Friday, December 27, 2013
Bloomberg - Michael Shaoul 12-minute audio interview. He talks about EMs and gold.
He says the general problem in EMs is that on the way down, you uncover all the malfeasance that nobody cared about on the way up. Particular significance for the EM credit complex.
Then he talks about gold. He thinks there's a "next leg down", and gold goes to $1000 in 2014.
He says other things too.
Reviewing the new Miley Cyrus video for her hit single "In Case You Didn't Watch Me Masturbate In My Last Video"
Here's that new Miley Cyrus video for "Adore", where she's in bed in her underwear masturbating:
What's shocking is that at 3 minutes, she suddenly switches to being in a lace bodysuit in a bathtub, singing about "God" and "holy matrimony". And masturbating. Yes, I watched this with the volume up, and no, you're not missing anything if you keep the speakers turned off.
Anyway, thankfully, she goes back to more masturbating 30 seconds later. Oh, and sucking her finger is a nice touch.
The verdict? I can fap to this. Though I'd rather watch a video of Lexi Belle masturbating. Or singing.
But do keep shooting softcore porn for us perverted old men, Miley! It's a positive contribution to the world.
Here's some stuff:
Bespoke - individual bullish sentiment back above 50%. But:
With individual investor bullish sentiment crossing the 50% mark, should investors be worried? While the current level is definitely elevated, it's by no means without precedent. As shown below in the chart of the AAII reading going back to 1987, sentiment has been above the 50% mark many times in the past. Coming out of the financial crisis, it has taken a long time for investors to gain trust in the stock market. Longer term, the market needs investors to have faith in it as an attractive asset class. As long as earnings can keep up with stock prices and the economy continues to grow, it would be nice to see sentiment stabilize at a more elevated level.It's nice when an analyst goes back to beyond the 2000 crash to look at longer-term data, isn't it? Because sentiment should do something different in a secular bull than what it does in a secular bear.
Reformed Borker (Bork Bork Bork!) - chart of the day: overbought. But:
It’s easy to poke fun at people who’ve been using valuation or some other fundamental indicator as a market timing signal. It’s demonstrably ridiculous and the results for the most stubborn among them have been disastrous.Apparently the S&P500 has been overbought for all of 2013:
Equally ridiculous is the idea that any one or two technical indicators can tell you when an uptrend or a downtrend is through running its course. We all have our favorite technical measures of price but, in the end, all of them are subservient to price itself.
But you and I both know that something can stay overbought for a long time - just like something such as gold miners can remain oversold for one hell of a long time, no?
Here's what Chubby says:
The next time someone cites this or any other single indicator (fundamental or technical) to bolster their bull or bear case, be sure to reply with “So?” No signal operates in a vacuum and, as I like to say (perhaps too often), it’s not different this time – It’s different EVERY time.If you're doing TA, the first thing you should look at is price action, no?
Not all of the metrics you choose to follow are going to be telling the same story at once and some of your signals – even your preferred ones – can spend what feels like forever in the cosmic penalty box, mattering less than the price of tea in China.
IKN - Chilean copper mines are high-grading. Dunno why they should have to do this at $3.30 copper.
Mineweb - metals expected to go up in price in 2014. "Expected" means the ignorant guesses of a bunch of analysts who probably don't have that great a track record to begin with. You'd expect increasing world demand to boost prices, no? But no less than Jim Rogers (the commodity god) tells us that in a secular equity bull, that doesn't happen. So it'll be interesting to see if "this time is different".
Qz, the Middle Persian word for a joke that destroys the flow of a comedy program - Jewelry was the standout in America's holiday shopping season. Well! The gold bears should be thankful that jewelry isn't made out of gold! Wait... um... what?
Boing Boing - $1b/y climate denial network exposed. Here's a tip for ya, buddy: if your goldbug newsletter analyst is also a hardcore global warming denier, then you can ignore every single thing he's saying. Why? Because he's just proved that he's not there to help you invest. He's proved instead that he's only there to regularly exhort you to vote Republican.
I guess it's time for a bit of a change, so here's Corvus Corax playing "O Varium Fortune" from their production of the medieval opera Cantus Buranus:
O varium fortune lubricum
Dans dubium tribunal iudicum,
Non modicum paras huic premium,
Quem colere tua vult gratia.
Et petere rote sublimia,
Dans dubia tamen, prepostere
De stercore pauperem erigens,
de rhetore consulem eligens.
Edificat Fortuna diruit;
Nunc abdicat quos prius coluit.
And I think it has something to do with this:
Til next year!
Thursday, December 26, 2013
Today I was clearing fallen trees from the backyard and truly came within a half-inch of getting an eye impaled on a branch. Thankfully my massive Cro-Magnon brow-ridge took most of the hit, so all I have now is a bad case of boxer's eye.
