Tuesday, January 19, 2016

B2Gold sucks

It's the news:

Calculated Risk - world oil supply and demand. There's still too much oil, so the price has to go down. Sorry, oilbugs, but we in the gold world have seen this play out a few years ahead of you boys.

New Deal Demoncrat - it's only a commodities recession. Sure, but I gather the central fear isn't so much oilpatch weakness, but rather the ultracollapse of China.

Olivier Blanchard - I just don't get it. He thinks the worldwide market weakness is just herd behaviour. Well, probably, but the herd doesn't stop til they realize they're being silly.

Krugginator - oil goes nonlinear. The argument goes that oil going down too fast can have a negative effect on the economy. And you know things have gotten silly when even economists are commenting on the stock market.

Gavyn Davies - the necessary evil of Chinese devaluation. A basic unalterable rule of markets is that currency values are highly dependent on expectations. So it is literally impossible for China to pursue a slow and measured 10% currency devaluation over a year: once it becomes necessary it'll happen in a couple days. We've seen it in the past and nothing has changed in the physics of currency markets since. Even more, it has to overshoot til the drop generates buying support in expectation of upward recovery.

FT Alphaville - signs of capitulation. Not that things can't capitulate more, of course.

WSJ - the world's 62 richest people are as rich as the poorest 3.5 billion. Even more, the richest 1% has more wealth than the other 99% combined. My question: so when does the bloodbath begin?

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