Saturday, October 19, 2013
Kaiser mentioned the Spokane Stock Exchange, as a possible endgame for the Canadian exploration scene, as starvation of capital forces the people working in the industry to leave.
Remember the Spokane Stock Exchange?
Here's the Wikipedia article. It's very short, because the Spokane Stock Exchange has become little more than a mumbled regret of senile goldbugs.
Please forward that link to the bosses at the Venture, because that's their future just a couple years from now.
So this Scott Gibson guy interviewed a bunch of people back in August or September about junior gold, and I only just came across the videos now.
Here's Eric Coffin:
At 3:50, notice how he entirely recaps all the gold opinions on my blog.
He also talks about the new rollback scheme and the end of the penny financing.
And here's Gibson with John Kaiser, with his own opinion about gold which I also sort of agree with:
Except then, weirdly, he starts talking about how the thinks the bullion banks are short physical and unable to cover.
Johnny! That there's ZeroHedge talk!
Seriously... bullion banks are short physical because they are bullion banks. They need to hedge downward moves in their gold inventory.
Anyway, at about 4:10 the brain virus goes away and he also starts agreeing with me.
Friday, October 18, 2013
Forgot to add a link to that previous post:
Introducing the Venture Capital Shareholders' Association.
True to form, it is a blog.
PSDave has become a card-carrying member of the Venture Capital Markets Association - at least until they figure out that he's merely an infiltrator. Here's his report:
Overall it was a pretty good bitch fest about the regulators, BCSC and IIROC for the most part. There was desperation in the voices and they want to start lobbying on the political front for changes.That would be hilarious! What federal, or even provincial, politician is going to take seriously a bunch of whining "Venture exchange CEOs" who run sub-million-market-cap lifestyle companies?
Dudes: you are nobodies to the political class. Most of them are richer than you. They don't listen to anyone whose "corporation" is so poor that they can't even get the cash together to meet basic listing requirements.
You guys are no Royal Bank or Goldcorp. Quit thinking you're going to get political attention like Royal Bank or Goldcorp. You guys are the clown who runs a chip truck who wants to complain to city hall about the cost of a street-vendor license. Shit, even the average Toronto taxi driver has a higher book value than most junior mining stocks.
Another sticking point was all the fees they have to pay to maintain a listing. My thought is if you are worth your weight in salt then these should not be an issue, but if your a lifestyle company then it looks like you are at the end of the rope.Exactly, and my response is this:
The explorecos don't have a credibility issue as much as they have a credibility mismatch with the Venture exchange.
A Venture company is supposed to exhibit some small minimum of professionalism, financial sophistication and trustworthiness. If these clowns feel that the extremely low bar set by the V is still too high, then (as I keep saying) they should go to the Nex or the pinks.
After all, in what way are any of these companies behaving not like an OTC stock?
The only reason for these idiots to get a V listing was to trick the instos into buying them alongside the other V explorecos like Atac and Kaminak. Well, that buying stopped a few years ago. Does the benefit of a V listing outweigh the cost anymore?
Seriously, mister Venture-listed CEO, answer me this: what the hell is the point of you still listing on the V? Why the hell are you still hanging around? It's 4AM, the party is over and the booze is all gone: what the fuck are you still doing in my living room?
Your price action should have proven to you by now that nobody wants your shitty stock anymore. Delist.
Just go away.
Which brings me to the next issue with private placements, you always need the retail (read bagholder) there to eventually sell your private placement cheap stock and warrants to. These days there is a rush to the exits from the holder of the private placements, usually showing up about a month before the hold comes off.Exactly. They've been running a Ponzi for the past several years. It works when the asset is going up - hey, we were all happy to buy the paper flood a few years ago - but when the asset is going down, all you create is a rush for the exits.
And as Cookie notes, these clowns print paper specifically so that the hold comes off a couple days after drill results. Whereupon the paper is sold.
By the way - how is this not a pump-and-dump? You bought paper with the intention of selling into a pump; then you manufacture a pump by (hopefully) releasing good drill data a couple days before the hold comes off, so the pop can get sold into. That's a pump-and-dump.
The industry has been killed the way Bre-X killed it years ago. The only difference is this time, Bre-X is smeared across five hundred different bad actors.
Frankly I think gold exploration is going to go the way of REEs from a few years ago: China is going to run the entire exploration industry.
