Friday, May 30, 2014

Speaking of the KLF, whatever happened to Cressida Cauty?

Further to the videos posted earlier today, I was wondering who was that chick with the red hair who's not really playing guitar on "Last Train to Trancentral" and doing the "woo woo". Mainly because I'm doing side research on pop of the 90s, and didn't know there was a British female guitarist til Lush or Curve came along.

Well, turns out I was right. With a little digging, I figured out it's probably Cressida Cauty. Then I came across this:

Labratory News Network - from the pop charts to the laboratory. Hopefully they're not pissed off if I quote in its entirety:
Twenty years after topping the charts with acid house music, Cressida Bowyer has swapped guitars for microscopes and is now researching new ways to fight cancer.

It’s been a major change of careers for Cressida, who sang backing vocals with the London band KLF on hits including Justified and Ancient, which reached number one in 18 countries and the top-ten UK hit Last Train to Trancentral.

The ex-wife of KLF’s co-founder and artist Jimmy Cauty, is coming to the end of her PhD studies at the UK's University of Brighton’s School of Pharmacy and Biomolecular Sciences, where she has undertaken ground-breaking research into liver cancer.

She is working on more effective ways to deliver life-saving chemotherapy in “beads” inserted directly into the liver and which carry the drugs direct to tumours. In September this year, she presented her work at the International Liver Cancer Association conference in Montreal, Canada.

Scientists have discovered that oxygen-deficient (hypoxic) cancer cells are resistant to traditional forms of chemotherapy and radiation. Cressida has developed a model of hypoxic liver cancer which mimics the problem in the laboratory and allows for experimentation to find the most effective drugs or combinations of drugs to destroy the tumours.Her research is sponsored through an Engineering and Physical Sciences Research Council CASE studentship in collaboration with Biocompatibles UK Ltd.

Cressida, who lives in Hove with her son of ten and boy-and-girl twins of 17, said her work was fulfilling a dream from her youth. She said: “I always loved science at school and wanted to pursue it as a career – but I found myself being seduced by punk rock.”

She left school at 16 and a year later she met Jimmy Cauty in London. Their relationship lasted more than 20 years, 16 of them in a squat in Lambeth where the K Foundation was established to “subvert the art world”. It staged alternative art awards for the worst artists and burned £1 million in cash on a Scottish island.

KLF, also known as The Justified Ancients of Mu Mu, or The Timelords, were one of the original bands of the British acid house movement during the late 1980s and early 1990s. Cressida later co-handled the vocals for Disco 2000 which released singles on the KLF Communications label.

Cressida took on organisational and design roles for KLF Communications recording studios, but the call of science was never far away. After splitting with Jimmy, Cressida and their children moved to Hove and she found herself drawn once more to science. She took A-levels and then a degree at the University of Brighton in biological sciences before starting her PhD studies four years ago.

Cressida said: “I probably would have gone on to university and to have studied science when I was younger had it not been for the lure of punk rock.

“I never envisaged being a student again at this stage of my life but I do really enjoy it and especially the work I’m doing.

“There’s no prospect of a band reunion and I certainly don’t have any ambitions to go back to that life.

“I got the T-shirt at the time and that was enough for me.”

Professor Adrian Bone, professor of cell and molecular biology at the University of Brighton, said: “Cressida has proved herself to be an extremely talented researcher and her work on liver cancer is opening up exciting new avenues for the potential treatment of a range of human cancer conditions.

“She is an example of how someone can change careers at any time of their life.”

So now she's saving lives and curing cancer and stuff.

In case she comes by, I'll just leave this video here:

Because everyone has done something embarrassing in their past.

Actually, I can imagine this being an early KLF studio experiment that was foundationally important to their later, groundbreaking hits.

But it's still embarrassing.

PS, seems like she subsequently came by.

a few more newsbits for the weekend

A bit more stuff:

Calculated Risk - headline for next Friday: "US employment at all-time high". I really hope McBride runs with that headline, too. And then repeats it every Friday until the US doomer brigade finally shuts up.

Reformed Borker (Bork Bork Bork!) - back to chasing bonds. He has a refreshing take on it:
Assuming 2% inflation minimum over the next ten years, investors are essentially handing their investment capital over for a near-zero return – and that’s if they’re lucky and rates don’t rise anytime soon. How much of this buying comes from a desire to produce the optics of “having gotten it right”?

Or is everything just a trade these days, with no expectations beyond the next week or month’s performance?

FT Alphaville - bond mispricing theory. Further comment on the article I passed on to you this morning. Whereas to me, it's just a symptom of the kleptocratic elite having insufficient rentiers left to extract rent from.

der Spargel - on Russia's worldwide propaganda campaign. Just in case you need to be told that Max Keiser is nothing but a stooge for Vladdy Pootypoot. I wonder how much funding Zerohedge gets, by the way? That would be a good story for an enterprising journalist!

Rio Alto buying Sulliden: good idea?

Survey says!:

Uh, no, Lex. The market seems to think this is a very, very, very bad idea.

B2Clive buying Papillon: good idea?

Survey says!:

Uh, no. Doesn't look like the market thinks it's a good idea, Clive.

Here are some pics of Bolivian president Evo Morales playing soccer

Because I'm at work so we can't do the Mila Kunis thing.

Eat your heart out, Pooty-Poot: I bet Morales even lets the other team check him, unlike a certain Soviet sissy of our acquaintance.

