Saturday, August 24, 2013

You must watch Jeff Berwick

OK, here's the deal. If you're one of my blog readers, then I absolutely demand that you watch this little ten minute interview with Jeff Berwick.

Jeff, I love ya, we should get drunk sometime, but you're fucking batshit crazy and I use you to set my reference level for utter batshit insanity.

The secret life of the cat

I saw this documentary a few weeks ago about some scientists who geotagged a bunch of cats and followed them around a little Surrey village.

I've never seen a house with a cat flap here - probably because we have a lot of other animals that would love to come into peoples' houses. I guess over in England they've exterminated all the wildlife?

Gold and the end of QE: how you can tell an argument is utter bullshit

This has been nagging me, so I may as well get it off my chest here.

The mass media's argument in favour of gold today:

P1: Because QE is ending, US Treasury yields are going up.
P2: Increasing UST yields means inflation is increasing.
P3: If inflation is increasing, you buy gold to hedge against inflation.
C: Therefore, UST yields going up is the explanation for why gold went up.

The mass media's argument against gold from just a few fucking months ago for the love of Christ:

P1: QE is money-printing.
P2: Money-printing causes inflation.
P3: If QE is going to end, money-printing will be reduced, so gold should go down.
C: Therefore, the imminent end of QE is the explanation for why gold went down.

What the fuck?!?

Both arguments cannot be right. And guess what? Both are wrong.

Here's some reality for you:

P1: The Americans have now essentially gotten out of their excess long gold positions, and the gold puked out of GLD has all been melted down into bangles & bars and sold to India and China.
P2: Because of P1, essentially there are no Americans left to sell gold.
P3: Now India's collapsing, and 1.3 billion Indians have taken the long-gold-short-rupee trade.
C1: Fuck you.
C2: No, really - fuck you.

Blackbeard, pirate king of the Caribbean

Here's a docudrama for you - Blackbeard, pirate king of the Caribbean. It's not high quality video but it's still a fun watch.

If this goldbug thing doesn't work out, maybe I'll become a pirate. It sounds like fun.


Thursday, August 22, 2013

India and Gold? You don't say!

IKN - Thirty days of gold in rupees and dollars, in which we are presented with this chart:

"B-b-b-but the gold price doesn't have anything to do with India! It has everything to do with the US 10-year Treasury!"

To be fair, all this chart really says is that the rupee has been collapsing. Beef vs. rupee would probably be a similar chart, though more ironic.

Even still, take a look at that chart again - but this time, recall that India has started to spiral toward economic collapse over these past few weeks:

Gee, that thar "gold" thing that the kids are all talking about today? That sure looks like a great asset to hold if you're in a country with a small banking system, undeveloped dry-farming agrarian economy and incompetent government, eh? Especially during those periods when its currency is collapsing, its bond yields are spiking, it's running low on currency reserves and it's suffering an uncontrollable trade deficit, eh? Y'think?

In fact, this even goes toward my "think of gold like copper and all your fears will subside" argument.

After all, Wikipedia notes that copper is also 100% recyclable, and 80% of all copper ever mined is still in use today - to the tune of 35-55kg per capita worldwide.

So why don't people worry about (math hurt brain so number might be wrong) 200 million tons of copper flooding back into the market? Because it's capital stock right now. It's doing something valuable - bringing you electrons and carrying away your poop.

And India's 20,000 tons of gold is also equivalent to capital stock - it's serving a purpose too. It's working as a counterpartyless diversification asset.

So quit worrying about gold.

What to do about Cambridge House September

Well, it's closer to the conference, and TRIC is really starting to look sparse.

The exhibitor list is pretty empty compared to last year: I might go and see if I can personally meet Mickey Fulp and Eric Coffin. Other than that, though, it seem pointless right now. There isn't even a bullion desk for me to buy shiny bullion at this year! I know Precious Metals House went extinct, but there are other low-markup Toronto bullion dealers they could invite!

