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Friday, July 31, 2015

Oh the poor grannies!


Aw! Someone's crying about a dying old canard again!:

this just in, 30% of Grandmas have passed away during ZIRP’s post-2008 run, with their savings passbooks never having received so much as a .25% bump while the pigs get richer and fatter with every non-action

My advice:

(1) Read up on the market for loanable funds.

(2) Okay, that requires reading. Forget it, I ask too much. Here's a video instead, now you have utterly no excuse:



(3) Understand that grannies have only been receiving a low interest rate because of nearly nonexistent demand for loanable funds compared with high supply. This btw is a worldwide phenomenon, and not just an "artificial" "suppression" by the evil Fed.

(4) I won't bother giving you links for the explanations as to why supply and demand is this way right now, because that will require you reading actual living economists like Krugman and Summers (or even the Republican buttboy Greg Mankiw FFS) instead of dead lunatic hatemonger clowns like Ludwig von Mises.

Please ignore the above advice and educational materials if your blog is supposed to be nothing but a part of the ignorant populist right-wing neocon echo chamber, in which case carry on you're doing great!



Yet more Friday news


So does gold finally collapse through $1080 this morning? Or is everyone who could be short already fully short? Oh this is so exciting!

Let's clean out the whole inbox for today:

Tim Duy - FOMC recap. He interprets the statement as slightly more hawkish.

New Deal Demoncrat - sorry doomers, there's still no sign of recession. This for all the clowns calling for an imminent crash. That they're all still in business tells us the market still has a long way to run.

Bespoke - investor sentiment craters. As above. Doom, doom, doomity-frickin'-doom.

FT Alphaville - a historical parallel to the Chinese stock bubble. I'm not going to spoil the ending, because it's a great read; and when you see who the "historical parallel" was, it'll really open your eyes, especially because China's leadership most definitely has studied that country's economic history.

Progressive Economics - Harper's real economic record. Short version: worst economic performance of a Prime Minister ever. Well, that's what you get when you vote for a hate-mongering think-tank ideologue, Canada.

Steve Keen's Debtwatch - help make Minsky easier to use. What? Economists do use dynamic modeling? Really? I'm just learning this now? Then why the hell are they teaching us undergrads 19th-century static bullshit? My only regret is that now I'll apparently be forced to take advanced theory and econometrics classes before I get to use Vissim. Oh well. Please support this guy's open-source dynamic economic modelling software project, it sounds exciting.

der Spargel - Germany being tested by refugee influx. Includes a long history of (post-war, ahem) German attitudes towards immigration, such as their less-than-welcoming attitudes toward their own people who fled the Russian annihilation of Prussia (that part of Germany that doesn't exist anymore). Hey, Germany: before whining about how you're being "tested" by a puny influx of 400,000 refugees per year, please note the rest of the world remembers you had no problem exterminating three or four million a year in the 1940s. Has German efficiency gone down in the interim? Or is it just easier for you people to destroy than to build? You're going to have to do more than resentfully hand some second-hand clothes to a few Syrians if you want to be let back into the human race.

Friday videos: Katy Perry's "Teenage Dream"


Here's another obnoxiously hummable summer hit single for you:




Owen Pallett had this interesting musicological explanation for the song's success in a Slate article:

Why did it go to No. 1? Let’s start by talking about the ingenuity of the harmonic content. This song is all about suspension—not in the voice-leading 4–3 sense, but in the emotional sense, which listeners often associate with “exhilaration,” being on the road, being on a roller coaster, travel. This sense of suspension is created simply, by denying the listener any I chords. There is not a single I chord in the song. Laymen, the I chord (“one chord”) is the chord that the key is in. For example, a song is in G but there are no G-chords. Other examples of this, in hit singles: Fleetwood Mac’s “Dreams” and Stardust’s “Music Sounds Better With You”; almost-examples include Earth Wind and Fire's “In September” which has an I chord but only passing and in inversion; same with Coldplay’s “Viva La Vida.”