Hudak's "million jobs" are actually 125,000 jobs, by the way

The Globe and Mail - Hudak needs to walk away from the mess he made. Apparently even the Globe & Mail's editorial board has thrown up their hands and turned their backs on their Conservative hero. Quote:

Tim Hudak has spent Ontario’s election campaign offering himself quite convincingly as the rare politician willing to level with voters about difficult decisions he thinks are needed, even if some of them may not want to hear it.

The Progressive Conservative Leader’s efforts to present himself as a straight shooter, however, are in the midst of taking a big hit from the laughable math error on which his pitch has been premised – and, even more so, from the way Mr. Hudak has reacted to that error being exposed.

There is, in fairness, no good response to the revelation that his promise of a million new jobs revolves partly around counting the hypothetical jobs eight times.

Yup. His "million jobs" are more like "a million person-years of employment", over eight years. That's actually 125,000 jobs.

Of course, this still makes sense for him, since he's going to achieve this by eliminating 100,000 unionized jobs in the public service, offering these people the shining opportunity of new jobs at his old company, Walmart.

So now that he's been revealed to be either an ignorant buffoon or an outright liar?

Having spent millions of dollars advertising that pledge, Mr. Hudak would risk turning himself into a punchline if he somberly announced he needed a do-over.

Yup. Like a true Republican, he doubles down on the stupid.

His best option might be to say that the “million jobs” figure is aspirational – that it’s not worth obsessing over the minutiae of precisely how many each new policy will create, but that any leader who doesn’t think they could achieve such employment gains over two terms as premier shouldn’t be seeking that office. But during a visit Thursday to The Globe and Mail’s editorial board, he declined to make that argument even when invited to do so.

Seriously. The Globe and Mail editorial board was astounded that he didn't even bother to lie.

Instead, Mr. Hudak continued to stand behind numbers that a legion of economists has discredited. Economists are known for contradicting each other, he insisted, overlooking that in this case they weren’t disputing projections but pointing out that he was counting each year a person works in a new job beyond the first year as an additional new job. When that didn’t work, the PC Leader – himself a trained economist – more or less pretended not to understand the question.

Seriously. Either his MA in Economics came off the back of a cereal box, or he's outright lying to save face.

What a clown.

Still, there is a swath of moderately right-leaning voters swinging between his party and the Liberals, and another (mostly in the province’s southwest) trying to choose between the Tories and the NDP. These are people motivated both by a desire for change and a mistrust of the opposition leader likeliest to bring it. And the “million jobs” mess could badly undermine Mr. Hudak’s efforts to address the latter, especially if his opponents are able to use it against him in next week’s leaders’ debate.

If Thursday’s editorial-board meeting was any indication, Mr. Hudak could spend most of that debate passionately making the case for his vision of a smaller, more efficient government, only to undermine himself when talk turns to the pledge after which he named his platform.

Oh god, I certainly hope so. I certainly hope the people of this province have enough intelligence to not get taken in by this fundie Republican jesus-freak.

Hudak: who are the "1.1 million people on the public payroll"?

One thing that clown Hudak is suggesting is that he can somehow trim 100,000 public service jobs without permanently crippling the province's economy.

Who's in the "public service"?

From the Toronto Star:
The claim: Defending his plan to cut 100,000 Ontario public service jobs in four years, Progressive Conservative Leader Tim Hudak recently said “but you know how many people are on the public payroll in Ontario today? 1.1 million.” Trimming 100,000 would return Ontario to 2009 levels, which is “fair, reasonable and balanced,” he said.

The background: Among his proposed cuts, Hudak says he would trim about 9,700 “non-teaching positions” in the education system, and shave the numbers of people employed within Ontario’s “hydro bureaucracy.”

He says “we need to pare down that massive hydro bureaucracy. They have 11,000 people in the hydro bureaucracy making ($100,000) a year. Can you believe that? Eleven thousand! Let’s reduce that dramatically and pass on the savings to ratepayers.”

So... you're going to fire 11,000 electricians? They're the ones making $100k a year - all those hours working forced overtime to get the power back on during an ice storm add up to a damn good paycheque. But I guess linemen are nothing more than "fat bureaucrats" who don't deserve to make good money off their specialized technical training and willingness to work long hours. They're obviously the type of people the Conservative Party is against.

And as for the taxpayers? After the grid falls apart and the hydro's out for good, maybe with those extra bucks they can buy some candles and firewood!

In his bid to reduce the size and cost of government, Hudak says he would spare police, doctors and nurses. But Liberal Leader Kathleen Wynne says his budget cuts would jeopardize the jobs of Ontario firefighters, personal support workers for the elderly, teachers, and meat, water and nursing home inspectors.

What are some of the other positions in the 1.1 million that could be impacted?

Statistics Canada keeps data on the number of Ontarians employed in the province’s public sector.

According to figures from 2012, there were 88,000 positions in the category “provincial general government.” Those workers include everyone from academics at the Ontario Institute for Studies in Education who write curriculum for schools, to civil engineers who decide where new highways will go, and social policy experts tackling child poverty issues.

Those in the health and social service category include hospital and home care workers, and social services not in government, such as group home workers, workers in children’s mental health services, and children’s aid employees. The entire group adds up to 239,000 workers.

So is he gonna fire group home workers and CAS employees? Actually, maybe he will... fundamentalist Christians consider these sorts of people to be their enemies. All that Christian work, helping the sick and the poor and the weak, is obviously anti-Christian. I agree with the Conservative Party - we should abolish the fat overpaid bastards making $30k a year working in group homes, and force Conservative parents to take care of their own defective offspring.

