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Saturday, May 13, 2017

Ransomware attack news


Krebs on Security - NHS hit by ransomware attack.

Bleeping Computer - Ransomware using NSA exploit leaked by Shadow Brokers is on a rampage.

Avast - ransomware spreading aggressively, over 50,000 victims.

The big story going around right now is that a ransomware worm is locking up computers by the tens of thousands.

I haven't yet read anything that has clearly explained how it's spreading, so I don't want to fire up my old Vista even if I disconnect from the net and disconnect my data drive beforehand.

I've heard people say it gets into systems via good old-fashioned email attachments and website drive-by infections, and then spreads internally on a company's LAN via MS networking protocols, exploiting a MS networking security hole that I obviously don't have here at home. So I'd be competely safe. But I've also read that it sets up a bunch of processes to attempt connection to random IPs via port 135 and port 445, and that scares me.

I was hacked by the 135 worm long long ago, and I'm pretty sure my Windows system locks down those two ports nowadays and the exploits are long gone.

But still, I was hacked remotely by the port 135 worm long long ago, and I don't ever want to go through that again. Worms are a real bitch.

So I'll just keep my Vista shut off for now, thank you.

Too bad you lost another Windows customer, Microsoft! At least you can count on the Linux development community remaining so fucking stupid that they can't ever develop anything to replace you, since they don't even know how to fucking write a startup routine that can wake a fucking Dell LAN card.

As for the hacker who did this, if we are to believe Russia, they apparently made the mistake of making the Russian Interior Ministry one of their targets. So if that's to be believed, I'm pretty sure the guy is going to end up in a wood chipper by next weekend.

He went way too large with this attack, and he attacked the wrong people. Stupid.

But what I find funny are comments like these on Krebs' site:

So uk and world hospitals should buy now bitcoins.
then when attack comes then they are ready and it will save many lifes.
Goverments now should prepare their bitcoins reserves.

OK, so obviously Krebs gets a load of lowlife children on his comments pages; most of them are little hackers who have probably DDOSed him.

But really? Governments and hospitals should stockpile bitcoins? Really? To be prepared in case of future ransomware attacks?

How about this: MI6 tracks down everyone associated with Bitcoin and fucking kills them for being members of a terrorist organization. It actually makes better sense, fiscally.

And as far as the conspiracy theory that this was actually a targeted attack by the NSA, just look at the map, Russia is the biggest victim here?

Well, if that were so, then it's only so because all of fucking Russia is operating off one pirated copy of Windows XP that they've never bothered to update.

Some weekend news


Stuck in linux right now because with all that's going on I'm not sure I have the guts to fire up my Windows. More on that later.

Weekend market reads:

Calculated Risk - retail sales up 0.4% in April. And up 4.5% above last year.

Calculated Risk - LA port traffic increased in April. Container volumes way higher than last year. Unfortunately, unless there's enough demand to mop that up, we'll just head into another inventory correction. As an aside, why is meat 50% more expensive than it was last year?

New Deal Demoncrat - real wage growth set to resume. Don't worry, Trump will find a way to fuck the working class.

New Deal Demoncrat - weekly indicators. Geez, looks like the whole summer will be a low-volume boredom melt-up.

FT Alphaville - US too expensive? Consider Japan. That's not exactly positive on the surface. Then again, Japanese yields are also stupid low. And that hints at the real reason: all assets are expensive, because there's insufficient supply of assets, while demand is high because the kleptocracy has sucked tens of trillions of dollars out of the economy into their own pockets. It's really that simple.

FT Alphaville - panic and $VIX. Ex-Jesus and Mary Chain lead singer Jim Reid says this:
ultra low vol doesn’t necessarily predict bad returns going forward but returns are generally higher when vol starts at a higher point than current levels or when it is ultra high. Quite high but not ultra high tends to be the worst starting point. There is therefore some evidence that future returns from this starting point might be sub-trend but no particular evidence of an imminent big problem looking at the historical data alone.
Which really just boils down to "buy low sell high", which means Jim just wasted my fucking time with this crap. No wonder William can't stand being in a band with him.


Thursday, May 11, 2017

Ermagerd! Derrrrm!


Ermagerd! The S&P is down 0.63% this morning! $VIX popped to 10! Let's check Zerohedge to find a reason to sell!:


Ritholtz - yeah, $VIX is actually bullshit. He thinks Josh Brown has a good explanation for low $VIX: simply, nobody's that interested in buying downside puts anymore. Then again, they were just last fall, and with the subsequent Trump market pop most likely overdone they'll be likely to buy downside puts again in the near future. Since $VIX is ideally an index of the cost of a downside put, this is a good experimental setup right here.

