Saturday, August 29, 2015

Some weekend reading, including what REAL sarcasm looks like

Some stuff and junk and stuff for those of you who want to flee from the meaningless babble of the goldbug world:

New Deal Demoncrat - hey, did you know corporate profits are a long leading indicator? And they're trending up?

New Deal Demoncrat - weekly indicators. He's still paying attention to the flawed Gallup poll and doesn't give enough credit to tax withholding. NDD, here's a link for some frilly little pink panties, I think you'd better stock up.

Bespoke - the great ETF crash of 2015. Was it really just a bunch of fruitcake retail types who puked the ETFs so bad on Monday that RSP dropped 43%? REALLY? Because if I remember correctly, when I checked on Monday morning the order book had dried up completely, and there were 10% bid-ask spreads on formerly decently liquid TSX-traded ETFs. Seems to me this was more of a purposeful robot-driven crash, if not an outright Soviet sabotage of the market.

Not that you'll ever hear about anything like that in the news. Hush hush.

Mark Thoma - a pretend interview with the Fed. All his points against a September rate hike are quite sensible, and he definitely scores great on the sarcasm front, which leads one to wonder why Mark Thoma is only a lowly professor of economics at Oregon State, instead of heading the Fed? Maybe it's because the people heading the Fed are quite a lot more intelligent and sensible than Mark Thoma gives them credit for, and maybe they already understand all his arguments and agree with them?

Hey Mark, do you think the people at the Fed have heard of that Trichet guy who sent a continent back into depression with an early rate hike? Hm? Or are they dummies? Hey, btw... does your spouse have a Nobel in economics? Cuz Janet's spouse does.

And hey Mark, when was the last time you were the governor of the Bank of Israel or chief economist at the World Bank? Cos Fischer was, and he's the dummy of the bunch over there.

Seriously, Mark. Have the Fed proven themselves idiots at any time in the past 8 years, say? No? Then why not just assume they'll continue not being idiots, at least until contrary evidence presents itself?

You're sounding like a bit of a fucking Republican loonie, Mark: better get your blood sugar tested before you start blaming stuff on Mexicans and negroes.

WSJ RTE - what changed over two weeks of market turmoil? Nothing. Here's that goddamn sense that needs to be beaten into everyone's thick skull:
it’s hard to conclude the stock-market drop heralds a serious economic slowdown or recession. Economic indicators that typically pick up the first signs of trouble, such as first-time claims for unemployment insurance, are steady or improving.
What about the rest of the world? China’s economy is slowing, and probably by more than the official 7% growth rate indicates. But alternative measures, such as industrial production, exaggerate the slowdown because China’s economy is shifting to services, which are more labor intensive.
Also, China has been shutting down marginal producers for over a year now, to reduce oversupply and fight pollution. That affects industrial numbers. Why the fuck has everyone forgotten this? Or did Whitey never follow the China news in the first place?

Gavekal Dragonomics, a China-based economic advisory, notes that shares comprise just 5% of Chinese household wealth. Share issuance is not a significant funding source for Chinese companies. Property prices are far more important to household wealth and as collateral for bank loans. House prices and sales have actually rebounded recently because of lower interest rates and fewer restrictions on purchases.
and for the love of fuck why hasn't anyone fucking understood that
An epic boom in commodity prices has been unraveling since 2011. But they are not falling solely because of lessening demand from China, but also because of rising supply, especially of oil, by producers. Thus, rather than a net negative for the world, the latest downdraft should be seen as a negative for commodity exporters such as Russia and Canada and a positive for importers such as India and the United States.
I have had a fucking headache for the past two weeks from all the ignorant fucking clueless garbage I've read about how commodity price drops signal an imminent worldwide depression, or imminent China collapse, or goddamn fucking worldwide deflationary spiral for the love of fuck.

Commodity prices also depend on supply. Chile is made out of copper, Australia is made out of iron ore, and Texas is floating on a sea of oil. The only reason any of those prices go up is because of demand temporarily outstripping supply.