“Teenage Dream” begins with a guitar sounding the I chord but an instant later, when the bass comes in, the I is transformed into an IV (an IV7 chord, to be exact). The I chord will never appear again. Notice, too, how Katy’s melody begins on the tonic—tonic: the root note of the missing I chord, the same note that the key is in. She stays around the tonic, reinforces the tonic, and the vocal melody establishes the key so clearly that there is no doubt: Katy’s voice is “home”; the rest of the song is oscillating around her. Even when the tonic note would clash with the chord (as it does over the V chord, on “feel like I’m living a”) she hammers it home. Her voice is the sun and the song is in orbit around it.

The “feeling of suspension” I mentioned is an effect of this. The insistence of the tonic in the melody keeps your ears’ eyes fixed on the destination, but the song never arrives there. Weightlessness is achieved. Great work, songwriters!

The second key to this song's Enormous Chart Success has to do with the weighting of the melody lines. Perfect balance of tension and release. Each line of the verses begin straight, on the beat, but end with a syncopation: [straight:] “you think I'm pretty without any” [syncopated:] “makeup on.

[...]

As Katy moves out of introspective mode and starts using imperatives “Let’s go all the way tonight! No regrets! Just love!” she gets straight, more serious, no syncopation. Then—genius—the chorus inverts the weighting that we heard in the verse. [Syncopated:] “You make me [straight:] “feel like I’m living a …” [syncopated:] “teenage dream!” And the gooey heart of the song, the “skin tight jeans” bit, is rhythmically entirely straight, voice tumbling out of the tonic-focused cage of the verse and chorus, like long-hair from a scrunchie released.

A particular point of pleasure: The title of the song (“Teenage Dream”) is sung syncopated on the chorus, but straight on the bridge. Compare the two in your head. Do you hear that? How brilliant. The title of the song is rhythmically weighted two ways—it’s like a flank attack. Two sides of the same face. You WILL remember the name of this song.

So for him, it's all about the rhythm and the variation from root. Personally I like how she sings on ninths in the coda, but whatever.


Some Friday gold news


Off to work today! Here's some news:

Bron Suchecki - gold forecasts everywhere. He reaches into his pile of past gold forecasts, and finds that all they've ever done is extrapolate a trend.

Bloomberg - monsoon defies el Nino forecasts. What? All of a sudden they've stopped whining about an Indian drought?:
“Thank God, we do not have to worry about water this year,” said 45 year-old Panda from Sambalpur in India’s Odisha state, who grows paddy in his 20-acre farm. “I enjoy looking at my lush green field now.”

The monsoon’s revival from mid-July has boosted rice and soybean crops, curbing food price gains and easing concerns of shortages. India’s central bank has said it’s closely watching the rains after identifying a monsoon shortfall as the biggest risk to the economy, where agriculture accounts for about 15 percent of gross domestic product. The country depends on rain to water half of its crop land.

“The nation is heaving a collective sigh of relief as the performance of monsoon is better than what was forecast,” said Soumyajit Niyogi, an interest-rate strategist at SBI DFHI Ltd. in Mumbai. “Better agriculture output will provide much needed room for the central bank to further cut rates.”
And area under cultivation is already higher than last year. So everything's fine, yeah?

Skymet - CEO's Indian monsoon update. It's actually going to remain dry for southern India. Unfortunately, those are the guys who buy the most gold. Still, the overall forecast is a 98% chance of normal or below normal, which is >90% average rainfall, which should be enough to not be noticeable for most farmers.

Reuters - RBI to hold rates on Aug 4th. Hey, speaking of which... you know how the gold price is supposed to go down when interest rates go up? Because gold has no yield? Then why are Indians still buying a thousand tons of gold a year when the RBI's rate is 7.25%? I guess India doesn't count to the gold market? Only America counts? The country that doesn't actually buy gold? That so?

