Friday, October 17, 2014
Vox - American potato lobby seeks desperately to understand millennials.
CAN THE US CONTAIN EBOLA?: a stunning infographic that will make you click through so I can make extra $$$$
Vox - Senegal and Nigeria have officially contained Ebola. Where we are also given this helpful infographic:
Ponder these and despair!:
New Deal Demoncrat - US consumers paying the least for gas in 4 years. Quote:
There are 250 million vehicles in the US, averaging 24 miles per gallon, and typically driven over 11,000 miles per year. A drop of just 5 cents YoY averaged for a year (the YoY decline overall so far in 2014) adds over $6 Billion in disposable income that can be saved or spent for other purposes by US consumers.I guess we'll puke the S&P some more when those great consumer spending numbers come out.
Calculated Risk - preliminary October consumer sentiment increases. Welp, it's happening already! Consumer sentiment is improving, let's puke stocks! Chart:
Bespoke- next week's key earnings reports. The market can be fucktarded all it wants, as long as it doesn't try to be a fucktard during earnings, when the real rubber hits the road.
New Deal Demoncrat - housing permits say deceleration, not DOOM. Yo NDD, there are five Os in DOOOOOM. Get it right or you get kicked out of the club. Oh, and gasoline prices might also affect the prices of consumer goods.
If you only news - E=MC^2 is liberal claptrap. And this isn't some wackaloon - this is (what now passes for) a mainstream Republican party member.
And remember, in America they only have two parties. One is a bunch of lying corrupt weasels bought and paid for by big business. The other is a pack of hallucinating psychotic neo-Nazis with markedly below-average IQs, who live in a poorly-constructed fantasy-land based on clownish cartoon misinterpretations of the mythology of the stone-age Israelites.
The Republican Party: it's like someone tried to construct a political party out of sibling incest, lead poisoning, and repeated head trauma.
Josh Brown and/or Barry Ritholtz (it's hard to tell the Happiness Twins apart) have been talking for a while about how the R2K has been grossly underperforming SPY all year, after small-cap's outperformance through the big 2013 markeet push, and how this was a harbinger of dooooom.
OK, so now I gotta respond with a sarcastic chart:
R2K has now corrected back to below where it was at the big pop of 2013. So Josh can stop talking about it now.
Oh and by the way, small cap is always supposed to outperform large cap when you're seeing economic growth, isn't it? I mean, the larger caps have a more defensive profile generally, don't they?
So you're telling me that the outlook for auto sales is worse than it was in May 2013?
Because I remember nobody was hopeful at all about anything in May 2013. China was crashing, the Eurozone was going to break up, India's economy was a fucking joke....
Kinda... um... like today, actually.
And it's like 25% worse than it was just a couple months ago?
And the outlook is only 15% better than it was in February 2012?
And apparently, Magna was only worth $83 two days ago, yet today it's magically worth $91. Because some Fed guy said something.
I guess Fischer said that the Fed's QE4 would involve buying a few million cars, and they'd make sure all the axles were manufactured at Magna because the Fed loves Canada so much. Or something.
So I guess Magna should now magically pop back to $115 and all the crap people were worrying about was just silliness.
Um, or not.
That's... let's count this. Thirteen? Yup, that's thirteen days of selling that turned out to be at a loss as of today.
So when are the hedge fund clowns who puke this gonna learn? Because it's the hedge fund clowns who buy and sell HYG, you know. It's not Joe Sixpack. Joe Sixpack doesn't buy a high-yield corporate bond ETF. The "investment advisor" at the bank wouldn't tell him to buy it. And he's certainly not going to trade in and out based on some ignorant talking head at CNBC.
But the hedge fund clowns don't care when they're puking stuff like this, since they're getting their 2 & 20 anyway. They don't need to actually show a profit as long as they get to fuck over endowments to the tune of 2% of assets per year, right?