Universities, colleges, and vocational and trade institutions account for 148,000 workers.Teachers, educational assistants, principals and office support staff at schools, fall under the school boards category, as do administrative staff and managers of the school boards themselves. The group accounts for 288,000 workers in the province.

Yes, yes. Let's get rid of all the teachers and close down the universities. That'll really make Ontario's economy strong.

The provincial government business enterprises category includes the LCBO, Ontario Lottery and Gaming Corporation, Hydro One, and Ontario Power Generation. This category accounts for 39,000 positions.

We already know Hudak wants to privatize the LCBO - it makes the government so much money that the slimeballs at Walmart and A&P have been lobbying to take it over for decades now.

But really, Hydro and OPG? Does he want us to go back to the fucking Bronze Age? How many of those supposed "million jobs" require a functioning electricity grid? Do we really need to become North Korea?

So far that’s about 800,000 Ontario public service positions.

Hudak includes 329,000 posts at the municipal level in the broader public service — everyone from parks and recreation staff, ambulance, police and fire, library, sewer and water, to those in garbage collection — again, with the caveat that police would be spared from cuts.

It’s assumed he could expand cuts to this sector by slashing funding to municipalities, who would in turn have to reduce the number of municipal workers.

Yeah, that'll work well. Slash municipal funding and you get no municipal roads, no garbage collection, and no ambulance service. Eventually the cities will be forced to jack up development rates and property taxes. Enjoy your tax break while you have it.

The verdict: Ontario’s Public Service Employees Union says it’s wrong to say the proposed cuts are “fair, reasonable and balanced.”

OPSEU political economist Randy Robinson says the number of public service workers in Ontario has always fallen closely in line with overall population numbers in the province.

“We are right in line with population (growth) over the long term average,” Robinson argues.

The 1.1 million positions works out to just under 10 per cent of Ontario’s population, and just below the 12 per cent average since 1975, according to OPSEU’s figures.

My verdict: Tim Hudak's an ignorant cunt.

Tim Hudak: I'm not staying silent any more

So I'm seeing Tim Hudak ads all over the internet. Apparently Google thinks I want to see this twat's face all day, along with his idiotic empty promise to somehow create a million jobs by bankrupting the province, criminalizing union membership, and turning us into a branch plant for Alabama.

So here you fucking go, Google. Every time you shove a Tim Hudak election ad into my face, I'll be posting one of my own Hudak ads on this blog.

Actually, he did. Once. After he graduated, he worked as a "travelling manager" for Wal-Mart. For a few months. He earned such a fantastic job by getting a supposed MA in Economics. Then he decided to get into politics. Because he knew so much.

Speaking of which, I'm actually impressed that Hudak has managed to keep his loony Republican fundamentalist Christian history out of the media. They're successfully suckering us into believing he's a normal human being with the moral authority to govern the province on behalf of all its citizens, instead of the hateful cunt who once published this:

So there you go. More Hudak hate to come, because fuck you Google.


Ciovacco Capital - stop wasting energy on the VIX.

Like I've been saying, the $VIX is not a "fear gauge". To the first approximation, it is an index purporting to measure the market forward expectation of implied volatility.

From Wikipedia, $VIX to the second approximation is:
[...] the square root of the par variance swap rate for a 30 day term initiated today. Note that the VIX is the volatility of a variance swap and not that of a volatility swap (volatility being the square root of variance, or standard deviation). A variance swap can be perfectly statically replicated through vanilla puts and calls whereas a volatility swap requires dynamic hedging. The VIX is the square root of the risk-neutral expectation of the S&P 500 variance over the next 30 calendar days. The VIX is quoted as an annualized standard deviation.
Which is explained marginally less painfully as:
The VIX is quoted in percentage points and translates, roughly, to the expected movement in the S&P 500 index over the next 30-day period, which is then annualized. For example, if the VIX is 15, this represents an expected annualized change of 15% over the next 30 days; thus one can infer that the index option markets expect the S&P 500 to move up or down 15%/√12 = 4.33% over the next 30-day period.[6] That is, index options are priced with the assumption of a 68% likelihood (one standard deviation) that the magnitude of the change in the S&P 500 in 30-days will be less than 4.33% (up or down).

The price of call and put options can be used to calculate implied volatility, because volatility is one of the factors used to calculate the value of these options. Higher (or lower) volatility of the underlying security makes an option more (or less) valuable, because there is a greater (or smaller) probability that the option will expire in the money (i.e., with a market value above zero). Thus, a higher option price implies greater volatility, other things being equal.
Which you still don't understand, because if you did you'd be reading some options blog instead.

But basically, what it really means is $VIX can be interpreted as measuring how much the markets think their positions might run away. So in a way it's measuring complacency, but not "complacency about the economy" or "complacency about the USD" or "complacency about interest rates".

But really, the "complacency" being measured is little more than a premium to an option price. So really, $VIX measures a premium.

Anyway, the article at Ciovacco says this:
The VIX is currently close to a historic low. If that means historic complacency, then logic would tell us that when the VIX rises from very low levels, it must mean rising fear and bad times ahead for stocks…right? That logic often holds in the markets, meaning the VIX can be and is a useful tool for stock investors. However, the strength of a stock market indicator lies in its consistency. Can stocks rise as the VIX rises from low levels? History not only says “yes”, but it does so emphatically. The chart below shows a period beginning in late 1995 when the VIX started to rise from low levels. The VIX surged from 10.36 in 1995 all the way to 38.20 in late 1997, which is a major spike in the VIX. How did stocks perform over the same period? The S&P 500 gained 47%…yes, that is not a typo…stocks gained 47% during a period when the VIX more than tripled.