So if Josh is right, $VIX should go back to its normal 12-14 range and XIV should lose a bunch of money for a while, the way XIV was a money-loser for about a year through 2015-2016, if I remember correctly. Which will be nice, cos then the XIV longs get punished for being suicidal idiots while the rest of us just sit thru a 10% drawdown in US equities. We need that.


Bloomberg - Ermagerd! Cherna Derlerverergerng cerntergern! Apparently, China is deleveraging, and that carries risk of contagion or something. Just like it did for the past 10 years, in fact. Me, I see a slight drawdown in ASHR and no move in FXI, so I'm wondering why everyone's suddenly piddling their frilly little pink girl-panties.

Wednesday, May 10, 2017

Troubled Wisconsin man goes on 50-state killing spree


Medium - Troubled Wisconsin man goes on 50-state killing spree.

With a helpful photo of what a troubled Wisconsin man on a 50-state killing spree looks like.

But it's America, we expect this kind of stuff from them.


$VIX noos


FT Alphaville - remain weirdly quiet as Satan laughing spreads his wings. Oh, lord yeah!:

The Vix — flawed measure of fear that it is — has fallen to another low, closing at its lowest level since 1993.

With a helpful picture of what the $VIX at its lowest level since 1993 would look like.

What freaks me out is that people who pass themselves off as institutional investors think it's perfectly okay to buy a synthetic short $VIX futures ETF like XIV - and then hold it.

Yes, holding XIV (or HVI.to in Canada) makes a lot of money, and "all you're doing is shorting time premium". That is all true. But there's still a risk problem with this, and an even worse market structure problem.

If you hold XIV, you need to realize you've got a 50% intraday loss riding on your books. Because XIV can drop 50% in a day if you get a $VIX spike. Check the charts. It's already happened a few times. Have you run a simulation to prove that your position is small enough to clear it without moving the market? Do you keep track of how large everyone else's positions are too, or do you really think you can be first out the door?

You don't have to know how XIV even operates, just read the goddamn prospectus! Why do they have that big section in bold saying "The Closing Indicative Value will be zero on and subsequent to any calendar day on which the Intraday Indicative Value equals zero at any time or Closing Indicative Value equals zero"? Or the part under "Risk Factors" (nice title, wonder what it means?) that they put in bold AND italics that says "Because of the large and sudden price movement associated with futures on the VIX Index, and the daily objective of the ETNs (including inverse or leveraged exposure), the ETNs are intended specifically for short term trading"?

Because XIV is actually able to lose over 100% in a day. It can do that because it's a short $VIX future.

And so the minute you get a $VIX intraday spike, and the loss on the ETF explodes, Velocityshares will try to wind it down before it goes negative. Which will mean buying back all of XIV's $VIX near and second month short position, during the day, during a spiking market. All this at the same time as Horizons is also selling HVI.to's $VIX futures. And while every other synth shop is selling theirs as well. And while the CBOE $VIX professional traders can smell blood in the streets.

That means an acceleration toward zero.

And because your position gets closed out right at the peak in $VIX, your loss gets capitalized. YOU DO NOT get to get back into the market to ride XIV back up, because IT'S CLOSED.

It doesn't matter what price you bought at, the potential of your XIV position going to $0 the next time fear spikes should wildly screw up your risk profile no matter who you are.

And these XIV holders are the people who bid down $VIX futures.

Then again, I do still think that if it were a true unbalanced elephant-in-a-kiddie-pool trade, someone would be able to make a bloody fortune on the other side. And there must be a few hundred quants out there that have already looked at this, it's a frickin' gimme.

Hopefully none of them have thought about starting an artificial run into $VIX near & second month to force XIV down and precipitate a loss. Hopefully it's not possible to sell a XIV position short. Hopefully there are no Russian quants who've read the Financial Times' XIV warnings over the past 2 years who work in an "economic warfare" subdepartment at the GRU, because it will only take a few billion dollars to spike $VIX to 80 and crash the S&P 500, as long as XIV as part of the market structure.

In fact, they could slowly build a $5B XIV position, then take $100B of the central bank's money and buy OOTM near puts on high-beta NYSE stocks when SPY's RSI is >70; then pull the trigger, dump the XIV position as a sacrifice to trigger a market run, and clean up on the puts like a mofo.*

And then Pooty-Poot will give them a fucking medal for bringing down American kapitalizm.

If you own XIV as a hold, you're holding a potential goes-to-zero-then-things-get-worse position. You are an idiot and should kill yourself right now for the benefit of humanity.

I do love trading HVI.to (Canada's XIV): but I trade it, only after the intraday has spiked and the futures have gone back into contango, and once I get my first 10-20% I cut back, and once I've made 30% on the rest I sell and walk away.

If people keep piling into XIV, this will become the next financial weapon of mass destruction. You heard it here first.