That's why you have to know what you're really looking at when you base your stupid theories on charts of ETFs like HYG. Yes, HYG is a risk-on asset; but "risk-on" doesn't have anything to do with US economic conditions or fiat money or "a dishonest system coming apart at the seams".
HYG is an easily-tradeable ETF with an illiquid underlying that can't handle a stampede of ignorant fraudster lemmings who have no qualms selling an asset at a loss because they still get their 2%.
Just like Magna or Union Pacific.
THE MARKET'S UP: here's the real reason, which you'll never get from Ritholtz or Josh Brown or Joey the Weasel
The market is not up because of a dovish Fed. Here's why:
1. the Fed was always going to monitor economic conditions to determine the best time to begin normalizing rates; and
2. US economic conditions are great.
And if the market were up because of dovish comments from the Fed, that would be silly because:
1. the market was scared of Ebola, even though the disease is mostly affecting countries that have no economy and the Fed can't do anything about it;
2. the market was scared of a Eurozone deflationary spiral, even though that was already happening months ago and will continue to happen despite anything the Fed does;
3. the market was scared of a China slowdown, which will continue despite anything the Fed does and which has been happening for a year anyway not like you'd see any hint of it in the Shanghai Composite Index;
4. the market was scared of a bunch of other silly shit too which didn't magically disappear yesterday either.
So why is the market up?
Because the market was down, and it was down because the bid side of the book had disappeared, and you can tell because even guaranteed home run stocks like Magna and Union Pacific were getting puked at the end, and of course the bid side had disappeared because the market had decided now was a good time for a correction.
But the market was still waiting to jump back in at the end of this correction, and it was desperate for any reason at all. Because the market knows that:
1. the US is in a secular bull market;
2. recent economic data has been great and there is no hint of trouble;
3. Nothing has changed in Europe or China or Sierra Leone in the past month;
4. And yet $VIX was as high as it was for the Fukushima earthquake and tsunami and nuclear plant meltdown.
And so of course the market was going to move up on a dime.
She'll never replace sweet Little Boots in my heart, but still this is a really good song.
Apparently Hilary Duff's management turned this song down.
Considering Hilary Duff has been living under a rock for the past 5 years and this song went top-10 (along with a sync in a $300M-grossing feel-good movie), Hilary would be wise to fire her management for gross incompetence. Then probably sue them for all the money they've probably stolen from her already.
Thursday, October 16, 2014
Magna, the premier North American independent auto parts manufacturer:
Why yes, I would agree that it's perfectly reasonable to puke down Frank Stronach's gem by 25% in the space of a month, given our place at the start of a ten-year US secular bull market, with dropping oil prices about to give American consumers increased savings that they can use to buy new cars.
Especially considering Magna has been growing like crazy for the past twenty years non-stop.
Because reasons! And after that, more reasons!
How stupid is this:
What do you think can justifiably be used as an excuse to puke down a railway 6% in two days, and then bid it right back up a couple days later?
That's how idiotic this market has been.
As far as I'm concerned, the action of the past two weeks still qualifies as nothing more than a rebound within a bear trend.
This happened once before, in mid-September: GDXJ popped above the downtrend's governing EMA(10) and hit the Bollinger mean, but then turned right back around and began to dive again.
Of course, this time it might only be happening because the rest of the market can also read a fucking candle chart.
The difference between today's market and September's market?
The crazy US dollar uptrend of the past few months looks conclusively broken now.
Oh, and apparently, the world's greatest market blogger called that top two days ago. The great thing is, nobody has yet recognized his genius, so he's still way ahead of every market move.
But he has demonstrated stunning genius time and time again, and I'm sure it's only a matter of time before he gets some great job from some investment house and disappears off the internet for a lifetime of pretending to dispense market insight while snorting hookers off cocaine's ass.
Because doing it the other way around is just not good enough for this fellow.
