Saturday, April 27, 2013

Os Ovni's "Holographic Dreams"

Weird and strange electronic music, which is the best kind.

It's almost as if Cosmos Computer Music suddenly decided to do pop.

That line's just there to freak out some guy who thought only 23 people in Toronto had ever heard of him.

Catnip: Egress to Oblivion?

Here's an educational short film for you.

Drugs are bad, m'kay?

High Places' "When it Comes"

Massively clunky beats, and one heck of a lot of yarn.

Some weirdo news

Because sometimes the news has to be fun.

The Chive - why you never give your cellphone number out on the internet. Fifteen hilarious trolls by text.

Don't even reply - emails from an asshole. You don't have to troll via text, email works well enough.

Uproxx - Alex Jones' now has a dating section. Something something dick in crazy.

Adrian Day interviewed by Kitco

Nope, no Daniela. It's the other guy what's-his-name, getting Adrian Day's opinion on the recent collapse of gold.

Some background articles regarding Silvercorp, and their connection to B2Gold

Here are some news articles regarding the ongoing story of Silvercorp, in case you forgot all about them:

Globe and Mail - In China, Silvercorp critic caught in campaign by police.
Huffington Post - Huang Kun, Canadian citizen, arrested in china after alleging fraud by Silvercorp Metals. - Silvercorp uses Chinese police to silence and suppress censorious short-sellers.
Globe and Mail - RCMP eyes Silvercorp investigation. Not that they'll do anything, since the RCMP and Canadian government are riddled with Chinese agents.
Vancouver Sun - Silvercorp faces class-action lawsuit over allegations in China.
Mineweb - Silvercorp hit by pair of class action lawsuits.
Globe and Mail - SEC probes Silvercorp short-seller fight.

And here's a link to an Alfred Little blog, with some Silvercorp stories and writeups. But I'm sure it's all lies.

It would be interesting to email Clive Johnson at BTO to ask him all the good things he has to say about having Robert Gayton from Silvercorp sitting on B2's board of directors.

I expect Clive will respond that Robert Gayton is a man of good character, has said he has seen no proof whatsoever of Silvercorp's alleged misdeeds, and indeed has proof that it's all a manufactured attack by unscrupulous short sellers. Because I'm certain that B2Gold would only ever allow a man of good character and diligence to sit on their board of directors.

I mean hell, look at this guy's CV:

Robert Gayton CV (Businessweek)

Friday, April 26, 2013

Princess Chelsea's "The Cigarette Duet"

Hilarious fun song. Hilarious fun video.

Yet more fun with blog stats

Since IKN is creeping out his readership with in-depth analysis of his blog stats, I thought I'd show him how it's really done.

To wit:

Yup, and I stand by it, Al. You're a fucking queer with your queerbait $10,000 gold call.

God! Vain much, Ned?

1. Fuck off.

2. I can guarantee you that she would have nothing to do with any bloody toothless Geordie. Not that I know anything about her at all, but simply that most people in the world have higher standards. If you're looking to hook up with someone maybe you should try the singles bar on Isle of Lewis; I hear they have a man shortage up there, and their incomprehensible gibberish language sounds vaguely like your own.

Well since you're a regular reader of my blog, maybe you can see to it that your fucking fascist scum compatriots in China set Huang Kun free, apologize to his family and to Alfred Little, and make a full and frank confession to the Canadian securities regulators about the illegal kidnapping and detention in an attempt to silence investigation into your company?

Evening news

Reformed Borker (Bork Bork Bork!) - the inter-sector rotation has begun. What's going to be the new "it"? Materials. Um... are you shitting me? You just finished shitting all over them for months and now you like them?

Dragonfly - Ford is preparing for long-term breakout. I dunno to what extent you should expect US automakers to break out, considering the state of the EMs and the demographic shift in the US away from driving.

Bloomberg - China warns on financial risks. See also

FT Alphaville - Chinese leaders more worried about financial crisis than slower growth. That's good, they can worry about both if they want. As long as they figure out how unproductive new debt issuance has become.

Mineweb - speculators turn eyes to Colorado Resources. Noted because they were one of the two explorecos at that Brent Cook Kitco extravaganza at PDAC. So I guess Cookie hangs around with explorecos who actually discover things.

