Friday, May 22, 2015
Friday videos: when we invest in junior miners we do it right, gettin' slizzer'd, sippin' sizzurp in my ride like 3-6
Because apparently, that 808 bump make you put cho hands up:
And apparently there's no such jet as a G6. What happened was, they found out there was a Gulfstream G4 that was "fly", and so they figured a G6 would be 50% more fly.
Which, y'know, is sorta logical in its own way. And in any case, as noted in the song, ladies do like his style, at his table gettin' wild, so that gives him the right to take artistic license.
Off to work, here's stuff:
BI - Rosie says this is the sweet spot for stock returns. Quote:
In periods when real GDP growth is running between 2% and 3% at the same time that core inflation is between 1% and 2%, the average annual advance in the S&P 500 is 14.4%.Checkmate, doomtards. Now buy SPY and quit your panty piddling.
Note that if growth were to move up a notice to a 3% to 4% range while maintaining core inflation between 1% and 2%, that average annual stock price gain rises to 22.6%.
Fore the bears, the only periods when the stock market enters negative price territory — and this is true under any inflation scenario — is when real GDP growth is 1% YoY or lower (thankfully we are just under 3% right now).
At no time, under any inflation segment, did the stock market fail to rise with real growth minimally at 2%. That is reassuring.
Krugman - conservatives and Keynes. Quote:
We’ve noted that after World War II there was a concerted, disgraceful effort by conservatives and business interests to prevent the teaching of Keynesian economics in the universities, an effort that succeeded in killing the first real Keynesian textbook. Samuelson, luckily, managed to get past that barrier — and many were the complaints. ...You already know what it is, Kruggers: conservatives want to destroy the social safety net and enslave the poors. The way you do that is by using a non-Keynesian pro-cyclical strategy with the business cycle to ratchet down benefits year after year. Reagan's crew explicitly said this 35 years ago.
What’s it all about, then? The best stories seem to involve ulterior political motives. Keynesian economics, if true, would mean that governments don’t have to be deeply concerned about business confidence, and don’t have to respond to recessions by slashing social programs. Therefore it must not be true, and must be opposed. ...
If you think I’m being too flip, too conspiracy-minded, or both, OK — but what’s your explanation? For conservative hostility to Keynes is not an intellectual fad of the moment. It has absolutely consistent for generations, and is clearly very deep-seated.
Bron Suchecki - Indian gold monetization scheme doesn't make sense. Well, he works at the Perth Mint so I guess he'd know:
Another issue is that “there is no guarantee that tax sleuths will not come calling hot on deposit, asking for the source” of funds that purchased the gold, as First Post notes. In addition, they note that the need to melt the jewellery “is abshagun, inauspicious and a strict no-no”.Then he goes into a lot of detail about how the system won't actually mean a drop in gold imports at all - unless, of course, the banks go naked short gold in rupees, which would be scary but it's not as if I'd put that past India. Bron, Rajan is an economist: I think he knows how lending works. So he must want the banks to go naked short gold in rupees, there's no other explanation.
The melting issue comes up a lot in the comments to the draft, but one helpful suggestion to “change the draft to deposit jewellery and get monthly interest on it” seems to miss the point of the whole scheme, which is for the gold to be used by jewellers. It also shows the difficultly in marketing this idea when people can’t see why it makes no commercial sense for a bank to pay interest on stored jewellery which it cannot use.
It is also a bit of a concern that the Government’s draft says that “banks may sell the gold to generate foreign currency. The foreign currency thus generated can then be used for onward lending to exporters / importers” which is basically saying the bank will go naked short gold (and no, they couldn’t hedge it as the cost of the hedge would eliminate the profit on lending cash – hence why the call for subsidies).
Thursday, May 21, 2015
I just got a letter notifying me that the Aurcana class action suit has been settled.
So now I have to check my files to see if I owned shares and/or warrants between 24 June 2011 and 19 December 2013. If so, maybe i get money or something?
OK, so $2.6M after costs, distributed across >500M shares and warrants, equals...
Gold got slammed this morning, probably for no reason. It doesn't seem to have been the result of a US dollar move. We'll see if it can break down below $1200 again.