That's the second time I almost lost an eye, btw.
The first time was 30 years ago, so I guess by all the rules of Technical Analysis I should really watch out in 2043, right?
I'm not truly anti-goldbug. Not at all. In fact I stack phyzz in my spare time. I'm just pro-reality, pro-empiricism, pro-education and anti-fraud, anti-incompetence, anti-fantasy, anti-lying and anti-Republican.
Here, I'll prove it to you:
Mining.com - Germany repatriated 37 tons of gold in 2013. Quote:
Jens Weidmann, president of the Deutsche Bundesbank, said Germany brought back nearly 37 tonnes of gold from its reserves in New York and Paris this year and that the final goal is to store half the national reserves of the precious metal, or about 3,400 tons, in its own vaults by 2020.Um, Jennie? As president of the Bundesbank, how are your math skills? Cos if you only got back 37 tons this year, it'll take you til 2031 to get your 700 tons back.
In an interview with the Bild newspaper (in German), the executive said the bank got back an estimated US$1.5 billion in gold, as part of a plan unveiled in January to increase the reserves held in Frankfurt. By 2020, it wants to have 700 tons back from the US and France.
But I guess it's hard to repatriate your gold when it's all been loaned out by the Fed, melted into bangles and sold to Indian women. I mean, they're not going to just hand back their dowries, are they?
Maybe JP Morgan would be able to scare up more of your gold if they were willing to pay more than the premium that the Indians are happy to pay right now. I mean, otherwise it might be hard to scare up 663 more tons of good delivery bars in 7 years. I mean, JPM will have to buy 3-4% of primary production between now and 2020 just to make good, no?
Maybe you can just take delivery of the Fed's IOUs. I mean, they've been good-as-gold up til now, haven't they? Hey, it even costs less to deliver IOUs.
Look into it, Jennie!
Here's an interesting chart:
Of course this has happened on miniscule volume, but RIO seems to have started an uptrend.
I'm curious as to whether it manages to pop over the SMA(50) soon, and/or successfully retest the short-term EMA and establish an upward channel.
I didn't know this was a thing, or that they'd hire a goth-metal band to play to a bunch of smelly physicists.
But anyway, here's Evanescence, singing about how junior gold miners suck and the Venture market has been completely destroyed forever, now nothing but a smoking ruin upon the face of Canada:
Now, has it completely sunken into your thick skulls how much junior mining sucks, how much the P.Geos have destroyed capital confidence forever, how much the regulators failed investors by allowing massive fraud, how much the idiot newsletter writers had no clue what the hell they were doing, how much even the officers of these companies were just stealing your money for their own back pockets? Hm?
Wednesday, December 25, 2013
Tuesday, December 24, 2013
So I was poking through the stats and saw that all of a sudden people took interest in my post about the Kevin Spencer TV show. Apparently some bulletin board people somewhere discovered the show and were blown away by its hilarity, as well as the fact you can find all the episodes on YouTube.
And also by this pdf of a complaint sent to the Canadian Broadcast Standards Council or whatever, which accurately sums up the TV show in whiny complainer form.
So one of the guys there has started up his own blog, where he's going to be reviewing every single episode of Kevin Spencer, a couple a week, starting December 31, 2013.
Now, my blog maybe only has 6 readers, plus Josh Brown and Joey the Weasel; but most of my readers are sick fucks to begin with, so they'll probably find the following link useful.
The Kevin Spencer Episode Guide
Actually, it even gives me an idea of something to do over the vacation that can sensibly involve drinking the large amounts of alcohol that I just purchased! What a great idea for a holiday!
The only difficulty is putting the episodes in viewing order.
Here's the series premiere, btw:
PS, to you guys from nohomers.net, who I'm sure will show up here: I used to watch Kevin Spencer every week. It's what turned me off South Park. The show was brilliant. It's just there's not enough sick bastards like me in Canada to keep it on the air past eight seasons.
He's locked down his blog but he can't stop me posting links to his interviews!
Here's a link to Michael Shaoul on BNN.
He's very bullish the US, go listen to his opinions.
One thing he points out, on the topic of multiple expansion and directed precisely at Jordan Roy-Byrne and other unbelievers, is that just recently the UST30Y was trading at a 2.5% yield, the equivalent of a P/E of 40. So the US equities' P/E right now is nothing to be concerned about; people simply haven't allocated sufficiently into equities, and as the reallocation continues, the market will get richer. People just disbelieve it because they were so traumatized by the last crash that they're still thinking in crash-protection mode.
