Tuesday, April 21, 2015

Wondering a little about India and RSIs


India chart, a bit squished up because I wanted a whole year of candles:


On the one hand, the daily chart has the price at -2SD at RSI(20) at 33. That seems, over the past year, to have been a good point to buy India. You usually seem to get rewarded with at least a 10% pop.

Also, $18.25-$18.50 was a pivot back in Nov-Dec, so that might be a support line.


On the other hand, why do I want to buy an India ETF?

Well, Shaoul seems to suggest it might be a good idea.

I wonder if I'll take a position today.


Michael Shaoul on Bloomberg two times


Bloomberg TV - Michael Shaoul TV interview. I tend to discount everything he ever has to say about the Fed, since if Shaoul actually knew so damn much about monetary policy he'd already be working there.

But then he gets into Asia and makes an interesting point: Western hemisphere economies are tossed about by US Fed policy, but in Asia the big fish has now become Chinese policy, and they've just started a loosening cycle.

Add in that Rajan is also looking forward to loosening over the next 2 years, and it might just be that EM and DM Asia together produce a big bull move.

That'd be neat, since I doubt anyone's really paying attention anymore.

Wonder what that would mean for gold demand btw.

Speaking of which,

Bloomberg - Michael Shaoul print interview. And by the way, he says Hong Kong shares are still quite reasonably priced, and he actually pays attention to this stuff unlike the idiot talking heads on CNBC.


Some Tuesday morning news


Here's some stuff:


Real Time Economics - the economy has slowed because the Fed has already tightened. The Krugginator would love this, if only he ever read the WSJ: the Fed has tightened by shifting forward expectations, and the US dollar rise has also produced some tightening.

FT Alphaville - low number of defaults. This bit I found interesting:
Taking defaults by borrowers rated single B as a proxy for high yield, Deutsche finds high yield default rates have been below the long term average for 12 of the last 13 years. Between 1983 to 2002 the average default rate was 6.9 per cent. Since then it has averaged 1.5 per cent a year, and falls below 1 per cent if you exclude the upward blip in 2009.

Or to put it another way, modern risky borrowers haven’t been very risky.
So in other words, there's a perfectly good reason for HY yields to be so low: no risk premium is required. As for the rest of the article, you can ignore it: it's attempting to predict the future based on what's probably a flawed conception of the market cycle. After all, what is going to make HY defaults rise in 2017-2018? Oh, a stock market crash? Aren't we a bit too early in this cycle, growth-wise, to expect a crash? Fed hasn't even started raising rates yet.

Gavyn Davies - the oil shock is a global monetary shock. Good chart in here that shows deflation concerns were at a maximum in January 2015, and have dwindled since, while inflation expectations are finally threatening to pick up again after dwindling since 2012. Wonder if that'll mean anything for gold....

Real Time Economics - India's central bank chief looks for more accommodation. He lays out his longer-term (2 years) path for interest rate cuts. It'd be interesting if India manages to grow strongly in the next few years, what with me being all EM secular bear and all.

Chronicles of Brodrick - gold miners look good here. He thinks gold miners have put in a convincing double bottom and it's all up from here.


gold ex-US is going somewhere soon


Here's a chart of gold ex-US:


The last three days saw the chart settle on the Bollinger mean. Maybe it's a breakdown in the making, or maybe it's just working off the overbought condition that arose a couple Fridays ago.

Dunno which way it's going, but I'd expect it doesn't recover. Physical buying doesn't boost the price of gold til June or so; we're a bit early.

Which reminds me, the first official Indian monsoon forecast should be coming out soonish.


Sunday, April 19, 2015

Some Sunday news


Here's some stuff to read:


New Deal Demoncrat - weekly indicators. Consumer spending is finally up. Personally I've started spending a lot more money these past couple weeks - bought a pile of new clothes, and am possibly buying a cheap-as-possible tablet for reading this week. It's a good time to go shopping when it's not fucking -20 outside. And I'm a Canadian; those wimp yanks were probably much more beaten down by the cold than I was.