Mining.com - new chapter in controversial Barkerville Gold saga. And so Sprott converts his debt into equity, and it's run by the press as a good thing when it means existing shareholders are even further diluted. And they still haven't found them 100 million ounces that Peter George said they had. And there's still the matter of the BCSC investigation, which has been going on forever so it might actually be serious. Great company!


Wednesday, July 29, 2015

How to know the bottom is in: Business Insider whores themselves out to doomer newsletters


How can you pick the bottom in the market?

Wait for Business Insider to run a fucking retarded story like this:

BI - Harry Dent says everything is starting to crash!!!1!*

OMG! Quote:

Despite a $486 billion fund to prop up the Chinese market, China's stocks sunk another 8.5% on Monday — the biggest one-day drop since 2007.

OMG Harry! If only you could have predicted this ahead of time, we might think you were intelligent instead of some clueless cunt who uses faddish news items to generate new subscriptions to your worthless fucking newsletter!

As it stands we're all in such fear about the Shanghai index being back to where it was this February.

Even more:

The DAX in Germany just started to crash again down 2.56% to below 11,100 on Tuesday — down over 10% from the top!

OMG! That's halfway to a 20% correction!

Um... Harry, the rest of the world buys 10% corrections. Have you been pissing your frilly panties and selling every time a market goes down 10%? Or are you again just using this as an excuse to peddle your shitty doomer newsletter?

As for US stocks, they seem to be imploding from within!

Even though the Nasdaq hit new highs recently, the advance/decline line didn't. That means more stocks went down than up, even though the most aggressive market hit a high!

Harry! Do you get paid by the exclamation mark! Because you're using a lot of exclamation marks here!

Oil will keep falling. It will force the frackers out of business. And when they default on the $600 billion in junk bonds and leveraged loans they have used to fund their drilling, it will be like the next subprime crisis in the US!

OMG! Because junk bonds are supposed to have absolutely no chance of default! That's why we call them "junk bonds"!

BTW Harry, you fucking asshat, did you pull this oil price prediction out the same bunghole as your prediction about "The Great Crash Ahead" as published in 2012 right before the S&P shot up 40%? Or "The Great Depression Ahead" as published in 2009 before the S&P flew up 87%?

Your predictions fucking suck Harry. Must be because you have utterly no fucking clue about anything.

To stay ahead of the curve and allow yourself to survive and prosper throughout all up-and-coming economic trends, sign up for our FREE daily newsletter.

Hey Blodget, you whore! How much do these clowns pay you to reprint their clownish garbage on your worthless website? Cuz I know some people in al-Qaeda and the White Power movement who are also looking for good places to reprint their screeds. Can you send me your rate card?



* - LGT Ashley Tisdale doing a pretty rad club electro cover of "Never Gonna Give You Up" because there's no way I'm linking to the bullshit article.

Tuesday, July 28, 2015

Quick update


OK, so with 5 down days in a row, I bought back all my US market positions.

#1, IWM is below RSI 30. #2, frankly at some point in the future the US market is going to be higher than it is now.

If we get another down day that's no big deal. If $VIX explodes from here I can move to shorting that instead.


Monday, July 27, 2015

A few more reads


Tomorrow afternoon I have an econ test that I still haven't studied much for, and then in calc we do continuous random variables all week, and then next week it's exam time.

In addition, my employer has seen their stock price tank 10% since I last worked there, so they're begging me back now. I do a bit this Friday, a bit next Friday, then full-time til Labour Day doing what I love most: tearing a new hole in McCormick Rankin's shitty preliminary design and showing it can be built for half the price if you just use some common fucking sense.

So basically I'm going to be busy for a couple weeks. Buy S&P when the fear is at its highest, that's my only advice. Oh, and hope that gold doesn't go to $800.

In the meantime, here's some news:

BI - Goldman Sachs says commodities selloff is part of global cycle. Translation: someone at Goldman Sachs just read Jim Rogers' "Hot Commodities", synthesized its main point with some first year economics, and is passing it off as new and original thinking. So Goldman, what are you going to say when this fad passes and it turns out China continues growing after all?