BI - the impact of falling energy prices. Somehow this Ed Yardeni article slipped past Joey The Weasel's echelon of Faber interviews and pictures of nuclear explosions. Quote:
The nearby futures price of gasoline is down 30% since this year’s peak during the summer. Retail sales of gasoline totaled $535 billion during September at a seasonally adjusted annual rate. So a 30% drop in the price would provide a $161 billion windfall to consumers.Ermagerd! $161 berlliern erncrerse ern cernsermer spernderng? Sell! Sell! Sell!
Calculated Risk - 4-week average of initial claims lowest since April 2000. In other words, initial claims has broken out from the secular bear market that began in 2000.
Ermagerd! Ler ernermplermernt? Sell! Sell! Sell!
New Deal Demoncrat - jobless claims set new low. Quote:
The 4 week moving average also set a new post-recession low.Do what I do, blame international jewry. Strangely, I've found that it increases Google ad revenue.
But, oh yeah, we're sliding into recession. Sure. Sweet jeebus, Doomers are stupid.
It's counterintuitive maybe, but the data is the data.
Here's the thing:
Vix has gone up strongly. Also, the term structure is strongly inverted on the near end and flat further out.
So XIV holders get clobbered:
Because not only are they losing money inverse to the upward $VIX move, but they also lose money every night as roll-over of contracts happens because of the strong backwardation on the near end.
The problem I have, if I understand XIV right (and I'm not sure I do, so feel free to try and puzzle this out yourself), is that if Google Finance is right and XIV presently has over $800M in AUM, that would mean an entity in the market (this ETF) is essentially short the S&P 500 forward options' volatility premium to the tune of $800M, and the value of that short position has to move lower to save people's skins.
I don't know how much $800M is relative to the total value of the S&P 500 forward options' volatility premium. But if a rush for the exits in XIV happened, this would be a positive feedback on the volatility premium, and thus a positive feedback on $VIX, and thus a market with a XIV in it would move a little bit crazier than a market with no XIV in it.
I can't quantify any of this, but I just wanted to point out one small way in which this market has positive feedbacks that previous markets didn't.
In a cybernetic system, change one feedback and you change all sorts of behaviour.
News later, to the extent that anyone cares.
But I just wanted to point out that Business Insider has dialed up the doompr0n to eleven by running an article on the latest predictions from that useless ignorant clown Bob Janjuah.
Faber can't be far behind.
On a Faber interview, go long US equities like it's your last day on earth: the horn will have sounded and the bottom will be in.
Wednesday, October 15, 2014
I really don't see how $VIX can go much higher.
By comparison, according to the old vixandmore blog, in 2011 $VIX went to 30 on the goddamn Fukushima earthquake and meltdown for the love of god and all that is holy. Have you seen any tsunamis kill tens of thousands of people lately? No?
The debt ceiling bullshit later that year sent $VIX to 48. Are we expecting that again this year? Not with midterm elections, we aren't.
The Eurodoom maintained $VIX in the 30-45 range for months, though. (Hey, do you remember when Standard & Poors cut Spain and Italy's debt ratings in 2011? Hm? How clever does Standard & Poors look now, with Spain's 10Y yielding 2.12%? Do they look clever now?)
But today is not Eurodoom. It's just another stupid recession, everyone knows how Europe can get out of it, everyone knows Europe won't because the Germans are cunts, and so it's just a boring old recession that they were nearly in for the past 2 years anyway.
This is little in the way of useful comment on expectation of future S&P moves, or even on the reasonableness of buyingXIV or HVI right now.
But you needed my little dose of perspective, especially if you've been reading the doomsters of international jewry over at BI and Ritholtz.com.
Wow, $VIX actually reached 30 today. I'd like to think this is about the bottom, especially with that big spike in IWM that I've just seen; but I'll give it til tomorrow before I start coming back in. In any case, shorting $VIX is dumb while it's in backwardation, and as of 3:45PM it still is, yup.
Anyway, here's some news:
New Deal Demoncrat - you fools! the US economy is actually in decent shape, quit piddling your frilly little pink panties.
