Saturday, July 5, 2014

Some weekend news

Here are a few significant newsbits for the weekend:

Liz Ann Sonders - sentiment is a mixed bag. She goes into all the sentiment indicators, and explains to what extent they actually matter when the market has been going steadily up for 6 frickin' years.

FT beyond brics - no sugar pill in India's budget. Despite how much Whitey loves Modi, the fact is there's no easy way to reform India. - Indian coal imports still rising. That hits their trade balance, and is therefore negative for gold.

Reuters - Jaitley says drought report no cause for panic. Therefore, panic.

Friday, July 4, 2014

More John Kaiser, with comments from moi

John Kaiser - blah blah gold. Same link as I just gave you earlier today, but I'm re-posting it so as I can feel better about quoting a big chunk of it:

Michael Berry regards the multi-decade low and steep downtrend as a sign that the enormous increase in the money supply created by quantitative easing has failed to stimulate the economic activity needed to grow the economy organically and pose an inflation risk. The people of America are paralyzed with fear about the future; the shriveling middle class has no spending power and the elite has no desire to spend its accumulating net worth. Banks are not lending because there is no vision of America's economic future, businesses are not investing capital because they do not see a growing consumption demand, and the wealthy are preparing to ride out the deflation that will accompany the return of interest rates to normal levels. But Michael Berry also warns that this spending aversion could turn around quickly, bringing on inflationary pressures that the Federal Reserve may be reluctant to move against aggressively for fear of spooking sharp declines in the bond market that brings back the deflationary threat. It is a frightening tightrope situation. A near term path out of the gold narrative trap would be a scenario where something triggers a rise in American consumption that risks a return of inflation that in turn spooks an anticipatory rush back into gold. This is the fingers-crossed hope for a September 2014 rally in the junior precious metals sector. But the drumbeat from Wall Street is that the economy is improving, the taper will end quantitative easing, inflationary pressures are far in the future, and there is no reason to own gold.

Note that this is why I find interesting Michael Shaoul's call for a near-term rise in US inflation. And that call seems to be starting to catch on among the Wall Street crowd.

Not only do I think that Wall Street's assessment is wrong about the underlying strength of the economy, but I also think that if something could trigger a perceptual inflection that unleashes a credit expansion that restores robust, broad based growth to the American economy, my predicted impact on the price of gold is the exact opposite of Wall Street's prediction. [...]

And I agree with this. The key to increasing the gold price is increasing demand; and the way to increase demand is to increase net wealth in Asia because Asians are the only people who buy gold.

Wall Street will eventually embrace my alternative gold narrative, but not until it has pummeled the prevailing poisonous gold narrative into dust, an exercise with which I have some degree of sympathy. That, and a return to robust economic growth, I'm afraid will still take several years during which gold could stay stuck in a range of $1,000-$1,500 where the economics of putting advanced gold deposits into production are lousy in most cases, the profitability of most operating mines is marginal, and the bar for what counts as a major exploration discovery is very high. Only severe geo-political stresses could drive gold prices sharply higher in the short term, but the eruption of such gold price drivers, and their sustainability, are unpredictable and belong in the category of "be careful what you wish for".

I disagree. I think if it weren't for the Chinese collateral situation and the weak Indian monsoon, we'd be seeing gold rise strongly this year.

In fact, maybe we already are; problem is we won't really know til the end of the year, since the present gold strength might just be the old seasonality thing. I think Whitey can't generate enough gold investment demand to swamp out weakness in Asian physical demand, but maybe I get proven wrong.

New Kaiser blog post on life, the universe, and everything

John Kaiser - understanding the junior resource bear market. Wherein he goes into a long discussion about literally everything. This article is easily 4-5 times as long as any edition of any paid newsletter, and it's the first time he's posted something on his free blog in months, so go read it.

Included are a fantastic dig at Lumina (whose Taca Taca was bought for a miniscule fraction of its $2.25 Cu 10% NPV) and a laugh at your anium ("heavily pumped as a re-ascending star by the Sprott Global complex").

