Saturday, August 8, 2015
This is what happens when you fuck with kerning:
And of course, the Chinese do it best:
Yay! A month with no homework, and getting paid $45/hr to do engineering.
In celebration, here's some news:
Bespoke - bullish sentiment sees slight rise. And still so many people don't want to be long the US market. My god the look of that sentiment chart is incomprehensible.
Moneyness - freshwater macro, China's silver standard, and the yuan peg. Yup, China once had a silver standard. A great article for luring in the silver-bugs and tricking them into reading some real economic commentary.
Mining.com - Canada Revenue targeting mining-sector tax cheats. Why, exactly, do you have to use an offshore tax haven if you're a mining company? It's not as if you're turning a profit to begin with!
New Deal Demoncrat - let's make fun of Automatic Earth. Here's a big long quote cos he's just such a damn good critic:
But to turn back to the article in question, as to which the Pied Piper of Doom touts a recent piece on the blog "The Autormatic Earth." What were they saying back in the Great Recession? Well, here's what they thought was going to happen as of December 12, 2008:
Last month I started warning of millions of lay-offs to come in the US economy. Since then, we've seen a November job loss of 533.000, as well as predictions of pink slip totals of a million and more every single month in 2009. ...
[S]upermarket shelves will be as empty as electronics stores ....
Banking and investing as we've known it won't be back for at least decades. The upcoming round of bank failures, which will leave very few, if any, standing, cannot be prevented.
The stock market bottomed in March 2009. What were they saying then?
On March 2 they wrote:
The US Government throws 30 billion more pearls before the swine at AIG.... [note: the US actually made a profit on its AIG investment, which was paid back in full]
The downturn is nowhere near over, or at a bottom, or anything like that. It will not be a straight line down, but the trendline is certain. Many pundits now claims that a Dow at 5000 is some sort of bottom, but don't count on it. As for home prices, they will keep tumbling and lose at least 80% of their peak values.
[note: house prices bottomed at the beginning of 2012, about 30% under peak values].
On March 4 they wrote:
Almost 700,000 Americans lost their jobs in February, which is 100,000 more than in January. The revised versions of those numbers will be between 10% and 20% higher. .... So I assumed that for the rest of 2009 pink slips will rise by 100,000 every month compared with the month before. That is, for the sake of scribblings I pretend that the economy will not deteriorate exponentially. I know that takes a lot of pretending, but since the results are bad enough even when I pretend, I'll stick with it.
The total number of jobs lost would be about 13.7 million on December 31.
Peak job losses were recorded at -824,000 in April. While January was revised higher, February wasn't. Job losses didn't increase 100,000 per month, let alone exponentially, on average they *decreased* 100,000 per month after that. So they were only off by about 10,000,000 jobs in their "conservative" estimate.
And on March 9, 2009, the exact day of the stock market bottom, they wrote:
Warren Buffet says that stocks are the best investment ... It won't be for all of the millions of investors who take his advice. Why would anyone listen to [Buffet], ... it's beyond me.
And the two author of the piece today and the Pied Piper of Doom, who is touting The Autormatic Earth ? Here's their financial insight, only two months after the stock market bottom, on May 12, 2009,:
Pied Piper of Doom: "Shifted to 75% Cash/Bonds Friday!"
The author of the piece about the commodity crash today: "The rally is done. .... If you are buying now you are simply giving your money away. Now is the time to go to cash. Maybe in a few months things might be different."
Of course, instead the stock indexes have more than doubled since then.
I'm a bit embarrassed that I used to read that shitty blog a couple years ago. Thankfully I eventually got enough sense to turn my back on doomery. What freaks me out is that people can't tell the difference between this doomy bullshit above and their own favourite doomy blogger, who also just a couple years ago was predicting a "massive repudiation of debt as a dishonest system comes apart at the seams" instead of, say, a 50% advance in the S&P 500.
Friday, August 7, 2015
Thursday, August 6, 2015
Mining Mx - gold industry in real distress, says Bristow. The CEO of Randgold tells it like it is:
The global gold industry was "in real distress" and might be in for further pain if gold dipped below $1,000/oz as it may do, said Mark Bristow, CEO of Randgold Resources which today posted a 15% increase in second quarter profit.
