Wednesday, December 23, 2015

A reminder about winter gold seasonality

This post was written almost a year ago and scheduled for today.

It's just a reminder that there's been a very reliable pop in the price of gold (and miners) every January and February over the past decade.

This is a chance to make a quick 50% profit, even if you just buy an ETF. And any chance to buy a 50% pop over 2 months is something you just gotta jump at.

So watch the chart, and buy that breakout when it comes!

Monday, December 21, 2015

More fruitiness: Elliott Wave

Elliott Wave International - ooh look at that bank index shart! Where they give us this bank index shart and ask us to look at it:

And y'know what? Maybe the reason the bank index is still below the 2007 high is because banks like BofA had to dilute like fuck in 2009 to stay solvent. Plus the whole "hard to earn a profit lending at 0% real rates when the housing market is a shadow of its 2007 self" bit.

And I'm not surprised the global hedge fund index has underperformed the S&P 500: 90% of these clowns underperform the S&P 500, and then they even take their 2% & 20% vig from that. I'm only amazed that the clowns have only turned in a 20% return since the 2009 low, y'know, with the whole S&P up 200% thing. But I guess when you're a kleptocrat you don't care how much you suck as long as you can keep snorting hookers off cocaine's ass, and fuck CalPERS and the Harvard endowment for being dumb enough to invest with you instead of buying SPY.

And I guess if you're a clueless fucking moron you can read this Elliott Wave blather and find it clever and interesting and insightful.

So I breathlessly await this "C wave down".

Not not really I don't.

Kunstler's gone batshit

James Kunstler - OMG DOOOOOM. Quote:

As it were, all credit these days looks shopworn and threadbare, as if the capital markets had by stealth turned into a swap meet of previously-owned optimism. Who believes in anything these days besides the allure of fraud? Capital is supposedly plentiful these days — look how much has rushed into the dollar from the nervous former go-go nations with their wobbling ziggurats of bad loans and surfeit of production capacity — but what actually constitutes that capital? Answer: the dwindling faith anyone will pay you back next Tuesday for a hamburger today.

We now enter the “discovery” phase of financial collapse, where things labeled “capital” and “credit” turn out to be mere holograms. Fed Chair Janet Yellen herself had a sort of hologramatic look last Wednesday when she stepped onto her Delphic platform to reveal the long-heralded interest rate news. Perhaps Mrs. Yellen is a figment conjured by George Lucas’s Industrial Light & Magic shop (now owned by Disney). What could be more fitting in a smoke-and-mirrors culture? Anyway, the rude discovery that capital is not what it has appeared to be is now underway, with the power to derail political systems and societies.

Yeah buddy, that's why 10Y USTs are trading at around 2.2%. Because all credit looks shopworn and threadbare.

And inflation at zero percent totally for sure indicates that there is dwindling faith anyone will pay you back next Tuesday for a hamburger today.

I eagerly await your "discovery" phase of financial collapse. I wonder if it's going to look anything like a massive repudiation of debt as a dishonest system comes apart at the seams? What, has this guy become besties with Gary Wordsalad? He sure is laying the linguistic diarrhea on thick. Is this going to be as epic as Mr. Losemoney's epic crash-call bottom-tick of June 24, 2013?

What a fucking queer. I guess Kunstler's joined the rest of the tea partiers and started working for Vladimir Putin.

Upward redistribution of income: are rents the story?

Dean Baker - working paper on rents. Why yes, of course economic rents are the mechanism for upward redistribution of income. How the hell else do you expect the kleptocratic ruling class to make money? Wise investment and hard work?

Ha ha ha ha ha!


This paper argues that the bulk of this upward redistribution comes from the growth of rents in the economy in four major areas: patent and copyright protection, the financial sector, the pay of CEOs and other top executives, and protectionist measures that have boosted the pay of doctors and other highly educated professionals. The argument on rents is important because, if correct, it means that there is nothing intrinsic to capitalism that led to this rapid rise in inequality, as for example argued by Thomas Piketty.

Wait. Wait a sec. You're saying this is a paper by an actual economist?

Yes, apparently Dean Baker is a former professor of macroeconomics, as well as a founder of CEPR.

So hasn't this guy heard of Douglass North? That's kinda an important economist there, and he explains in detail how rents are produced by institutions. You could basically sum up the entire paragraph above, and much of the rest of the paper, as "go read Douglass North".

The people with power influence the political process to gain the ability to confiscate wealth from the economy. Basic fact. So obviously the ability to confiscate rents has nothing to do with capitalism, per se, but is actually just a feature of corrupt societies in general.

You don't have to limit your analysis to patents, financial sector, CEO pay and professional organizations, either; basically every institutional structure in every economy can be altered to feed more money to the kleptocrats. Union-busting legislation in the US, government subsidy of subsistence wages at Walmart, 2%-20% hedge fund fee structures, corn ethanol subsidies, and the military-industrial complex are all areas where money is taken out of the American economy and handed over to a kleptocratic elite who provide nothing of value.

In fact, given John Kenneth Galbraith's explanation of the positive effects of oligopoly, the problem is not so much government granting of oligopolistic power to corporations: the real problem is government granting of kleptocratic power to the rentier class.

So I guess the article isn't actually a paper by an economist as it is just another political screed. Oh well, that's fine. I guess that's what CEPR does.

Sorry for the lack of news

Well, I was pissed off cos I needed a 95 on the exam to get an A+ in polisci. But then I sat down at the table, opened it up, and...

I'd studied the Washington Consensus, in fact I've read Stiglitz's Globalization and its Discontents, andwouldn't you know it that was one of the essay questions.

The other was on critical theory, and dammit all wouldn't you know I've already studied everything from constructionism to Foucault in detail.

So it's quite possible I got a perfect score on that exam. Then again, the TAs seem to not want to give a mark higher than 90 to anyone who demonstrably knows even more than them on the topic. "Gee, you explained the central thesis of post-modernism better than any of our polisci profs can, because you actually read 1000 pages of Foucault and Lyotard, but we're going to dock 5% because your paragraphs are too short."

Oh well. All that's left is a stats exam on Tuesday, and I just can't be arsed to study for it. So here's some of the news that's been piling up:

New Deal Demoncrat - weekly indicators. Again, real estate, M1 & M2, tax withholding.

Calculated Risk - LA port traffic increased yoy in November. Again, that's the US economy right there.

Macro Musings - the Fed wants a 1%-2% inflation corridor. Quote:
Yes, even though the Fed has an official 2 percent inflation target revealed preferences indicate the real force shaping Fed policy has been a 1-2 percent inflation target corridor over the past seven years. Once you understand this point all other Fed mysteries begin to clear up.
Well, they must not be all that concerned about zeroing the inflation expectations term if they're pursuing a 1%-2% corridor instead of accepting temporary overshoots of 2%. Personally I think it's awful gutsy to tiptoe along the knife-edge of deflation this way: maybe they're worried that Summers' "secular stagnation" could progress into stagflation unless they nail inflation down at zero?

The question is, what does the next Fed do for an encore 10 years from now? Nail down a 0.2%-0.4% corridor? At some point Feds have to accept higher inflation than was around before.

WaPo - women are dumbasses at assembling Ikea furniture. Hey sweet-tits, maybe the reason we guys don't follow the instructions is because we're not idiots?