Saturday, July 11, 2015

Eric Coffin at Metals Investor Forum 2015:


Here's Eric:



And hey Eric, how's about you assume from now on that Janet Yellen knows more about macroeconomics than you do?

Similarly, how about you don't follow fads like commenting on Atlanta GDPNow? Because the Atlanta Fed is presently saying this:





Friday, July 10, 2015

Friday videos: the even moster obnoxiouser summer hit single of ever-er


In the contest for the world's most fatal summertime earworm, we now move on to Len.

I was in a band with someone who knew these guys, and they did some really good music later on that absolutely nobody in the entire world has ever heard:



And, again, the even moster obnoxiouser summer hit single ever-er was also written and performed by Canadians. Again, because British people never have sex. Or something. And reasons.

Thursday, July 9, 2015

One more thing


EWJ:


There was someone on CNBC this morning who didn't seem like an idiot, who was suggesting that the heavy selling of Japan was driven by Chinese panic.

Apparently, with so many stocks halted, they had to cast their eyes far and wide to look for things they could sell, and thus they sold Japan and a whole bunch of other stuff.

I bet yesterday's panic over the "OMG it's a Chinese hack attack on the NYSE" helped dump stocks too.


Some news


Dammit I gotta get out of the house. Quick, here's some news then I'm gone:


New Deal Demoncrat - midyear update on the LLIs. Summary:
While not every long leading indicator is making new highs, and in particular corporate profits have stalled, the other indicators solidly suggest that this economic expansion will last at least through the 2nd quarter of 2016.
So quit being a pussy and buy the S&P.


Calculated Risk - US heavy truck sales highest since Feb 07. So quit being a pussy and buy Ford.


Slate - why the stock meltdown doesn't spell DOOOOOM for China. OK it's only Slate, but the author does understand economics. I found this tidbit of data interesting:
The investment share of GDP, a flow, is high in China in large part because the stock of productive capital is so low. That largely reflects the sad state of the Chinese economy in the late 1970s in the aftermath of the Cultural Revolution. In fact, China’s stock of capital per worker—long recognized as a key driver of productivity—is currently less than 15 percent of that of the United States and Japan. China’s economic development will depend critically on its ability to raise its capital-to-labor ratio—an outcome that requires it to maintain a high investment share of its GDP for the foreseeable future.
Which means, in the long run, China's demand for physical capital isn't about to disappear anytime soon. So quit selling copper, you morans!


Gavyn Davies - remember Hong Kong's successful stock market intervention? Quote:
In 1998, the Hong Kong dollar was under relentless speculative attack. In the so-called “double play”, macro funds were enormously short the currency, and also short the stock market, believing that Hong Kong was in a depression that would soon force a break in the currency peg against the US dollar. These trades had been extremely successful elsewhere in Asia, and it was widely seen as inevitable that Hong Kong would follow the rest. It was also believed that China would devalue the renminbi, and the Hong Kong shorts were a means of indirectly investing in this theme.

But none of it ever happened.

Donald Tsang and Anthony Yam, the two senior officials running economic policy in Hong Kong at the time, hatched an audacious plan to buy 11 per cent of the Hang Seng, paying for the move by drawing on foreign exchange reserves. They conducted the purchases within 10 days, starting on 14 August 1998.

The stock market rose rapidly, and never looked back. Furthermore, short positions against the Hong Kong dollar were effectively squeezed out, and the peg survived against all the odds. The renminbi was not devalued, and Asia recovered. The HK move was initially greeted by derision from the hedge fund community and from international financial officials, led vociferously by Alan Greenspan. It was not until a decade later that Mr Greenspan publicly admitted that the intervention had been a major success.

Why did it work? It is clear that messers Tsang and Yam picked exactly the right time and the right market in which to intervene. The hedge funds had not anticipated that the central bank could or would buy equities, and I remember them complaining bitterly that “no one told us they could do this!” Also, the Hang Seng was cheap, so it was ripe for a major bottom.