I'll hold my nose and post this anyway

Tommy Humphreys interviewed Rick Rule recently, and as you know the best thing I can say about Rick Rule is that he's somewhat more affable than Doug Casey.

But anyway, here's a link to the interview, and Rule says he's been a big buyer of Bear Creek and Lydian.

Which I guess means he's ripping off Brent Cook and IKN's best ideas.

Well, if it makes him money, and makes them look good....

Or a Euro margin call....

Zerohedge - who got the golden margin call?

This still doesn't disprove my wild-assed guess that the margin call was driven by people getting killed in the long-commodity-short-yen trade. God knows anyone who tried that crowded manoeuvre is probably using margin, right?

Friday news

Bespoke - what's wrong with this picture? It's that the AAII bullish sentiment was recently at its lowest since the depth of the 2009 crash, while the S&P 500 is 100% higher. If you want a hated rally, this is it!

BI - Japanese yen surges. Maybe that explains the collapse in commodities today: everyone who's long a commodity short yen is unwinding. It was one contributor to the gold crash, where (again) the other hard commodities also dove. Consider it a chance to load up on the stuff you didn't load up on Wednesday, maybe? Or not?

JC Parets - sell in May and go away? Everyone's talking about it now - BNN just said they're going to devote a whole week to it - so it might just be wrong.

FT Alphaville - marginalized in Spain. A massive new underclass of permanently-unemployed is being created. Of course, you should have expected this, since the dream of every right-wing neo-Fascist economist is to have a permanent slave underclass. And that's why the Austerians won't budge even now that Rogoff's thesis has been proven to be a politically-motivated lie. Really, they make us read Marx in sociology class - why not in economics too?

BI - the gold crash was a good thing says Zervos. He says it's not an indication of coming global deflation - and I agree, which is why you shouldn't ignorantly follow charts without paying attention to market events. He says it was the hyperinflationists getting carried out in bodybags - and I disagree, because it affected other commodities as well; also, the pukers weren't the hyperinflationists, they were the ignorant hedge funds who Tchir said were invested in GLD for no particularly good reason, cos they thought GLD was a hedge against something or other so why not.

Didja know Kraftwerk played their back catalogue at a series of concerts at the MoMA? Then again at the Tate?

Here's Kraftwerk playing Metropolis at the Tate Modern in February:

Here's Kraftwerk playing Spacelab:

Here's them playing La Forme, which they never did on the last tour:

Radio Stars/Uranium/Transistor/Ohm Sweet Ohm:

They even played Sex Object live. It's hilarious to see Rolf wince as he sings the lyrics.

Thursday, April 25, 2013

White Ring's "Eternia"

Very gothy and synthy.

Oh look what's gone up today

Copper's up and the ETF volume looks excited.

Coal is up.

Steel is up.

Maybe this is because

China's really flown up and

India's been moving up.

I wouldn't trust China to break its SMA(50), except India already did.

Who knows? Maybe the EMs aren't dead just yet?

Low Sea's "Lay Down the Truth"

Very ambient gawthy pop song from Low Sea.

Five bits of morning news

FT Alphaville - China's growing debt and where it might be headed. If China's really interested in shifting to a consumer-oriented economy, then why still so much debt generation? Maybe as Shaoul says, it's just a pile of new debt going out to service old unpayable debt. The credit intensity number fightens and confuses me.

WSJ - China's economy slams on the brakes. If tightening rules on real estate has such a huge effect on the Chinese economy, what does that say about the health of the Chinese economy?

And for an opposing view,

Bloomberg - Goldman Sachs says Chinese valuations appeal. Shanghai trades at 9 times estimated earnings. But maybe there's more perceived downside risk now, so the valuation should be lower?

JC Parets - what happens if FCX rallies? I guess it better, otherwise the H&S means it goes to $12. Which would be great for DMs and doom for EMs. - Greece to push Germany for war reparations. Y'know, since the precedent of asset confiscation has already been set, and the Eurozone plutocracy is so much in favour of this new-fangled idea, why doesn't Greece simply confiscate all German assets within Greece? Or is it wrong when the Germans aren't the ones stealing everything?

Oh and also, Albert Edwards is a fucking queer

BI - Albert Edwards says "Stocks will crash, hyperinflation will come, and gold will go above $10,000!!!1!"

Oh give me a fucking break you fucking queer.