Gavyn Davies - lowflation forever in the US? Some panty-piddling from an Englishman this time. I say "Englishman", Gavyn, because no true Welshman would be such a fwcllyng syssy. Cerys Matthews is more man than you FFS.

Joe Stiglitz - Greece, the sacrificial lamb. Oh sure, those "structural reforms" are all being pursued with Greeks' best interests at heart, oh no they're not an attempt to bleed Greece dry:
The rationale behind many of the key structural reforms has not been explained well, either to the Greek public or to economists trying to understand them. In the absence of such an explanation, there is a widespread belief here in Greece that special interests, in and out of the country, are using the troika to get what they could not have obtained by more democratic processes.

Consider the case of milk. Greeks enjoy their fresh milk, produced locally and delivered quickly. But Dutch and other European milk producers would like to increase sales by having their milk, transported over long distances and far less fresh, appear to be just as fresh as the local product. In 2014 the troika forced Greece to drop the label “fresh” on its truly fresh milk and extend allowable shelf life. Now it is demanding the removal of the five-day shelf-life rule for pasteurized milk altogether. Under these conditions, large-scale producers believe they can trounce Greece’s small-scale producers.
Kruggers is a teddy bear compared to The Stig.

Economist's View - on goldbugs and silverbugs. Including some Krugman:
The basic mindset of the kind of people who pay Ron Paul for his economic advice is pretty clear: they’ve made some money over the course of their lives, they believe that all of it reflects their own virtue, and they think they know from that experience what it takes to create wealth. They hear that the Fed is printing money, and it sounds to them like a violation of both the laws of economics and morality — and they surely think of it as a plot to take away their completely earned gains and give them to Those People (hence the whiteness issue).
It's almost too easy to make fun of these clowns. Nevertheless, capitalism demands that we beat up on the retarded, so let's start with the retards of capitalism, no?


Some Monday news


Some news:

Barkley Rosser - are China's problems responsible for recent market slides? Now, he's only an economist, not a China watcher, but this bit is funny:
A final point regards the stock market bubble story. While Dean Baker sneered at the story from the NYTimes, an aspect not reported by them or him, but in Wargent reports and some other sources says that the methods used by the Chinese government in its efforts to halt the stock market slide (so far successful) were very extreme, including simply forbidding many stocks from being sold, and also forcibly confining stock dealers in rooms until they engaged in purchasing some stocks, with portions of the market still shut down with no transactions allowed.
I can just imagine how terrified the typical White-ass honky trader is when he hears a story like that!

New Deal Demoncrat - weekly indicators. Meanwhile the US is still doing fine.

Jojo - gold miners nearing rebound. Yet he still thinks gold hits $1000. Get back Jojo!


The problem with shorting gold miners into the dirt....



The problem with shorting gold miners into the dirt:


is that you kinda lose perspective.

I mean, gold is only down 5%; why sell down miners 20%?

And when Shanghai Chaos exits its short position, can you make real sure you buy back your shorts faster than everyone else?


Further comment on shorting $VIX


Shorting $VIX (though HVI.to) is one thing I've done rather well all year, but what the heck is my method?

Well:

 ASHR is crashing again, cos Shanghai is crashing, so I guess that creates fear in the US:


Which makes people buy downside protection for their US market positions, and $VIX is an index of the premium paid for downside protection.

So my job, in order to trade HVI successfully and not get bloody murdered, is to determine how much the panty-piddling has to go on before it stops.

So I look at the $VIX chart above and wonder if it can get to 20 again this time. Well, China dumped before y'know, and the world didn't end, so there should be less fear this time 'round andd $VIX shouldn't make it to 20 this time, right?

Ah, but wait:


There's suddenly a bunch of stress in the junk market, probably because of the whole oil thing:


And $INDU just made a lower low:


So maybe this fear pop can carry on for a little while?