Anyway, here's the news:
BI - Myles Udland was dead wrong about the Fed. Yes, Myles, you were dead wrong with your June interest rate rise prediction. Might you have been wrong, Myles, because the people who run the Fed are professional economists with an advanced education in economics, while you have a BA in English from U.Conn? Perhaps, Myles, you should shut the hell up and limit yourself from now on to reporting what the smart people are saying, instead of offering your own worthless opinions?
WSJ RTE - Fed's Evans says natural jobless rate may be below 5%. BTW, is our favourite TA still making fun of "Fed jawboning"? Because he could learn a lot from these people at the Fed if he actually paid attention, instead of sitting there feeling superior in his ignorance.
New Deal Demoncrat - the most important positive data of the year. Housing permits and housing starts both reached post-recession record highs in April, he says. Investment spending (housing, corp capex) has grossly underperformed ever since the crash, so it'd be nice to see a turnaround, but I'm not holding my breath.
WSJ RTE - The Portuguese are the next to tell the IMF to go fuck themselves. It seems everyone is finally realizing that the IMF purposefully and negligently destroyed economies with what they themselves later admitted was utterly faulty austerian policy. I'm happy, cos rebellion against the established plutocratic elite is a necessary condition for world improvement.
Mining.com - Whitey's buying gold again. Quote:
According to the data, long-time top investor in GLD is still US billionaire John Paulson’s hedge fund with a holding worth a shade over $1.2 billion.So I guess gold doesn't suck anymore?
But the big news is out of Toronto where Canadian asset manager CI Investments purchased a whopping 6,117,900 shares worth $703.6 million during the first three months of the year. It has become the second largest holder of bullion in the fund with total holdings of $735 million.
Goldreporter says that corresponds to 7.7% of the entire portfolio of CI Investment and made GLD the biggest single holding of the asset manager in Q1 2015, an even bigger position than shares of Apple Inc. ($626.7 million).
Swiss investment bank [which one, Frik?] also picked up a large number of GLD units in Q1 increasing its position 490% to just over 4 million shares worth $474 million.
The two weren't the only firms to make bullish bets – Lazard Asset Management doubled its holding to just over 2 million shares and Morgan Stanley (+18.3%) and Blackrock Group (+167%) were also huge buyers.
Reuters - India's gold monetization plan lacks lustre. Or planning, or co-ordination, or forethought. Here's an illustration of the problems still unsolved:
"Banks need to propose at least 3 to 4 percent interest rate to attract gold depositors," said Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation. "Otherwise they will not come forward to go through the cumbersome process of testing, melting their jewellery and opening bank accounts."So, the banks are going to have to assay, melt, refine and distribute the gold. And they want the Indian government to subsidize these costs. Which I can see happening, sure: the Indians are great at throwing money away. Still:
Current gold deposit plans offer up to 1 percent interest.
While the proposed scheme does not spell out the rate to be offered to depositors, it is unlikely banks will be able to pay much as they would struggle to deal with costs of refining, assaying, distribution and other potential risks.
An issue for depositors is that they might be asked to show proof of ownership of the gold, which will be difficult for many Indians because the precious metal is often passed on from generation to generation.And thus an important difference between gold and paper: gold doesn't care who owns it or where they got it from. As proven by the thousands of corrupt Chinese officials, third-world dictators, drug lords and libertarians (oh snap!) who use gold as a store of wealth. Again, this illustrates how pie-in-the-sky the gold deposit plan is, and how little we have to worry about it for now.
Stumbling and Mumbling - another reason economics isn't a science. Just because you can say evidence is "consistent with" your theory doesn't mean your theory is correct: another theory could also be consistent with the evidence. Again, you economists would do yourselves a favour by generating temporal domain versions of your models and testing them against real-time changes in the economy. Good luck learning the math.
Wednesday, May 20, 2015
Despite everything else I've said about bullishness and rah rah USA, this chart still shows $TRAN dropping below its weekly SMA(50). It is what it is.
Also, here's HYG weekly:
This week's candle suggests a rollover could be coming, and those aren't nice.
I guess the argument in the bulls' favour is that everyone already can see these stupid charts, and so everyone is already selling, and anyway the S&P hit a new alltime high so quit piddling yourself.
