Saturday, October 17, 2015

Friday, October 16, 2015

Friday video: Black Tambourine

Here I was wondering how it happens that after 20 years Scott Cortez finally got off the fucking couch and turned Astrobrite into a live band, and then I come across a video by Black Tambourine:

And I realize that Cortez can finally get his music out there because there is no gatekeeper anymore, and all the great music of the 90s is finally available to everyone.

Thursday, October 15, 2015

Documentary: the one year that the UK had a nice warm summer, this happened

This is what happens when England gets nice weather for a year:

Cookie Monster is at it again, this time demolishing Rubicon Minerals

IKN - Brent Cook's analysis of Rubicon Minerals. Passed on by me just because it seems to piss off the dime-a-dozen crowd at

And FWIW I don't see consistent mineralization there either, and I'm just some dummy who doesn't even have a junior mining newsletter.  


Oh Ice-T, you're so funny

Yeah I only just found out about the Tutuola meme today:

Wednesday, October 14, 2015

US market update

Looks like there could be another rollover for a bit.

 $INDU has already rolled over and begun printing a long red candle. Apparently, Walmart something something.

SPY's not rolling over as much, but whatever. We'e seen so many fails at 3 points above the SMA(50), one more seems reasonable to expect, even if it only results in a higher low around $190 or so.

And maybe people will barf their short volatility some more. That's good, I'd very much appreciate the opportunity to buy back my HVI at 50% cheaper.

What's really cracking me up is, now that downside protection has gotten relatively expensive, Whitey is looking around for cheap US puts and has realized he can buy gold and the gold miners for a song.

Whatever happened to Jeffrey Currie?

Hey Jeffy!

How's that $1000 gold call going, Jeffy?

HARDCORE ECONOMICS - long-term US productivity decline and Republicanism

One of my interests is how right-wing economic dogma from American conservatives might be the actual cause of worldwide secular stagnation.

So today I've been looking for articles on public infrastructure spending: the idea is that the Cobb-Douglas production function incorporates government-owned infrastructure, either as a separate term, or as a modifier of the TFP coefficient.

So when you have a government that spends on infrastructure, it increases TFP. Of course, this only happens if the infrastructure spending has a positive return - it's better to build a new highway through LA than through the middle of Alaska - and if all subsequent maintenance (versus the very real yearly depreciation of physical structures) can be funded from the increased tax revenue generated by the productivity improvement brought by the new infrastructure.

This is all pretty fucking obvious to me, because I've worked in highways for 15 years, but apparently economists don't really get it. In fact, in undergrad we're all taught the classical/neoclassical propaganda that all government spending is evil and must be eliminated.

Anyway, Aschauer's 1989 JPE article seems to be the central paper starting the whole area of research into the TFP-growing role in public infrastructure spending, and guess what? The Chinese like his paper:

Aschauer 1989, via (pdf)

And guess what?

The results of this paper suggest the importance of considering public capital expenditures in attempting to explain the productivity decline. Table 7 presents average annual growth rates of total factor productivity and the nonmilitary public capital stock. The growth rate of the net stock of government capital fell from 4.1% during the period 1950-70 to 1.6% during the later period 1971-85. Fig. 1 is instructive, picturing the normalized relationship between total factor productivity (after accounting for the effects of time, the private factors of production and the capacity utilization rate) and the public capital stock (detrended). Dramatically, the fall-off in productivity growth is matched, or slightly preceded, by a precipitous decline in addtions to the net stock of public nonmilitary structures and equipment.

Really? The post-70s collapse in US TFP growth is the result of right-wing neocon policies that have constrained US public infrastructure investment?

I know Aschauer didn't explicitly say this, but that's definitely the explanation I get from it.

If only some proper economist like Krugman read my blog! Maybe we'd get some sort of discussion on this!

Secular stagnation my ass, Summers. You refereed Aschauer's article, you dumbass: quit blaming everything on excess savings. The world is screwed because of insufficient government investment.

And if public infrastructure investment can increase the rate of return to private capital, then bam! all of a sudden you have generated an incentive for increased private investment, all those excess savings get mopped up, and the world economy goes back to gangbusters for another few decades.

All we have to do is quit with the idiotic neocon fiscal policies that chronically underfund public infrastructure.

Oh, and about gold as a harbinger of doom....

In case you're surfing the internet reading a bunch of white-ass honky cracker clowns blathering on about how we can read the present strength in the gold price as a harbinger of worldwide economic doom and investor fear....

Tuesday, October 13, 2015

CBOE skew hits record high, therefore buy with both fists

Zerohedge - market skew has never been higher. I'll link to this neo-Nazi Russian-funded disinformation and propaganda site before I link to BI.

Anyway, this article says far-tail crash protection has never cost more. The Russian-funded Bulgarian Nazi traitor to America even provides a great chart:

Which is great because it shows us the previous spikes occurred in Jan and Apr 2014, which were both great times to buy SPY.

Meanwhile, the chart also shows a really really really really low skew in the beginning of 2008, which actually would have been a darn good time to sell every stock you have, double-short the civilized world, and go hide in an underground bunker for a year.

Oh, I see skew was also low in March 2000, which is exactly when you should have puked the NASDAQ.

Hey, what about that other spike in 1998? I guess that coincides with the August '98 20% correction, which was followed by a 50% rise in SPY. Yes, SPY, not QQQ.

Wow, guys. A more fantastic contrary indicator I have never seen.

I guess that so many of the white-ass honky crackers are piddling their panties that they've decided to forego inverse SPY ETFs and throw all their idiot honky client money right into far-out-of-the-money puts.