Calculated Risk - existing home sales, Lawler versus consensus. Apparently Tom Lawler is such a good predictor of homes sales figures that the herd tends to revise their predictions whenever his come out; right now he's calling for a large beat in existing home sales. on Wednesday. Personally, I don't see why anyone gets worked up about existing home sales when it's not as if they have any direct impact on the economy. The houses were built a long time ago, remember. But, at least it sets us up for an upside data surprise on Wednesday.


Mark Thoma - are we kidding ourselves about competition? I can't wait to use this in my intro macro class:
Consider a situation where there are 10 firms in a market and they compete with one another. Now suppose that all shareholders — say because they are following the dicta of diversification — allocate their wealth in equal proportion across those 10 firms. That means that each owner of the firm — even if there are thousands of these — cares equally about each firm’s profits.

So ask yourself: when those shareholders vote on the composition of boards or the management of the firm, or, importantly how the management of the firm is compensated, are they going to vote for managers who will care only about the profits of the firm they manage or about the profits more broadly? The answer is obvious: they will look to managers who manage in the interest of shareholders and so that means they care about all firm profits and not just the one of their own firm.

In a world where shareholders can get what they want, we won’t have competition in this outcome but, more likely, a collusive outcome. What is more, the firms won’t have to go to all the difficulty of violating antitrust laws to obtain this outcome, they will do it unilaterally.
Thoma says "this seems implausible to me", but I'd like to know why he thinks so. Personally, I think the authors are mistaken with the mechanism: nobody fucking votes for BoDs! But the company strategy certainly must be informed by a desire to not piss off their shareholders and see them jump ship to the competition. And thus you'd end up with the same collusive outcome anyway.


Mark Thoma - NBER abstracts. Re Barnichon & Figura's paper on declining labour force participation, I'm going to read it tonight and see if they say anything at all about declining real wages. See, I'm one of those leaving the labour force, because it seems capital doesn't want to pay a living wage for a fifteen-year specialist technologist to work in Mississauga or Markham.


Economist - Chinese growth coming down to earth? Weasel question mark added by me, because that's all you get from shitty rags like the Economist. Bill Bishop at Sinocism liked this bit:
When “60 Minutes”, an American television news programme, visited a new district in the metropolis of Zhengzhou in 2013, it made it the poster-child for China’s property bubble. “We found what they call a ghost city,” said Lesley Stahl, the host. “Uninhabited for miles and miles and miles and miles.” Two years on, she would not be able to say the same. The empty streets where she stood have a steady stream of cars. Workers saunter out of offices at lunchtime. Laundry hangs in the windows of the subdivisions.

The new district (pictured), on the eastern side of Zhengzhou, a city of 9m in central China, took off when the provincial and city governments relocated many of their offices there. Then, high schools with university-sized campuses began admitting students, drawing families to the area. Last autumn one of the world’s biggest children’s hospitals opened, a gleaming facility with cheery colours and 1,100 beds. Chen Jinbo, one of the area’s earlier residents, bemoans the lost quiet of a few years ago. “Rush hour is a hassle now.”
And indeed it is quite inconvenient for Whitey to admit that his bullshit hyperbole of a couple years ago was completely wrong, and that Whitey is supremely ignorant of China and should be ignored from now on.


BBC - Australian PM filmed downing a beer in 7 seconds. Here's a quote:
Some may say it is behaviour unbecoming of a prime minister. Others have applauded it.
Here's what they really meant:
Bloody foreigners may say it is behaviour unbecoming of a prime minister. Australians have applauded it.


Saturday, April 18, 2015

Weekend news


Here's some weekend reading:


MSNBC - GOP passes a $269 billion tax cut exclusively for millionaires and billionaires. The Republicans really are the party of the kleptocratic elite, and now they aren't even trying to hide it anymore. A more enlightened nation would hang every last one of the bastards.