None of this applies so clearly in China today. The A shares market still looks somewhat expensive overall, and very costly indeed in some frothy sectors such as IT. Furthermore, everyone knows that the authorities are eager to intervene, so the shock effects will be much less. Also, hedge funds are certainly absent from the A shares market, and possibly from H shares as well.

Yet there is one important similarity, which is that the Chinese authorities have ample ammunition in the foreign exchange reserves to buy large quantities of equities if they choose to do so.
It's an interesting story, if nothing else.


Reuters - India to roll out $20B food welfare program by December. Well, I guess that's $20B more for Indians to spend on gold, right? Though how much of that money goes to the crooks, and how much to the peasants, is always up in the air.


CASEY RESEARCH PREDICTS GOLD CRASH: here's what you need to know



Casey Research - Millions of Chinese will have to sell their gold and silver. Yeah, no really. Click through if you don't believe me. Here's Louis James:
The world’s biggest gold buyers are suffering a major liquidity crunch. Many won’t have the cash to buy anything, not even gold. Worse, hundreds of Chinese stocks are halted and huge numbers of investors are facing margin calls. That means that many who own gold will be selling because it’s the one thing they can get a bid on.

When a large number of buyers are forced to become sellers… well, counterintuitive days like today can make sense.

If I’m right about this, precious metals will slide until the liquidity crunch in China passes. We saw the same thing in 2008.
So I guess we can say the bottom is in?

Wednesday, July 8, 2015

ADOBE TO PATCH ZERO-DAY FLAW USED BY GOVERNMENTS TO SPY ON CITIZENS: here's what you need to know


Krebs on Security - Adobe to patch zero-day flaw used by governments to spy on people. They're only patching it because it's been posted about. And the point is, they knew the flaws were there, and probably put it there at the request of a government, probably the US:

Adobe Systems Inc. says its plans to issue a patch on Wednesday to fix a zero-day vulnerability in its Flash Player software that is reportedly being exploited in active attacks. The flaw was disclosed publicly over the weekend after hackers broke into and posted online hundreds of gigabytes of data from Hacking Team, a controversial Italian company that’s long been accused of helping repressive regimes spy on dissident groups.

In an advisory published today, Adobe said “a critical vulnerability (CVE-2015-5119) has been identified in Adobe Flash Player 18.0.0.194 and earlier versions for Windows, Macintosh and Linux. Successful exploitation could cause a crash and potentially allow an attacker to take control of the affected system.”

Wow, eh? How useful! The vulnerability works against Windows, Mac, and Linux! So no matter what OS you run, you're vulnerable. That's either an amazing coincidence, or it's a great feat in software engineering.

Get this: the problem's not flash. The problem is that every operating system was vulnerable to this flash exploit.

Several reports on Twitter suggested the exploit could be used to bypass Google Chrome‘s protective “sandbox” technology, a security feature that forces the program to run in a heightened security mode designed to block attacks that target vulnerabilities in Flash. A spokesperson for Google confirmed that attackers could evade the Chrome sandbox by using the Flash exploit in tandem with another Windows vulnerability that appears to be unpatched at the moment. Google also says its already in the process of pushing the Flash fix out to Chrome users.

AND Google! They can sploit Chrome by using yet another Windows vulnerability. Wow, those completely honest mistakes and heretofore unknown "vulnerabilities" are just multiplying and multiplying, eh? And they all fit together so perfectly, as if there was some sort of perfect Creator God who willed them all into being.

The Flash flaw was uncovered after Hacking Team’s proprietary information was posted online by hacktivists seeking to disprove the company’s claims that it does not work with repressive regimes (the leaked data suggests that Hacking Team has contracted to develop exploits for a variety of countries, including Egypt, Lebanon, Ethiopia, Sudan and Thailand). Included in the cache are several exploits for unpatched flaws, including apparently a Windows vulnerability.

According to new research from security firm Trend Micro, there is evidence that the Flash bug is being exploited in active attacks.

The hackers didn't develop an exploit that manages to exploit unknown vulnerabilities in 3 separate operating systems. That's silly. The Sudanese government didn't tell them "hey, we need a hack to break into people's systems to monitor their comms, and it needs to work against everything including Linux in case we come across a target running Xubuntu on a rooted Android phone."