Plus this great observation about hard money goldbugs:

Unfortunately, the belief that gold could be at $2,000 tomorrow is held by a shrinking pool of investors who believe it for reasons that are irrelevant to the resource juniors. Apocalyptic gold bugs have hijacked gold as the symbol for a libertarian ideology that attributes all problems to the absence of an unfettered free market that somehow on its own prevents a free market stifling "winner takes all" outcome. Support for gold has become a rallying cry for the Tea Party. Although elsewhere in the world gold is treated simply as a hedge against human folly, in America gold has been turned into a symbol of allegiance to human folly. This has turned the topic of gold into a pariah of sorts, something to be shunned by people with money who dream of a flourishing future for themselves and their children, who see themselves as dispensers of divine grace rather than righteous punishment, and who recoil at the innate mean-spiritedness and twisted conspiratorial thought of the current owners of the gold narrative. The poisonous politicization of gold has unnecessarily constrained the pool of potential resource sector investors. And the unfortunate outcome is that the de facto owners of the gold narrative by virtue of their apocalyptic mentality have no interest in the resource sector, especially the juniors. The gold narrative needs to be restructured so that it is of interest to the entire political spectrum and offers a reason to expect the higher real prices that are beneficial to the developers and miners of gold.

So go read the only junior mining analyst out there who knows how to write in paragraphs and theses, and the only junior mining analyst out there who has the balls to make fun of goldbugs in front of a full crowd of goldbugs.

Wall Street Whitey's effect on gold

Go look at Kitco's gold chart today. You'll see the price has hardly budged since Wall Street closed.

Isn't it interesting that the gold price only gyrates wildly when Wall Street Whitey is at work?

Friday videos: Galaxie 500's "Fourth of July"

Here's Galaxie 500 with a totally fun, very atypical love song:

Trivia includes:

1. Their drummer played a drum kit he got from Conan O'Brien.
2. I had a friend in university who was so in love with this band that his girlfriend looked like Naomi Yang.

Thursday, July 3, 2014

Some American Imperialist Day news

For some strange reason, when American Imperialist Day happens, they close the market on the afternoon the day before. Why? Isn't America all about stock markets?

Anyway, here's a bit of news:

Noah Smith - Austrian economics is a brain worm. This is too good an article for America:
The Austrian worldview is like a brain worm that has infected large swathes of our financial industry, commentariat and general public. Even you, dear reader, may carry one or two of its wriggling larva inside your gray matter.

When the Austrian brain-worm invades, you start believing things like: 1) Federal Reserve money-printing is a government plot to boost big banks, 2) prices are rising much faster than anyone thinks, 3) real “inflation” means money-printing, not an increase in prices, 4) printing money can never boost the economy, 5) academic economics is a plot to use mathematical mumbo-jumbo to cover up government giveaways to big banks, etc., etc.

The Austrian catechisms range from almost plausible (taking toxic mortgage assets off of bank balance sheets must have been part of the reason the Fed did quantitative easing), to somewhere in the neighborhood of the 9/11 truthers and moon-landing hoaxers. Most of the elements of Austrianism are so directly contradicted by data that the belief system practically screens itself for people who are out of touch with reality.

Bloomberg TV - Michael Shaoul on US inflation risk. He's actually positive about the commodities now, noting that Japan and the US and EU also use commodities. In fact, he thinks this is the start of another big commodity move like 2003-4. (Buy gold buy gold buy gold.) Other than that, he thinks the BLS data grossly underestimates wage growth as noted by corporations in their quarterly conference calls. And his favourite two equity sectors to play the inflation trend are commodities and semiconductors.

Reuters - monsoon strengthens after weakest start in 5 years. It's still not good for Indian gold demand, but whatever. Keep buying gold because America.

Kitco News has a chance to do something interesting

So Kitco News is going to Freedom Fest next week. They will probably interview Steve Forbes and Doug Casey about their views on hating the poor, their rejection of responsibility toward fellow citizens, and (of course) their magical thinking about gold. Oh, and about what a supposed genius Doug Casey is.