For those scoring at home, the 47% move in stocks began when the VIX showed “a high level of investor complacency” with a reading of 10.36.

Yes, he's being overtly selective in selecting his high and low, but that's to illustrate his point: from 1995 thru 1997, you had to buy the $VIX low and sell its high.

One backtest and he's destroyed the rule of thumb that you sell the low $VIX and buy it high.

Always look under the hood, and always recognize that people in the media love to grossly oversimplify to make their story palatable. In this case, I'm not saying "$VIX of 11.49 is nothing to be frightened of"; I'm saying "it's a lot more complicated than that, and it's best to keep your mouth shut til you've done the math and seen what $VIX really is measuring".

Some Friday morning news

Here's some snarky Friday snark:

Bloomberg - pent demand suggests temporary setback. Quote:
The good news: Much of the decline was due to less inventory building that economists say can’t last. As a result, some are boosting second-quarter growth forecasts, with Morgan Stanley projecting a 4.2 percent gain.

Stockpiles grew at less than half the pace than in the final three months of 2013, lopping 1.6 percentage points off GDP while businesses cut back on investment.
Q1 GDP is quite obviously an extremely backward-looking indicator anyway, in which case there's no reason to worry about it; but isn't it funny that the people who have no clue what they're talking about seized on the headline number and never paid attention to inventories?

Coppola Comment - on liquidity hoarding and QE. Some thoughts on why QE has driven yields down, not up. Though this begs the question: why is cash being hoarded anyway? Can it really earn no return when invested in business? Can Apple really grow no faster than the yield payout on the UST10? Is it possible that nobody can identify areas to create economic growth? Or is it instead just that the financial elite who own the most trillions don't want to invest in the hard economy, and we're just seeing what happens when the rentiers successfully enslave the proletariat and then run out of proles to extract rent from?

NYT Upshot - Piketty bitch-slaps his critics for being ignorant morons. His critics at FT obviously never went to university.* If they had, they'd realize that if you're going to criticize your prof, you better have damn well read his paper, read it completely, and understood it, and that means reading the footnotes. The ignorant will think Piketty's just being a bitch; but actually, he's just admonishing a first-year Bro who's being a smartmouth without even having bothered to do the assigned reading. "Kid, you can open your mouth when you've finished your doctoral comprehensive. Til then shut up and let someone who knows what he's talking about teach you."

Reuters - hopes for Modi and India's sluggish economy. The problems are bigger than the Congress Party:
Arvind Panagariya, an economics professor at New York's Columbia University who is tipped to get an advisory role in the government, has called on the new administration to revamp the cumbersome tax regime and boost capital spending.

But that's easier said than done. States wield much of the power in approving projects, while only a quarter of approvals come from central agencies. High corporate leverage and rising bad loans at banks are also weighing on investments.

Stressed loans in India - those categorised as bad and restructured - total $100 billion, or about 10 percent of all loans. The debt-equity ratio of Indian firms, meanwhile, has hit a two-decade high of 97.9 percent, according to Nomura.
That last bit sounds like the structural crisis of an EM economy at the end of a secular EM bull market, doesn't it?

Barron's - gold miners' value destruction cycle being repeated. Hey lookie there - Cookie's ideas have hit the mainstream. Here's Citigroup ripping off The Legend:
Cuts to capex and exploration costs, and high grading, are helping margins near term. However, it is a double edged sword. The reason is that gold companies have to spend an increasing amount of capex just to fight a falling production trend and prevent a blow-out in unit costs. For example, the industry’s capex increased 7-fold between 2000 and 2013 (Figure 31). Yet, production decreased 10% and unit costs escalated at a CAGR of 12% p.a. The fall in production, and subsequently rise in unit costs, would have been significantly worse if capex budgets did not increase.

It is because of this that we caution that a slow-down in capex will invariably result in a fall in production (over time), which in turn will lead to a faster rise in unit costs. Whether or not they cut capex, we see both scenarios as bad for cash flow delivery and shareholder returns, longer term. Increasing head grades in order to boost near-term results (a practice that has become common over the past year) should also have detrimental effects longer term. There seems to be no easy way out.
Yeah, there is an easy way out. Production continues to decline while demand stays steady. When Whitey runs out of London Good Delivery to ship to China, the gold price starts moving back up and through $2000. As long as China and India don't fall into stagnation, the longer future is good for gold.

* - LSE doesn't count as "university".

Friday videos - A double-shot of the KLF, "3AM Eternal" and "Last Train to Trancentral"

Note to all you little hipster kiddies out there: this is how you do irony.

1. They aren't even trying to make it look like they're playing.

2. The entirety of the song lyrics are the band name, the song title, and stuff about how great they are.

3. The KLF's songwriting credit comes only because they said to the producer "ok, put a rapper in there, and maybe some women singing '3AM', and some guys shouting 'Ancients of Mu!' OK, got it? We'll come back next week and see what you've got done."

And here's "Last Train to Trancentral":

Which is really good, considering this is fucking 1991, the SB16 still hasn't even been invented, and yet these guys have invented trance. Hard to believe it's possible with the technology available at the time.

Also, it's interesting that the faker the band gets, the better the show they can put on for Top of the Poops. I mean, I personally wouldn't have expected to enjoy seeing guys in white cloaks wearing elephant tusks strapped to their heads pretend to play sitars with bows while pretending to sing into a vocoder. But this seems to work. Maybe it's just the strobe lights.