But now supply has expanded to meet demand. This is not a recession. This is not a depression. This is what happens in every DM secular bull market, and even a goddamn insane fruitcake goldbug like Jim Rogers knows this.

der Spargel - mass Balkan exodus puts pressure on Germany. Hey, Germany! Why is it that you allow corporations to cross borders at will in search of the most favourable tax regime, yet you make it a crime for human beings to cross borders in search of more favourable employment? Is it because globalization is just another fucking scam of the kleptocratic elite, and your country is just as corrupt as the rest of them?

Friday, August 28, 2015

The good and the bad about the end-of-week charts pre-open


Still scary to look at, but despite the blather in the lamestream media the S&P 500 has still recovered the entirety of that idiotic Monday morning collapse, and is already back above last Friday's close.


Again, despite the blather of the lamestream media, QQQ has recovered all the way back to last Friday's open.

Note that the EMA(10)s are on these charts, but after such a vicious move you should really pay more attention to a shorter EMA. Except, really, this was such an outlier move that no EMA can really be expected to say anything sensible for a while.

But in any case, you should be framing your deliberation about the US market not in terms of "OMGWEALLGONNADIE", but rather in terms of "on Monday people were so retarded that they puked GE down below $20 and Ford below $11". As in, the recovery from such stupidity has been going on all week now, but it's still not done.

Always remember:

Friday Videos: Florence and the Machine on how investing in QQQ is a hell of a lot better than fucking shitty junior gold miners like B2Gold

Here's Florence on how she's very happy she stuck with a Nasdaq index fund instead of trying to catch the falling fucking cartoon anvil that is B2Gold:

Come on Clive, you pussy. Wanna fight?

Wednesday, August 26, 2015

Gold miners re-suck™

Man oh man:

Yo mama went from around $1.75 to $2.45 and the people who bought at the bottom felt they were all oh so clever, til it went back down to $1.77. What a one-month round trip! Nice turnaround at the magical SMA(50) too.

B2Clive went from around $1.00 to $1.37 and the people who bought at the bottom felt they were all oh so clever, til it went back down to $1.09. What a one-month round trip! Nice turnaround at the magical SMA(50) too.

McEwen went from $0.65 to $1.00 and the people who bought at the bottom felt they were all oh so clever, til it went back down to $0.72. What a one-month round trip!

I'm not saying I know what forced liquidation looks like, but I imagine it would probably look something like this, especially with gold still at $1125. Hey, if gold goes back to $1050, or even to Jeffy Currie's $1000, maybe GDX will have to do a reverse split at $5. That'd be a great buy point, no?

I mean, if gold ever were to go up again that is.

Some news

You probably don't mind that I haven't kept you up to date with the news, since the market obviously doesn't give a crap.

But I may as well clean out my inbox:

Calculated Risk - July existing homes sales highest pace in eight years. Therefore puke the S&P.

Reuters - consumer confidence, housing blah blah WE DON'T CARE ABOUT ECONOMIC DATA OMG SELL SELL SELL. Frankly, I'm starting to think Pooty-Poot handed Kim Jong-Un the passwords for JPM and GS's prop desks, and this whole market collapse is actually North Korean hackers trying to fuck with Whitey.

New Deal Demoncrat - will you shut up about China already. Quote:
I expect that the main fallout of the China syndrome on the US economy will be cheaper gas and cheaper mortgages. That strikes me, on net, as a positive.
OK fine, but even still:

The Krugginator - it's getting tighter all the ti-i-ime! (Tighter, tighter, tigh-ter!) Where he notes:
When thinking about the market madness and its possible real effects, here’s something you — where by “you” I mean the Fed in particular — really, really need to keep in mind: the markets have already, in effect, tightened monetary conditions quite a lot.

First of all, if break-evens (the difference between interest rates on ordinary bonds and inflation-protected bonds) are any guide, inflation expectations have fallen sharply:
And then charts and so on, to illustrate the idea that recent market heebie-jeebies have acted like a US Fed rate hike. That's fine, K-dog: but the Fed doesn't diddle with rates every single stupid time the break-evens hit an extreme in the chart, do they? The Fed funds rate is just an underlying condition around which everything varies stupidly. For you to suggest otherwise means you must have looked at your 401-K recently.