I mean, what's a goldbug conference without gold?

The Thursday presentation list is so sparse it may as well not exist. So I may as well limit my attendance to Friday.

And here's the Friday schedule so far:

They gave Eric Sprott an extra 15 minutes in the morning, and know what? I might actually go listen to him. After all, he's going to tell me about the "investment opportunity of a lifetime!"

No seriously, I make fun of all the little Sprottlings under his command - they remind me too much of brainwashed "true believers" - but Sprott himself is probably a sensible person to listen to. And I guess he's the star of this show (thank god there's no Ron Paul), so to not review him would be a bit of an omission.

The "panel on precious metal prices" is kinda funny. On the one hand you have Eric Coffin, a sensible fellow who must have a valuable opinion; and you even have Eric Sprott, who probably is worth listening to on the topic since you'd think he doesn't want to further wipe out his investors and end up flipping burgers for a living. But what do Jay Taylor and Peter Spina have to contribute on this topic? Have they done a good job predicting prices up til now? Did they manage to predict that outflows from GLD would swamp demand from India? Have they even been mentioning India?

Have they exhibited a basic understanding of supply & demand, and a comprehension of how Bernanke's fiscal policy was aimed at avoiding a deflationary depression where there was a collapse in aggregate demand? Or have they been bleating out "money printing! Zimbabwe! Gold to $3000! Gold to $10,000! Vote Ron Paul!" through the whole past 2 years of collapse?

At 11AM is Mickey, and he's probably just going to do a "lightning round" chat. But what the hell, he's always a pleasant enough guy to listen to, I may as well go.

(Hey Mickey! You better damn well read up on Santa Barbara Resources, cos I'm gonna be testing you.)

I guess people still want me to review Calandra, so I'll review Calandra. Expect hilarity.

I'll go see Kaiser at 1, since he does always give you things to think about, and it'll be fun to see how much of our email chats have influenced his outlook for gold.

I definitely want to see Coffin in person, since I have really taken a liking to the guy. He's got such a matter-of-fact, sensible way of thinking. It's almost a shame to see him at one of these conferences.

I can't promise that I'll want to stick around for Katusa - wasting an hour wandering around, just to spend a half hour listening to this guy? I might prefer getting home early.

HUSSMAN SAYS COLLAPSE IMMINENT - here's what you need to know

First, let's get jobless claims out of the way.

Bonddad - Initial jobless claims.
Calculated Risk - initial jobless claims.
Michael Shaoul - initial jobless claims.
Bespoke - initial jobless claims.

And now, the news.

Bespoke - the bulls are running for cover. AAII bullish sentiment is near a low. God I so want to go long SPY! But wait!

BI - Hussman says a crash is imminent. Blodget takes a lot of care in putting Hussman in context in this article - and by "putting him in context", I mean "pointing out that Hussman wanted the world to be short S&P since 2009, so why anyone should listen to this clown is beyond me". Frankly, Hussman is a clown and a loser, and trotting him out to call a crash probably means the S&P is going to skyrocket further from here.

Michael Shaoul - Spain trade data for June. If you can't look at a chart and see what the first and second derivatives are telling you, you should probably go back to school and take some math classes before investing.

BI - investors to rotate into European stocks? Well, they're trading at a fantastic P/E discount relative to the US, so P/E expansion is a possibility. Plus, earnings expansion is also a possibility now. The US has already used up the former, and nobody believes in the latter for the US, so why not Europe now?

CNBC - Bernanke bubble going bust in emerging markets. There. Now the bloggers who hate Bernanke have a reason to start thinking about the EM collapse. Because reasoning with them doesn't work, and throwing hundreds of news articles in their faces doesn't work.

Times of India - government steps to rein in the cost of onions. This'll make you shake your head: the government solves an onion crisis by issuing a tender for onions. This is how stupid the government is - they don't even have a free market for onions. And this is your saviour EM market?

Mineweb - Dundee on all-in silver costs. Check out Silvercrest's all in costs at the bottom! Eric Fier is even more awesome now.