Macro Musings - it takes a regime shit to raise an economy. An argument for combatting ZLB stagnation with a nominal GDP target, instead of a 2% inflation target.


Reuters - India worries gains may be lost as trade deficit widens. Everyone thinks Narendra is so great, but what exactly has he done so far to help India produce even one thing that the rest of the world actually wants to buy from them? If he wants to double exports, he's going to have to find something in his country worth selling, and they can't even grow their own fucking onions.


Mining.com - pension funds join clamour for Barrick board extermination. The strange thing here is that pension funds, including the Ontario Teachers, have put even one red fucking cent into Barrick, or into any other gold miner. How's your investment return, guys? Are you even outperforming SPY?


Mining.com - which way will PMs break? Jojo's not sure, and it takes him 552 words to say that. Hah! I find your lack of faith disturbing, Jojo! The ability to do TA is insignificant next to the power of the force! Dude seriously, PMS go up in the spring when the Indian jewellers start buying. There's your answer. Now gimme my consultancy fee.


Mining.com - How does Miranda Gold still get press? Damn, again with Ken Cunningham getting press for his $7M market cap company! I'm sorry dude, but whenever I think of "Miranda", I think of the scene from Serenity where River Tam gets the post-hypnotic assassination trigger signal from the Japanese TV commercial and goes:



And sure it's always fun to watch Adam Baldwin get elbowed square in the nuts.


Friday, April 17, 2015

Regarding Flin Flon


Here's an explanation of the origin of the name Flin Flon:



Because for six months of the year, Canadians have nothing better to do than film short documentary vignettes.

For example, this other guy doesn't even have an NFB grant and yet he decided to film a short adventure through Flin Flon:



Like every other town in Canada, they have a hockey team:



We won't hold it against them that Flin Flon is the birthplace of the legendary whiny worm Bobby Clarke, because Flin Flon was also the home of good guys like Kenny Baumgartner and Dean Evason.

Anyway, that's Flin Flon, one of the thousands of towns in Canada that you never hear anything about.

Friday videos: Ozzy and Sabbath doing "Children of the Grave" in, most appropriately, Birmingham


Here's Ozzy and Sabbath doing "Children of the Grave", which again is a metaphor for shitty junior mining companies:



And who in their right mind would have ever expected that Ozzy would have outlived Ronnie James Dio? I'm shocked, I just now found out that Dio died in 2010.

UPDATE: Apparently you can see Simon Ridgway in the audience. About 2-3 minutes in.


More Silvercorp news


I'll keep reposting links to these news stories so they can get some traction and people can start paying attention:


National Post - B.C. man wins right to sue Canadian mining company he says conspired to falsely imprison him in China. Quote:
A British Columbia man has won the right to sue a company in a Canadian court that he alleges conspired with Chinese authorities to force him to spend years behind bars in China.

The B.C. Supreme Court rejected a bid by Silvercorp Metals Inc. to have Kun Huang’s allegations of “false imprisonment” thrown out.

The Vancouver-based mining company had claimed in court that the case would be better dealt with in the Chinese justice system.

[...]

In his lawsuit, Huang alleged the mining company provided money and encouragement to local police, directing them to detain and interrogate him.

He claimed local police, at Silvercorp’s direction, demanded he turn over passwords to his computer, email and trading accounts associated with EOS.

The documents further allege that Silvercorp used that access to find documents to bolster its defamation claim against Huang.

Following a lengthy detention, Huang was reportedly convicted in September 2013 in a single-day, closed-door criminal trial.

He claims the trial was attended by two lawyers from Silvercorp who effectively acted as prosecution.

Thursday, April 16, 2015

What's wrong with religion?


This is what's wrong with religion:




Silvercorp news


Just cos I hate the bastards, let's repost this news tidbit:


Metro News - B.C. man’s false imprisonment trial against Silvercorp Metals goes ahead. Quote:
The B.C. Supreme Court rejected a bid by Silvercorp Metals Inc. (TSX:SVM) to have Kun Huang’s allegations of “false imprisonment” thrown out.