So I just have to sit and do nothing for a few days, til either I get a Wagnerian $VIX climax, or I miss the boat, in which case no fear I can just buy double-long QQQ again and be like the normal people.

And because HVI and XIV only really make money as the front end of the curve increases its contango, it even pays to be a day late to the party! Seriously, just cos $VIX climaxes at 20 doesn't mean you want to buy XIV if the front end of the future curve is still backwardated.

So there's really no method - except just sitting and watching panties get piddled, attempting to estimate the ultimate target of panty-piddling, and if the target is missed big whoop I just take back a normal position.


Monday morning market comment


So overnight Shanghai did this:


So now $VIX is doing this:



And eventually I'll be able to short $VIX again and make yet more money.


Friday, July 24, 2015

Some Friday news


Here's a bit of Friday newsreading:


New Deal Demoncrat - initial claims, adjusted for population, set a new all-time low. And since it seems monetary policy has permanently slain the inflation beast in the West, the only reason to raise rates now would be to smash the working class. Again.


Calculated Risk - on June existing home sales. He takes pains to remind us that resale of existing homes has only an insignificant effect on the economy. Inventory and distressed sales are the significant data points in this report.


New Deal Demoncrat - sub-$2 gas this winter? That will be a positive for the US economy.


FT Alphaville - the real bubble is in "China bust" articles. Here's the opinion of two actual Chinese analysts from Citi:
While the A share market declined by 24% off the peak, it is still worth remembering that China is still up for the year. The CSI 300 is up 18% in US$ terms, Shanghai A shares are up 23%: sure, both markets were up a lot more a few weeks ago but those performance numbers are still enviable compared to many other markets (see Figure 3). The SPX is up 3.4%, NASDAQ 10.2%, the Euro Stoxx is up 6.9% in US$ terms and the N225 is up 14.2%, again in US$ terms. In percentage terms in EM, only Russia and Hungary, up 22% and 27% in US$, have outperformed the CSI 300, while many markets in EM are down double digits: take Columbia off by 25%, Peru off by 12%, Turkey down by 19, Indonesia off by 15% and Brazil off 15%. So, for all the talk of an imminent blow-up, the Chinese markets have actually done rather well. Our most likely scenario for the Chinese economy, should reforms fail, is the Japanisation of the economy with growth slowing progressively until there is none. Given that China borrows from itself and runs a CA surplus, a progressive ossification of the economy and financial system is still a more likely outcome than the sharp sudden crisis so often seen in EM, the latter being mostly CA deficit-driven adjustments. China remains a net creditor to the world.
And I'd rather hear the opinions of Chinese analysts than some idiot honky who doesn't understand the country or its long history.


Mining.com - GLD dumps 23 tonnes. Well, let's just clean that fund out and maybe we'll see a bottom.


Mining.com - George Gero on gold. He points out the obvious:
"With all the bears in the woods, everybody [being] bearish is probably the most enticing reason to start to pick at the market."

Gero said Monday's 2.2 percent selloff in gold was sparked by one large trade, rather than any sea change in the fundamentals.

"Somebody had to make the decision to be out of the market with that size trade, which distorted the markets," he said. "We will be going back in the next few months to basics."
People forget it was one big Shanghai Chaos smash that hit gold, and it hasn't been dropping all that hard since. When does Chaos have to close?


der Spiegel - interview with Julian Assange. I find it interesting that academia instantly rejects all papers that use Wikileaks as a source. That's something to remember come Ph.D. time.

Back to obnoxiousness: Friday summer earworm video


OK, it's Miley:




And the verses suck. They suck the way most American hit single verses suck. Because nobody in pop music knew how to write a good verse for a hit single til Max Martin.

But the chorus is so goddamn addictive.

And yes I'd happily punch that annoying Miley idiot in the face today, but back then she was a cute fun harmless teen pop singer, and nobody hates that, right?