IKN - this is how nasty I get when I have a hangover. But in all seriousness, it's fair what he points out - the goldbug scene needs to see all the worthless moose-pasture just go away. Then again, how likely is that to happen, really?

Things that should be going up

Ford should be going up if the US economy is improving - people need to replace an old fleet. This is a stock to watch to determine if the S&P dump is over.

Homebuilders should be going up as well.

Regional banking should really take off, since they make money on the interest rate spread by issuing mortgages (or as certain bloggers call it, "perpetuating a dishonest system" - I dunno, apparently these bloggers feel that the peasant class shouldn't be allowed to take out mortgages and buy houses).

Some people say that semis do well in an accelerating-growth environment.

Those are the 4 charts to watch to see if the S&P has bottomed.

Or, of course, some other sector might take the lead in the next leg up. Big financials, maybe?

Wednesday, August 21, 2013

Just because it's funny

For no other reason than it's funny, here's Christina Hendricks.

And friends.

Some evening news

Here's some evening news so I don't have to post it tomorrow:

Calculated Risk - positive trend continues in architectural billings. It suggests "some increase in CRE investment in the second half of 2013".

Michael Shaoul - existing home sales. Quote:
Inventory as months of sales is now 5.1 homes, again representing a tight marketplace that in certain regions has become almost starved of product.

This tightening of inventory is shown in the price level, which kept close to June's very elevated level at $260.6K for a single family house a 9.95% increase YoY (see chart). Again this suggests no stress from rising mortgage rates is being transmitted to the existing home market.

Calculated Risk - inventory has bottomed. He says it's too early to see the impact of higher mortgage rates. This means you, Shaoul!

Reuters - Japan manufacturers' optimism hits 3-year high.

FT - Asia's debt conundrum awakens ghosts of 1990s. I want to quote the whole thing at you, but I'll just quote half:
But as the tide of cheap money from overseas rolls back from emerging economies across the region, analysts warn that Asia could be at the start of a series of currency and credit crises, not unlike the experience of the 1990s.

Most of the focus has so far been on India and Indonesia, the two countries in Asia with the biggest current account deficits, making them the most reliant on foreign capital to make ends meet. Both have seen their currencies and their equity markets plunge in the past week.

But the risks of contagion across the region are beginning to rise, say economists, made worse by the slowdown in China, Asia’s biggest growth engine.

In Thailand, which slipped into technical recession in the second quarter, household debt to GDP has risen from 55 per cent in 2009 to almost 80 per cent today. Total debt to GDP now stands at 180 per cent, according to data compiled by HSBC.

Oil-rich Malaysia has seen a similar increase in debt levels, helping to power consumption and housing booms. But poor trade figures have raised the prospect of it slipping into deficit this year, after a decade of running surpluses.

And last week Indonesia reported a sharp widening of its current account deficit, its worst since 1996, thanks mainly to a fall in the value of its commodity exports.

“We’re going into a period of stagnation in growth over the next couple of years,” said Fred Neumann, chief Asia economist at HSBC. “It was a sweet spot and that’s now coming to an end. Asian economies had an easy ride because they bought themselves growth through leverage. They should have used that time to carry out structural reforms. Instead they’ve used the cheap money and enjoyed the high growth rates. That opportunity has now gone.”
The charts aren't saying the EMs are going up. The charts say the EMs have been going down. And guess what? The last 2 years should have taught you that things going down can continue going down.

Reuters - rupee at record low despite intervention. How does India pick itself up from here when it's not even done playing out its currency collapse?

Bonddad - India situation continues to deteriorate. Bond yields are skyrocketing. Because it's the end of the EM bull market.

In anticipation of the fed minutes

Frankly, I've dumped a bit, and have more cash, in anticipation of the Fed minutes.

The way I figure, gold has been purported to be going up because of increasing US interest rates; so if the cokeheads interpret the Fed minutes as being pro-September taper, gold should go up. And the SPY should go down.