Anyway, stick that up your bum and pleasure yourself, Bob Lefsetz ya self-important coont.

Wednesday, May 28, 2014

Body Remix & Les Variations Goldberg

Here's Marie Chouinard's "Body Remix & Les Variations Goldberg":

Your argument is invalid.

Three bits of news, and two breadth charts for TAs still bleating yesterday's doomery

I'd have more but my email account was temporarily deleted. By the lizard people.

Bespoke - consumer confidence still hasn't peaked. Got a long way to go before we're at a top.

FT Alphaville - desperately seeking volatility. Well, if the volatility premium can be used to make money, that profitability advantage eventually has to be arbed away, right? That's how free markets work. I wonder if we can see a $VIX under 5 before the market finally crashes.

CNBC - Gartman sees more pain to come for gold. Upon that break of support, gold's chart now "just looks horrible". I guess if the past few months' static price range saw longs piling in, convinced the bottom was in, the next few weeks will see them get slaughtered. Sucks, but maybe I'll buy a few more gold coins if the price drops significantly. Stack physical, boys!

And I'll just add these two charts for that TA who is saying US markets are still seeing dwindling leadership after they've run to new all-time highs:

Please do try to keep up with the news. You should have checked whether breadth was back when new highs were reached. Your thesis is now disproven, find a new one and hope your subscribers don't remember this one.

Tuesday, May 27, 2014

More bile and spittle for you

Here's the rest of tonight's assignments:

Reformed Borker (Bork Bork Bork!) - 361 Capital weekly research briefing. As for the clowns who look in every nook and cranny for some bullshit obscure indicator that will flash the doomsday signal, whether it's the $BKX:$SPX, JNK:TLT or NYSE A/D? Well here's Blaine Rollins with a reminder on keeping it simple, which you'll probably ignore:
It’s not quite blood-red seas and locusts, but the bears are starting to get downright apocalyptic as they trot out their warnings of an imminent breakdown in the financial markets: tumbling Treasury yields; staggering small-company stocks; incinerated Internet shares; and blown-up biotechs. There’s just one problem: Transportation stocks should be crashing if the end were truly nigh. Instead, they’ve sailed through the carnage virtually unscathed.

Remember, transports are one of the most economically sensitive segments of the market. When the U.S. economy is growing, trains are full of cars and coal to deliver, trucks have computers and toys to carry, and airlines have more passengers to fly to their destinations. If the economy was really heading for a major fall, transports like Union Pacific (UNP), Knight Transportation (KNX), and Delta Air Lines (DAL) should have tumbled — just like high-flying biotech stocks Biogen Idec (BIIB), high-priced internet stocks like Twitter (TWTR), and small-company stocks like Lumber Liquidators (LL), which have all dropped more than 10% during the last three months.
That's why you watch the $TRAN, and you watch New Deal Demoncrat's weekly indicators in the transports section. And you ignore the bullshit. But no, you guys all want to read doomer porn on free fucking blogs - or worse, in paid fucking newsletters.

Liz Ann Sonders - mounting momentum. They have charts showing real economic things, not oogity-boogity pedantic purposefully-obscure bullshit.

Calculated Risk - on house prices. He thinks distressed sales have warped the trend a little bit. And he reminds us that for there to be a bubble in anything, there has to be speculative buying. You know, like when you bought Atac or Bear Creek for $9 thinking you could unload it on some clown for $15? You remember that bubble? Eh? Do ya?

Badass Digest - the Dark Dungeons movie trailer! As a Jack Chick "fan", I find this hilarious. I especially like how they're at a rave, and suddenly they all decide to start "RPGing". What's even funnier is they're going to be premiering it at GenCon. Here's the trailer:

Christians are so fucking retarded.

Ed Yardeni on that stupid 1929 chart

Yet more things to read.

BI - Ed Yardeni says hey, you remember that 1929 chart? Remember when a whole herd of retards across the golbuggoblogosphere were saying that the market was re-enacting the weeks before the disastrous 1929 crash? Remember that chart? Here's the version that known permaclown Mark Hulbert ran:
Ooh scary!

Here's Yardeni:
In the 2/18 Morning Briefing, I wrote: “What would it take to repeat the grim fundamental underpinnings of the scary scenario of 1928-1933? Another Lehman moment would do the trick, and make Hulbert and the other promoters of this grim scenario right on the money. Of course, there have been several variations of this ‘endgame’ scenario provoking anxiety attacks and corrections since the start of the current bull market. But Godot has yet to show on stage.”
Of course, he shouldn't have bothered wasting his valuable time on this chickenshit. Because even another Lehman wouldn't have created that crash. That time was different.

In 1929, on the first day of the crash, the wirehouses cut all connections out of NYC, so nobody outside of Wall Street knew what was going on and the big boys were able to dump stocks into uncancelled bids, thus getting out first. When the rest of the world was finally let in on the story, the subsequent cascade crash was more a case of people exiting the market in disgust at having been taken by criminals.

Plus the makeup of the 1929 Dow has nothing in common with today's US market. Here was the Dow 30 before the October 1929 crash:

Allied Chemical General Foods Paramount Publix
American Can General Motors Corporation Radio Corporation
American Smelting General Railway Signal Sears Roebuck & Company
American Sugar Goodrich Standard Oil (NJ)
American Tobacco B International Harvester Texas Company
Atlantic Refining International Nickel Texas Gulf Sulphur
Bethlehem Steel Mack Truck Union Carbide
Chrysler Nash Motors U.S. Steel
Curtiss-Wright National Cash Register Westinghouse Electric
General Electric Company North American Woolworth

What you don't see: financials (Visa, JP Morgan, Amex, Goldman). No pharma (Merck, Pfizer, J&J). Um, quite obviously no computers (Microsoft, Cisco, Intel). And very little in the way of multinational presence, generally. Shit, most of those 30 companies are commodities.