* - Then again, maybe Pooty-Poot would be able to launch the same attack even if XIV never existed, just by selling $VIX futures directly at the CBOE? I'd be happy to hear an explanation of why he could, because that would make me sleep a lot better.


Tuesday, May 9, 2017

John Mauldin is now sucking Bob Lefsetz's cock for business


It's not posted on Lefsetz Letter yet, but here's Casey confidante John Mauldin teaching us all what the smell of desperation smells like:

Subject: Thoughts on 700 new subscribers and Mauldin - from John Mauldin

Bob,

I've been meaning to dictate/write this letter to you for some time. I've been reading your pieces for at least a few years, and while we are of the same age (more or less as I am almost 68), radically different growing up experiences. I have to apologize to you that you only got 700 new subscribers. I should've put a link in and it would have been much higher. Next time I will.

Will the new readers stick? Hard to say… I am not sure that your tribe and my tribe are all that different,

AHAHAHAHA no, John, your tribe is very different. They may be attitudinal coke-snorting washed-up 70s rockers, but they also follow Trump tweets, vote Tea Party, and accuse politicians of being in cahoots with an international conspiracy masterminded by the Rothschilds.

That's your tribe, John. You picked them, remember?

but then again I'm not sure who your tribe is.

Hopefully people who don't fall for permadoomer goldbug nonsense.

And that's where your writing speaks to me.

Oh god John. You're in way over your head here. Bob Lefsetz was a music industry lawyer. He's had his cock sucked by the best. You really think you can compete? You don't even know what to do with your tongue.

You talk about musicians finding listeners and giving them what they want. We think about expanding our investment information junkie tribe and making them feel included, feeding their information needs. We actually hired a person this year whose entire job description is to make new readers, who sign up for my free letter, feel appreciated and wanted. Hopefully they will buy something. Eventually. Like a musician, I appeal to a certain audience/tribe. It's an interesting business model and not unlike the music business.

Seriously? You're letting people behind the curtain here. So when you publish your permadoomer nonsense about the "coming crisis" and "end of the debt supercycle", you're simply giving people what they want?

Is that really all you are, John?

If we should ever find ourselves in the same ZIP Code, I think you might be fascinated to sit down and compare the experiences that I go through in Internet marketing investments and newsletters and the music business.

Oh yeah, he would be fascinated to read your articles from 5 years ago, where you were calling for hyperinflation, utter destruction, teh ebil sociamalist Obama's taxes on non-Sharia marriage, and other such Tea Partyist chickenshit.

I make my marketing team read your letter religiously.

Again with the amateur sex work, John.

It's lines like this from today's letter that inspire me: We don't need much, but we do need great.

This is just desperate now. Has Vladimir Putin got your wife and kids at gunpoint? Is your letter just an overly amateurish recruitment drive for the international Russian disinfo army? You trying to get Lefsetz onside with the Russky program?

Every week when I sit down as I have for soon to be 18 years, I look at a blank screen and say, "dear gods, don't let the magic stop now." I started with a few thousand names back in 2000 and the letter just took off. I did a few things right, got lucky on more things.

And now let me guess, you're finding your readership is disappearing because, with the Evil Kenyan Muslim Usurper replaced by Trump America Great Again, the right wing fools are no longer interested in your perennial short-S&P-buy-gold strategy, right?

You can no longer spin the narrative that the US will default on its debt, now that you have a president who is going to run up the debt and a Republican party in charge of that debt. US debt is awesome now because there's no negro in the White House! How can we possibly whine about the US debt? There won't even be any debt after 8 years of Trump! Because magic!

And you can no longer spin the narrative that the S&P is horribly overvalued, now that the Republicans are rushing into the market after 8 years of sitting on the sidelines as the S&P tripled, because now that Trump's in charge the American economy will grow at 3-4% per year!

And that's why you're suddenly cuddling up to Bob Lefsetz, right? Now that your senile Republican fear crowd is just buying SPY, your readership is dwindling, so now you realize you need a new group of clowns, and who better to sell snake oil to than the entertainment industry, right? And Bob's got the readership, and you have no clue why they read Bob, but you think you can get some of that magic for yourself now, right?

But mostly, your letter was the reason you got 700 new readers. People far outside the music business intuitively understand that attention is everything. And you seemingly effortlessly just let the words of wisdom roll off your fingers on the screen

Bob can do that, not because he's trying to hoodwink people, but because (like me, not you) he sees bullshit a mile away and can't stop himself from calling that bullshit out. Whereas you are the bullshit, John. Your newsletter is the throwaway Mariah Carey singles of the 90s.

Except at least Mariah was sexxay as all sin. You don't even have that going for you.

And also, Bob believes in truth in art. Whereas you believe in selling apocalyptic fantasy novels, John.