Alternately, if the cokeheads interpret the Fed minutes as saying the taper is further off, gold should go down and... what? SPY goes down, then? EEMs go up? I dunno.

So in any case, I'm sure I'll be able to buy stuff cheap this afternoon, so why hold right now?

Oh, and here's the $VIX chart:

Obviously people buying protection for today's Fed announcement.

So should I maybe just short $VIX?

Then again, maybe they'll also be waiting for some other Fed thing on Friday?

Meh, I dunno.

The $VIX term structure is still a nice straight line.

BTO answer?

Is this it?

B2Gold still interested in Navachab
16 May 2013 - Story by Edgar Brandt
Article Views (non-unique): 994

WINDHOEK - B2Gold, which recently held a sod-turning ceremony for the Otjikoto gold mine between Otjiwarongo and Otavi, is still interested in acquiring the Navachab gold mine close to Karibib in the Erongo Region.

"B2Gold has publicly stated their interest in obtaining Navachab since entering Namibia and we continue to evaluate whether or not the project makes sense as part of B2Gold’s global strategy," B2Gold's spokesperson, Gretha du Plessis, told New Era yesterday. According to AngloGold Ashanti, which owns the Navachab mine, the Namibian operation will be sold as a going concern to minimise any adverse affects on the Namibian workforce.

However, AngloGold Ashanti's spokesperson, Alan Fine, this week said he was not at liberty to divulge the suggested purchase price of Navachab. He added that he could not disclose the parties that have submitted bids or that have been short-listed to purchase Navachab.

Speaking to the media in South Africa, Fine explained that AngloGold Ashanti is selling Navachab, which is one of its smallest gold mining operations on the continent, to rationalise its capital investments with the aim to focus on the development of its larger mining operations.

On Monday this week AngloGold Ashanti announced that it would trim about N$4.6 billion of operating costs, seek to dispose of the Navachab mine before the end of 2013 and develop another mine for a possible further asset sale this year.

Meanwhile, B2Gold's Otjikoto gold mine, which is expected to be the largest gold mine in Namibia, is estimated to yield an annual production of 112 000 ounces of gold, although the first five years are expected to produce a higher yield at 141 000 ounces per annum.

The Otjikoto gold mine is 92 percent owned by B2Gold and 8 percent by Namibian black empowerment group, EVI Gold, and will employ about 540 people full-time when the mine is fully operational in 2015.

EVI Gold in turn is owned by Nam-mic Investment Holdings, Pamue Investment Corporation, Omankete Investments, Patron Investment Corporation, Price Properties and the Omusati Women Empowerment Group. B2Gold Namibia is a subsidiary of the B2Gold Corporation based in Canada.

Some news

A reminder that today is Fed Minutes Day, so whenever those get released don't expect any sort of liquidity in the market. They turn the bots off.

Now here's the news:

Bonddad - the case against Larry Summers. Basically, Yellen is educated, prescient, reliable, deliberative, emotionally mature and a collaborative leader; Summers, on the other hand, is a fucking toe-rag. If Obama picks him he will have sabotaged the US economy.

Calculated Risk - ATA trucking index. What's important is this chart:

Because you can see something interesting here. For the dataset we have, the index stays level during secular US bears, and rises during secular US bulls. And it's printed a new high since the 2008 crash, so... what does that mean? Hm?

Risk Reversal - The submerging markets.

Michael Shaoul - India equity, debt and currency markets. Still further to go, I guess.

Mineweb - India mulls leasing of gold. Maybe it's just a threat fired across the bow of the long-gold short-rupee trade? Yes this means Chidambaram's lost it, but it also might not be great for gold. Only something to keep in mind for now.

Mineweb - Anglogold says costs at Ghana mine unsustainable.

Ritholtz - copyright infringement is being treated as terrorism. We're long past the point where the plutocratic class needs to be exterminated.