Tuesday, May 19, 2015
IKN - blah blah bitgold blah blah making the junior mining clowns look bad. I have a shorter take.
Step one, show the nearly 200% gain on their 4 day chart:
Step two, meet Tommy Lee Jones:
IKN - I laugh at asteroid mining.
It doesn't go into detail about the true problems associated with mining and refining metals in a zero-g, zero-temperature, zero-atmosphere, zero-chemistry environment bombarded by solar radiation. But Zach only recently graduated from dick jokes, so I guess it's to be expected.
However, I had a better idea:
My Own Awesome Blog - how we should respond to the business opportunity in asteroid mining.
Who doesn't want to be a pirate, anyway?
It's only been a few weeks and yet I'm really bummed by economics - Mankiw's textbook especially, but the patent idiocy of the field more generally.
One problem I have is that economics seems to consider itself "scientific", and yet all I have seen in refereed papers is steady-state formulas.
Now, in electronics, a steady-state formula (like P=VI) is only a ciggypack first approximation. In fact, nothing in electronics happens instantaneously, because an infinite first derivative violates the laws of physics. E.g., you can't have an instantaneous change in torque, or else the machine will rip itself off its foundation and explode in all directions in a nuclear fission reaction. Everything happens over time.
So we were taught (and remember this is in community college, the place that University professors consider beneath them) that every true model needs to take time into account. Even when all you have is a DC power supply, an on-off switch and a resistor, you have to model that circuit with the understanding that VR does not go up instantaneously: the wires have an impedance, hey maybe even the switch has a capacitance of some sort, and thus you get an exponential curve from 0V to the on-voltage. It maybe only take a nanosecond, but in electronics we work with lots of stuff that operates in the nanosecond range (CPUs, microwave xmitters, etc).
It seems there is no such acceptance of the existence of time in economics. So, for example, when a demand curve shifts, it is modelled as a t=0 and t=1 problem with absolutely no time in between, so you get no explanation of how the equilibrium price shifts from E0 to E1.
You can not call yourself a science if all you can present are steady-state formulas with no prediction of what happens between t=0 and t=1. In fact, a theoretical model that takes time into account will actually make your theory at least marginally testable without a control group - just tell me what the data should look like from one day to the next, and as long as you have sufficient resources to follow the data and can sufficiently control for noise in your signal, you can prove the model just by showing that it successfully predicted the movement of a variable over time.
(Of course then you will see the problem, obvious to those of us who've studied control systems, that in fact no variable can be left out of your equation: in a feedback system, it's possible for any input variable to rule the output. But let's leave Laplace transforms and feedback math out of this, we don't want to make the poor economists' heads assplode.)
Even worse, the "comparative advantage and gains from trade" topic in every first-year text doesn't even seem to include the idea that the tradeoff of trade specialization involves not just foregone revenue in the market where you have comparative disadvantage, but also foregone growth and revenue into the future. It seems Krugman recognized this and used it to invent his idea of "dynamic comparative advantage", though I haven't seen the paper yet: but how pathetic is that when it takes a Bank of Sweden prize winner to insert the letter t into an equation? He's done this other times too: apparently stickiness at the ZLB is only a solvable problem by including present and future expectations. Did economists only discover time recently?
I am thus dumbfounded by the apparent utter ignorance of the entire economics profession. Plus I am enraged by how much first-year textbooks serve only as indoctrination texts for the Republican party. Remember, a lot of students take first-year econ: engineers, finance students, business students. They're learning stuff that's utterly childish and wrong. It's even worse: this propagandizing provides the support for the loony right-wing to pursue policies that actually destroy the economy.
Thus, I'm happy that I managed to get myself a copy of The Economics Anti-Textbook. The authors (a pair of econ profs from UNB) are also fed up with the pathetic state of intro econ textbooks, and so they wrote an entire book explaining how first-year econ subject matter is completely disproven by more advanced econ.
It's not commie pinko disinfo either: Robert Prasch and Joe Stiglitz (two people referred to in this book whose journal articles I've started reading) aren't marginal economists, they're serious people.
So thankfully I've found that, despite the clownish idiocy of Mankiw's Intro Macro propaganda pamphlet, there are some few economists who are actually trying to study economics seriously. So maybe I can continue on with this degree.