This market is not the 1929 market, so anyone asserting a parallel should always be mocked first, and then listened to only if you've got spare time and braincells to lose.

Anyway, the point remains. What's happened since this stupid "1929 parallel" chart hit the blogoverse?

This. This is what has happened.

You'll note the absolute lack of a 50% fucking crash over these past few months.

It sure was fucking foolish for you people to have given these doomers like Hulbert even a second of your time, no?

Yes James Rickards, there's always more room in the clown car

ETF Daily News - financial collapse and massive shortage in gold coming. It's explained in the first nine words of the article:
Financial expert and best-selling author James Rickards’ latest book

And how's the monsoon coming along?

Let's check in on the Indian monsoon, which is a critical input to worldwide gold demand though it's not as if Wall Street Whitey will ever clue in:

Reuters - weather office forecasts delay in monsoon. This was as of May 15th. Since then....

Al Jazeera - pre-monsoon rains hit Kerala. It's apparently ahead of schedule in the south. The south is where the farmers are richer and buy more gold, so that's encouraging. And as for the rains being forecast at 95% of average? A 5% drop doesn't really affect yields, not if the rain still covers the country evenly.

All of this, remember, with a pinch of salt, because Indians are the world's biggest worriers and whiners.

DM ex-US also looks fine

Here's CIE.TO, a big holding of mine which is apparently DM ex-US, probably currency-unhedged who knows:

It's Eurozone, plus Switzerland and the UK, plus a big position in Japan, some South Korea I think, and so on.

Looks like that might break to the upside too. Apparently people are expecting Draghi to say something or other this week at some conference in Portugal, which would mean Deutschebank is already buying positions based on their covert monitoring of the supposedly secret meetings.

Look, we're in a world where economies suck, though not as bad as a few years ago, and while things aren't great they seem to have a bias towards getting better instead of worse. That's the economy whose market I want to buy.

I don't want to buy an economy firing on all cylinders with amazing profits. Cos those never get better.

some gloatationary news

Here's some morning reading:

Bespoke - S&P closes at an all-time high. Hey, remember the imminent crash?

Reformed Borker (Bork Bork Bork!) - advancing volume. Hey, remember the imminent crash?

Joe Fahmy - the market just fooled the majority again. Quotes with commentary:
How this applies to our current stock market is that NO ONE is a raging bull.
Uh, wait... I'm a raging bull.
It seems like EVERYONE is cautious. Last week, David Tepper gave cautious comments at the SALT conference. Respected technician Ralph Acampora expects a 25% correction for small-cap, mid-cap and tech stocks. He went on to say “I have a sick feeling a 25% crash is ahead.”
Seems like Ralph Acampora shouldn't be so respected then, eh? 25% corrections in secular bull markets are so rare that you simply can't trade in expectation of them.
A trader friend of mine who has been a blind bull for 3 years recently called for a 10% correction.
10% is maybe more realistic, but aren't you just flipping pennies then? Quit being a pennyflipper, buy SPY and go away for 10 years.
Another friend who manages $2 Billion and is a VERY sharp money manager says that small-caps “are about to get killed.”
Really? Why? Because of the ongoing growth rotation? Your buddy isn't too sharp if he hasn't heard about that already.

FT beyond brics - Evo Morales, part-time footballer. Wherein the FT makes an egregious and unacceptable error:
Once the first indigenous president of an impoverished country with an Indian majority has established his authority, tripled the size of the economy and is poised to win a third mandate, what else is there to do?
Indian majority? "Oh my, Rajeev! Our president Morales is so good at football!" "So true, Joginder! Now if only he could master our national pastime of cricket!"

Carl Sagan's bullshit detection kit

Ritholtz posted it today but it's not his, so I feel free to repost it in its entirety.

From Carl Sagan's A Demon-Haunted World:

The kit is brought out as a matter of course whenever new ideas are offered for consideration. If the new idea survives examination by the tools in our kit, we grant it warm, although tentative, acceptance. If you’re so inclined, if you don’t want to buy baloney even when it’s reassuring to do so, there are precautions that can be taken; there’s a tried-and-true, consumer-tested method.

1. Wherever possible there must be independent confirmation of the “facts.”

2. Encourage substantive debate on the evidence by knowledgeable proponents of all points of view.

3. Arguments from authority carry little weight — “authorities” have made mistakes in the past. They will do so again in the future. Perhaps a better way to say it is that in science there are no authorities; at most, there are experts.

4. Spin more than one hypothesis. If there’s something to be explained, think of all the different ways in which it could be explained. Then think of tests by which you might systematically disprove each of the alternatives. What survives, the hypothesis that resists disproof in this Darwinian selection among “multiple working hypotheses,” has a much better chance of being the right answer than if you had simply run with the first idea that caught your fancy.

5. Try not to get overly attached to a hypothesis just because it’s yours. It’s only a way station in the pursuit of knowledge. Ask yourself why you like the idea. Compare it fairly with the alternatives. See if you can find reasons for rejecting it. If you don’t, others will.