But this is interesting: Whole Foods' John Mackey will be there.

Wikipedia - John Mackey.

Now, according to this article, Mackey is still just yet another Objectivist flunkie who worships Ayn Rand and Ludwig von Mises. The article says he compared the ACA to "fascism", he thinks Americans have no intrinsic right to health care, and he thinks workers should not be allowed to form independent unions to collectively bargain. And he's a climate change denier.

So, on the surface, he's just another Casey/Forbes clone, and Kitco could just do another bullshit interview where they let some rich asshole propound on how we should all hate our fellow citizens and grow rich from greed and viciousness. It wouldn't make the world a better place in any way, but Kitco could still do it.

However, interestingly, he's also a vegan who supports the green tax shift, the humane society, aid for the poor, and he even reduced his salary to $1.

Kitco has an amazing opportunity to interview Mackey on these topics, instead of allowing yet another clown to parrot off yet more Ayn Rand Libertopian bullshit.

Which do you think they'll do?

Yay! Monsoon!


Times of India - monsoon hits parts of north India.

WSJ India Realtime - monsoon rains arrive in New Delhi.

Times of India - rain lashes Delhi, monsoon to arrive within week.

New Indian Express - monsoon weak, but no drought.

But you go ahead, Wall Street Whitey, and keep selling gold based on US employment data that you would have already known about if you'd followed the indicators and seen the trend.

Wednesday, July 2, 2014

BOB LEFSETZ IS STARTING TO LIKE LANA DEL REY: here's what you need to know

Ha! Bob Lefsetz, full-time hater of Lana del Rey, is starting to like her!

I hate everything about Lana Del Rey except the music.

Ha! Haters gonna hate, Bob!

She changed her name, she inflated her lips, she had a disastrous SNL performance, but the grooves have sustained Lana Del Rey's career.

Everybody changes their name. Bob Dylan changed his name: do you hate him too, hater?

As for her SNL performance, I never watched it. But I've seen a lot of her live performances on Youtube, and yes: her live singing often stinks, she doesn't really put on a good show, and even at the best of times she can't reach the level of her studio recordings.

She was stunning singing "Video Games" on Letterman, that's about the best I've ever seen her live. And she did do a pretty good "Ride" on French TV. So maybe her problem is that she can't sing with monitors instead of headphones. Vocal monitors universally suck, Bob.

Or maybe part of it is that her studio singing has so many of those little inflections and curlicues that carry the song, and she just hasn't got the attention necessary to pull it off live. Or maybe again it's the monitors: you just can't sing subtlety with a loud band behind you on a live stage. Especially not with a horde of fans screaming at you.

Margo Timmins and Hope Sandoval could sing subtlety, but their bands were punishingly quiet and their fans behaved, so that made it easier. Lana's trying to do Margo and Hope with a wall of sound behind her. That'll cripple her right there.

Seriously, pay good attention to her voice on the studio recordings and you'll see all sorts of tiny little gems. When she sings "Young and Beautiful", the emotion behind the line "I know you will/I know you will/I know that you will" carries across the character's desperate self-delusion in a way that you won't find from your fave modern pop singers.

Bob, when you asserted that Doctor Tongue sang a better "Summertime Sadness" than Lana, you proved you don't have a fucking clue about singing. Where was the tense expectation in "I'm feeling electric tonight", the psychosis of "got my bad baby by my heavenly side", and the ominous finalism of "I know if I go I'll die happy tonight"?

Lana singes the emotions of characters, Bob. When's the last time a pop star did that?

But yes, she has sucked live. I unfortunately didn't get to see her on her tour this spring, so I dunno if she's improved recently. I didn't get to see her on tour because the show was sold out in just a couple days. You give her her props for that yet, Bob?

"Cruel World" didn't sound like everything else, not even close.

It's not Top Forty radio ready.

And it's not alternative.

It's got the polished, slick production the major labels can afford featuring players who know their craft. The indies pale in comparison.

And the lyrics.