Bespoke - back to overbought. More on my $VIX point from earlier this morning. And yet:
FT Alphaville - taper delayed because data delayed. Seems like this means the market will have many days of running on nothing but hopes and dreams, til the data starts coming back and whacking people with the mackerels of reality. Like thus:
WSJ Moneybeat - Ralph Acampora is comfortable being bullish again. Apparently TAs are supposed to care what Acampora says. And here's what he says:
Ralph Acampora, director of technical research at wealth management company Altaira, is back to being bullish because of the old Wall Street adage, “Don’t fight the tape.”Ah, the old "don't fight the tape" strategy! Looking at what direction the market is going in, and then assuming that a turn-around isn't always right around the corner! The first data point of technical analysis: price!
Mr. Acampora pointed out that a number of key market indexes have recently reached new bull market highs, including the Russell 2000 index of small-capitalization stocks, the Nasdaq Composite and the Dow Jones Transportation Average. The S&P 500 index was heading for a fresh record high close on Thursday, and he said the Dow Jones Industrial Average should do the same, shortly.
Michael Shaoul - Bloomberg financial conditions index. Quote:
Since mid September US Financial Conditions (as measured by the Bloomberg US Financial Conditions index) have continued to improve, with the index actually registering a new all time high of 1.58 on Wednesday (5 years and one day after the index made its record low at -12.67), before falling back slightly to 1.47 this morning. Perhaps more importantly these readings are not the product of a brief blip, since the trailing 10 week ma has now reached an all time high of 1.34, while the 52 week ma is 1.04, the first time this measure has averaged over +1 for an entire year.FT beyond brics - China's overcapacity strategy.
In our opinion the length of time that conditions have remained strongly positive is perhaps more important than the level itself, since it generally takes some time for financial conditions to start to filter through to actual economic activity.
Mining.com - Draghi says central banks would be unwise to sell their gold reserves. Hey Tekoa, no surprise here: he was born two and a half years after Italy's WWII collapse, so he knows all about why central banks need to keep gold on hand.
Reuters - India's September jewelry exports rise 16.5%. Basically, the gold import rules have been straightened out, so the jewellers can make jewelry again.
Oh and Dear Mineweb: all the stupid popup boxes on your site have now made it impossible for me to read any of your articles on my Android smartphone. I will be unable to link to your articles anymore until you get rid of that garbage.
Reuters - lurching gold prices mystify traders. Quote:
these seemingly sporadic trades lasted only minutes but overwhelmed volumes and price direction on each occasion.Now what kind of idiot thinks that these trades weren't simply intended to gain maximum price move from a minimum amount of outlay?
Others said it may be due to unusually low liquidity, as open interest dwindled to a four-year lows just a day before the first episode on October 1. But professional Comex traders should know to moderate their orders in thinner conditions.No shit, they should. In fact, I assume that bad order execution would get your ass fired and blacklisted out of trading forever. So these orders were, simply, executed perfectly for whatever result was desired.
A few suggested darker causes: the deliberate gaming of the market, whether by a rogue trader or a computer-driven algorithm that seeks to maximize market impact by overwhelming the system with a large number of orders in milliseconds.Again, another insight from the institute of No Shit Sherlock. Commodity futures have been gamed forever: read Jesse Livermore's book if you need insight into this.
More later. Posting problems again.
Ritholtz - secular bull market roadmap. Here, look at these charts:
Reformed Borker (Bork Bork Bork!) - from such great heights. Let's quote him completely, because I agree whole-heartedly:
Is this the top?
How about now, is this it?
The S&P 500 is now printing 1725, a new all-time record high. The Russell and Mid Cap 600 beat it there and the Dow is right behind it, perhaps.
The timers and tactical guys will now point to inflation-adjusted measures to convince you that it's not a record high but it is. The newsletter guys will rail about the Fed as they have been for five years now and the TV people will obsess over whether or not you should be "playing it" with retailers or banks or tech stocks.
Take a moment, from this peak - or way-station toward some higher, future peak - to reflect on who's been wasting your time and distracting you from your retirement goals. Who's been filling your head with nonsense. The average 401(k) balance has doubled since the market lows of 2009, has yours?
Growing as an investor is never about how much you can add to your routine, it's always about discovering what you can leave behind.
Think these thoughts and adjust your consumption habits accordingly.