How about if you tell me what's going to happen in the next 3 months so I can make some money while awaiting the queerbait apocalypse.

Gold is broken, and that's a good thing

One of my neat talents is being able to go to sleep with a bunch of half-baked ideas in my head, and wake up the next morning with an insight.

I got pretty good at this in university. When I had an essay coming up, I'd do a bunch of reading on the topic. I'd write down notes: it seems the act of writing things down helps organize thoughts (since you have to write it down in a context that's useful to you), but also helps you remember (probably because you're using a different part of your brain than when you're just thinking, so your memory gets reinforced).

I wouldn't start the essay at all til the night before it was due. But when the time came, I'd watch Letterman's monologue at 11:30 (humour helps get the blood flowing to the brain), then have a coffee and a couple smokes (good for concentration, especially if you've got concentration problems like me), and then spew out 1000 words an hour of pure gold. And yes I usually got good marks, as long as I remembered not to criticize the prof's favourite writers.

Part of my reason for this came from my second-year course on Freud. He had this idea that it's not just your conscious mind that thinks; the unconscious and subconscious also do thinking, you're just not aware of it. So, I felt I was just taking a bunch of reading, and assigning the work of synthesizing a proper thesis to my unconscious/subconscious. He generally did the assigned work quite well, so I've learned to trust him now.


So this morning I woke up with an interesting little tidbit in my head about gold and GLD.

Of all the things said about gold in the past few weeks, these were the ones that really struck me:

1) Peter Tchir saying that the selloff in gold was driven by the selloff in GLD.
2) Soros telling the SCMP that he felt gold had been "destroyed as a safe haven".
3) Probably a fair bit of goldbug screaming about "paper is not gold!!!1!" that does have a grain of truth to it.
4) Aw, let's throw in IKN's "gold is an asset class damn you all" screed that he wrote in his newsletter a while back, which I can't find on the internet right now, so here's a link to a post where he called gold a bubble.*

OK, so I'm down with "gold is an asset class", assuming we're talking physical metal here, and I've already fallen in love with the idea that it's the only one without counterparty risk (supposing you can stop people from stealing it from you, I guess).

And like I said, I already know that GLD is not an asset class the way physical gold is. It's a synthetic whose price is derived from physical gold, but GLD has counterparty risk (e.g. if HSBC goes bankrupt or your discount brokerage decides to screw you and take all your shit - don't roll your eyes, we're talking fat tail risks here). GLD is an equity, I guess, or whatever fancy term they've invented for a fucking equity.

And since you know I'm the type of guy who likes to ask about everything "but how do we calculate its value", and who likes deciding on what number to use for a discount factor because everything has to be risk-adjusted in my mind, you can predict what my mind splooged out this morning after the stupid cat got me up at 5AM.

I realized that GLD can get mispriced.

GLD shouldn't always sell for the price of 1/10 a troy ounce minus whatever money HSBC has scammed out of it for management and storage costs, if the market is working properly. When there is risk in owning GLD, it should sell at a discount to physical gold, right? It's not gold, it's a derivative, and so when there's more risk to owning GLD than there is to owning physical gold, GLD should sell at a discount to physical gold.

That's how an efficient free market should work, right? Equities get discounted when perceived risk increases.

And so there's a problem here, as Peter Tchir noted. Because if GLD is selling at a discount to its purported, non-risk-adjusted NAV,
the “arb” would be to buy the ETF and sell more gold. 
But he points out that in that situation you drive down the underlying, which then drags down GLD. That's positive feedback.

Positive feedback, in electronics and control systems theory, pushes the signal down to zero (or up to the top bound if its effect is additive, which it's not here) unless something else moves in and stops it. The physical market was probably what intervened to stop the drop.

(Though of course one commenter noted that the supposed physical market scarcity might just be temporary, because dealers don't want to sell for $1400 the gold they bought at $1550. So there might be a caveat for the longer term. But if we're looking at the instantaneous GLD/gold situation, the physical market has definitely stopped the move to zero.)

Now add to that someone's (JC Parets?) basic fact of markets that people decide to buy when prices go up and people decide to sell when prices go down.

