In your opinion, what does this blog need more of?

Saturday, May 9, 2015

Saturday video - U2 in 1980


UPDATE AT THE TOP COS I NEVER MET A POLL I DIDN'T WANT TO SKEW:

I laugh today at the "cool kid" in school who got me into J&MC and the Smiths, because the day "Joshua Tree" came out he actually skipped school and stood in line from 6AM at the mall to buy it. Boy was he let down.

Because as it turns out, U2 started to suck after Unforgettable Fire. (Actually, they began to suck after War, but that wasn't an option in IKN's poll.)

Seriously: Remember "I Still Haven't Found What I'm Looking For"? Please just go listen to it to remind yourself. What a horrid slurry of pap. It's right up there with "In the Air Tonight" in the contest for World's Most Annoying Song. Really, you still haven't found what you're looking for, Bono? What is it you're looking for - credibility? Cos your wallet is right over there, collapsing into a singularity under the weight of all the cash you've made, you twat. Harden the fuck up.

And "With or Without You"? Really? What utterly annoying lyrics:
See the stone set in your eyes
See the thorn twist in your side
I'll wait for you

Sleight of hand and twist of fate
On a bed of nails she makes me wait
And I wait without you
What the hell does that crap even mean? It's nothing but slapped-together utterly meaningless "cool-sounding" phrases that rhyme. Again, it's just as empty and random as any particular song from Madonna's "Ray of Light" - except the title song of course whose lyrics she nicked from a late-60s hippie band. But the Republican soccer moms liked "With or Without You" for its easy melody and the sing-along chorus, and so it became yet another excuse to turn off top-40 radio every time it came on.

And ooh! "Exit"! A suicide song! Wow, how edgy! Because it's so fucking sad and lonely going on huge world tours and having everyone there eat up every last word of your bloody whining about the mass-murdering IRA oh and yes Apartheid too we can't forget that.

And don't get me started on production. Dan Lanois is the single most uncreative, obtuse and over-rated person to have ever come out of Hamilton, and believe you me he's got competition. Eno is always great, but nobody in mainstream media has ever praised him for the work he did with Slowdive just a year later so I don't see why they should be fawning over U2 just because they had hired him.

As the Negativland Mondo 2000 interview showed us, by this time U2 were already living in a corporate cocoon, completely cut off from all the goings-on in the outside world, surrounded by yes-men, smelling their own farts and proclaiming them superior to the oven-fresh scent of cinnamon buns, while their fascist legal team was out there crucifying anyone who offered an insult to The Brand.

U2 had previously been a half-decent band with some original musical ideas. They ran out of ideas after War, and that's also about the time they ran out of legitimate thoughts, and coincidentally the moment they became corporate. They then mooched off Brian Eno's ideas for another ten years, collecting awards along the way because corporate America loved them so damn much.

And all the way through the 90s they were bloody self-important. "Ooh look at us recording in East Berlin in 1990, we're so edgy! Let's rip off Primal Scream!" And that goddamn Zoo TV Tour? Seriously? "Ooh look at us we discovered 'multimedia', look at our utterly fucking boring stage set up!"

And goddamn Popmart?

Now here's my original post:



Here's U2 in 1980, playing "I Will Follow":



And yes, there's the bouffant hairdos and poofy shirts and the 80s white-ass honky style of dancing that I like to call "clenching the hamster", but you have to admit for 1980 these guys were good. Considering we were still in the early days of postpunk, and U2 had already moved on to new territory.

But, of course, as we can say about most bands that have been around too long, the world would have ultimately turned out better had they all been stranded forevermore on an Antarctic mountaintop after a plane crash around the time of the Negativland Incident.

Not killed in the crash of course, that's bad. Just, y'know, stranded, in the Antarctic, forced to make hard choices to survive, cast adrift on the cruel whim of fate, hunger variously driving each past the gossamer line dividing man and beast, until one day six months later a rescue expedition finds a strangely well-fed Larry Mullen as the last survivor and all he ever says afterwards is "I just don't want to talk about it."

Actually, that would be an awesome novel, wouldn't it?