People love Lefsetz for the same reason they love Don Cherry: he might go way off sometimes, but we know he's always been the guy who'll drop the gloves and fight for his teammates at a moment's notice.

People love Lefsetz for the same reason my 6 readers still read me. 

And then you find yourself putting in a six-figure budget just for the ability to be able to send out millions of email addresses a week without being flagged as spam. Wasn't even in the budget line 4 years ago. Now we are spending mid-six figures just growing our list. Five years ago we grew organically. Then Boom, the world changed. One of my main competitors is down 80% on their deliverability and income. And these guys are pros, having been around 30 years. Early Internet pioneers and then everything just changed. And then changed again. My executive team fully expects to have to reinvent the entire business delivery model every 3 to 4 years now.

Yeah, it does sound like you're struggling, John. As I said above, maybe it's because you were selling a bullshit anti-Obama narrative as your investment thesis, and now that whole strategy has become obsolete because the people you were selling to are now in charge, and don't need you anymore.

Kinda like Alex Jones. Maybe you should retire like him.

I know I've only got 25,000 followers on Twitter. I find Twitter to be mostly noise as far as revenue production. But you're right, I will get somebody on my team starting to focus on getting more twitter followers. There's no reason I shouldn't have a hundred thousand with some effort.

Ask your buddy Vladimir. He can get you 100,000 Twitter followers instantly.

It's probably good for the branding and all, but still not sure how you make money out of it. We keep trying to figure out how to monetize Facebook. We know we have to do it to stay relevant but damn it's not easy. It's like being on CNBC or FOXBusiness or Bloomberg. Its validation but as far as I can tell it does almost nothing for increasing my readership. Honestly? I get more viewers from putting a link in my letter to the segment I was on than they probably have watching it to begin with. Business news aggregators? They are changing even faster.

And in all this gentle caressing and romantic whispering, John, you said absolutely nothing about the quality of your content.

Because you don't have quality content. You believe in selling blather to suckers.

You're the Gene Simmons of the investment newsletter world.

Bob can see this, I hope.

My cell phone is ___-___-____ and you are welcome to call. I am writing a book on how the world will change over the next 20 years I would love to pick your brain.

AHAHAHAHAHAAHAA how are you going to slant it politically, John? Who's going to be the Democrat demon who drives the world into disaster? You need a bad guy for your sci-fi novel, you know.

I really really really hope Bob doesn't fall for this.


Addendum: for my opinion of John Mauldin, you can start here, here, here, and here. #1 is the best one, with simply a cryptic Ritholtz comment that "you'll see I don't publish much from him anymore nowadays."


Monday, May 8, 2017

Oh and by the way, Vladimir:


I find it interesting that I was getting so much "traffic" from France these past few months, and now that the French election is done my French "traffic" has withered away to be replaced by Russian "traffic".

I look forward to my German "traffic" suddenly getting a boost by about June or so.

UPDATE: Can't you idiot Russian trolls cover your tracks better than this? An old Google node and a hacked Marriott server, really?

The most unsatisfying video in the world


Maybe you've come across the "most satisfying video" videos on Youtube? They used to show really neat shit with chemicals and stuff, but recently they've degraded into a bunch of clips of people decorating cakes and shit.

So here's a hilarious parody of the "most satisfying video" videos:


Monday morning noos


So this summer, among other things, I'm taking a couple lower-level classes. I'm also reading through a bunch of textbooks to get ahead of the workload this coming fall: one on transportation geography (then maybe a second), one later maybe on geographical stats, maybe one on monetary modelling, and one on intro earth science.

And maybe some other stuff too, like Mark Thoma's advanced econometrics videos, to get ahead of the game for Metrics II.

But meanwhile, I can start posting news again, and boy is it boring out there:

FT Alphaville - boy is it boring out there. $VIX of 10 is making news. I think part of it might actually be that too many people are trying to get leverage by shorting via XIV. If so, expect a few explosive $VIX pops for little reason. Then again, we just went through 8 years of people expecting the apocalypse as the SPY tripled, so maybe people have finally thrown in the towel on that idiotic doom trade and this is just the new normal.

Speaking of which:

Buzzfeed - Alex Jones will never stop being Alex Jones. Even if it's during a custody battle for his kids. You have to love a story that starts with "It was the winter of 1997 and Alex Jones couldn’t stop getting punched in the face."

And as for actual economic news:

Calculated Risk - rail traffic increased in April and hotel occupancy rate increases. The interesting bit to me is that hotels are at an all-time high, but rails actually had a terrible year last year and still haven't recovered to 2015 levels.


Sunday, May 7, 2017

Funny toilet graffiti


Since we're easing our way back into blogging, here's a toilet graffiti video:



My favourite is "Matt, listen... there's no time to explain. Pull up your pants and start running."