The result of all this, which as far as I can tell is an addendum to what Tchir wrote, is:

Any time when risk of holding GLD becomes nonzero, GLD's risk-adjusted value will drift below the value of its underlying; at that point GLD must go down. And as Tchir notes, that drives down the underlying. So physical gold goes down.

And that's why Soros would say gold is broken. The GLD ETF has fucked everything up. The volatility of the physical gold price hasn't just gone up because of the increased liquidity resulting from GLD's existence; volatility has also increased because GLD has added positive feedback effects to the physical gold price.

Plus the hedge funds are fucktards. As Tchir hilariously writes,
It is one thing for a commodity focused hedge fund to lose on gold. It isn’t even so bad if a global macro fund does, but the problem is when funds that really don’t have much business being in gold have added positions. As a “hedge” or as an “alternative”. Whatever the excuse was, many funds had accumulated some gold, if for no other reason than it was working and seemed like a good “hedge” to something.
And it's hilarious because GLD is not a hedge against anything to begin with.

Because it's not gold.

* - I'll also include a link to an old Otto post about copper not being an asset class, cos he makes fun of Ambrose Evans-Pritchard, and I think both of us always need reminding what a whackaloon AEP is.

Wednesday, April 24, 2013

Belong's "Come See"

Someone in the comments section called this "noisy kraut-rock". I doubt you can call something like this "kraut-rock"; maybe more like Spacemen 3.

Noisy though is correct. Great.

The push-around-the-bots game

The bots are back on the TSX gold scene.

I grabbed a bit of Lydian for the hell of it, since it hasn't yet bounced as BTO and OGC have.

Guess what? Once you buy, the bots all follow into that price.

Essentially you can drag them around behind you.

If you'd like to drive Lydian up to $2, now's your time. :-)

Some items of news

Reformed Borker (Bork Bork Bork!) - The Borker's investing rule #76. Here's the short version:
The fancier the math one uses to justify an entrenched investment opinion, the more obscure and arcane the indicators employed, the more desperate and wrong that person is.

FT Alphaville - on exporting deflation. Izzy Kamizzy is again on the edge of what I'm able to comprehend, bt it's an interesting idea anyway. And as she asks, "will Germany overcome its totally unjustified inflation paranoia and act to counter the disadvantage?" I'd say no. The cycle ends at the racial group most likely to enjoy being miserable.

Noahpinion - on Krugtron the Invincible. A fun opinion piece about the Krugginator, but with a good morsel of fact: the US was not re-enacting America 1970s, it was re-enacting Japan 1990s. Kruggsy clued in, while the right wing didn't. Then again, this piece utterly ignores the whole right-wing agenda part of the story.

FT beyond brics - Indian engineers lose their edge. It's funny, by the way, to see someone say that among the disadvantages of Indian engineers is "lack of social skills".

FT beyond brics - how fridges will transform India. Well, fine, it's an interesting bit of sociology there. But India still has a lot more problems than lack of fridges. - silver investment up, consumption demand down. Doesn't look good for silver. And why the fuck do you invest in silver? God... I'm half-expecting SLV to drive the next crash, with silver dropping to $10 or so. What's break-even for the average silver miner? Cos with the byproducts (zinc and lead, or gold, usually), I bet a lot of these miners are mining silver for awfully cheap... and thus there is a whole load of speculative demand to wipe out before silver hits its own bottom.

FT Alphaville - Goldman closes its gold short. I guess the physical buying proved the end of that drop? Was this the bottom for gold? Or are they just happy to close a trade with a one-week 10% win?

Index universe - the physical/ETF disconnect. A very good article. Here's a quote:

For an asset like gold, the tradability of paper-based versions of the metal have a far greater influence on the price of the security than possibly any other asset tracked by exchange-traded products. This can distort the picture of the true supply and demand for the physical metal itself.

After all, not only is gold in relatively short supply globally—remember the image that all above-ground gold in the world could fit into an Olympic-sized swimming pool?—and it’s not very liquid at the margin.

Small-scale physical purchasers of gold must typically pay a high premium to spot prices and they have to deal with everyone from pawnshop owners to local coin dealers to buy it.

A simple thought experiment highlights this. Given the decline of gold prices and of GLD last week, it would be logical to expect a rash of physical sales over the same time frame. After all, if the price of gold and, by extension, the price of GLD, were a proxy for real gold demand, a wave of price declines would trigger a tsunami of panic sales by individual gold investors.