One newsbit - NAIRU and black Americans


WSJ RTE - jobless rate for black Americans finally falls into single digits. Seriously:
The seasonally adjusted unemployment rate for black workers was 9.6% in April, the Labor Department said Friday. That was down from 10.1% in March and the lowest reading since June 2008, when it was 9.4%.

For whites, the unemployment rate was steady in April at 4.7%.
It seems funny, then, that the Fed would think the NAIRU is around 5%: that would essentially be a policy statement that they want blacks to continue suffering the equivalent of a deep recession. Forever.

Really? Hasn't the US done anything in the past 40 years to improve the employability of black people? Haven't there been any strides in education, health care, crime reduction, employment equity, and reducing racism?

Because the concept of NAIRU was first invented in 1975. Anyone who "calculates" a NAIRU number seriously must take into account the shifting structure of American society, and not just assume that today's economy grows out of the same societal structure that we had even 10 or 20 years ago.

The Krugginator has, in the past, made note of how so much US economic policy is deeply informed by racism (see, for example, The Conscience of a Liberal), so I'd love to see his take on this idea that raising rates at 5% unemployment is a policy decision aimed at keeping blacks in poverty. Then again, I'm pretty sure it's him who asserted recently that a 5.0% NAIRU is just a number randomly pulled out of someone's ass one day, and that the US saw extremely low unemployment in the noninflationary 90s.

Well, I guess til I see proof otherwise, I'll have to put my faith in Janet Yellen being a person who actually cares about the citizens of the US.

PS - Conflict Theory is a thing in sociology. So is there such a thing as "conflict economics"?Yeah, okay, there's Marxist economics, but sociology was already way the hell beyond Marx's sociology 100 years ago. It'd be interesting to graft conflict theory (and Foucault and post-colonialism and so on) into economics. Maybe I'll become a prof after all.


Friday, May 8, 2015

Bonds are overvalued, not stocks



WSJ RTE - bonds are overvalued, not stocks. Seriously, they are:
For example, in theory, the return on a 10-year bond should be roughly equal to the return on holding Treasury bills for 10 years, plus a bit extra, which is called the term premium.

The term premium compensates investors for the fact that bonds are much more volatile than T-bills, largely because investors may guess wrong on the path of short-term rates. For 10-year bonds it has averaged 1.6 percentage points since 1961, according to estimates by staff of the Federal Reserve Bank of New York.

With inflation low, the economy operating below capacity, and the Federal Reserve promising to tighten monetary policy ever so slowly, Treasury bills aren’t going to return much for a while. Yet even after taking that into account, bond yields are strangely low, because the term premium is close to zero. Indeed, until a a few weeks ago it was negative. In other words, investors were actually paying up to own bonds rather than Treasury bills, which is not the way the world is supposed to work.

No, it's not.

But the people investing in US bonds nowadays aren't calculating term premium to see whether it's a good deal. Because the people investing in US bonds don't calculate anything.

The people investing in US bonds are hedge fund cokeheads who buy whatever's going up. Maybe the less coked-up of them also feel they still have to hold to a 50-50 asset allocation despite bonds yielding less than T-bills.

What can explain the fact that investors are wary of the risk in owning stocks but so cavalier about bonds? It comes down to the threats that hang over the world economy.

Bullshit, WSJ, you clueless fucking morons. There are no fucking threats hanging over anything. The fucking US is still in the middle of a secular bull market, Japan is heading out of depression, China will still grow over 6%/y for the rest of the decade, and the EMS generally aren't cratering like we thought they would. Pull your heads out of your fucking asses, you neocon fascist Republican assholes, before you miss the next 5 years of a bull market.

Put simply, there's far too much capital out there, and not enough places for it to get invested unless OMG they put it into equities. Or chase yield in the EMs.

I mean, the rich could pay more taxes instead, and then governments could invest that money into anything with a 10-20 year payback - new highways, better education, development of human capital, preventative medicine. That would all yield productivity gains, it'd go towards building value.

But the fucking idiot Republicans out there who cry about how money isn't going to anything productive are also against putting money into anything productive. Because it helps minorities and is socialist.