Though I wonder if it's possible to sue a university for teaching patently false subject matter. I mean, don't econ profs have a duty of care to ensure that they don't teach stuff that's disproven in upper years? I mean, it's as if a physics department's first-year class taught that the sun revolves around the earth. May I please get my first-year tuition back?
Apparently the authors of the Economics Anti-Textbook are discussing doing a new edition for 2015. I think what they should do instead is write a new intro econ textbook, following the formula of the existing books, but going beyond them by incorporating real theory and illustrating the actual disagreement and the faultiness of simplistic models.
Anyway, it's a great book, well recommended.
Here's the $HUI chart as of this morning:
I've circled three support tests of the upward channel.
I've got this weird "rule of threes" thing in my head that's really only founded by instinct and past experience, but it says "if the chart does something successfully twice, and then tries to do it a third time, it usually fails."
It makes some kind of sense - thing have to break down eventually, and easily recognizable chart patters have to break often or else even the dumbest of us could regularly beat the market. And the market is makes sure that people can't beat it.
So we'll have to see what happens to the gold miners over the next couple days.
Personally, I'm ignoring this morning's drop in the gold price, because:
The only reason gold dropped was because the US dollar went up, as you can see by those last two candles. And as far as the US dollar is concerned:
All it's done today is bounce off a small support cluster (from January) at $24.50 and pop back to the Bollinger mean.
You and I saw that sort of action all the time in the gold miner collapse of the past two years, and in that case it was never a buy signal, only a correction from oversold.
Nevertheless, the US market is full of cokehead panty-piddlers, and so we'll have to pay attention to whether the gold miners break down anyway. Hey, maybe gold ex-US is correcting like the USD, in which case we're just seeing a local top and failure at the SMA(50).
Thankfully, everyone else probably thinks the same thing.
Monday, May 18, 2015
So one of the many roadblocks to me going back to my old job is that the corporation has now instituted this stupid policy where I'm asked to submit to a background check.
I'm not interested in that sort of bullshit, and my old boss at work didn't even know such a thing existed. Maybe my name is flagged because I refused to submit to a government security check a year ago in order to be carried on a staffing list for a border plaza.
I already notified my boss I'm not going to agree to a background check to go back to work with them, but I might just email the HR contact as well to stipulate that indeed I am an anarchist terrorist stalker with rage and alcohol issues, a criminal record and a tenuous grip on reality, and that I have ties to drug gangs, environmental terrorists, White Power skinheads, the goldbug movement and the Unabomber (and maybe the international Bolivarian socialist movement if IKN's anything to go by), and my boss needs me anyway so fuck you.
Anyway, here's the news:
FT Alphaville - OMG Chinas margin's verses free float is a thing now!!!1! Fuck it, if that's the best these roundeye barbarian analysts can do, then I'm buying China tomorrow.
Bonddad - John Hinderaker is a moron. Linked just cos I like when he slags people.
IKN - so how's your anium doing? Linked just cos I like when he slags people.
Bron Suchecki - no, JP Morgan isn't buying 350 million silver eagles. Linked just cos I like when he slags people.
Krugman - money, inflation, and models. About how expansion of the money supply doesn't automatically produce inflation if you know your Hicks. Linked just cos I like when he slags people.
BBC - German police assaulted migrants in Hanover cells. The part about forcing a Moroccan to eat pork was hilarious to me, because I'm entertained by the irony of Germans making oblique references to the Holocaust. I guess they don't teach 1933-1945 in history class anymore? Hm?
Why do you think silver is going up so strongly? I mean, four consecutive days above +2SD is good, eh?
Maybe it's because people outside of the US have started buying gold again over the past 4 days?
But you keep believing your silly white-people theories, Whitey.
Mister Pee-Pants the Hedge Fund Manager is still freaking out about:
1. China collapse
2. Greek default
3. US dollar strength killing exports
4. low inflation
5. The Fed intentionally sabotaging the recovery with OMG a 0.25% rate rise
And yet the US market still goes up.
That's because Mister Pee-Pants the Hedge Fund Manager is an ignorant coke-snorting Republican buffoon who doesn't know the first thing about China, Greece and the EZ, currency fluctuations, macroeconomics, or how to run fiscal policy in the largest economy on the earth.