Tuesday, August 20, 2013

Does anyone know what a secular DM bull market looks like?

IKN - Peru's central bank tries to defend the currency.

No shit, eh? Peru trying to defend its currency from depreciation in order to stave off inflation, while stuck running a current account deficit?

Where have you heard of things like that happening before in other developing markets?

Some smart guy's blog, perhaps? Like, not on any goldbug's blog at all?

And what did that smart guy say it meant? A secular DM bull market was beginning, perhaps?

These other bloggers out there looking at global bond charts and so on - have they picked up on this secular change at all, or are they blundering around thinking it's just a "massive repudiation of debt" and predicting the imminent collapse of the S&P 500 (yet again)? Y'know, cos the Shiller PE says so and the market leverage says so?

Maybe with some massive inflation thrown in as "a dishonest system comes apart at the seams"?

Do they even know what a secular DM bull market looks like?

Liz Ann Sonders from Schwab

For some reason the folks at Schwab were pioneers of internet stock trading but still haven't discovered RSS.

Anyway, I like reading Liz Ann Sonders over there, and here's her writeup from Monday last week on the markets.

Remember, it's one week old.

Read Blaine Rollins if you care about the US market's next move

Reformed Borker (Bork Bork Bork!) - OMG we all gonna die, and Blaine Rollins' 361 Capital weekly research briefing.

Josh Brown in the first link talks about how this isn't even a correction. Yeah, right Josh. It won't be one either, until housing breaks down. Because housing is key.

Blaine Rollins in the second link says so many sensible things, and posts so many charts to back him up, that I think the US market must be bottomed by now - unless of course there's a massive fear-driven liquidity crisis around the corner, which there isn't except in India.

Go read Rollins' post right now.

What a nice chart this is

It speaks to me.

1. Big white candle breaking through the short-term EMA.
2. A couple days of red candles that turn back from the SMA, then only get as far down as the EMA. Less selling volume than buying volume.
3. Now a nice white candle again, a 6% up day so far, and the SMA(50) just 1% away, with so little volume that it's as if nobody's left to sell and pure buying is driving it up.

My stop-loss is around that $13.25-$13.50 area.

Hey, all you guys who are coming to my blog from the Latin American halls of power today, trying to figure out who BTO is going to buy: screw BTO, buy BVN instead.*

* - Nothing written or implied on this blog should be taken as investment advice, an inducement to buy or sell securities, or anything other than the insane ramblings of an anarchist sociopath who dreams of a dystopian future where Jeff Berwick has been elected the undying Robot Overlord.

And now, some news

I'm sorry, but I'm not interested in trying to blog like Weisenthal today. It makes me feel like a clickslut.

Besides, nobody else has bothered to join in.


Anyway, here's the news:

BI - Jeremy Siegel gives another reason why Shiller P/E is bullshit. And that's the last I'll say on the topic, since the "Shiller P/E means US crash imminent" argument has proven to have been the most worthless waste of my time since I quit visiting Stockhouse.

der Spargel - Germany profited from Euro crisis. Wouldn't it be nice if they gave back some of that unearned money to the countries that needed it? Hm? But of course they won't, because Germans are the cheapest, meanest, most spiteful race on the planet. As if you hadn't learned that already.

Reuters - rupee hits record low. Y'know, it seems like Indians would do well to hedge their equity, bond and currency exposure with some sort of investment that has no counterparty risk and protects against local inflation. Anyone know something like that? Something they could buy?

BI - India's food inflation is getting out of control. Y'know, it seems like Indians would do well to hedge their equity, bond and currency exposure with some sort of investment that has no counterparty risk and protects against local inflation. Anyone know something like that? Something they could buy?

Reuters - India, Brazil, other EMs hit by currency routs. This sort of thing happens when the US economy shifts into a secular bull. I'm sorry, fellas, but this is what happens.

And a big hi to the BTO detectives!