So the asshat Republicans fail to fund highway repair and the highways fall apart, they cut education funding and otherwise-potentially-productive people end up in poverty for life, they hold sixty fucking votes to attempt to defund ACA.

So now you've got too much money, you rich asshats, and nowhere to find yield. And your country is developing an ever larger productivity shortfall. And because you're idiots, you have just bid US bonds up to insanity.

Capitalism has no "invisible hand": it has an invisible fucking brain tumour.


The $VIX chart shows how stupid Americans are


The $VIX is more or less an index of the premium paid for downside puts:


What this chart is telling you is that Wall Street Whitey spent all this week getting more and more fearful of today's Jobs number, and felt compelled to buy more and more downside puts, bidding them up higher and higher - until the open this morning when suddenly he realized the world hadn't ended.

Goddammit, hedge fund people are idiots.


April Employment Report: 223,000 jobs


Calculated Risk - April employment report.

Shouldn't shake the world at all, since rising employment is something you're supposed to see in a growing economy.


Friday videos: Charli XCX's "Superlove"


Great fun pop to kick off the summer season, and this one also has dancing Japanese robots and Charli XCX in various ultratight minidresses:





Thursday, May 7, 2015

A few more things to read


Stuff and junk and stuff:

Bespoke - NFP predictions on twitter. They're all hilariously low, and that's probably because twitter is full of right-wing idiots who have no faith in America.

Calculated Risk - US demographics are now improving. The largest cohort is now the 20-24s, and that is the cohort that you want to be driving homebuying and consumer spending. So tell me again how a crash is imminent.

FT Alphaville - the great turning point in bond markets, maybe. Yeah sure because all that capital has somewhere else to go. Keep selling, Whitey, your clients will always love you.

FT beyond brics - Austria ruling means Ukrainian corruption will continue. And of course we'll blame the Ukrainians for being ruled by criminals, and not blame Austria for being in bed with the criminals.

Bloomberg - flood of China IPOs. The big flood of new paper will take a while for the Chinese market to chew through, so the suggestion is that the upmove will be over for a while. Well, would you rather these companies raise $376B over the next week via the equity markets, or via shadow banking? See, that's why it's nice to have a strong equity market.

Mining.com - global silver output running low. Quote:
After over ten years of gains, global silver production is expected to drop this year, as new supply from projects won’t be sufficient to replace production losses from aging operations, a study released Wednesday shows.

According to the World Silver Survey 2015, published by The Silver Institute and Thomson Reuters GFMS, global silver output went up by 5% in 2014 to reach 877.5 million ounces, the 12th successive gain and a new record. This year, however mine supply is set to decrease.

“We’re just not seeing the investment in new mine capacity that would be needed to sustain continued record peak production,” Andrew Leyland, an analyst with GFMS who worked on the report, told The Street.
OK, good luck with that whole supply-demand thing.

IKN - this is what happens when you refuse to put on that dress. IKN says the uproar over Giustra's Clinton connections is karmic vengeance for his refusal to wear a dress in public. To which I have to reply: imagine the uproar in the NYT if he had worn that dress?


Wednesday, May 6, 2015

A few more newsbits


New Deal Demoncrat - unit labour costs increase by 1% in Q1. Quote:
This is another sign that wages are finally participating in the expansion.
W...w...wait! BI just finished saying that increasing labour costs was a sign that DOOOOOM!!!

Nice chart by the way, NDD:


It shows that unit labour costs measurements vary insanely from Q to Q. Therefore, anyone freaking out over OMG a 1% print is a moron and should be ignored from now on.


New Deal Demoncrat - what ails rail? Apparently the problem was coal, due to the pop in USD. Thanks NDD, that's the first explanation I got from anyone. So we don't have to worry about a continued downtrend in rail loads anymore, now that the USD is done moving.


Econospeak - Okun's law turns out to be a big fat lie. There is no tradeoff between equality and efficiency, despite what chapter two of my Mankiw textbook says. The PPF says utterly nothing about the distribution of goods, as Rosser says.

And this was a golden comment too:
Why would you even want to think about growth and inequality divorced from the character of production and the structure of the economy? To do so has more the character of a philosophical musing than an empirical inquiry.
Which also bites hard given Mankiw's textbook asserts that something like Okun's "law" is a "positive" and not "normative" statement. Fact is, nearly everything that comes out of an economist's mouth is normative.