Streetwise Professor - I knew Black Monday. Black Monday was a friend of mine. He says this Monday is no big deal, cos he was around on a Monday when the market was -9 standard deviations. Well, good for you, but today the market is a different machine. Thanks for freaking people out, though; maybe you can get a job at Business Insider someday when Sam Ro finally gets sick of the taste of vomit in his mouth like Mamta Badkar did.

The Chronicles of Brodrick - robots flying at the speed of sound to show you how it all began. Included for this bitchslap:
Dude, I have heard people declare “China is doomed” since 2005. Someday they’re gonna be right. But are the odds any better now than, say, during the big global recession in 2008?

No. Not unless China’s leaders have lost their will to throw money at problems. Headlines like “There’s No Saving China Now” are written by and for idiots and newbs.
Well, Sean, you've just fucked your chances of working at Business Insider one day.

WHO ARE THE DONALD TRUMP SUPPORTERS? here's what you need to know!


Time - pollster's legs wobble after Donald Trump focus group. And hey, his upcoming presidential nomination really does make perfect sense when you listen to the Trump supporters:
“I think America is pissed. Trump’s the first person that came out and voiced exactly what everybody’s been saying all along,” one man said. “When he talks, deep down somewhere you’re going, ‘Holy crap, someone is thinking the same way I am.’”

“When Trump talks, it may not be presented in a pristine, PC way, but we’ve been having that crap pushed to us for the past 40 years!” said another man. “He’s saying what needs to be said.”

“I used to sleep on my front porch with the door wide open, and now everyone has deadbolts,” one man said. “I believe the best days of the country are behind us.”

“I’m frustrated beyond belief. I feel like I’ve been lied to,” a woman said. “Nothing’s getting better.”

“We know his goal is to make America great again,” a woman said. “It’s on his hat. And we see it every time it’s on TV. Everything that he’s doing, there’s no doubt why he’s doing it: it’s to make America great again.”

“We’ve got to show the Republicans that we’ve had it with them, that we will not be there every single time. They treat us like crap and they lie to us and promise us things and then they expect us to vote again,” said a Republican woman. “That’s why we want Trump.”
Goodbye Republican Party! You made the ground fertile for Donald Trump, and now he's going to be in charge.

And despite the gloating and the bottom-calling....

And despite all the gloating and the bottom-calling that you read these past few days about gold miners:

It turns out they still really, really suck. Like, down almost 20% in four days suck.

Durable goods orders CRUSH EXPECTATIONS

BI - durable goods orders CRUSH EXPECTATIONS. There, Whitey, it turns out you made the smartest move ever when you puked S&P 500 stocks into an empty bid because the economy is collaps... er... whatever.

Tuesday, August 25, 2015

Everything's okay again, stop piddling yourself


BI - US futures rip higher, ignore what Blodget was saying this weekend about how stocks were going to fall 50%. And it's all because of a 0.5% cut in China's reserve ratio. Now the world is better again. Or something. Fuck I dunno. Here's David Kostin from Goldman Sachs:

"We expect the US economy will avoid contagion and continue to expand. S&P 500 will rise by 11% to reach 2,100 at year-end."

Kostin thinks we could experience something similar to what we saw in 1998, when a currency crisis in Asia resulted in only temporary jitters in the US.

"S&P 500 plunged by 14% during August 1998 before rallying by 29% during the last four months of the year," he wrote. "Ultimately, the US economy was relatively unaffected by overseas financial market gyrations in 1998 and we believe a similar situation will occur in 2015."

And if you remember, 1998 was late in the cycle, and there was still a shitload of money to be made in the US market after that correction.

And despite what a lot of people are saying, we're still probably early in the US cycle: progress out of the crash bottom has been slower, housing hasn't taken off yet, wages haven't risen yet, unemployment has only just gotten out of the danger zone, we've had 6 years of government spending cuts and spending will only be able to increase when state governments are in surplus, and there's been no initiation of rate rises yet.

Those of you who e.g. puked Ford to $10.50 yesterday should probably take the rest of your money out of the market and buy CDs because you're a danger to yourself and your portfolio. And that means you, hedge fund cokehead clowns.

