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Friday, July 24, 2015

Some Friday news


Here's a bit of Friday newsreading:


New Deal Demoncrat - initial claims, adjusted for population, set a new all-time low. And since it seems monetary policy has permanently slain the inflation beast in the West, the only reason to raise rates now would be to smash the working class. Again.


Calculated Risk - on June existing home sales. He takes pains to remind us that resale of existing homes has only an insignificant effect on the economy. Inventory and distressed sales are the significant data points in this report.


New Deal Demoncrat - sub-$2 gas this winter? That will be a positive for the US economy.


FT Alphaville - the real bubble is in "China bust" articles. Here's the opinion of two actual Chinese analysts from Citi:
While the A share market declined by 24% off the peak, it is still worth remembering that China is still up for the year. The CSI 300 is up 18% in US$ terms, Shanghai A shares are up 23%: sure, both markets were up a lot more a few weeks ago but those performance numbers are still enviable compared to many other markets (see Figure 3). The SPX is up 3.4%, NASDAQ 10.2%, the Euro Stoxx is up 6.9% in US$ terms and the N225 is up 14.2%, again in US$ terms. In percentage terms in EM, only Russia and Hungary, up 22% and 27% in US$, have outperformed the CSI 300, while many markets in EM are down double digits: take Columbia off by 25%, Peru off by 12%, Turkey down by 19, Indonesia off by 15% and Brazil off 15%. So, for all the talk of an imminent blow-up, the Chinese markets have actually done rather well. Our most likely scenario for the Chinese economy, should reforms fail, is the Japanisation of the economy with growth slowing progressively until there is none. Given that China borrows from itself and runs a CA surplus, a progressive ossification of the economy and financial system is still a more likely outcome than the sharp sudden crisis so often seen in EM, the latter being mostly CA deficit-driven adjustments. China remains a net creditor to the world.
And I'd rather hear the opinions of Chinese analysts than some idiot honky who doesn't understand the country or its long history.


Mining.com - GLD dumps 23 tonnes. Well, let's just clean that fund out and maybe we'll see a bottom.


Mining.com - George Gero on gold. He points out the obvious:
"With all the bears in the woods, everybody [being] bearish is probably the most enticing reason to start to pick at the market."

Gero said Monday's 2.2 percent selloff in gold was sparked by one large trade, rather than any sea change in the fundamentals.

"Somebody had to make the decision to be out of the market with that size trade, which distorted the markets," he said. "We will be going back in the next few months to basics."
People forget it was one big Shanghai Chaos smash that hit gold, and it hasn't been dropping all that hard since. When does Chaos have to close?


der Spiegel - interview with Julian Assange. I find it interesting that academia instantly rejects all papers that use Wikileaks as a source. That's something to remember come Ph.D. time.

Back to obnoxiousness: Friday summer earworm video


OK, it's Miley:




And the verses suck. They suck the way most American hit single verses suck. Because nobody in pop music knew how to write a good verse for a hit single til Max Martin.

But the chorus is so goddamn addictive.

And yes I'd happily punch that annoying Miley idiot in the face today, but back then she was a cute fun harmless teen pop singer, and nobody hates that, right?


Wednesday, July 22, 2015

A 1% DROP IN S&P INSPIRES PANTY-PIDDLING AT BUSINESS INSIDER: here's what you need to know


My god.

I went in search of panty-piddling market commentary and found Bedwetters Anonymous at Business Insider:

BI - Warren Buffett's favourite measure says stocks are overvalued!!! Hey "Dr." Ed, Buffett's "favourite measure" is used by a guy who buys companies at secular bottoms. Were you loading up in 2009 when the chart hit bottom and Buffett bought BNSF, Ed? Or were you still warning about the coming fucking apocalypse? I assume it must be the latter, cos Warren's worth $72 billion and you're writing a blog.

BI - Jeffrey Gundlach calls junk bonds the next big short!!! Yes and we should care because all his other calls have gone so fucking well. Seriously, this guy's the market world's Kim Kardashian. WHO THE FUCK CARES WHAT JEFFREY GUNDLACH SAYS.

BI - Apple's spaceship campus is the sign of the top!!! Sure cos they're worth $700 billion so they don't deserve a spaceship campus.

BI - gold crash reminds us of "liquidity" warnings!!! Yes because Shanghai Chaos dumping notional billions into thin bids at preopen on a Japanese holiday is EXACTLY like the daily trade in the Nasdaq 100. Fucking idiot.

BI - Apple data shows China collapse!! More with the panty-piddling.

BI - Diet Coke sales are plummeting!!! Thus I guess the US consumer is dead.

Dammit I was so hopeful that we could see another 5% drop in the US markets before I went back to shorting VIX and going double-long Nasdaq. But as it turns out, the panty-piddling has come awful fucking early in the correction.