BI - Jeff Saut on the nightmare of the underinvested. Again, quote:
Now that the "crisis" is in the rear view mirror, the equity markets should refocus on earnings, economics and the Federal Reserve; and here the story is pretty good. S&P's bottom up operating earnings estimate for the SPX is currently $107.58 leaving the SPX's PE ratio at almost 16. Next year's estimate is $121.66. If the SPX continues to trade at that PE multiple, it renders a price target of 1946. As far as economics, things appear to be getting better. In 2014 I believe GDP growth will finally accelerate to 3% driven by a capital expenditure cycle because companies like GM are running their plants flat out 24/7 and the equipment is wearing out. Finally, with Janet Yellen at the helm of the Fed, it should be steady as you go. That implies no tapering and plenty of liquidity. To the underinvested -- and underperforming -- investor, this trifecta is a nightmare.
Mining.com - gold price spikes higher on huge volumes. Frik sums up all the pro-gold arguments that just a week ago were considered utterly unimportant - Janet Yellen, postponement of the taper, QE "money printing", and so on. But Frik: gold spiked higher in the barren electronic market. Nobody covering a short is going to do it when the book is nearly empty. So gold only spiked higher cos some person wanted the price to go up.
Check out this chart:
The $VIX index has utterly collapsed since the US government decided to stop being morons for a couple months.
You'd have to wonder if maybe this excitement goes on for just another day, and then the US markets dive or at least hold steady for a while. Cos this is just way too much of a short-term thrust.
Of course, what is the $VIX?
It's an index of the premium on options. So I guess all this is really saying is that short-term puts are no longer in the demand that they were a week ago. Which is obvious.
The market advancing would eventually, I guess, make more people buy downside puts after a few more days of advances. So in the next few days we might instead see $VIX advance back up with the market advancing as well.
Then again, an advancing $VIX might be a signal to the algos to sell the S&P. A self-fulfilling incorrect prophecy.
Then again then again, that would just drive dumb money (i.e. the algos) out, which would be a good situation for an advancing S&P.
So the $VIX means nothing and you should ignore anyone who talks about it.
Thursday, October 17, 2013
I don't know if he's serious about this, or if he's just looking for a few fellow disgruntleds in Van to form a posse and bust some heads. Or maybe just find a few people to play World of Warcraft with.
But anyway, PS Dave has invented the Venture Capital Shareholders' Association and maybe wants everyone to join up or something.
Or at least fill out an online survey, which obviously means he's just looking for funny names and anecdotes.
Here's the Peru ETF:
Y'know, if gold was truly done for, forever and ever, then you'd have to think nobody would want to buy an emerging market like Peru that's one of the largest gold producers and whose economy is so dependent on gold.
Saw this at the Second Cup today:
Question for the Peruvians: do people really make certifiably organic, fair-trade coffee in Cuzco? Or are Second Cup just using the name "Cuzco" cos that placename makes people think of big hilltop cities and smiling vendors of crafts?
Would I be providing a superior income to nice peasant farmers by buying it?
Yeah, I'm a bit jaded and cynical.
Here's two bits of news:
Ritholtz - the truth about the deficit. Quote:
If the tax cuts from 2001, 2003 were repealed, half of that deficit goes away.I would add the following, Barry:
If the FICA cap is lifted from $113k and allowed to rise to $250k or $500k, SS is solvent for 75 years.
If the US no longer spent the equivalent of the next 20 countries COMBINED on Defense, a huge chunk of the deficit goes away.
- If you get rid of the Democrat in the White House, the Republican party will no longer be concerned about the deficit.
Michael Shaoul - Euro area current account Aug 2013. Old numbers, but they still support his theory of Euro resurgence. Quote:
In other words the sums involved are large enough to matter even in an economic area as large as the Eurozone. Gains have also been well dispersed with only France showing little sign of improvement over the last three years.
We believe that the improvement in Current Account data has been largely overlooked by market participants, just as the substantial deterioration in emerging market data went unnoticed until currencies dislocated at the end of the second quarter. We would expect rather more attention going forwards as the strong equity market performance of most Eurozone markets starts to generate more interest on the part of investors.
So gold popped on the London open.
Let's assume someone was very short gold; that's why they were puking into nonexistent bids during electronic trading. I guess the (temporary) end of the debt ceiling impasse means gold has no more reasons to go down, so they have to close out their short. Inefficiently, I guess.
So now the gold miners have popped:
They still haven't broken their Bollinger mean, so this is still not an exciting move to me. And the trend hasn't obviously changed yet. This could just be short-covering.
Illustrative of this:
Suddenly Minas Buenaventura is +3SD and >50RSI in the first time in ever. On no volume, but still it is a change.
One day of short-covering is not sufficient cause for any goldbug bottom-caller to gloat. The only thing that has changed for gold is that debt-ceiling nonsense; has Goldman even retracted their $1000 gold call yet?