And yeah I passed this link on to my prof.


ALBERTA ELECTION RESULTS: now what did I say?


Dammit how's about that, eh?

CTV - NDP wins majority, ending 44 years of conservative rule.

Now, didn't I say something a few months ago about how the collapse in the price of oil was going to mean the end of Harper's career? Yes, I did. I said the Conservative era was over.

In the 2008 provincial election, the NDP won only 8% of the vote. The PCs got 53%, Wildrose (who were just old men yelling at clouds back then) 7%.

In 2012, the NDP still only got 10% of the vote. PCs 44%, Wildrose 34%.

This time round, the NDP won 40% of the popular vote. PC 28%, Wildrose 24%.

Why the big 30% switch?

The NDP, meanwhile, committed to tax hikes on the top 10 per cent of income earners, and corporations, in order to raise more money for health care and education. The party has also said it would re-examine fossil fuel royalties.

This is frickin' Alberta, the Texas of the north! People voted for higher taxes?

Maybe they realized that the oil patch has all dried up, and they'd rather make the rich start paying their fair share instead of balancing a budget by closing all the schools and hospitals?

Meanwhile, Justin you spineless little centrist bourgeois brat, the Alberta Liberals got slaughtered down to one seat.

Why is this result so important to Harper?

Because if you look at the Federal electoral map of Canada today, you see a lot of blue in rural Ontario, and then pretty darn well total solid blue from Manitoba to BC.

Now, for those of you who've forgotten the old days, Saskatchewan and Manitoba used to elect a fair number of NDPers. BC too, in the 80s. The Reform Party took a lot of those farmer-peasant votes and turned them into rural-hicks-scared-of-coloureds-and-homogays votes, and then brought them along when they took over the dried-out husk of the Conservative party.

If those Man-Sask-BC conservative votes are now back up for grabs, then hoo boy you're going to get one hell of a shock come October.

And, my theory was, they indeed are up for grabs, because of the end of the resource boom. Everyone votes conservative when they're raking in easy money from oil/potash/uranium - it's just like when you're born a billionaire, you're automatically right wing. But once times are tough and you actually have to start doing something for a living? Well then you suddenly turn pro-labour, don't you?

Nobody wants government to protect other people. Fuck, Conservative MPs don't even think the government is there to serve any Canadian who didn't vote Conservative!

But once the money dries up and you feel exposed, suddenly you want government to protect you. And so you vote for the party that hasn't been telling the people in your position before to go fuck themselves.

The NDP right now has over 100 seats. I have no clue if they've been grossly embarrassing themselves in Quebec; but if not, they have a chance this fall to keep those seats and gain another 20-40 out west in 2015.

Justin the spineless little centrist bourgeois brat has mid-30s. He's not going to win over 120 new seats anywhere. He might be able to pick up 10-20 in Ontario and out east.

Sorry Justin, but your only chance at power for the next ten years will be to support a minority NDP government.

Because the times, they are a-changing.

The conservative era of stupidity and resentment is over, and this election was the writing on the wall.

Maybe if you had the guts of your dad, Justin, but you don't.


Tuesday, May 5, 2015

A few other newsbits


A little more news:

Bespoke - ten-year yields spiking globally. I guess that's what you do when you're a hedge fund clown who expects OMG a 0.25% rise in the US rate sometime in the next year, right? But where the hell are they putting all this money that they're taking out of the bond market, I wonder? It's going to have to go somewhere, isn't it? I mean, if they want to earn a positive return?

Paul Krugman - John Taylor is a clown. The many failures of the Taylor rule that John Taylor refuses to admit to.

New Deal Demoncrat - about China data. NDD just rolls his eyes at what passes for China doompr0n now:
This morning NC's linkfest led me to an article about how Chinese shipping data shows were all DOOOMED.   That in turn led me to the HSBC Chinese factory PMI, which the latest clickbait at Business Insider telling me is in contraction, and at a one year low.  OMG!!!