Some fear charts


Looks like that little one-week burst upward in QQQ is about played out. Thankfully I dumped the last of my HQU yesterday, feeling it was overplayed on the Google pop.

I felt stupid buying XSU and CJP for replacements, but it doesn't look like such a bad idea now.

Cuz HYG is rolling over:


Which means very little except maybe a bit of fear.

I'm sure it'll get played up in the gutter press if it keeps dropping, though. We need a bearish narrative, don't we? I mean, there has to be a new reason to expect a "massive repudiation of debt" or a "liquidity crisis" resulting in the US markets going down OH MY GOD a full 5%.

And of course $VIX bottomed on Friday:


Looks like it wants to move gently upward for a bit. The drop from 20 just felt too damn fast to me, especially since it seemed to be driven just by the stupid end of stupid fear caused by stupid news about stupid Greece. Now, sudddenly, the market for downside protection has a bit of life again.

I guess that's cos while QQQ broke out, SPY did this:


Which is bloody annoying, no? How many times does it have to turn back?

Oh well. I eagerly await the next buying opportunity. Cuz this picture:

is worth a thousand words - mostly variations on "quit piddling your frilly little pink panties".

Congratulations to IAG, KGC, BTG....


Iamgold:


Congratulations on your new penny stock status and imminent NYSE delisting!

Kinross:


Congratulations on your new penny stock status and imminent NYSE delisting!

B2Gold:


Congratulations on your new penny stock status and imminent NYSE delisting!

Bunch of gold commentary, in case you missed it


Lots of people talking gold this week, go figger. Here's a sampling:


Bron Suchecki - the spin on the gold smash. This is the part I agree with:
In terms of the why, here are some of the more sensible comments:
Ross Norman: They choose the optimal moment in the early morning and when Japan was closed for a holiday to get the biggest bang for the buck. It was clearly ‘short’ traders using leverage to trigger (technical) stops” he said. The price later regained some of its ground, allegedly as the profiteers cashed in jackpot gains on options that they also had. “It was a trade within a trade”.

Marex Spectron: no coincidence that this happened in the quietest, thinnest period of the week … they deliberately want to move it in a big way

“Traders”: Gold also fell in the Chinese derivatives market, which, traders said, added to the impression of an orchestrated attempt to push the price down, triggering others to sell their positions.

Societe Generale: It was just a bit of a bear raid and there was nobody on the other side to mop up the selling

“Market Participant”: The fact that it was done in Asian hours and in a loud, messy manner suggests it may be done by people not directly under European and US regulation)
Translation: Shanghai Chaos. However:
That is not good for gold as it will give them confidence to test gold again.
So gold can go lower still. $1000 is a magnet, everyone wants to get there now.


Reuters - don't count on India to come to the rescue. Uh, that headline comes from the editor, not the writer:
"This is not a festive or wedding season, so interest remains low," said Kumar Jain, vice-president of the Mumbai Jewellers Association.

This year's Hindu calendar has fewer auspicious dates for weddings, a traditional time for buying and giving gold.

The RBI's inflation targeting efforts have helped bring price rises under control, removing one main reason for Indians to hold gold as a store of value. The rate of inflation has halved to 5.4 percent from double-digits at the end of 2013.

[...]

"Many Indian consumers are not buying, thinking there's still scope for downside in prices," said Daman Prakash Rathod, a director at Chennai-based wholesaler MNC Bullion.

And weak monsoon rains mean many farmers from India's rural areas, which make up nearly two-thirds of domestic gold demand, don't now have the ready cash to buy gold, Rathod noted.
Listen to the Indians, not to the white people, if you want the real news about India.


Pragmatic Capitalism - are we nearing peak commodity hatred? Yeah, but Cullen forgets that we're in a secular-stagnant economy: inflation can't go higher because world governments have slain the beast for good. And in any case, you want demand to outstrip supply for prices to go up, Cullen.


Mining.com - four reasons a buying opportunity is fast approaching in gold. Tommy Humphreys (who knows all about economics, commodities and trading due to his vast wealth of experience) has some commentary, with a number of charts. Apparently since spec positioning is very short, and retail sentiment is very negative, he's sure it can't get worse, and August to October is a good seasonal period for gold even though everyone thinks Yellen will raise rates right in the middle of that.

Tuesday, July 21, 2015

gold chart and sarcastic commentary


Here's the past 2 days of gold, from Kitco:


So where's the rest of the waterfall drop?

I mean, that sure was some great attack one minute before the Shanghai open on a Japanese holiday, guys, but where's the follow-through? I'm not shocked or awed here.

And why is it that all the Americans could muster is a bit of a dump after 4PM?

Where's the waterfall? Isn't Whitey supposed to be dumping this to $1000? $800? $700?

Or was the Chinese attack just too gaudy for anyone to want to associate with?

Or is everyone already too short?