The hackers just found something that was already put there.

They probably got the code from some Russian, whose dad works at the FSB, who got the code from Germany, who got the code from Israel, who got the code from some programmer at Apple or Google or Microsoft or Adobe who was part of a team that wrote their company's small portion of the exploit under the co-ordination of the NSA.

You won't think I'm paranoid when they come to get you!

Wake up sheeple!

ASHR's discount to NAV


Apparently, ASHR closed yesterday at a $2 discount to NAV.

Which I guess has to be considered against future expectations for that ETF.

But a certain swarthy fund manager individual has also noted recently that the wind-down of Chinese margin is at its climax right about nowish.

Something to know.


Well, thankfully I took profits on Japan


Thankfully I sold my Japan. Maybe I should buy it all back now? Cuz Japan going -3SD is just silly.


Or maybe I should wait til it bottoms out. Cuz this is going on:



Our swarthy investing gentleman friend with the name that rhymes with "Blichael Blaoul" is adamant that China is a good fundamental buy right now.

Personally, while I accept that the A-shares market has little to do with the actual Chinese economy, and I would totally agree that China will be worth a lot more 10 years from now, I dunno if I want to get into a market populated by 1.3 billion fugitives from Gamblers Anonymous. Let that knife fall, baby!


Tuesday, July 7, 2015

Some Chinese stock charts


Alibaba:


Yes, yes, people in China aren't going to buy things over the internet anymore. Let's sell!

Baidu:


 Yes, yes, people in China aren't going to need search engines anymore. Let's sell!

China Mobile:


Yes, yes, people in China aren't going to use mobile telephony anymore. Let's sell!

Sohu:


Yes, yes, people in China aren't going to use the internet anymore. Let's sell!

Wow. There's some good stocks to watch if you're into it.


Europe charts saying something about the Greece situation I reckon


Here's a bunch of European ETF weeklies:

 This week's candle looks like the market is voting with their feet, Angela. Perhaps they don't want to invest their money in a currency union that actively overthrows governments, intentionally destroys banking systems, and tosses countries out of the union for eating crackers in bed? Maybe they think Germany is doomed?

Similarly:

 Who would want to own Italy, with their own bank run around the corner?


 Also Spain?



And hey, the French are apparently Communists just like Syriza, so maybe everyone should sell France before their own government is overthrown.

Good work, Angela!


Silver 1, Brodrick 0


Wow:



Whee! Keep stackin' phyzz!

It seems like only yesterday that the Broddinator said

But what could drive silver that much lower? Greece? It's a tempest in a tzatziki bowl. A collapse of the Chinese stock market, maybe, as traders and investors sell what they can because the value of their shares have gone up in smoke?

and then I said

Well, I guess it's good to question how silver could possibly ever make it to $10 again. As long as you weren't previously questioning how the heck silver could ever drop to $15, cos it turns out we're there now.

In fact it was only yesterday. And now silver is making - you guessed it - its move to $10.

So there you go. At least Sean didn't say that gold "should now start to catch a bid".

The moral of this story being that predictions are sorta like heroin, or autoerotic asphyxiation, or the new U2 album: try it once to see what it's like, sure, but don't make a habit of it.



OMG CHINA DOOOOOM


Big whoop:


Oh wow like so the A-shares are totally back to where they were at Christmas. Thus all the phantom capital that was waved into existence with a magic wand this spring has disappeared, and all that's left is the capital that was there in the winter. Oh boo hoo.



As above.

But Whitey will still piddle his pants over this.

Looks like I got the EU's attention


Further to my abusive post yesterday about the Germans....


I dunno what's better:

A) my outright nasty tirade earned a reader from the EEC, or
B) he seems to be a regular.

I'll just note that people can easily leave anonymous comments on this blog where they can bitch to their heart's content, and the only people who will be able to find you are the NSA. Um, and all the other attack dogs of the capitalist kleptocracy.


