Friday, January 6, 2017

Thursday, January 5, 2017

Economics question for you

In a standard DSGE model, assume the only two goods or services being produced are lap dances and full-release sensual massages.

What is the equilibrium labour supply?

Answer after the break.

One the twelfth day of Lemmymas

My true Lemmy gave to me....

Vladimir Putin's official US information service at it again

And you still believe Zerohedge isn't funded by the Russkies?

Zerohedge - the US has begun amassing troops on Russian border.

Yeah, don't bother clicking through, they haven't. It's just more Russkie FUD propaganda.

Yet just a few short months ago the official Russian narrative, as evidenced by the trolls posting on social media, was that Hillary Clinton was going to lead the US into a third world war with Russia. What changed? Aren't we all safe now that they elected Trump?

By the way, why isn't everyone on the loony right wing stocking up on gold anymore? Didn't Trump's "economic advisor" Kudlow say he was in favour of moving the US back to the gold standard? I mean, gold would have to go to $50,000 US in order for that to work. Shouldn't you all be stockpiling gold right now?

Jojo kinda called the gold miners

Get back Jojo! - Dec 30 video update.

He sorta called the present minispike in gold miners.

Wednesday, January 4, 2017

On the eleventh day of Lemmymas we got a really good Wacken

Few people know that he had a second face lump, that would appear and disappear, rarely and unpredictably, temporarily orbiting the larger face lump for a while, like the Lesser White Oval of Jupiter.

He plays the song slower here because he's at a metal festival and doesn't want to confuse them.

Ritholtz on 2017

Ritholtz - what history tells us about your investments. Some general advice about investing this year, plus a fantastic kick in the teeth to those who blather about Shiller PE:

Let’s start with CAPE — the cyclically adjusted price-to-earnings ratio. Think of it as the 10-year P/E ratio. It is high for U.S. equities by historical averages, elevated for Japan, moderate for Europe and low for emerging markets. Those are simple facts.

If I wanted to scare people, I could selectively pull data showing that at present we have the highest reading outside of 2000 (43.2), 1929 (32.5) and 2007 (27.6). But cherry-picking dates to scare people is bad form, and I prefer to use the data to look for evidence.

What does it show? Since 1990, the S&P 500 has traded above the average CAPE ratio in 307 of 324 months — that’s 95 percent of the time. If you abandoned U.S. equities when the CAPE ratio was overvalued, you would have missed gains of more than a 1,000 percent over that time.

Don't get suckered by all the CAPE nonsense. The market goes up til it goes down, it's rich when people are optimistic, and there's no such thing as divining the future whether by casting runes or tarot or simplistic technicals.

Tuesday, January 3, 2017

On the tenth day of Lemmymas

I don't think Lemmy would mind this either, and if he did it doesn't really matter since he's fucking well dead.

Goldbuggery to start the new year

Well, this semester I'm taking an overload, and it includes a 4th year theory course and two heavy-reading courses, so you might be getting a lot less commentary from me til April.

As for right now, I'm looking at gold and the miners and wondering:

1) Last year gold's bottom was conclusively printed in December, followed by a long ride upward. People might expect to see the same thing again this year.

2) Gold's post-Trump November puke was too far too fast, considering you don't even know what Trump is going do do. Fuck, that clown Kudlow might convince The Orange One to move to a gold standard! There's a long way to get back to $1260, and gold might drift up there.

3) Gold is too far below its SMA(50), and it spent an entire month aggressively dragging that average down. That should beg for an upward correction.

4) more peripherally, UST yields also moved too far too fast given the lack of actual policy change. Treasury yields are NOT I repeat NOT dependent on future debt & spending outlook: they're dependent on the worldwide savings/investment equilibrium, and Trump certainly ain't gonna be moving that in an FDR direction!

5) the silver and GDX charts show a far bit of accumulation the past two days, and I'm not sure that's all just rebalancing. SLV has already retaken its (admittedly downward-trending) Bollinger mean, and GDX is flirting with its SMA(50). That seems to at least hint at a deluded level of hopefulness among the goldbug world, probably informed by point (1) above.

6) Russia AfD Le Pen.

7) Indians and Chinese are the only people who buy gold, dumbass.

That there is just some stuff for you to ponder. I have no big call on gold and the miners yet, but did buy myself a 10% exposure today.