But at least there is that air of hopefulness that makes me want to pay attention.
Wednesday, October 16, 2013
PDAC, seeing the writing on the wall, is spamming everyone who's ever gone there even as a dumbass newsletter follower, selling their exhibit spaces.
I was thinking, perhaps I should start up a gold exploreco?
I'll call it "Let Me Punch You in the Balls."
Then I can have a booth at PDAC where I spend all day punching people in the balls.
I'll try and get a spot right next to Sprott. Maybe Rick Rule will pop by.
If my arms tire from all the balls-punching (my off hand is a bit weak right now but that's easy enough to develop), I can knee people in the balls instead.
Of course they'll complain that it wasn't a proper punch.
"You promised me a punch in the balls! What the hell was that?"
Then I can respond with "Actual results may vary materially from those described in forward-looking statements or information."
What do you think? How much should I tap the capital markets on my first go?
Here's some stuff I happened across today:
Reformed Borker (Bork Bork Bork!) - the most uber-bullish thing you'll read today. Seriously, Ritholtz has gotten cautious, but Josh sounds like a frickin' cokehead anticipating his next hit. Here, let me quote the whole damn thing:
Let me set the scene for you:I forwarded this to Jojo in an attempt to make his head assplode. No reply from him suggests that it was a success. It must feel terribly lonely when even Gary Tanashian has gone full-bore bullish the US stock market.
* There is a Debt Deal in the works that removes the ceiling and related draconian cuts from the discussion til at least February. Out of sight, out of mind.
* There is no election this fall.
* There is no war with Syria and high level talks are happening with Iran for the first time in decades.
* The incoming Fed Chairperson is the most dovish in the institution's 100 year history. There will be no taper talk whatsoever so long as employment data remains muted. At least not this quarter and probably not until the spring barring a huge tsunami of good economic news.
* Stock markets around the world are selling at fair to absurdly cheap valuations.
* The banks are as highly capitalized as they have ever been.
* Home prices are back to long-term trend and appreciation continues despite recent mortgage slowdown - normalization being the operative word.
* US households reclaimed the 2007 peak in total net worth and have now surpassed it.
* Small and mid cap stocks are at all-time highs and yet still under-owned by the largest pools of capital in the US - pensions, endowments and insurance companies.
* Going back 110 years, when the Dow has been up in the first half, it's finished the year strong with gains in the back half 70% of the time.
* Hedge funds are at their highest net short positions since January and have massively trailed every equity benchmark you can think of.
Thats the set-up going into year-end.
What happens from here? My guess would be that we have all the rocket fuel we need for an explosion.
Bonddad - live-blogging the debt default. You've already lived through it, so the post is meaningless, except this section:
From Bonddad: A note on why the short-term treasury spike is so important: there is a market between companies called the repo market. It's essentially a short-term collateralized loan market where one party will essentially give a second market a specific amount of treasury bills in exchange for a short-term loan. For example, company A needs $10 million because of an unexpected cash short-fall. They're a large company who just happened to run into a short-term cash crunch. But while they may be short on cash, they do have Treasury Bills as part of their cash management strategy. So they give $10 million of T-Bills to a second party who essentially makes a collateralized $10 million dollar loan to the first party. 30 days later, Company A has sufficient cash on hand to repay the loan, so they do so and get their $10 million in T-Bills back.
Here's the rub: this transaction which is incredibly common and a bedrock of modern treasury management requires a "riskless" security to perform. Enter the T-Bill which is backed by the full faith and credit of the US government. The T-Bill makes this a routine and standard transaction. But remove the riskless nature of the T-Bill and you've got big problems in the financial world as this market grinds to a halt, making short-term lending impossible. That completely cripples trade and commerce, and that is why this situation is so deadly.
NPR - what if we paid off the debt? All of it? As noted before, Greenspan himself was the architect of the Bush tax cuts; he said world finance would be thrown into disarray if there was no more US debt for banks to leverage off of. Read it. The modern finance system runs on debt: it's not a "dishonest system coming apart at the seams".
FT beyond brics - Indian reforms and the electoral cycle. I still think Avantika Chilkoti is useless as a writer, but at least this article will give you a slight bit of useful background if this is the first time you've ever heard of India.
Mineweb - Molycorp sucks. Mountain Pass has only achieved half expected throughput, and the only rare earth they're mining in any quantity is the one that nobody in the world even wants. And you thought gold miners were pathetic losers?