And I'd like to say hi to the people at BMO, K2, Bloomberg and the Grope & Flail who've come to my blog expecting to get the poop on who BTO's going to buy. Oh, as well as that guy from Managua. Hello to all!

If you want, here's a link to the audio of The Clive's appearance at PDAC back in March. Hey! Maybe he gives you a clue during this talk! You should listen!

And since this is Blog Like You're Weisenthal Week, where we make fun of the shameless click-whoring of Joe Weisenthal at Business Insider, you guys also get a free picture of Mila Kunis in sexxay lingerie:

Remember, she called the US bull market of 2013!

Ashton's a dork, Mila! I could do so much more for you.

My entry for The Clive Sweepstakes

As we know, BTO is raising money to buy something. So some loony has started up a sweepstakes where the person who predicts BTO's next purchase gets a shiny new silver coin.

I don't know many mining companies, or how buyouts get done, or much of anything really.

But I figure they have enough production already with Masbate and now with Otjikoto coming online by 4Q14. So I'd expect their next buy must be a development story; they don't need to raise money for another moose-pasture, and they won't see enough upside in buying another producer.

And I'd figure they'd want to buy a story with low per-ounce costs - Otjikoto is $525/oz operating cost, The Clive said. And given they've already gone into the Philippines, Nicaragua and Namibia, maybe it's reasonable to expect their next play to be some other second-tier country where there are sensible politicians they can work with. So not the Northwest Territories. Not Argentina, and maybe not even Peru.

And of course there's a certain market cap they're aiming for - although I assume this buy will be shares plus cash, since The Clive loves telling people what a great deal they're getting by swapping out their stock with BTO shares. As he says, they don't want to overpay but they do want to give both parties to the transaction a good deal; and they want to have a property they can add ounces to.

And, if they're buying a development property, there must be a certain capex they're aiming for, so they can fund development entirely through cash flow. The Clive isn't going to bend over for a bar of soap in this gold market.

So that would be what you'd have to add together to get an idea what they'd buy.

So my pick for this sweepstakes was Lydian. Cookie loves saying (or at least he did in the past) how they're a fantastic low-cost mine waiting to happen and they definitely will get bought someday; who else has a property far enough along that will be cheap enough to mine? And it's big enough, and supposedly the government is onside enough, and BTO would end up being a big employer and a great provider of Central Bank holdings, which would mean President Sargsyan and associates would be as friendly to them as Ortega is in Nicaragua.

I have no clue what the capex for Amulsar is, I have no clue if there are more ounces waiting to be added, and of course the big problem is the water issue they're dealing with right now. (I have no clue how that pans out either, but from what I've gathered in the NRs and knowing a tiny bit about engineering this shouldn't be a game-killer for LYD. You throw $20-$50M at an environmental problem and it usually goes away.)

I think the Lydian shareholders would be mighty pissed at an opportunistic offer from BTO, and they'd probably want at least $2.00 plus BTO shares. I know I would, and DISCLOSURE I own a bunch of Lydian.

Maybe BTO waits til the water issue is fixed? Then again, would their own shareholders be pissed at a $2.00 plus shares offer for a property in the shadow of Russia with a possibly nasty water issue?

But if you're The Clive and you have a big pile of money on hand, what other property is available for you to buy? Assume it's a development property - neither moose-pasture nor an operating mine; it has cheap ounces; its capex must be reasonable cos BTO doesn't want it to be an uncomfortably large part of their future spend; and it must be in a place with sensible politicians and no long-term political risk where the next election kills the project.

It's not a perfect answer, but nothing is.

It would be interesting, by the way, if this turned out to be the "inside information" that Rick Rule stumbled across a few weeks ago. Cos as IKN notes, if BTO's raising money now then they've already selected a target and done their due diligence.

I am not an analyst, and I only own Lydian cos I think the water issue is overblown and gets solved, without pissing off environmentalists or the government btw, and that this'll give the stock a good pop back to more reasonable prices. But a BTO buyout would be a nice extra boost. Plus a chance to gloat.