Which I guess is a sensible strategy if you're getting all your news from a den of idiots like BI or ZH. Which I'm sure is where all the hedge fund managers go for the latest news.

Monday, October 12, 2015

And Angus Deaton wins the Not Nobel Prize in Economics

WSJ RTE - Angus Deaton wins the Nobel Prize in Economics The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

There are links there to what he's written over the years. Lot of neat stuff - poverty, economic development, and elasticity of caloric intake in India, for example, or even an article titled On the Behavior of Commodity Prices.

And just so that you can compare him with what clown "economists" like Greg Mankiw sound like, here's an example of what Angus Deaton, the prize-winning economist, has said

In your book you say that inequality perpetuates itself, especially when the very rich have no stake in public health or public education. Can you elaborate on that a bit more?

So that’s the dark side of inequality. On the bright side, if the returns for going to school go up then there’s a big incentive to go to school and that brings you up and that seems terrific. On the other hand if you don’t have the talent to go to school you get left behind and there’s nothing you can do about it. And that sort of inequality doesn’t seem like such a good inequality and the people who don’t have that talent are relatively worse off than they were before. But the really dark side is what you just talked about, which is this issue when you get extreme income inequality and these people that are very very wealthy. They’re so wealthy they hardly need any government. They don’t need government education, they don’t need healthcare, they may not even need the police or the law courts because they can buy lawyers and policemen or whatever. They’re relatively independent of these things that the rest of us really need and so they have no interest in paying taxes. So it’s very much in their interests to undermine the provision of public goods.

You know the government shutdown that recently ended in the United States? The fact that it was fought over the healthcare extension, and the fact that that strategy was developed by wealthiest people in the United States is a very good illustration of the sort of themes I’m talking about.

You are concerned about the future of democracy because of this growing inequality. Can you elaborate on this?

I think it’s worse in the United States that it is in the United Kingdom because of the pervasive importance of money in politics. But the lobbying that’s become very important in the United States is not just the buying of politics, you can do that anywhere. I think it’s much less important in the UK still, but, before Brits get too complacent about “this would never arise here”, it didn’t use to be very important in the United States either. There’s been an enormous increase in it. In fact the real problem from an economist’s point of view is why isn’t there more of it? Because the rewards for lobbying can be ginormous and the cost of lobbying is way smaller than the rewards so why isn’t there a lot more? I think Gordon Tullock was the first to raise that question of why isn’t there more money in politics? That’s the real puzzle. Basically if the rich can write the rules then we have a real problem.

A couple colleagues of mine have recently written books in which they studied voting patterns in the US Congress and matched them up with the preferences of the constituents of those Congressmen. And they’re very closely aligned with the preference of their wealthy constituents and not at all aligned with the preference of the poor constituents. So there’s a real movement of democracy in the direction of plutocracy and that is something to worry about. On the other hand I don’t think the game is over yet. We may or may not already be at half time or something. If you think about the last election in the United States, one of my favourite stories is that, you know the plutocrats really thought they’d won and they had bought enough polls in pleasing direction to believe themselves that Romney was going to win. Apparently you could not park your private jet in Boston because every fat cat in the country who contributed to the Romney campaign had parked there for the victory party, which of course never took place. So that’s a case where the money did not overcome democracy in that way. And so, the more recent crisis is some attempt to come back at that and so there’s an endless battle over those issues going on but I don’t think we’re done yet.

Gold: because of course it does

Gold turns back at $1165-$1170:

Because Wall Street Whitey trades gold contracts based on technicals, and lookie lookie:

Oh wow! Some white-ass honky cracker drew a horizontal pinkish line at about $1165-$1170! Hey, here's an idea - let's all put our market sell orders at $1165-$1170 and pocket our short-term gains! Because America is the only thing that matters to gold!

So now you can just sit back and watch for what happens next. Will gold only drop to the short-term EMA at say $1140, or will it have to retest its SMA(50) at, say, $1125?

Either one is a positive technical development, as long as it goes back up after. That would mean the longer-term trend is back to accumulation, and that'll be swell considering the Indians and Chinese have bought all the gold that Whitey would want to accumulate.

So you gotta ask yourself, punk: was that the bottom in gold?

Sunday, October 11, 2015

A bit of Sunday news

Here's more edumacational material for y'all:

New Deal Demoncrat - weekly indicators. Mortgage applications, real estate loans, M1 and M2, tax withholding yoy, and gasoline prices are all fantastic, NDD. Quit piddling your frilly pink panties.

Calculated Risk - demographic impacts. A good article on how US demographic trends will move the needle over the next few decades. You can't fight demographics. But I'd like to know if I can study the economics of demographics in undergrad.

Antonio Fatas - savings glut and financial imbalances. On the global savings glut, it finishes thusly:
What the world is missing is investment demand. The real tragedy is that investment in physical capital has been weak at the time when financial conditions have been so favorable. Why is that? Jason Furman (and early the IMF) argues that the best explanation is that this the outcome of a a low growth environment that does not create the necessary demand to foster investment.
Y'know...There's a part of the world with 4 billion people living in poverty that is trying to expand economically, but is running into the problem of insufficient physical capital. So maybe instead of crowing about some silly "Chinese debt explosion", maybe people should review their fucking NPV lessons and realize that still there's a fantastic investment target for all the world's savings and more.

Calculated Risk - household debt service ratio is at a 35-year low. Tell me more about this "massive repudiation of debt as a dishonest system comes apart at the seams", Gary.

Tim Taylor - the EZ crisis, crystallizing the narrative. This explains what really caused the EZ crisis. With a link to an entire book.

Paul Romer - endogenous technological change turns 25 (pdf). Groundbreaking paper, and he's made it available for free download. Read it if you're interested in macroeconomics.