But you would be wrong to draw this conclusion. The Perth Mint, which refines nearly all of Australia’s gold and is the de facto retail source for gold bullion, saw sales double last week.

Meanwhile, back here in the United States, our own mint saw gold coin sales surge sevenfold over the same year-earlier period. In keeping with the trend, retail gold sales in India and China, the world’s two largest gold markets, also surged.

All of this is to say that the sell-off in gold might be traced back to our new friend the ETF, while the true demand for gold seems to be chugging right along, with bargain hunters ready to step in on any correction.

And that's what we saw.

Mineweb - did gold really disappoint as a safe haven? Congrats, Julian Phillips, on a generally very good article, and you obviously read my blog. Most importantly, GLD is not a safe haven; gold is. Oh, and by the way: gold selling for $35 pre-Nixon was a price control, and you'd better include that in your analysis from now on.

FT - Asian bargain hunters pile into gold. Obviously, Asians buying physical gold is much preferable to US hedge funds buying paper via GLD. Physical gold is a lot more sticky and doesn't generally flood the market after one day of furious puking.

Mental flossTwenty words we owe to William Shakespeare. And while we're on the topic, go check out Psalm 46 of the King James Bible. Look at the 46th word in, and the 46th word from the end (not including selah). Then rub that factoid in the face of anyone who denies the human authorship of the Bible.

Chelsea Wolfe's "Movie Screen"

Very dark and sparse trip-hop.

The drummer almost seems to be doing a Tomasz Krakowiak thing.

You probably haven't heard of him, but we played a gig once with Krakowiak and others, and he was a drummer who got amazing sounds out of his drums by doing things not remotely percussive with them - like drawing a guitar string tthrough a skin, or rubbing a skin with soap.

No really.

Six dead explorecos

IKN helpfully points out that Tower Hill now sucks.

Let's use that as a jumping off point for checking horrifying exploreco charts, shall we?

Yes indeedy, that is certainly a stock in love with gravity.

Atac seems to be bouncing, but it's still a long way from the heady days of 2010.

How much does that Glenstrata silver stream contribute to their bottom line now?

Let's note, to be fair, that Almaden is another stock that today can be found snuggling up to gravity and licking its ear.

How many ounces, and of what? Seems the market is in disagreement of the value of this company.

If you didn't have enough pocket lint on you to buy them last month, it seems they're now accepting pocket lint IOUs.

Euro peripheral bond spreads - take a look

Let's check the Euro fear gauge.

Spanish 10-year is 4.25%.

Italy 10-year is 3.98%.

France is 1.73%, which is within 5 pips of both the USA and the UK.

Therefore there is nothing to fear in Europe.

BTW, I'll just jinx everything right now by saying I've put a bit of money into EWI and EWP, at the behest of Michael Shaoul. Will put in more, but am trying to average in.

Tuesday, April 23, 2013

Masquer's "Happiness" live

Here's Swedish duo Masquer playing live. Good sound quality, considering.

Let's check in with the PMs

Doesn't look like something I'd want to buy. Not if it can't even fill a fucking gap.

Doesn't look like there's a hopeful attitude toward future profits for streamers. Not if this can't even fill a fucking gap.

Looks like silver wants to drop some more. Without even bothering to get above April 15th's range.

I haven't seen any bounce of any deceased mammalian type whatsoever.

I wouldn't touch this with my worst enemy's bargepole.

Dear Comet52

You obviously use Firefox with NoScript, and that is a very good thing, as we've just found out.

Flash crash

ZH says there was an AP tweet out that said 2 bombs went off at the White House and Obama was injured.

I just checked, and CNN and MSNBC don't seem to be saying anything about it.

So it probably didn't happen, and the twitter account was hacked.

Which is funny, since the S&P puked 1% instantaneously.

It's now back to where it was.

Carry on....

Martial Canterel's "You Today"

Oh, the synths, there are so many of them!

Morning newsbits and a pump for Michael Shaoul

Silver's broken support, looks like a good short at this instant (11:10AM). As if I can ever call these things!

Here's the news:

Mineweb - Ernesto Echevarria loading up on the juniors right now. Add that to the"Sprott's buying up everything" reported on IKN, with of course the caveat that these guys might not have a clue what they're doing.