UPDATE: My opinion is apparently so utterly stupid and asinine that someone felt he should repost it on Stockhouse. Oh good, that's one strike against me.

Two big miners and a question

I know Vale has something to do with iron ore and Brazil. Plus I think they bought Inco ages back so they also do nickel?

Anyway, if the China infrastructure story was still dead this chart would suck more. As it is this descent to the EMA just looks like a pause to refresh, to me.

Remember that the October Plenum is the Chinese leadership's chance to roll out all their economic reform measures. Apparently there's already a story out that they'll be liberalizing deposit interest. More things will come, and I bet they will all be recognized by the market as good ideas. Because the market likes command-economy dictatorships.

I frankly have no clue what these guys do, other than dig holes and speak Spanish at people. Google Finance has this blurb:

Compania de Minas Buenaventura SAA (Buenaventura) is a Peru-based mining company engaged in the exploration, mining, smelting and commercialization of gold and silver, as well as other metals and minerals. The Company operates directly seven Peruvian mining units located in Uchucchacua, Orcopampa, Poracota, Julcani, Recuperada, Antapite and Ishihuinca; as well as indirectly the mines of Shila-Paula, La Zanja and Colquijirca. Through its subsidiaries, the Company is also involved in the generation and distribution of electric power, as well as in the provision of engineering and chemical processing services. As of December 31, 2011, the Company owned such subsidiaries as Compania Minera Colquirrumi SA, Compania Minera Condesa SA, Empresa de Generacion Huanza SA, Buenaventura Ingenieros SA and Procesadora Industrial Rio Seco SA, among others.

That's actually a neat description, since it means they're integrated, and I think integrated is great. But I still have no clue who they are or whether they're worth buying.

But right now, this chart seems to be doing what the junior golds were doing a week or two ago that piqued my hopefulness and got me buying them - the price is trapped in a channel between the SMA(50) and the EMA(16), it's making higher lows and higher highs since 2 weeks ago, and there's a whole lot of space above that SMA(50) for it to run before it's done negating its recent suckage.

I bought thinking I'd limit my losses on a breakdown of the Bollinger mean and short EMA.

Now the question is, do I want to own this, or BCM and RIO? Those two stocks have printed much stronger charts while this one has lagged like hell.

The flipside to that question is, who has more space to run if gold and silver keep moving up?

Does it all depend on what happens in this chart?

On the subject of Europe and Japan

Banco Santander looks broken so I ditched it. No loss taken, and half sold at a higher price last week. NBG is also weak so there must be some concern floating around about Euro periphery banks.

Italy still looks fine so I'm not selling yet. As long as it stays above the May pivot and the Bollinger mean.

God only knows about Japan. My exposure is limited to CIE, the developed world ex-US ETF from here in Canada.

I'm assuming these charts are telling me that Japan and Euro-periphery are played out stories now. So either the entire developed world has a good hard bear move, or the US will outperform in the next upmove. So I bought some HSU, the 2x SPY, today. Will add more, or sell, when the market makes it more obvious what its emotional state is.

Broad market charts

Do we get a 110%-20% SPY crash or not?

Let's look at some charts:

This only tells me what's been happening. SPY has been rolling over. There's no June-like reason for this rollover, so my bias is to think we're at about the bottom.

Here's the EMA(10) of the A/D, and you can see it's about as low as it was at the June bottom. Risk-reward is definitely positive here, no?

But then:

If interest rates are going up, regional banking should be doing fine, cos they make money on spreads. So why is KRE drifting downward?

Homebuilders, along with autos, are the central story in the US economic recovery, and right now they're still flirting with breaking down the H&S. Toll Brothers hasn't broken down though.

And here's your autos, and how well it correlates with the S&P, and check that breakdown at the SMA(50), but then look at the last one.

I dunno what to make of things, except maybe simply that the market is freaked out about the possible (worst, apocalyptic) effects of a change in monetary policy.

Maybe it's a good time to buy S&P.

