him having held some capital back in the hope of a final capitulation. I'd want to.

But if he did hold some back, so did a lot of other people. Listening to Cookie, it seems there are more financiers left than there are viable gold projects.

So I'm suspecting that the odds of Rick being left on the dock as the boat leaves him behind might be significantly nonzero.

Which I guess he doesn't mind: if he feels certain he's missed the bottom he's still got a long time to pile in after the rest of the market has made the first 20%.

But him and everyone else, acting together, are a market that determines how the gold miners stocks will behave. Remember that.

Monday, March 23, 2015

GOLD, NEXT STOP $1000: said every idiot white-ass honky cracker ever

OMG look at the shocking collapse in the price of gold this month oh wait

Looks like all the white-ass honky crackers who thought they were being so clever being short gold contracts approaching a Fed have been cockpunched quite well.

WHAT WILL YOU EAT AFTER THE APOCALYPSE? It's more likely than you think!

Nautilus - what will you eat after the apocalypse? Someone actually sat down and calculated the number of chainsaws in the world, their duty cycle, and how many would be needed to cut down all the world's forests to make wood pulp for growing mushrooms. Now that is engineering!

It's looking more like the end of the USD bull run

US dollar:

It's looking more like the end of that bull run.

Maybe UUP drops to $25?

Then again, maybe the blowoff to the upside now has to be replied to with a sharp hit to the downside.

It'll be interesting to see what Wall Street Whitey decides to do with gold in this situation, eh?

Sunday, March 22, 2015

NDD's weekly indicators

New Deal Demoncrat - weekly indicators. No, the US economy is not rolling over, but he warns us to expect a terrible GDP print come April.

In fact, he thinks Tuesday's Feb CPI release will show deflation - which you'd think the market would take as a positive, since they might still remember Yellen's chat from last week, rabbit-brained clowns that they are.