I haven't listened to any of the new record yet. Frankly I was so blown away by the few songs I listened to on the first one that I haven't wanted to go near the new stuff yet for fear it might suck. Because most of the artists I've loved have put out shitty second albums, and I don't want anything to spoil my feelings for Lana.

But yeah, on some of the first album's songs the production was stunning, "Born to Die" is unbelievable, and so is "Ride"; you should be able to hear all the clever references in these songs if you've followed pop music since the 1950s.

Lana's producer uses sound collage. We haven't been seeing this in music in a long time and it's nice to see it coming back.

And her live band is definitely brilliant, especially her pianist (dunno if he's on this record).

It's like a modern day Doors record. It's dark. She's the female Jim Morrison. In tone, if he only sung when he was stoned and if she wrote slightly better lyrics.

Um... sorry to tell you this Bob, but Morrison did sing when he was stoned. Like, all the time. Like, during the vocal recording for "LA Woman" he collapsed in a puddle of his own urine.

Or she's Lou Reed with a better voice.

Oh god please! Don't compare Lana del Rey to that talentless arrogant douche. He was a one-hit wonder after the original VU, and still he thought his shit didn't stink. Guy rode on the coat-tails of drugs and John Cale for a decade, and only the drugged-out loser attitude of washed-up 70s punk scenesters kept him from having to take a job as a night watchman.

But what's striking is Lana's the anti-Katy, the anti-Rihanna, she's not employing post-feminist girl power, all about physique and outfits, it's almost like she's on drugs in a dark room and is telling you her story and doesn't even care if you're listening, which makes you want to!

And the track is nearly endless. 6:39. And although hypnotic, repetitive.

But so intriguing. It's what music used to be, not playing to the station or the masses but just you, the individual, who wants to participate but is flummoxed by society. That's what records used to be, comforters, even if they were metal, they were blankets to wrap ourselves up in to stay warm, to survive.

Sounds like you're falling in love, Bob.

And I want each and every one of you to listen to this song.

A good thirty percent will hate it outright. You know, the guys with the tattoos who believe rock must be loud and edgy and...

And those who are afraid... Who flinch at profanity, who want no controversy.

But the rest of you will be struck just like me. THIS IS WHAT PEOPLE ARE LISTENING TO? THIS IS A BIG ALBUM? HOW FANTASTIC IS THAT!!

Oh god! All caps? You are falling in love!

Sure, the live performance doesn't measure up to the image. But you have to admit these three things about Lana del Rey:

1. She has image out the wazoo.
2. Her recorded vocals are jam-packed with fantastic little twinges that carry emotion beyond the words she sings.
3. That production is so damn dense and gushy.

What more do you want from an artist, anyway? She's doing 3 things better than everyone else. Everyone else.

But it's good to see you warming up to Lana, Bob. I had lost all respect for you when I heard that you didn't like her. Maybe now I can like you again.

Now if only I can get you to admit that Katy Perry and Ke$ha are top 40's best singers for this entire generation.

Monday, June 30, 2014

So is gold really coming back to life? Let's ask Amy Lee.

Hey, I found another version of Evanescence's "Bring Me to Life"!

This one's in Italy, apparently.

So gold went back up....

Sorry I didn't post this afternoon. I was busy reading comments about the idiotic SCOTUS decision that makes it legal for an employer to force his pseudo-religious mumbo-jumbo on his employees.

They did not rule that an employer has the right to refuse insurance coverage for birth control due to religious beliefs. That is not what they ruled. Because the employer involved in the case is not a member of a religion that is against birth control.

Rather, he personally thinks that birth control is bad, and now SCOTUS has said he has the right to enforce his own personal, ill-conceived, mis-interpreted, make-believe, pseudo-religious mumbo-jumbo on his employees.

Pretty stupid. But what do you expect from a country where people are no longer ashamed of being ignorant?

Anyway, gold went back up today:

It doesn't matter what the hell I or anyone else thinks or says. That is a higher high, and it came on volume. Thus the upward trend is continuing.

As far as I can tell, there was utterly no reason for gold to pop at ~1:55 Eastern time. I didn't see anything in the news. So, it must simply be someone wanting to buy gold. So fine, I'll play along.