Monday, July 6, 2015

A few more newsbits


Some more news, now with less grease:

FT Alphaville - ha ha gold sucks. Izzy Kamizzy decides to weigh in on the old canard that the gold price has something to do with a) fear or b) interest rates. Instead of... y'know... India and China physical demand.

Mining.com - hedge funds have NEVARRR been this bearish. NEVARRRR.

Poith Mint - actual gold COMEX data. Quote:
I would note that the decline in registered gold stocks and delivery rates occurred soon after gold’s dramatic crash through $1550 and into the 1300s, and the stocks and rates have stayed low since then during the subsequent weak/sideways gold price phase we are currently in. A reflection of lacklustre western investor interest in gold? However, I note that eligible inventories have increased from 6 million ounces at the time of that price drop to 8.5 million ounces today, and such accumulation has usually been considered an indicator of positive western investor sentiment to gold.

I don’t have an answer at this stage as I hadn’t noticed this discrepancy until delving into the figures for this post but it is another sign of the exceptional state of the current gold and silver markets, which in my opinion hasn’t been this pessimistic since 1999 when gold was pushing $250. If ever there was a contrarian trade....
Well let's sure hope so!

$VIX futures are backing up


Vixcentral is working again:


And the front 2 months are backwardated again, which means now's not exactly the time to own XIV.

But at least now I have a chance to watch the $VIX futures. They're always fun.


Piketty stomps a mudhole in Germany's ass and walks it dry in new Die Zeit interview


I should remind everyone reading this that I am 3/4 German.

With that in mind:

Medium - translation of Piketty's Die Zeit interview. Dayum:
DIE ZEIT: Should we Germans be happy that even the French government is aligned with the German dogma of austerity?

Thomas Piketty: Absolutely not. This is neither a reason for France, nor Germany, and especially not for Europe, to be happy. I am much more afraid that the conservatives, especially in Germany, are about to destroy Europe and the European idea, all because of their shocking ignorance of history.

ZEIT: But we Germans have already reckoned with our own history.

Piketty: But not when it comes to repaying debts! Germany’s past, in this respect, should be of great significance to today’s Germans. Look at the history of national debt: Great Britain, Germany, and France were all once in the situation of today’s Greece, and in fact had been far more indebted. The first lesson that we can take from the history of government debt is that we are not facing a brand new problem. There have been many ways to repay debts, and not just one, which is what Berlin and Paris would have the Greeks believe.
I love the "we Germans have already reckoned with our own history" bit. It shows Germany is grossly ignorant of the typically German psychological outlook that led to the Holocaust and which reflects itself today in Bild's regular racist and fascist tirades against the Mediterraneans and anyone to the left of Thatcher.

Anyway, continuing on with the interview, and abuse aimed at Germans generally:

Kruggers on Greece


The Krugginator has quite a lot to say this morning about Greece, and you should read it all because he understands economics, but this little aside of his is pure gold:
Now, I get interesting mail when I say things like this — much of it along the lines of “I can’t believe that a far-left-wing type like you got a Nobel”. Because a lot of people seem to believe that real economists believe in sound money, preferably gold, and that only socialists believe that there can ever be any advantages to currency depreciation.

Socialists, that is, like Milton Friedman. But of course modern conservatives get their monetary economics from Ayn Rand, not the Chicago School.
Actually, K-dog, you're forgetting the paean of right-wing lunacy, Ludwig von Mises. He (along with his lapdog Rothbard) was a supporter of "sound money" and an enemy of fractional reserve banking.

So right-wing neocons actually do base their 19th-century fantasy fiscal & monetary policies on the writings of "economists", and not just on the sci-fi stories of a bitter Russian bourgeois exile who hated the Bolshies for taking her daddy's money away.



Monday morning market comment


Well, it's 9:29 as I start to write, supposedly US futures are down a bit less than 1%, gold popped Sunday night but then drifted back down, and for the love of god why do people think the Greece situation matters to the US?