Except when I go find a longer term graph of the HCBC Chinese PMI, here's what it shows:


Apparently Chinese manufacturing has been in a state of contraction, with respites of mediocre expansion, ever since 2011!  Pretty amazing for the secularly fastest-growing economy on the planet.
I'd take that as a reason to block Business Insider on your router to make sure you never read its childish garbage ever again, but whatever.

Perth Mint - positive and negative factors for gold outlook. Basically they don't know. Well, at least they mention China and India, that's nice of them.

Krugman - paranoia strikes derp. Texans are again worried that Obama is planning an invasion. No really. Of Texas. Fucking clowns.

How you know the selling's not about anything to do with the US


Here's how you know the selling's not about anything to do with the US:

Cos they're also puking Japan, China, Germany, and any other market represented by a US-listed ETF.

White-ass honky hedgies be moving to cash again.

Hey, whatever happened to Keek?


Hey, whatever happened to Keek, Sheldon Inwentash's new favourite stock?


Wow! Don't twitter and facebook exist anymore, Sheldon? Cuz this stock was supposed to be so awesome because twitter and fecebook exist!

And was it really such a clever plan of his to corner KEK with $5M in secured notes due this coming October? Because the company's only got a $3M market cap now. You'd have been able to buy them outright with your smokes money by summer.

And there was that $18M financing in Jan 2013, and that $7M financing in Sep 2012, which Pinetree participated in to some extent, not gonna bother looking up how much because all that tells you is whose money's been flushed down the toilet.

The truth of the matter is that all money is fungible, all life is absurd, and death awaits us all.

But good goddamn you've gotta shake your head at those idiots who bought this drain-circling turd of a stock back in March at $2 on the strength of a trading halt (good goddamn, a trading halt?) for a press release reminding people yet again that fecesbook still exists.


Some news and opinion


US looks like it wants to keep selling... the argument this time is apparently "sell in May go away". Or maybe people are still scared of imminent wage inflation, as if we've seen any of that at all since Reagan declared war on the workers 30 years ago.

So I guess we're in a holding pattern, still.

Gold btw broke down ex-US a while ago, but since the gold miners are still in a slow uptrend I'm not concerned very much. The PMs really do look like they're bouncing along the bottom here, and as long as Indian jewellers stock up on gold again this summer everything should still pick up in a month. My only concern is that the gold miners will have done their advance ahead of the metals.

Anyway, I've been ignoring Bill Bishop's blog for too long, so here's a couple China stories:


Bloomberg - China finds cure for debt hangover in $4T stock boom. Yes, that's right - the pop in Chinese shares has so far added over $4 trillion dollars to China's market cap. And if this does result in $160 billion in capital raising this year according to UBS, at least that's dilution of equity and not accumulation of debt. And as for China being "overvalued"? Well, firstly, where else are Chinese supposed to invest to get a return? And secondly, wasn't it undervalued before, considering that even 6%/yr growth means a doubling of GDP in 12 years?

Matthews Asia - yeah, about those "ghost" cities. That "ghost city" story has turned out to be a gigantic joke - they're becoming fully occupied. Seems it's Whitey who is stupid, not the Chinese government.

Sunday, May 3, 2015

NDD's weekly indicators


New Deal Demoncrat - weekly indicators. You can either believe some clown with a blog post who says the market is rolling over, or you can believe someone who says the economic indicators support no such blather.

So why do some people think the market is "rolling over"? Here's why:

Coincident indicators were mixed, but primarily negative. There were three positives: Tax withholding, container shipping, and for the third week in a row, Gallup consumer spending. Steel production was again "less awful" this week. Rail was again mixed, but after turing positive one week ago, returned to a negative reading this week. The Baltic Dry Index turned slightly negative. The TED spread and LIBOR turned more negative. Johnson Redbook consumer spending rebounded weakly from its least positive week in a year.

This week continued the dominant theme of the last several months: poor coincident indicators with generally positive long and short leading indicators. There is a shallow industrial recession due to the strong dollar and oil patch weakness, but a resilient consumer economy.

Because they're being fooled by the coincident readings. Actually, they're being fooled by a desire to concentrate on the negative coincident indicators, while ignoring tax withholding and consumer spending.