Monday, August 24, 2015

Two good posts from Cam Hui

I didn't like his blog before, but it seems he's gotten better.

Cam Hui - relax and have a flaky. He ends by noting that as long as the Nazis aren't rolling their tanks into Paris, you can expect the market to make back all its losses.

Cam Hui - is this the Ashley Madison market panic? Wherein he has graphics like this:

and then other things like $TRIN and the participation index and $CPCE and so on but you probably don't have to worry about those when blogosphere crackheads are calling for the next 1929.

blog traffic

Man, I've already got more than double the usual daily blog traffic, and it's not all Sean Brodrick leaving comments complimenting my musical taste.

Good to see you're all following me. Now go get a second mortgage ASAP and buy a short VIX ETF like it's going out of style.*

* - nothing on this blog should be construed as investment advice, an inducement to buy or sell securities, or anything other than the insane ramblings of a violent sociopath who's had too much coffee today.

For those concerned about the US dollar....

Yeah OMG one big problem has been the appreciation of the US dollar and....

Oh wait.

Looks like as of today the USD is back to where it was at the start of the year.

Oh hi Sean

The Chronicles of Brodrick - how much lower can $SPX go? Quote:
Here is a chart showing corrections since the big one in 2008. The last correction was 10%. There was a panic at the time. Do you even remember it? It was the "Ebola Is Going to Kill America" scare.
Hi Sean, thanks for mentioning my blog. I await my royalty cheque.

EDIT: Yes of course I like Sean Brodrick's blog. At least he's sensible and responsible, unlike absolutely every single other blogging clown out there.

No, I don't really need a link, Sean, I was just teasing. Your readers would find me offensive anyway.

Here's how stupid people are

QQQ as of:

Look at the Bollingers.

QQQ was puked down nine standard deviations this morning.

I blame Josh Brown for saying we'd see another 1929, and Henry Blodget for saying stocks would drop 50%.

Seriously. There was no fundamental reason for that -9SD collapse. There was only the fearmongering of the clickwhore press. For those suckers who puked at the open, I strongly suggest you seek out Josh Brown and Henry Blodget, and explain in Anglo-Saxon terms (both linguistic and, as legally as possible, behavioural) your displeasure.

Market has begun reacting sensibly

Here's some perspective on the silliness of this morning, and yes I'm still using 4SD Bollinger bands:

Who the fuck dumps Apple at $92.50? They invented selling mp3s and thus wiped out the record store business. You nuts? Damn well yeah you better buy it back into the green, bitch.

Who the fuck dumps Ford at $10.50? There's no recession. Ford is still selling F150s. Damn well yeah you better buy it back to $13.19, bitch.

Who the fuck dumps GE down below $20? OK fine, GE's stock has sucked forever, but who the fuck pukes GE at a price it last saw years ago? They invented electricity (well... okay really it was Nikola Tesla but whatever) and they're the only game in town for most everything that eats electrons. Seriously. I work in electrical engineering and GE makes more money off our projects than I do. Did you really have to puke the past 3 years of gains into an empty book at 9:30:00.01 AM?

I just laugh


Yeah no really, QQQ really truly went -15% at one point this morning. Now that is what you call puking into an empty book!

The chart above has its Bollinger bands set at four standard deviations. In statistics, 4SD is crazy-talk.

When I have to use 4SD, I just sit back and laugh.

There was no ability to trade this morning anyway, the book had massive spreads everywhere. I guess I'm just going to sit tight.

DOOOOOM: here's what you need to know

Jeffrey Saut this weekend said that a bottom is never put in on a Friday - it usually takes a dry-retch on Monday to end the insanity. Oh well. I guess I bought a short VIX position too early again.

Here's some reading for the morning:

Schwab - perspective on recent market volatility. Seems they're not expecting a 50% collapse in stocks, unlike Henry Blodget and Josh Brown. Then again, Schwab don't have to click-whore for their paycheque, do they?

Bespoke - past weekly drops of >5%. Seems the drops don't go on forever. Unless it's 2008, which everyone in the blogosphere thinks it is.

Marketcrotch - investors haven't piddled this many frilly pink panties since 2009. And we're not in 2009 right now. With Jeffrey Saut's comments.