He doesn't say anything about Rosenberg's capital expansion and productivity increases.
He thinks the big mid-cycle risk is interest rates going up faster than the Fed wants, because it's still too far behind the economic curve. Then again, I don't recall Shaoul being invited to join the FOMC.
He notes the global growth picture is exciting; you haven't had Europe, Japan and the US all growing at the same time since 1987. Which is nice, since that year was the start of 13 years of a fantastic US stock market.
Monday, December 23, 2013
IKN - Colossus Minerals mysteriously loses their gold after the mine is built. Apparently, once you let real geological consultants like Roscoe Postle look at the property, their gold disappears.
And in subsequent email Otto & I chatted about how stupid this makes Sandstorm Gold look.
Hey, Nolan! Smarty-pants! Um, did you bother to do any due diligence on this property? Y'know, before you handed them a pile of shareholder money to build a mine that it turns out they didn't even know how to dewater?
I used to think you were smart, kid. Now I know you were just lucky. And now the luck's run out.
I'll post a link to this again:
Krugman - bits and barbarism.
And quote Krugger again:
Clever stuff — but Keynes wasn’t finished. He went on to point out that the real-life activity of gold mining was a lot like his thought experiment. Gold miners were, after all, going to great lengths to dig cash out of the ground, even though unlimited amounts of cash could be created at essentially no cost with the printing press. And no sooner was gold dug up than much of it was buried again, in places like the gold vault of the Federal Reserve Bank of New York, where hundreds of thousands of gold bars sit, doing nothing in particular.Hey Krugger! You know that old conceptual error of thinking this time is like another time? The old "apples & oranges" thing?
John Maynard Keynes seems to have died long before Nixon ended gold convertibility.
So, really, Keynes was right. Digging up gold was nothing more than digging up money. Because there was a hard price control on gold: a miner only got paid $35 for each ounce.
Since 1971, what currencies have been linked to the price of gold?
So why have we spent the last 42 years still digging up more and more gold? Inertia? Because holy crap we sure seem to have increased worldwide gold production since the end of Bretton Woods.
Or maybe gold is a commodity whose demand is dependent at least partially on its value as insurance against existential risk?
Note to Krugger: if you actually do respond, please give me a free NYT subscription otherwise I won't be able to read your post. I like reading you, but I'm not fucking paying for it.
BI - Rosenberg says "don't be fooled by the deflation hoax". Here's a fun story from Rosie about generational narrative inertia:
I spent the 1980s and 1990s on trading floors with old veterans from the late 1960s and 1970s who had only seen rising inflation and higher bond yields. They knew from nothing else and so it was very tough for them to buy into the disinflation theme and declining interest rates. In the periodic spasms to the upside they would say "Rosie, ya see, inflation is back". You see, they couldn't differentiate between what was cyclical and what was secular. And then I noticed in the 1990s and this past decade-plus, that we have an entirely new crew of bond traders on the desks, the sons, daughters, nephews and nieces of the old guard, who have only known disinflation, deflation, lower (minuscule) bond yields and radical Fed easing cycles. That is all they have known for their entire professional lives. Their elders didn't see the great deflation coming, and the offspring don't see the remote prospect of a moderately higher inflation environment coming at any time on the forecasting horizon. They have become entrenched in the consensus view of demographic strains, excess capacity and demand deficiency (I was there once, but knew when to make the turn).I find generational narrative inertia to be a satisfactory explanation for things.
But I find it funnier that now even Rosie is starting to mention inflation.
This might become a thing.
Gee, is there some sort of thing that fat ignorant white people on Wall Street typically buy to protect against inflation? Some sort of substance, maybe? Like a yellow metal?
And here's probably the last bunch of interesting news that I'll be coming across til next year.
Don't worry, I'm sure I'll have other things to foam at the mouth about over the next few days.
Philosophical Economics - the single greatest predictor of future stock market returns. Wow. This guy boils it all down to supply and demand. This is very freaky. Better wear a helmet when reading it, cos I don't want it to make a mess when it blows your mind.
Reformed Borker (Bork Bork Bork!) - what could go very right in Europe? Dude, you don't have a clue about Europe. The Germans are always going to be sabotaging it. It's their race's moral imperative. There will be no stimulus, there will be no sensible banking union.
CNBC - cut your EM exposure by a third. Quote:
Goldman Sachs used the 59-page report to argue that growth in emerging markets from 2003 to 2007 was a result of specific economic circumstances that aren't likely to be repeated; the political and economic reforms needed to improve growth are too painful to undertake.
There has also been a "seismic shift" in investor sentiment on emerging markets for the worse. "The returns were not as attractive as expected, the economic growth rates were not as sustainable as imagined, and the countries were not as stable as believed," the report said.