Calculated Risk - retail sales decreased 0.3% in September. That's the headline. You have to go into the article to read that September retail sales is actually up 4.3% year over year. Bill, you can do better than that.
BI - CSX boosts its outlook. Yeah, so therefore puke the S&P 500, because railroads having a positive outlook is a sure sign of imminent collapse. Really, people, is this fucking rocket science?
Bespoke - energy sector is being ANNIHILATED. Want a driller with a 10% dividend? Buy Transocean.
FT Alphaville - yet people are rotating into bonds. Yes, yes! What a great idea! Dump an equity after it's down 5-10% to buy a UST yielding 2% over ten years! What could possibly go wrong? I mean, after 5 years of holding that bond you've made back the money you lost dumping your stock. Really, people?
Bloomberg - shorts pile onto oil. Quote:
“Several big, smart commodity hedge funds saidOK let me stop you right there. There are no smart hedge funds. I know this because they're all underperforming SPY. So whatever they said, we can fade.
Mining.com - John Kaiser's tips for escaping the resource sector. The first part of the interview is good. But then he starts recommending stocks. Like Exeter.
IKN - Marin Katusa has gone awfully silent on PRD Energy. Quote:
And John Mauldin, why have you been so quiet on this stock, after pumping it to your own flock? Probably just a coincidence.And, I'd like to add: Barry Ritholtz, why oh why are you still reprinting garbage from John Mauldin?
Pharmasave Dave - a new traffic driver found for my blog. Short answer? Hookers on East Hastings. Long answer? Tranny hookers on East Hastings.
Reuters - Lockheed makes breakthrough on fusion energy project. Well, that would be promising. Russia would certainly be fucked in the ass forever.
Tuesday, October 14, 2014
Here's some reading for you:
Bespoke - sector trading range charts. Don't bother: it's simple. Everything's 3 standard deviations down. Because, as usual, reasons.
Gavyn Davies - it's the new mediocre, not a global recession. With a lot of charts with squiggly lines, but also the important reminder that collapsing oil prices are good for oil importers. Hey, Japan and Europe import oil, don't they?
Mineweb - 1000-year-old Viking treasure found in Scotland. Hey Warren! These Vikings seem to have had no trouble with burying their gold in the ground. Should they have instead invested in the government bonds of, say, the Holy Roman Empire? Or would you have preferred diversification, to include exposure to bonds from the Fatimid Caliphate and the Kievan Rus?
Or hey, maybe they should have bought farmland with their money. Because farmland produces wealth, unlike gold. And god knows that farmland retains its value through the centuries, especially in Scotland in the Middle Ages!
Ask yourself why we care about a 1000-year-old Viking gold & silver treasure, and why it's worth $1 million today.
Mineweb - gold ETFs in India suffer 13th straight month of outflows. Quote:
Between June 2013 to August 2014, consolidated outflows were $521 million (Rs 31.94 billion), which is over 40% of the category's current assets under management.Um... I did the math. That's around 18 tons at today's price. India consumes more gold than that in a year. In other words, I don't care about Indian ETF flows.
Inquisitr - Fox News wants Ebola victims sent to special FEMA camps. Yeah, nothing to add from me here:
While Fox News has worried in the past that President Barack Obama is using the Federal Emergency Management Agency to create concentration camps to confine American citizens, a similar step is exactly what Fox contributor Stacey Dash wants implemented, as a response to the yet-to-materialize mass outbreak of Ebola in America.
The 47-year-old actress-turned-commentator, best known for her roles in the film and TV series Clueless, said on the Fox News panel discussion program Outnumbered on Monday that every American state should create “a special facility” just for people who might have Ebola.
During the same Ebola discussion, other Fox News panelists suggested that former New York City Mayor Rudy Giuliani should be appointed Surgeon General — despite a complete absence of medical background or qualifications — and that Americans should not go hospitals at all when they are sick, with Ebola or anything else.
Harris Faulkner, another co-host of the Fox News show, accused President Obama of “really letting us down” by allegedly failing to appoint a surgeon general who could oversee measures to stop the spread of Ebola.