6. Quantify. If whatever it is you’re explaining has some measure, some numerical quantity attached to it, you’ll be much better able to discriminate among competing hypotheses. What is vague and qualitative is open to many explanations. Of course there are truths to be sought in the many qualitative issues we are obliged to confront, but finding them is more challenging.

7. If there’s a chain of argument, every link in the chain must work (including the premise) — not just most of them.

8. Occam’s Razor. This convenient rule-of-thumb urges us when faced with two hypotheses that explain the data equally well to choose the simpler.

9. Always ask whether the hypothesis can be, at least in principle, falsified. Propositions that are untestable, unfalsifiable are not worth much. Consider the grand idea that our Universe and everything in it is just an elementary particle — an electron, say — in a much bigger Cosmos. But if we can never acquire information from outside our Universe, is not the idea incapable of disproof? You must be able to check assertions out. Inveterate skeptics must be given the chance to follow your reasoning, to duplicate your experiments and see if they get the same result.

Now try applying all that to the bullshit you read from bloggers every day.

CHARTS FOR GOLDBUGS: see what is making them foam at the mouth!

Ha ha!

GDX is <-2SD and collapsing. All support lost, the black cloud of doom spreads across the blasted landscape.

GDXJ breaks support. The goldbugs are crushed, we see them scattered before us and hear the lamentations of their women.

Hey, remember when the weakness in the Nasdaq was an indicator of an impending market crash?


SPY is at an all-time high again. $SPX will probably hit 2000 in a week or two, if the law of round numbers holds.

Speaking of all-time highs: when something's at an all-time high, the easy bet is to assume it'll keep printing all-time highs. Because a streak of all-time highs has a tendency to keep going for a long time.

Now let's kick back and read all the doomers' blogs as they walk back their calls for collapse. "Oh, when I said the S&P was topping, what I really meant was that it'll go up again, and it'll top after going higher."

oh and gold opex is today? fine, let's make fun of more anal ysts

Oh and re gold's price drop: OGM14 last trade is 27 May, isn't it?

Speaking of which, here's a funny headline:

Forbes - gold may remain near $1300/oz ahead of Tuesday options expiry - analysts. Embarrassing quote #1:

In the meantime, “the gold market has really endured a period of collapsing volatility. The market has become quite range-bound and quite trapped not too far from this $1,300 mark in the June futures,” said Sterling Smith, futures specialist with Citi Institutional Client Group.

Further, the $1,300 level may serve as a “magnet” due to the open interest in calls and puts, Smith continued. He pointed out that the calls and puts are roughly even around this level – 4,999 puts and 4,996 calls – resulting in a state of “equilibrium” around this price.

Well, Sterling, you were proven wrong. Too bad about the whole looking like a moron thing.

But wait! There's more!:

Prices early Thursday rallied to right around $1,300, pointed out James Ramelli, trader with, which focuses on options.

“Because the week of Memorial Day is generally pretty thin (trading), I think there’s probably a little bit more likelihood that gold is going to pin somewhere near that $1,300 level,” Ramelli said.

It’s a price level where a large number of traders are involved in the market, he said.

“Some people say the market makers will try to push the underlying there, or whoever is involved in those options. Because at $1,300, they will all go out worthless,” he said.

Well, James Ramelli, looks like you also were proven wrong. Your moron t-shirt is in the mail, I assume you take an XL?

And Smith doesn't know when to shut up:

“The market has a habit…or a repeated behavior of trying to make the most options expire worthless or near worthless,” Smith said. “So right around $1,300 would render nearly everything kaput. The puts up above are limited, so of those that would actually have some value, there aren’t that many out. And by the same token, there are a lot of calls above $1,300 that would meet their maker.

“I don’t see much deviation away from this $1,300 mark unless there is something of an outside political nature that really does something to drive the market,” Smith said.

Ouch. Apparently he bases his argument on max pain theory. Well, it must have been the first time he ever based an argument on max pain theory, because he's about to feel the max pain of realizing max pain theory is bullshit.

And not one to stay out of the fray, Jim Comiskey:

Jim Comiskey, senior account executive at Archer Financial Services, also said gold could remain near $1,300 ahead of expiration, but added often markets will make a big move once expiry is out of the way.

“In my opinion, we’re going to be marking time right at this $1,300 level until expiration,” Comiskey said. “Then the gloves come off. We are so range-bound. Every participant in the metals market these days is frustrated and growing increasingly frustrated because the gold and silver are so range-bound.

Well it sure looks like the market isn't holding to your timetable, Mr. Comiskey.

In summary:

whoops! gold just pooped a lung


Gold dropping below $1280 isn't good. Here's the daily candles to splain why:

It has printed a wick before down to $1268 or so. So we're not exactly in no-man's land yet.

However, we haven't see a daily close below $1280 for the past few months of chop; that and the proximity of the SMAs used to make this chart look hopeful, as if an upmove was a possible threat.

A daily sub-$1280 close opens up a new lower price range for gold, one which indicates a failure to finally conclusively break above the SMA(50) and SMA(200). That will probably inspire Wall Street Whitey to start selling again.


Moving down into a lower range also makes the weekly chart look bad, again because gold was threatening to overtake its weekly SMA(50). That was what was making the weekly gold chart look hopeful; on a gold downmove, it will look less so.

Especially if gold makes it down near $1200; all you'd need then is for someone to walk into a crowded room and say "there's no such thing as a triple bottom".

What's funny is that this morning I was laughing at how Mineweb ran yet another article from Julian Phillips, calling for (yet again) another "imminent strong move in gold". Hey, it's true - if a price range gets tight, one day it's going to widen.