Mining.com - Gartman says gold looks awful on the charts. Quote:
With the political mess in Washington, gold should be going up but it's "just not going what it should be doing," Gartman said.
"A market that won't go up on news that should send it up is not going up."
No really, honest, I bought Bank of Ireland yesterday afternoon for a larf.
Today so far it's up 7%. I'm watching the volume, though, to see if it ends up with enough to stay +3SD.
And of course I shall celebrate this win by getting drunk and picking fights.
at 8:15 AM
The shorter-period the EMA that governs a move, the more unambiguous the move is, as far as I'm concerned. Normally I've followed EMA(16) for the miners; for other more boring stocks like banks and such, maybe you want to use an EMA(20) or even EMA(50)?
Anyway, the shorter the EMA, the worse the downmove is. That's the general idea. So have a look at this:
The $HUI's recent month of puke has been governed by the EMA(10). That means I consider this dog to have utterly no signs of life whatsoever unless it can get above that really pathetic short-term EMA.
But look who's even worse:
GDXJ's month of pukitude has been governed by the EMA(8). That's even worse. So even yesterday's hopeful upward thrust by end of day still didn't manage to get GDXJ above the exponential 8-day average of prices.
You can't even trade the oversold condition, that's how little hopefulness this has.
Seriously, that is one committed downward spiral.
Tuesday, October 15, 2013
CEO.ca - Cookie says neener neener.
For a good explanation of PretiVm's resource modelling problems, beyond the "wharr, ah doont troost 'em, mite" of drunken Geordies.
Again, another link I found via juniorgoldminerseeker, who I've decided to subscribe to.
Bloomberg - mining M&A decline. With a few soundbits from people like Jamie Sokalsky and The Clive.
Wow. When even Bloomberg and PSDave are going on about the end of the junior scene, we really must be nearing the bottom.
(No, I agree, it'll suck forever til gold goes up again... just wanted to get a little dig in there.)
Some evening reading:
Reformed Borker (Bork Bork Bork!) - 361 Capital weekly research briefing. Including this chart:
Ritholtz - 90% up days are bullish. It really must suck to think the S&P has to stop going up before gold miners can make a comeback.
Reformed Borker (Bork Bork Bork!) - what if global headwinds become tailwinds? To be fair, I was thinking that months ago.
Vancouver Venture - junior gold miners suck. Welcome to the parade float.
Reuters - the majority of US fast food workers need public assistance. What a great country you have! You subsidize the fast food industry with government assistance!
Here's your noontime noos:
Bespoke - midcaps and smallcaps hit new alltime highs. Which is supposed to mean the bull market has farther to run.
Bloomberg - hedge fund bears at highs. They're usually wrong. So I don't think there's a meaningful top right now.
Michael Shaoul - German sentiment. Still positive, but still safely far away from top territory.
Michael Shaoul - India September PPI and CPI. Quote:
This emphasizes the very difficult position the RBI finds itself in, navigating between an industrial sector of the brink of recession, a weak currency and high inflation and we see no easy way out for monetary policy which now risk a period of stagflation.
FT Alphaville - inflation in China. The danger, again, is limited space for credit easing if pork yet again leads the CPI higher.
FT beyond brics - Chinese food inflation could be structural. The argument is that Chinese agriculture is so backward that it's unable to quickly respond to the inflation signal.
Reformed Borker (Bork Bork Bork!) - EMs might be creeping forward. Then again, do you really want to buy a short-term upward correction in a long downtrend? Check this out:
To me, you'd have to be a short-term pennyflipper to want to participate in that.
Monday, October 14, 2013
All the news you needed to trade the market today!
Mother Nature Network - Americans' internet searches for hemorrhoids have skyrocketed in the past 5 years.
Orlando Sentinel - scientists confirm: spiders have personalities.
Science Daily - shape of fish genitalia linked to predators.
Slashdot - scientists working to extend wireless network to caves in the bottom of the ocean, because fuck you is why.
The guy whose job is to puke gold into nonexistent bids on the electronic market isn't at work today.
In other news:
Forbes - Ritholtz interview. Some investment insight for you. One interesting idea is the emerging markets dividend ETF, DVYE.
Mining.com - China's iron and copper imports set records. China's still rolling.
WSJ China Realtime - China's hunger for gold triggers speculation about reserves. I personally like how it's triggering speculation in the Wall Street Journal.
Mining.com - Art Cashin on the strangeness in the paper gold market. Why would you suddenly dump a large amount of gold? You'd do it if you're not trying to close out a long. You'd do it if you had already established a short and wanted maximum damage.