I should maybe look for other sectors to see if something else is maybe looking bullish.

I think I'll do a lot of blogging today

There is a lot of desperate pessimism floating around the broad market. People are saying September is horrible for stocks, they're worrying about a stupid $85B/mo taper's effect on the world's largest economy, they're blathering on and on about Shiller P/E, and they're freaking out over a 2.8% yield on the 10Y.

And there's desperate optimism in the gold scene. People trying to come up with explanations for why gold is up - some looney even suggested it had to do with a rise in the 10Y! - and wondering if the doom is really over and the cyclical low was really printed.

So I think I'll run through a whole pile of stuff today.

Here's a chart:

Is there any reason for $HUI to have stopped a descent at the July pivot?

GDXJ still has a long way to go to get to its July pivot, so I think that has nothing to do with anything.

More later.

Monday, August 19, 2013

Top ten jokes to make about Hitler wine

So some people are calling for a boycott of Hitler wine.

And the people at Fark come up with a whole load of fun one-liners.

These are the top ten one-liners! Let me show you them!


10. You'll find it in most liquor stores on the extreme right of the shelf.

9. The great thing about the vintage is that it will last 1,000 years.

8. Hide the manischewitz

7. Distilled for maximum concentration.

6. You've really got to decant this wine. It needs space to breathe.

5. The wine turns sour the closer you bring it to Moscow.

4. Frankly, I don't understand what the fuhrer is all about

3. Jeez, hold a grudge why don't you.

2. at least it's a low price wine so your wallet won't take a big hit. In fact, you could say it's a hollow cost

And the number one joke about Hitler wine?

1. But, I wanted to enjoy the wine while sitting in mein kampfy chair...

EMS DESTROYED, GOLD NEXT: here's what you need to know

Here's the news of the day, Weisenthal-style:

Bespoke - bearish sentiment has hit highest level in survey history. Which of course can only mean that the stock market is going to collapse from here. Because Obama is a socialist.

Ritholtz - whether stocks are cheap depends on what happens in the future. Analysts around the world are now debating how much of a collapse they can predict for US stocks based on how irrationally pessimistic they can be about the future. Well... dumbass blogger analysts from the goldbug world, anyway.

Bespoke - 10-day A/D line extremely oversold. As you can see, it's a massive repudiation of US equities as a dishonest system is coming apart at the seams.

Michael Shaoul - Indonesia collapsing. Massive 5.58% decline in equities, bond yield skyrockets to 8.37% in a massive repudiation of debt.

BI - India 10Y yield chart is shocking. Their yields are skyrocketing, like you'd expect for every incompetent shithole when the easy money flees back to the US.

Zerohedge - worst day for rupee in 20 years. Even ZeroHedge has clued in to the Indian situation. So there must be some long-gold short-rupee positioning out there somewhere, and the pop in the gold price last Wednesday was created by that, and not by the drop in US Treasuries no matter what some pencil-pusher in Peru wants you to hear.

Reuters - Indian gold buying resumes again. Well, why not? It's safer than their banking system or their currency right now. Ah-ha! Did you see what I did there? Did you see how I explained why gold is still a valued asset class for 1.3 billion people in India?

Zerohedge - Obama about to crash the gold market again. You heard it on ZeroHedge first! Their predictions always come true!

BI - Krugman's advice to Joe Weisenthal: be a shameless whore just like your mom! Apparently Weisenthal interprets Krugman's "you have to provide the hook" as actually meaning "you have to use pictures of exploding buildings, write in all-caps, and make every day's moves sound like the fucking apocalypse".

Sunday, August 18, 2013

Holy shit, American Gods is coming to HBO

Say what? American Gods is going to be an HBO TV series?

It was a great book, and now if you haven't read it you can wait for the TV show.

We can pretty much be sure it's not going to have people cutting off penises and nipples and stabbing pregnant Oona Chaplins in the uterus like Game of Thrones has. Because Gaiman actually tries to write a story.