But Obama did in fact nominate a doctor, Vivek Murthy, to fill the vacant surgeon general position earlier this year. But Murthy’s nomination was blocked by Senate Republicans who objected to Murthy’s view that guns pose a public health threat.
Gun violence kills approximately 30,000 Americans every year, compared to the one person who has ever died in the United States due to Ebola.
Fox News panelist Andrea Tantaros, however, suggested Giuliani as a surgeon general nominee that Republicans could support because, she said, when Giuliani was mayor of New York, he “put together and extensive set of doomsday plans for this city.”
Yup, still no additional sarcasm from me.
Sometimes, just backing off and letting an idiot speak for themselves is its own kind of sarcasm.
It was such a big move that it should probably be about done. And until a higher top is printed, all we've seen is lower tops over the past few weeks.
If you think the recent market mayhem was caused by the big move in the US dollar, that means the market mayhem should peter out soon.
Then again, HYG's chart still sucks. And everyone wants a 10-20% correction, judging by how often the bloggers have demanded the US market give them one. So maybe this has to follow through to give everyone what they want and more?
$VIX as of last night:
It's +3SD on the weekly chart, RSI(14) of 71, 50% above its EMA(10), and 77% above its Bollinger(20) mean. Meanwhile the futures chart is flat 3-6 months out and heavily backwardated on the near end.
So either you should be prepared for a major market collapse imminently, or this level of fear has gotten stupid.
Damn damn damn damn damn it's so tempting to short $VIX right here. Even for just a 1-day reaction.
But I should watch the action in HYG for confirmation - its move has been equally stupid.
Monday, October 13, 2014
Vix futures curve as of the close:
Wow. There's real fear now. I'm kinda happy I wasn't tempted to do any trading today.
Anyway, here's the news:
Bespoke - highest % oversold stocks in a year. Hey, y'know what you should do then? That's right, puke US equities!
New Deal Demoncrat - weekly indicators. Quote:
I suspect that weak commodity prices and negative steel production are about weakness in Europe and China. I see no signs for concern about the US domestic economy in the immediate future. Again, there has been deceleration, but at this point it only means positive, but less so, in the months ahead.Hey, y'know what you should do then? That's right, puke the S&P 500!
Bloomberg - corporate debt healthiest in decades. Hey, so y'know what you should do then?
That's right! Puke high yield! Because reasons!
Liz Ann Sonders - quit piddling your frilly pink panties. Listen to a real analyst tell you to walk it off, you damn sissy.
Sunday, October 12, 2014
Hey, Jeffie Currie!
That $1050 by Xmas call doesn't seem to be working out anymore!
If still you want to get the price down, you'd better enlist more of your central banker and international Illuminati jewry buddies to help out! Cuz you haven't broken support yet with all your disinfo and market manipulation. Is that all you got?
Ha ha Jeffy Currie you suck and you're a fag
World Complex - here's a bunch of diagrams about the gold price, not that you will understand them. Mickeyman finally remembers that the clicks are in gold.
FWIW, it is very important that gold has only "dropped" in US dollars, as I've kept pointing out. This chart:
shows a calming bottoming pattern, not a breakdown.
Then again, US traders won't care, they'll short gold since that position makes money in their currency, right?
Then again, to be fair, this chart also sucks:
Then again then again, the rupee's strength has come from rumours of the powers of Modi's magical +3 Handbag of Margaret Thatcher. But as we'll find out over the next year, in reality the problems he faces can't be fixed simply by busting coal miners' unions and declaring war on Argentina. So make of it what you will.
I'll only take issue with the following:
With the gold price falling, cannot these companies show their empty pockets to local governments and ask for tax breaks/benefits for infrastructure?This would assume these (mostly third-world) governments will have money. The gold miner would have to threaten closure and the loss of enough jobs to threaten the government's hold on power. I'm not going to want to invest in that company.