FT beyond brics - Mexico's not that great either. I'm starting to think this is it for the EMs.

Economist - let's try to lipstick the Chinese pig. After reading Michael Shaoul, I'm a lot more negative on EMs in general and China in particular. As in, I'm sticking up on the canned goods.

And after seeing Michael Shaoul on Bloomberg News and on BNN, I checked him out elsewhere and am hooked. He explains things simply - e.g. China's debt generation is failing to create growth because it's all going into support of existing debt, which means they're at an endgame point right now - and even incorporates dispassionate recognition of market participants' emotions into his analysis.

Plus he seems to be really good at ferreting out bullshit: for example, he doubted the Hong Kong-China trade figures so much that he looked for corroboration in Chinese currency reserve numbers.

It seems so far that he's calling for the imminent collapse of China. This seems the only thing that satisfactorily explains for me why the commodity complex has pooped a lung, so I'm hooked and want to know more.

Oh, he seems also to be very positive the EU periphery, like Spain.

UPDATE: I have removed things from this article, and also a few comments.

Monday, April 22, 2013

Tamaryn's "Dawning"

The singer doesn't sound so much like Toni Halliday on this one.

Philip Klapwijk's European Gold Forum presentation

The 2013 European Gold Forum might have had a couple good companies presenting, but the speaker list seems to include massive over-representation by the loonie goldbug fringe - guys who quite honestly believe that you should be hoarding gold coins.

Anyway, one guy who's not a complete lunatic (but see below) is Philip Klapwijk from GFMS.

You can access the pdf of his presentation here.

Here's a few slides and my comments:

The "massive overhang" bit I pretty much agree with. As well as the "broken" bit. But I'd say that Asian demand for gold is rather special. In that it's 50% of world demand.

Oh hey, and if the Indian and Chinese post-crash data holds up, we might find out that the Asian demand's tonnage seems to rise as the price falls! Almost as if Asian gold demand is a function of wealth generation, and the result of a fixed dollar value going into that asset class regardless of per-ounce price!

That's something I have to remember to keep my eye on, then.

And I really don't think we'll be seeing central bank selling of gold anywhere. Certainly not the Eurozone: why would Portugal or Italy, say, sell their nation's gold reserve to bail out banks, especially when a year down the road they might still have to leave the common currency?

I mean, if the ECU actually takes steps to make their currency union less utterly fucking retarded, in such a way that the Mediterranean countries can see they'll never have to leave, then you've created a condition where a central banker could possibly sell gold without increasing the possible future jeopardy of his nation. For now, however, the European political leadership tend to do just enough to avoid absolute destruction today, while leaving the future utterly fucked up and continually letting Aryan buffoons like Dijsselbloem and Weidmann make things worse by speaking into microphones.

But if you're looking at a possible future where you have to leave the EZ overnight and move to e.g. a massively volatile peseta, then the economic chaos you'd have to expect would then require you have a large store of currency reserves to keep the lights on and the country fed until the dust settles. If nobody wants your shitty pesetas, you'd better have something else to pay for your grain and oil and medicine imports, right?

I mean, does nobody hear about what happens to countries that run out of reserves?

Now an ex-ECU pariah could still rely on USD reserves to keep the lights on... but... wait....


You mean to say people are worried that these countries will be asked to sell their gold, and not their US dollars? Really? You'll ask Italy to sell its gold to make its banks whole, but not its US dollars?

Has anyone out there actually realized that this sounds a bit fucking fishy? Commanding reserve banks sell gold, and not foreign currency?

OK, that's so damn asinine that I'm going to ignore the "ooh ahh Italy's going to dump their gold" argument from now on.

Moving along....

You've seen it before.

Certain goldbug newsletter writers think it's stupid to talk about the gold price having anything to do with physical supply and demand. Well, if that's so, you can forget about $1211 being any sort of fundamental support for the gold price. In which case I don't see why the fuck you're adding to your junior miner positions today, hombre. Next stop, $1000? $800? How are your precious fucking miners going to be doing then?

If this is the best Klapwijk can come up with, then you goldbugs are all well and truly fucked.

1. Blah blah debt. Yes we know. Ooh property rights. So I guess we have to wait for the next financial system crash? Cos there doesn't seem to be a mad rush of rich Europeans buying gold right now, despite the Cyprus precedent. Eh?