Krugman - bits and barbarism. Strangely, he thinks gold is as worthless as Bitcoin. He starts with Keynes' story about burying money in disused coal mines so businesses could dig it up again, and then says this:
Clever stuff — but Keynes wasn’t finished. He went on to point out that the real-life activity of gold mining was a lot like his thought experiment. Gold miners were, after all, going to great lengths to dig cash out of the ground, even though unlimited amounts of cash could be created at essentially no cost with the printing press. And no sooner was gold dug up than much of it was buried again, in places like the gold vault of the Federal Reserve Bank of New York, where hundreds of thousands of gold bars sit, doing nothing in particular.Because... um... one point two billion Indians have no reason to own gold? Because Paul's wife has a pull-tab from a beercan for a wedding ring? Gold does nothing, Perfesser? What is the point of a reserve? Gold has no insurance value?
You know I'm not an anti-Krugmanite at all. But god, he's really talking out his ass here.
Safe Haven - the time value of gold. I dunno, this guys sounds like a goldbug, but the article seemed very interesting when I read it.
BI - will inflation come back? Joey the Weasel has brought it up:
Indeed, there are signs that the story is changing.All fantastic points.
Owners' equivalent rent — which is how housing costs are imputed into the CPI — is showing signs of lifting off.
Meanwhile, headline measures of inflation lately have been dragged down by factors that don't seem likely to persist.
The year-over-year rate of growth in medical inflation has plunged lately, and the widespread belief is that this is likely to bounce back up at least a bit.
Meanwhile, we're benefiting from a major drop in gas prices compared to last year.
The gas trend might persist, but it's hard to know.
Meanwhile, the tightening of the labor market looks likely to continue as the economy gains traction in 2014 (which is a good bet, as we explained here).
And for the first time since the crisis ended, households are actually taking on more credit overall.
So it seems likely that inflation — something just hasn't been an issue at all in recent years — is going to be at least somewhere on our radar again.
Then again, Joey, if this is a new secular bull market, maybe we'll see a continued drop in commodity prices? What did commodities do in 1987-2000? As well, if Rosie's capex cycle starts in the US, what will that productivity improvement mean for inflation?
Also, Joey: if inflation is coming back, then maybe we need to allocate some of our portfolios to... um... some sort of shiny yellow metal?
Mining.com - Sharps Pixley guy says it's wrong to focus on US inflation for understanding the gold price. He has a point:
Norman said while long-term inflation is an important driver for the gold price, it is wrong to focus just on US inflation, which is sitting near decade lows of 1.2%:Sure he's from a bullion dealer, so he's conflicted on the topic. Still, true gold consumption (buying a commodity and turning it into an asset class) is occurring in India and China, not in the USA; so if you are one of those fossils who believes in "gold as an inflation hedge", you better get your "where is the inflation" bit right.
"Before the financial crisis India and China accounted for 46% of global demand for gold. Today its is over 80%. It is the inflation in those demand centres that really matter. Attempt to stimulate economies in the West often lead to inflation in those countries, where much of the goods bought in the West is manufactured. India's inflation is running at 7.5% and China's at close to 3.5%, and demand from these economies will continue grow in future."
And also, he notes the US/EU/UK are exporting inflation to the developing world right now.
Gold has nothing to do with America. It hasn't since Nixon ended convertibility. Deal with it.
The ice storm hit us yesterday, and the power went out for a long time. I still don't have any internet connection at home, and am writing this from work - where we had to break in because the security system locked us out.
I have a bunch of news links for you, but my work computer wants to install its Windows updates right now, so you'll all damn well have to wait a few more minutes.
Here's Evanescence, this time at Rock am Ring 2012:
Amy Lee's significantly chubbier nowadays, which is okay, and it looks like most of the band has been replaced. Oh well.
Junior miners still suck.
Is the market open today?
If so, let's watch the final absolute destruction of the junior miners, as the last few dry retches dump the final worthless few shares into a rococo splatter all over the dive-bar toilet trough.
(You've never been to a bar that had a toilet trough?)
Sunday, December 22, 2013
Yes, Jeff Berwick has an opinion about Bitcoin, and he talks about it on ...drum roll... Fox Business.
He thinks it has the potential to go to a million dollars.
Partially because the US dollar is going to collapse.
Oh and Galt's Gulch Chile accepts Bitcoin in return for land in Chile.
And so on.
So if you're going to VRIC 2014, we already know you're not going for the junior PM miner action; why not have a chat with Jeff Berwick about Bitcoins?
If I remember correctly, he can also hook you up with a Belizean passport.
Look for a guy valiantly fighting off a horde of Statist thugs. That's him.