Josh Brown - my little trick for coping with a correction. Basically, plan out the deadly deals you'll be able to buy at the bottom. Then you'll be rooting for lower prices! Great way to turn around your own psychology! Really, surprisingly sensible commentary from a guy who on Friday was saying we're going to see another 1987 or 1929 (was crack on special Friday?!?) market collapse. - hedge funds reverse historic bearish position. So how's that "barbaric relic" and "worthless rock" looking now that you're facing the apocalypse, guys? Hm? Fact is, gold did not go down last month because blah blah rate hike or blah blah US dollar strength: it went down simply because Shanghai Chaos dumped $3B notional into an empty book during premarket on a Japanese holiday.

Sunday, August 23, 2015

Two weekend reads

Two reads for the weekend:

New Deal Demoncrat - weekly indicators. I found an error btw. NDD, there has been no "continued appreciation of the USD against global currencies" over the last week: $USD made its last high August 7th, and since then it's dropped a little over 3%. And why do we suddenly care about Gallup consumer data again, when it was grossly misleading us for years?

Rolling Stone - Donald Trump just stopped being funny. Matt Taibbi over-reacts, I think: nobody gave a shit about the hateful populism of Pat Buchanan decades ago. And as for this:
The political right in America has been flirting with dangerous ideas for a while now, particularly on issues involving immigrants and minorities. But in the last few years the rhetoric has gotten particularly crazy.

Texas Congressman Louie Gohmert proposed using troops and ships of war to stop an invasion of immigrant children, whom he described as a 28 Days Later-style menace. "We don't even know all of the diseases, and how extensive the diseases are," he said.

"A lot of head lice, a lot of scabies," concurred another Texas congressman, Blake Farenthold.

"I'll do anything short of shooting them," promised Mo Brooks, a congressman from the enlightened state of Alabama.

Then there's Iowa's Steve King, who is unusually stupid even for a congressman. He not only believes a recent Supreme Court decision on gay marriage allows people to marry inanimate objects, but also believes the EPA may have intentionally spilled three million gallons of toxic waste into Colorado's Animas river in order to get Superfund money.

Late last year, King asked people to "surround the president's residence" in response to Barack Obama's immigration policies. He talked about putting "boots on the ground" and said "everything is on the table" in the fight against immigrants.

So all of this was in the ether even before Donald Trump exploded into the headlines with his "They're rapists" line, and before his lunatic, Game of Thrones idea to build a giant wall along the southern border. But when Trump surged in the polls on the back of this stuff, it caused virtually all of the candidates to escalate their anti-immigrant rhetoric.

For example, we just had Ben Carson – who seems on TV like a gentle, convivial doctor who's just woken up from a nice nap – come out and suggest that he's open to using drone strikes on U.S. soil against undocumented immigrants. Bobby Jindal recently came out and said mayors in the so-called "sanctuary cities" should be arrested when undocumented immigrants commit crimes. Scott Walker and Marco Rubio have both had to change their positions favoring paths to citizenship as a result of the new dynamic.

Meanwhile, Rick Santorum, polling at a brisk zero percent, joined Jindal and Lindsey Graham in jumping aboard with Trump's insane plan to toss the 14th Amendment out the window and revoke the concept of birthright citizenship, thereby extending the war on immigrants not just to children, but babies.

All of this bleeds out into the population. When a politician says dumb thing X, it normally takes ‘Murica about two days to start flirting publicly with X + way worse.

We saw that earlier this week, when Iowa radio host Jan Mickelson blew up Twitter by calling for undocumented immigrants to become "property of the state" and put into "compelled labor." When a caller challenged the idea, Mickelson answered, "What's wrong with slavery?"
This is really no different than the last 30 years of Republicanism and you know it, Matt. The difference is that Trump is forcing the media to either eat feces in public with a smile on their faces, or finally stand the fuck up and call Republicans evil.

Because you clowns haven't had a problem with Republican hatemongering til Trump, have you? The entire US press has been one great fucking gutless wonder.

Well, now you can stand up and be counted. You should be thankful for the opportunity to grow a fucking spine.