2. Here we go again with the inflation fear, despite the undisputable fact that there is none. Instead of bothering to respond, I'll just tell you to fucking read Bonddad's why does anyone listen to conservative economists anymore?

3. Blah blah currency debasement. Really? When the US dollar goes down we can protect against inflation if we buy oil. Or copper. Or iron ore, soybean meal, lean hogs, lumber, coffee, or THE FUCKING S&P 500.

A few evening newsbits

Calculated Risk - good housing sales report. Yes, good. Read it, because Bill McBride understands this more than you do.

Reuters - Caterpillar misses. Massive cancelled sales from the mining industry contributed. However, at least they've seen improved sales in China... though how much of that is up to shady financing is your guess.

Calculated Risk - Median miles driven still decreasing. Because young people drive less, and over-55s drive less. Which, again, is a nice little demographic boost, since it means lower gasoline demand in the US, I guess.

FT Alphaville - Bill Gross of Pimco either recently pulled his head out of his ass, or recently stuck it back in. First he complained the UK didn't have enough austerity; now he says that austerity is bad. Seriously, does PIMCo make money, and if they do is it because they let Gross do all the clueless blathering while other people do the real work?

Jim O'Neill - reflections on Japan and elsewhere (pdf). Seems like this weekly newsletter is ending next week? Is that correct? That'd suck. - Frank Giustra will sing Patsy Cline while wearing women's lingerie. That is, he promises to do it if the gold bull market is over. However, he's a pussy cos he only offers to do it in the centre of Robson Square, where such behaviour is normal. Try East Hastings, Frankie.

Weekly charts for some commodities

Copper seems to be knock-knock-knockin' on heaven's door.

Coal seems to be descending into the underworld.

Steel is flirting with support.

Nickel's alles ausgeborkend.

I'm now beginning to suspect the "blah blah deflation" argument and (to a lesser extent) the "blah blah EMs doooom argument". This isn't deflation, it's just an unwinding of speculative premia in commodities. Lower commodity prices are like free cake for everyone.

EMs like Brazil still suck, and India's not far behind (the lower gold price won't improve their current account deficit one bit - Indians are buying more gold now). And exporting EMs are alles ausgefuckend with these low prices - no more free money for el Presidente, from now on he's got to work for it.

But lowered commodity prices are great for the US, no? I mean, lower gasoline prices have a known positive effect on the US economy.

Two interesting company charts

I find these two very interesting.

GE has a very intreresting business model - do all your financing work in other countries, thus avoiding paying any US corporate tax. Oh, plus make a few LED lightbulbs so you can apply for a massive government subsidy for green energy.

The stock price seems to have been supported by the 50 week SMA before; will it break down this time? Thing's also yielding close to 4% at this price - 19 cent quarterly dividend.

Uranium has collapsed along with the other commodities - U.TO is $4.87 right now, the worst since the US was dumping back in November. So does Cameco collapse through its $17.50 support, or does it turn around and back to $23?

Uranium isn't copper.

Which of those two do you think is better?

Only a few news items

Bonddad - weekly economic indicators return to lukewarm positive. This guy reads the US economy better than you, so I'll be happy to just trust what he says.

BI - CAT's world economic outlook. It looks a bit rosy, compared to mainstream predictions. CAT got busted on misreading China over the past 2 years, so maybe they're wrong on global outlook now too?

FT beyond brics - Brazil's foundations undermined. There is only one positive indicator in Brazil right now, and that one is trending downward. I'm thinking this is the story for all EMs; you have any proof to the contrary?

India Reuters - Years of weak growth sow doubt in economic rescue plans. The Indian Finance Minister sums it up:
"Unless Europe gets its act together and unless the green shoots that we see in the U.S. actually flower and become solid plants, and unless Japan does the near impossible task of reflating its economy and having inflation of 2 percent - how is it that developing and emerging market economies can achieve high growth?" Indian Finance Minister P. Chidambaram said at an event on the sidelines of the meetings.
And maybe this is the explanation for how the EM boom ends:
Poor nations worry that rich nations' monetary stimulus will destabilize their economies by flooding them with capital, fueling inflation or asset bubbles. Money printing by the United States, Europe and Japan also subtracts value from the currencies of the rich world, helping its exporters at the expense of factories in countries like Brazil.
Mineweb - commodity slump ripples through global economy. Is it truly a collapse in end-user demand? Or is it....