The Vancouver-based mining company had claimed in court that the case would be better dealt with in the Chinese justice system.

“The burden is on the defendant to establish that the alternative forum is the ‘clearly more appropriate forum,'” wrote Justice Carol Ross in her judgment released Tuesday.

“Silvercorp has not established that China is the clearly more appropriate forum.”

Court documents outlined how Huang worked at the time in China as a researcher for John Carnes of EOS Funds, a New York-based hedge fund manager.

In 2011, he contributed to a brief but damning report that highlighted discrepancies in Silvercorp’s financial and mining output reports to Canadian and Chinese authorities.

In his lawsuit, Huang alleged the mining company provided money and encouragement to local police, directing them to detain and interrogate him.

He claimed local police, at Silvercorp’s direction, demanded he turn over passwords to his computer, email and trading accounts associated with EOS.

The documents further allege that Silvercorp used that access to find documents to bolster its defamation claim against Huang.

Following a lengthy detention, Huang was reportedly convicted in September 2013 in a single-day, closed-door criminal trial.

He claims the trial was attended by two lawyers from Silvercorp who, effectively acted as prosecution.


Thursday morning news


It seems a half-decent Philly Fed reading was enough to inspire Wall Street Whitey to dump PMs starting at 10:00:00.000 AM, which is funny because silver is an industrial metal so a good manufacturing number should be good for silver you'd think, and anyway the regional manufacturing numbers have always have been nothing but bullshit for years so it must just be the dummies who trade on them.

So, let's ignore the bullshit for a bit and read us some news:


Bespoke - bullish sentiment not really. Whitey can't stop piddling his frilly little pink panties.

Bloomberg - time to shut up about "bubbles", Whitey. #1: stocks can't be in a bubble if everyone's calling it a bubble. #2, forward yield of equities should be compared to the alternatives, buddy! #3, man oh man when people finally do shut up about "bubbles" things are really going to take off; you want to participate in that next pop, or not?

Economist - China's economy coming down to earth? No, you lily-white douchenozzle, it's not. Because if you looked at the fucking numbers you'd see the service sector is still growing at >10%. It's just property and manufacturing that's slowed down, and this is explicitly what Xi Jinping has been aiming to do: cool down property, crush pollution, shut down inefficient factories, and transition to service industries. That white-ass honkies still don't get this means they're positioned wrong.

A Gloomy European Economist - thoughts on "structural reform". He notes that the data proves "labour market reform" has utterly no positive effect on economies: you need "product market reform". And, okay, stomping on tax evasion and the kleptocratic elite. In other words, you need to do exactly those things that make you an enemy of the German plutocrats.

Reuters - Indian wholesale prices show deepest drop in 9 years. Modi is getting blessing after blessing from Lakshmi. Cuz he sure ain't earning this himself.

Mickeyman - Hong Kong bling. Nice photos of the kind of beautiful gold products you can buy in the high-end markets in Hong Kong. Because Chinese people are dummies or something, since they should all be buying USTs or stupid utility stocks but instead they're buying a barbaric relic and it's even selling at a big premium to melt so it's not like you can trade these things on the market and BTW there's 1.3 billion Chinese people out there y'know.

Mining.com - Kun Huang wins right to sue Silvercorp for "false imprisonment". Good. And why not? They're a Canadian listed company, so why can't he sue in Canada? Let's just hope the jackasses in the Canadian media pay attention to this story. As for Silvercorp, if I were them I'd be worried that their cozy relationship with local police doesn't now get them in trouble with Xi Jinping... y'know, what with that anti-corruption war that he's been waging.

Conversable Economist - in Denmark the government prefills your tax form for you. They already know how much money you made, they already know where your bank account is, they already know your capital gains. And they have it all on one big computer. So why not just fill it all in for us, send us the form and say "is this right?", and save us all a lot of effort?


Hey Verdmont! Hey! Verdmont! Verdmont? Hey!


Royal Bank:


Cry uncle on that Royal Bank short yet?