So congratulations, Julian Phillips - after months of predicting that gold's price will move, it looks like it's finally going to move. If only your predictions were even remotely actionable! Wow, it'd be worth it to read your articles then!

Monday, May 26, 2014

Simple question about tax cuts

I was reading Josh Barro's "there's no such thing as a free tax cut", and I realized something.

I'm always hearing about idiot neocons campaigning for tax cuts. We've got that going on here in Ontario right now, with that ignorant fundie clown Hudak*.

I understand why tax cuts are so popular, despite the fact they're stupid (who's going to pay for all the roads and bridges after we eliminate taxes?).

But why don't conservatives ever campaign for higher wages, instead? After all, if we all get paid more, then that's just as good as a tax cut, no? We still have more money in our take-home.

Yes, I know why the conservatives don't campaign for higher wages - I just thought it was silly that we've spent the past thirty years swallowing this "lower taxes" bullshit when we could have been pushing for higher wages all this time.

* - Apparently Hudak only ever had one real job his entire life: working for Wal-mart, where his job was bossing around minimum wage peons. He did that for a year and then went into politics. Typical conservative.

Some Mammorial Day news

If I heard correctly, apparently it's Mammorial Day in the US, when everyone listens to the music of Dolly Parton. Then they go out and buy fluffy pillows.

So here's some news:

Reformed Borker (Bork Bork Bork!) - the great rotation. Seems some clown with a blog who underperforms SPY every year was mocking this concept all year. Josh's take?
The Great Rotation market meme of early 2013 turned out to have nailed it, perfectly capturing what was happening in the investment business and, by extension, the major averages.

Stocks jumped on the first day of trading last January, never went negative on the year for even a second, rallied a historic 30% and finished the year on December 31st at a new record high. This was almost entirely driven by investors rebalancing their outrageously lopsided portfolios after five years of fear and apathy. Despite all the naysayers, flows into equity funds went mega-positive in 2013 while money going into bond funds slowed to a trickle. The fact that money hadn’t fled bond funds on a net basis is not the point – it was the change in trend that mattered and on that score, the Rotationistas (myself included, see here and here) were correct.

Marketwatch - four things the doomers got wrong. Let's summarize:
Elliott Wave analyst Robert Prechter, whose heyday was in the 1980s, got some notoriety a few years ago by calling for a market collapse. In July 2010, Prechter predicted that “the Dow, which now stands at 9,686.48, is likely to fall well below 1,000 over perhaps five or six years as a grand market cycle comes to an end.
“Without a dramatic change of heart by the [European Central Bank] and by European leaders, the single currency could break up within weeks,” declared The Economist in November 2011.
Peter Schiff, CEO of Euro Pacific Capital[:] in December 2009, he said it wouldn’t surprise him if gold hit the 5K mark “ in the next couple of years .”

Well, it did rally above $1,900 by September 2011, but it’s been downhill ever since. Still, in an interview last month, Schiff doubled down on his $5,000 forecast.
Faber [...] predicted last year on the open microphone CNBC regularly gives him, [the Fed] might “increase the asset purchases to say $150 [billion], $200 [billion], a trillion dollars a month.”
In summary,
But too many people have lost precious time and a chance to make real money by listening to these fear mongers. They’re probably kicking themselves now, or should be. The rest of us, who hung in there when things looked bleakest, are quietly smiling all the way to the bank.
That is precisely the reason why you should ignore forever anyone who got these calls wrong. And ignore forever anyone who even mentions the name of these clowns. The truth is hard enough to track down anyway: don't make the job more difficult by confusing yourself with known losers.

Telegraph - gold prices heading higher as wharrgarbl. As far as I'm concerned, the only thing that could positively affect Indian gold consumption would be Modi somehow transitioning India to a successful high-growth economy that generates a tremendous new secular wealth boom. However, I'm happy that this goldbug story is now getting play in the Telegraph: maybe, if the narrative becomes popular enough, London traders will start positioning themselves for a gold bull run, ignorant of the fact that their very positioning will be what drives the price higher.

IKN - hilarious "technical analysis on gold". I'm at work so I can't give this the satire it deserves, so I'll just say something something Rick Rule, something something Objectivism, something something chiseled features, something something very heterosexually.

My own take on the Euro elections

BBC - Farage's UKIP wins Euro parliamentary elections. Plus a neo-Nazi wins in France.

My own take?

The people of England saw the EZ destroy Ireland's economy for the benefit of the unelected financial elite.

And the people of France saw the EZ destroy the lives of Portuguese and Spanish for the benefit of the unelected financial elite.

A "parliament" is supposed to protect the people from the machinations of unelected, antidemocratic kleptocrats. The Euro parliament did nothing. In fact, you'd have to wonder if the Euro parliament ever does anything at all for the good of the people.

So what do you do when you see that your supposed "parliament" at best does nothing to protect the masses from the machinations of the elite, and at worst is actively conspiring to enslave the people?

You elect a bunch of fruitcake Nazis. Le Pen is a Nazi, her father was a Nazi, don't overthink it.

As for Farage, he spouts off so much patently untrue ZeroHedge propaganda that he must either be an utterly ignorant buffoon, or he's consciously and willingly spreading falsehoods for his own political benefit.

And it makes perfect sense to elect both of them. What people in England and France are doing is daring the Euro parliament to prove that they have any power whatsoever. If the EP is a meaningless body of talking heads, then no harm has been done; if the EP really does have power, then at least England and France will have elected parties who aren't associated with a decade of destroying the lives of Europeans for the benefit of the banking elite.