FT Alphaville - breaking bad inflation expectations. Was the entire commodity collapse just a result of a vigorous repricing of the TIPS yield? If Izzy Kamizzy is right, then we have seen no change in real supply/demand; rather, a change in inflation expectations has eliminated the profitability of hoarding commodities, so we're just seeing a collapse in speculative premia across everything.

Here's a quote:

Since the beginning of the year, for example, we noted there was a strange disconnect between what the physical spot markets were telling us in terms of supply and demand and the pricing of commodity futures. Whilst there seemed to be more than enough physical supply, prices were not correcting as they might be expected to.

Part of the reason, it is now becoming clear, was linked to the incentive for these surplus inventories to be financialised (or securitised) for as long as the mispriced curve (due to incorrect inflation expectations) was in place. In that sense, high futures prices were being encouraged not necessarily by expectations of higher than expected demand for commodities in the future, but by inaccurate yield expectations.
Here's a chart:

That chart looks very similar to the commodity price crash, doesn't it? In fact, if you subtract out the positive bias, it very much resembles the gold crash. Seems to me that whatever the heck Izzy is saying (and I don't understand it at all), it seems to be a good explanation for what's going on.

Bloomberg - Hedge funds still idiots, Paulson still believes we'll get inflation. Do we still have another gold puke in our immediate future? Also, Reserve Bank of Australia's assistant governor Guy Debelle thinks gold has no intrinsic value, which I guess means he never learned about Australian history during World War II.

Blouse's "Shadow"

Again, spacey and bent. There's hope for the kids of today.

Sunday, April 21, 2013

Soft Metals' "Psychic Driving" and "The Cold World Melts"

Hard to find any actual videos by these guys. Very synthy futuristic.

Bingham Canyon

Catching up on, he has an article on the Bingham Canyon slope failure that also points to a nifty set of photos of the damage.

It's one of the biggest holes in the world, manmade or otherwise, the result of 100 years of digging, and now a significant section of it recently decided to get more familiar with gravity.

I'm no mining engineer, but I still think it'd be a massive pain in the ass to rebuild that pit to the point where you can mine in it again, and that's even assuming the slopes are stable now that this movement is done. I'm also no soils specialist, but I wouldn't assume the rest of the slopes are stable at all now.

If I was running that mine and saw this level of damage, I'd deal with it by mailing out my resumes the next day.

James West blames the international elite and lizard people

IKN thinks James West is some sort of criminal scammer. I could give you links to his posts on the topic, but they seem to have disappeared off the internet, ahem. has led me to something that leads me to a very different opinion of Westie: - Gold price plummet is latest AMSCAM fraud

Now first, here's the things he says that I agree with:

The entire world financial system has been hijacked by a relatively small elite group whose interests run very much contrary to those of the global population.

Sure, I agree. Death to the lizard people.

What most poor ill-infomred Americans don’t understand is that the average family is just as much a victim of the fraud as are the citizens of foreign countries. The soaring stock market and the Zero Interest Rate Policy does absolutely nothing for the individual wage earner.

Minus the spelling mistake, sure. Death to the capitalist bourgeois parasites, long live the glorious revolution of the workers etc., I'm on board with that.

The financial future is being hijacked by the elite.

Yup, though it's their stock market to begin with.

But as far as there being a secret collusive attempt to destroy gold in favour of blah blah fiat Weimar blah blah lizard people Bohemian Grove?

I'm sorry dumbass. Commodity markets get raided. Especially when they're up against critical support, their ETF securitization increases liquidity, the EM driver seems to be falling apart, supply is growing, and there's a bunch of clowns owning the commodity who have no reason to own it.

The boat was weak and one push was all it took to knock it over and kill off a big chunk of the speculative premium. I'm sure gold will look good again in 5 years when supply starts collapsing with no new discoveries in the pipeline, as long as India's economy hasn't collapsed by then.

Stuff like this convinces me Westie is not even remotely corrupt or malicious. He's just a simple, innocent child with no clue what he's doing.

I Break Horses' "Wired"

These two are apparently from Sweden. Again, the weird and strange music of the kids of today when allowed to live unfiltered by the dying zombie of the music industry.