C'mon guys! B2gold is still too expensive! You can buy it for 2 years of its gold production!


oil today


Maybe the gold miners are interesting today, since they were obviously puked yesterday on a total loss of hope that gold will ever retake $1150.

But I find oil neat too:


I guess the story is that it went down on hopes of an Iran nuclear deal. Well, now the deal is done. Does oil now have to break down to a new low? Or does it turn around from an oversold RSI reading here? Seems like, moneywise, there's an asymmetric bet to be had here.


Monday, July 20, 2015

Morning PM comment


So gold got monkey-hammered last night, with a massive downspike as stop losses were hit, followed by a halfway recovery. It's probably some big fund trying to short gold into the dust, I'm not worried. Gold doesn't go to $1000, period.

Anyway, importantly, silver and platinum were monkey-hammered at the same time. But as of a bit after 9:30, silver's chart is like this:


I.e., overnight it essentially lost 5 cents, which is basically nothing.

Platinum similarly is only down $6 from Friday close at this moment, which is good considering last night it spiked down $50.

So silver's and platinum's lack of collapse suggests to the entire world that gold's drop is a simple paper attack on one single metal, and what with the entire investing world being 90% short gold right now it's going to take a heck of a lot of new money to push it farther down.

And those shorts will have to close at some point, and sorry but the majority of gold investors aren't going to be selling right now because that would involve taking their physical jewelry and physical bars out of storage and to a physical buyer.

So I'm not worried, but I'm happy to see the potential for a big long position soon.


Sunday, July 19, 2015

Some Sunday newsreading


Posting might be light the next while. This is the last 3 weeks of classes for the summer, so I have to study a bit harder to ensure I ace the finals.

Also, some idiot got the idea to draft me for jury duty, and while they do typically let off students, I might still have to go down to the courthouse and present documents in person.

The month of August is clear sailing, though I might go back to work, and if not I might buy a DVD player (yes I'm one of those people) and watch a few seasons of the new Doctor Who.

Here's some stuff for the weekend:



New Deal Demoncrat - weekly indicators. He seems to be piddling his panties a bit, but far as I'm concerned if tax withholding is positive and intermodal is positive, the US is still okay.


The Krugginator - the Fed is going to fuck shit up when they raise rates. But ultimately the Fed is always going to be slaves to the kleptocratic elite.


Ben Bernanke - Europe isn't holding up its end of the bargain. Money shot:
What is a problem, however, is that Germany has effectively chosen to rely on foreign rather than domestic demand to ensure full employment at home, as shown in its extraordinarily large and persistent trade surplus, currently almost 7.5 percent of the country's GDP. Within a fixed-exchange-rate system like the euro currency area, such persistent imbalances are unhealthy, reducing demand and growth in trading partners and generating potentially destabilizing financial flows.3 Importantly, Germany's large trade surplus puts all the burden of adjustment on countries with trade deficits, who must undergo painful deflation of wages and other costs to become more competitive. Germany could help restore balance within the euro zone and raise the currency area's overall pace of growth by increasing spending at home, through measures like increasing investment in infrastructure, pushing for wage increases for German workers (to raise domestic consumption), and engaging in structural reforms to encourage more domestic demand. Such measures would entail little or no short-run sacrifice for Germans, and they would serve the country's longer-term interests by reducing the risks of eventual euro breakup.
But don't expect Germany to raise a finger to correct its structural imbalance with the rest of Europe. Especially not because the most successful central banker of the past decade has said it's necessary to save the EZ.


Reuters - Indian road building hasn't been. All those Thatcherites who worship Modi should be asked to explain how he's going to improve India's economy when he can't even get a single highway built. By the way, India: I'm pretty sure at least a couple of your nationals work at highway agencies like MTO; you should ask them to come over to India and explain to your incompetent bureaucracy how to purchase the right-of-way before issuing the fucking construction contract.


Mining.com - oh thank god China just reported its gold reserves, now the goldbugs can shut the fuck up. By the way Cecilia, you're not quoting Business Insider. You're quoting a BI reprint of an article from Zerohedge, the famous Russian propaganda website.


MSN - ice cream parlours: dens of evil! Quote:
But perhaps the most outrageous anti-ice cream parlor screed was published in a 481-page 1909 book called War on the White Slave Trade, in which the Illinois Vigilance Association tore the city’s taste for cool treats to shreds.

“One thing should be made very clear to the girl who comes up to the city,” the association warned, “and that is that the ordinary ice cream parlor is very likely to be a spider’s web for her entanglement.” They went on to describe how foreign-owned ice cream establishments were “recruiting stations” for prostitution, where “scores of girls have taken their first steps downward.”
And ultimately it did all boil down to American fear of the swarthy foreigners that owned and operated ice cream parlours, who so obviously intended to use ice cream to lure white women into prostitution and white slavery.