I mean, sure, sell European stocks. Sell them. That continent's leadership has proven themselves an ignorant group of silver-spoon kleptocrats who have utterly no clue how to run an economy: it's stupid to own European stocks while the EZ power elite continues to deny economics, including the work of their own servants in the IMF research department.

But sell the US? Really?

So now it's 9:32 and the US opens down about 0.7%. Stockcharts.com seems not to be working very well. My god what a bunch of panty-piddlers.

Anyway, here's some news:


Chronicles of Brodrick - how low will silver go? My god, Sean, this chart sucks like Sagitarrius A*, the supermassive black hole at the center of our galaxy:


And he says:
But what could drive silver that much lower? Greece? It's a tempest in a tzatziki bowl. A collapse of the Chinese stock market, maybe, as traders and investors sell what they can because the value of their shares have gone up in smoke?
Well, I guess it's good to question how silver could possibly ever make it to $10 again. As long as you weren't previously questioning how the heck silver could ever drop to $15, cos it turns out we're there now.



New Deal Demoncrat - weekly indicators. Nothing's really changed, though he's a bit concerned about the Gallup survey, maybe cos he's forgotten how worthless Gallup's figures have always been in the past. As far as temp staffing, you can't really judge on one week of data.


Sunday, July 5, 2015

The Germany/Greece conflict, explained


This explains it all, apparently, according to the Independent:




Greece referendum nailbiter (updated)


UPDATE: Apparently Greece voted No. Good, now I can do my homework.

So apparently the polls are closed and they're counting votes. Whatever the result, I am confident that the bullshit drama will continue on for months on end. Maybe years. Because it's Europe and the European plutocracy are nothing but a parasitic class of inbred buffoons with zero management ability.

Nevertheless, I've seen a few real pussy quotes come out in the past few hours, and they suggest the possibility of an interesting story developing:


BBC - polls close in bailout referendum. Quote:
French Economy Minister Emmanuel Macron said negotiations should continue even in the case of a win for the "No" vote, and that Europe could not "crush an entire people".
Probably not nice to call him a pussy in particular. But it is significant that France, Germany's enabler girlfriend, is suddenly talking about being all reasonable and conciliatory.

Especially since it's been reported that Merkel's going to visit her enabler girlfriend Hollande on Monday afternoon.

And then this:
Meanwhile, German Finance Minister Wolfgang Schaeuble, one of Greece's harshest critics, suggested that if Greece were to leave the eurozone, it might only be temporary.

Greece was a member of the eurozone, "whether with the euro or temporarily without it - only the Greeks can answer this question," he told the German newspaper Bild on Saturday. "And it is clear that we will not leave the people in the lurch."
Dammit, that's interesting. Given Schauble has been a hardliner all this time, and there have been articles run recently about how he secretly considers himself the true king of Germany with Merkel as mere puppet, I'd have to wonder if Merkel is going to do a DolchstoƟ on Monday and command her EZ/ECB/IMF lackeys to resume negotiations with Greece - using fiscal expansionism and debt restructuring as a new basis for a Syriza-acceptable solution per the considered opinion of real economists, including the saboteurs/traitors at the IMF who leaked the Greek debt unsustainability document to the press last week.

Because if she does soften her stance and turn constructive, she'll make Schauble lose face for good. And her fellow-traveller cryptonazis from the Bavarian CSU, the ones who are always ready to supply a racist opinion to Bild, would also lose face. Especially if the Monday upshot of a clear "no" vote is a 10-20% crash in the European stock market.

And maybe Schauble knows this. So he's decided to try walking back his arrogance before all the votes are counted.

So with a Greek "no" vote, maybe Merkel comes out ahead?

I dunno. What's more sensible for her? Should she rather want to be remembered as the dumb bitch who proved the impermanence of the ECU, caused a national crisis in Greece, and ended up launching a successful Greek economy on the drachma while losing the IMF and EU €300 billion?

Well, it'll be interesting to watch, but it's still of little importance to my portfolio: I wasn't buying Europe to begin with, and this will have little negative effect on the US economy unless Merkel decides to be really buttfuck stupid and destroy the whole EU. Again, I doubt she wants that in her legacy.