Silver also went up:

That's not a higher high, and silver is still overbought, but who the fuck cares? That's the most buying volume in SLV in 5 days.

And GDXJ dutifully followed:

That's definitely not a higher high, but it's still a bounce off the supporting EMA after a 4-day ride, with volume, and it's not even overbought by RSI.

I'd have to think nobody expected this, since the strong June move in PMs and miners must have left everyone expecting a pullback. That is nice, when everyone expects one thing and then another happens.

Plus, there's no fundamental reason for gold to go up - unless you believe the Zerohedge theory that the Chinese collateral gold unwind will force prices up by forcing buybacks of forward sales against nonexistent collateral. Or maybe Whitey is buying because he expects inflation to increase in the US faster than the Fed can adjust rates?

Or maybe people are buying gold because of the declaration of the Caliphate?

Fuck I dunno.

Be long gold miners again, I guess.

Monday morning reading

Most Canadians are off work today, since it's the day before Canada Day and there's nothing we like more than a four-day weekend.

Here are a few links:

Vagabond Journey - a journey to China's largest ghost city. Wherein we find out it's actually not a ghost city at all. As background:
I’d been chasing reports of deserted cities around China since last December, and I had yet to find one. Over and over again I would read articles in the international media which claim that China is building cities that are never inhabited only to find something very different upon arrival. The New South China Mall had a lot of empty shops but it turned out to be a thriving entertainment center, Dantu showed that an initially stagnant new city can become populated and come alive, and I found that Xinyang’s new district, a place called a ghost city since 2010, wasn’t even close to being built yet. 
Read the article, it's very enlightening. Basically, it seems the people who've been blathering about "ghost cities" have no idea what they're talking about.

Reuters - Modi eyes first labour overhaul in decades. Still a lot of talk but nothing actually happening. Are Americans buying on the talk?

Indian Express - monsoon expected in India by July 5th. Apparently the June rains aren't particularly important to total monsoon performance. With that in mind, the northeast is 80% deficient. You really should be watching this, mister goldbug.

Economic Times - el Nino intensity may be moderate. The hope for the monsoon is that el nino doesn't move until after monsoon season is done.

FT beyond brics - demographic risk threatens EM powerhouses. Demographics is the engine that powers economics. Ignore at your peril. - hedge funds add to bullish gold bets. I don't like this, because hedge funds are always wrong. What, have they run a supercomputer simulation to predict a good monsoon for India? No, they've just chased a strong gold move on Yellen talk. They will lose money and you don't want to hang out with them on the long side.

Sunday, June 29, 2014

Some weekend reading

Here's a few weekend newsbits:

New Deal Demoncrat - weekly indicators. Everything is still fine except the oil price, which probably can't get any worse.

Bespoke - historical first half versus second half performance. In actuality, the supposed subpar market performance in midterm years hasn't happened since 1998. 2010 was +22%, and 2006 was +11.6%. So there's another old saw sent to the scrap heap.

WSJ Moneybeat - time to stick a fork in that 1929 chart. He means this one:

Yet another instance where Tom McLellan has been proven to be not just an utter moron, but a childish, simplistic, ignorant utter moron.

IFL Science - you have a better chance of being bitten by Luis Suarez than a shark. But only if you're a professional soccer player. And in any case, it's better to be bitten by Suarez: if you're bitten by a shark you die a gruesome death, whereas if you're bitten by Luis Suarez the worst that can happen is you look like a fucking crybaby when you go whine to the ref about it.

Like this:

What a fucking whiner! "Ooh look! I have a tiny fucking mark on my shoulder! Look at me!"

Hey listen, all you soccer whiners. These are injuries:

If you have to scream like a fucking toddler and stick your shoulder in everyone's face, then you're not bleeding. Fuck off.

And don't get me started on those whiners who lay there feigning death til the trainer comes with the fucking magical sponge. If I were the trainer I'd come out with a bottle of isopropyl alcohol and pour it out over your chafed balls to get your fucking attention.