Friday, February 2, 2018

Quick snark

No kidding? Someone finally clued in that a multi-trillion dollar tax cut to the rich, financed entirely with debt, would be massively inflationary and screw yields?

a brief note on SPY and $VIX


It's important to keep in mind that a 15 intraday $VIX is nothing, in the broad scheme of things.

And if it gets above 17, that'll be a fear level that people haven't seen in over a year. Wonder how they'll react?

Will they blame Trump?


It's lost the Bollinger mean, so maybe it drops all the way down to 270, to test the SMA(50).

But even if it does that, that only means that some of the January froth will have been worked off.

You'd have to wonder what it would take to drop SPY back down to a MACD of 1 or 2.

Friday videos: where EMF got their riff from

Here's where EMF got the riff for "Unbelievable":

Wednesday, January 31, 2018


This morning, I watched a 5-minute feature on bitcoin on TV.


Fork in it, done.

Tuesday, January 30, 2018


Is it:

Business Korea - US asks Korea to examine crypto transactions. Well, yes, insofar as this will shut down North Korean, Chinese and Russian demand, and it's not like there are any other backward countries who only discovered banking a decade ago who are now willing to buy Bitcoin en masse.

But no...

BBC - Facebook bans all cryptocurrency ads. Well, getting rid of an avenue for finding really stupid people to sucker with your shitty coin IPO does help.

But no.

The sign of the ultimate top and coming hypercollapse of crypto is this:

BBC - Really, no honestly, I'm not shitting you. This is not a joke. There really is... no honestly, I'm not making this up... there really is a fucking J-Pop band that have based their entire fucking image on crypto. You don't believe it?

Here's fucking song lyrics translated already:

And more bitcoin news

Daily Express - South Korea shutting down Bitcoin. Or, rather, they're getting rid of its only source of demand:

Speaking to BBC Radio 4's Today programme, Mr Taylor continued: "I’ve seen various estimates that between 20 and 30 percent bitcoin trading has been through South Korea at some point. Same for Ripple and some of the other key currencies.

"They were holding currency on behalf of anonymous actors. What South Korea has now said is ‘we think there could be fraud, we think there could be money laundering.’ All kinds of bad activity could be happening.

"If we prevent anonymous people from being on these exchanges then maybe we can reign in some of that."

New regulatory noise emerging from New York will concern wallet holders with Fortune reporting that Federal judges in Brooklyn, New York, are about to rule on the question of what exactly bitcoin is and whether it can be regulated.

Don't they understand that criminals are the only demand out there for cryptocurrencies?

Well... and stupid libertarian idiots. But mostly criminals.

More Nouriel Roubini bitcoin doomery

FFS, just read Roubini's twitter feed.

Mashable - a little-known token may be fueling bitcoin's rise. Apparently, the bitcoin price is being gamed.

Bloomberg - SEC freezes a $600M crypto IPO. Its creator is on probation for felony theft... ok, we can get past that, but why would you name your crypto ArseCoin?

Fiat and seigniorage

Dr. Doom weighs in on Buttcoin:

Nouriel Roubini - bitcoin is bullshit. Here's the relevant quote:
As a currency, Bitcoin should be a serviceable unit of account, means of payments, and a stable store of value. It is none of those things. No one prices anything in Bitcoin. Few retailers accept it. And it is a poor store of value, because its price can fluctuate by 20-30% in a single day.

Worse, cryptocurrencies in general are based on a false premise. According to its promoters, Bitcoin has a steady-state supply of 21 million units, so it cannot be debased like fiat currencies. But that claim is clearly fraudulent, considering that it has already forked off into three branches: Bitcoin Cash, Litecoin, and Bitcoin Gold. Besides, hundreds of other cryptocurrencies are invented every day, alongside scams known as “initial coin offerings,” which are mostly designed to skirt securities laws. So “stable” cryptos are creating money supply and debasing it at a much faster pace than any major central bank ever has.
If you don't know why that's important, go read the Wikipedia article on seigniorage, and maybe see if you can learn something.

Cryptocurrencies are just private seigniorage: they are printed, and then the printers accept goods and services (or, ha ha, real currency) for them.

In fact, it's blindingly obvious that a world with one private currency will quickly turn into a world of many private currencies, as long as the market offers more than the cost to produce. It is impossible to limit the total private currency money supply without hard-limiting either the cost of production or the going price.

Any idiot with a basic understanding of micro should know this.

And thus the only fair cost for any crypto is the cost of production: anything higher is just a seigniorage markup.

Market comment, now with charts again

Let's see if I can post a chart, now that I have a new computer running Edge in Windows 10:

Yay! Now I can post charts on my blog again!

So, as of this sec, SPY has broken thru its EMA(10), which was support twice in December. Again, rule of threes.

MACD is way high, and is about to trigger down.

RSI was way high for a month, but is now back below 70.

And everyone knows this. And also everyone knows that the market needs to correct. And also everyone with half a brain knows that Trump's tax breaks, on an earnings basis, were already baked into the market 10 times over back in the fall, thus this market has zero support.

And we know everyone knows this, cos I mean just look at $VIX:

Everyone's been buying downside protection since the start of January, because they knew things wouldn't hold. Hell, even $TRAN was telegraphing a change for the past week.

So everyone should sell like the fear of god is in them, and I'd not be surprised if the Bollinger mean didn't provide more than just intraday support in the next week.

Some US economic news

With the market crazy high, and $VIX popping, let's see what we can dig up for US economic news:

Reuters - US consumer spending rises, savings at 10-year low. The low savings just means consumers aren't protected in anticipation of the next downturn... which is fine as long as there's no downturn.

New Deal Demoncrat - is the economy partying like it's 1999? Sure, and yet 1999 was the best year to invest in the last half century. So it doesn't mean too much, if 2000 doesn't come for another few years.

WSJ (paywalled? I get their RSS feed for free so I dunno what the problem is) - 4Q GDP. It's important to note the US has only just now closed the output gap, and you wouldn't expect output gap closure to happen just a year before the next recession.

Calculated Risk - chemical activity barometer increased in January. So we know industrial activity will be growing. So there is at least another year of growth ahead.

Remember, even the MBS crisis took a few years to go fubar.

So god knows. Maybe the market goes even higher to a really crazy forward P/E before something eventually happens.

Or maybe governments start redistributing to the poor, supporting consumer spending with a new 1950s-style boom, while curtailing giveaways to the rich that only end up inflating asset markets.

Ha, ha.