"We are starting to see real distress."
And then he starts calling people out!:
"The question is when does the industry take action for rescue measures rather than some moron paying over-the-top for assets,"
Ooh! Take that, Clive Johnson! Mark Bristow just called you a moron!
"and giving cash just to keep the dogs at bay," he said of recent corporate action.
Ooh! That's what he thinks of MUX's new dividend, Rob McEwen!
And why do gold miners suck?
The sector was mining at a loss in order to keep its debt payments up, he said. "The industry is struggling with survival. It can't get out of its own debt structure, mainly as it doesn't have a good enough quality reserve base," he said.
And so gold mining dies.
Wednesday, August 5, 2015
I had a bit of a feeling there that the July double bottom in transports, if it held, could be the set up for a summer rally is US equities generally. But it's been so frustrating waiting.
But this morning's uptick looks good, as well as this:
Because while transports printed a double bottom, Q has printed a series of higher highs.
However because of the early July explosion in Q, I'm long SPY instead.
Well, at least sentiment stinks, and the fundamentals don't support it.
Tuesday, August 4, 2015
Bespoke - Ford sales have best July since 2006. Panties, quit piddling them.
New Deal Demoncrat - actually, wages grew at 0.6% in Q2. Once you back out incentive pay, that is.
WSJ RTE - black unemployment still twice the rate for whites. Seriously, if Yellen raises rates with the intent of choking off employment and wage growth, it's a declaration of war against black people.
Brad deLong - is secular stagnation a monetary-financial problem or a fundamental-technological problem? Barry Eichengreen is a real economist, and Brad discusses his ideas. I'd like to note deLong's commentary:
Note that in this view secular stagnation can be solved in any of three ways:Brad, take a look at that list again. Note how each solution runs contrary to the demands of the Washington Consensus/Republican/conservative economic ideology: a 4% inflation target is socialism, financial regulation is Nazism, and economists assert that government production of capital assets never happens (instead your profession has invented the propaganda term "crowding out") - and what, now you want to finance the construction of these assets with yet more bonds? Gee, let's sacrifice white babies to Satan while we're at it, Brad!
- A higher inflation target that would allow for the possibility of a real safe interest rate of -4%/year would make it straightforward to induce enough finance to fund enough investment in physical, intellectual, and organizational capital to carry the economy to full employment.
- Better financial regulation to create a financial sector that could actually mobilize the–enormous–risk-bearing capacity of society as a whole would shrink the wedge between safe and risky required rates of return from its current 8%/year or so down to something like 3%/year, or less.
- Alternatively, a government that took on responsibility through its spending for maintaining full employment could do the job that the private sector’s shortage of risk tolerance is keeping it from doing–and in the process process it could create enough safe assets that the private sector would be eager to finance risky investment in physical, intellectual, and organizational capital as well.
BI - DOJ probe Deutsche for Russian trades. Again, this is just an illustration of how Germany's not less corrupt, just corrupt in a different way. A way that is acceptable to the German people. Because Germans get to make a profit on the corruption.
FT Alphaville - how much gold should you hold in your portfolio? Interesting article, but problems: #1, you don't hold gold in your portfolio, you hold it outside your portfolio as a hedge against existential risk. And #2: when you count the 183,000 tons of gold "out there", are you including all the gold that adorns cathedrals and Buddhist temples? What about wedding rings? King Tut's treasure? A lot of gold isn't "gold", y'know: it's gold. Anyway, the article is great, not in the least for the amount of invective in the comments section.
BI - vaccine offers 100% Ebola protection. Hooray, we've cured Ebola! And by "we" I mean Canada. Well, and also Norway. And the Who, apparently.
Chronicles of Brodrick - four charts that prove gold is poised for a rebound. Hey, personally? I was impressed that gold has outperformed the CRB for a decade. Still, I'd rather wait til the gold chart actually turns up.
Monday, August 3, 2015
How's about that Indian monsoon collapse, Reuters? You still talking it up?
Skymet - low to bring heavy monsoon rains in central India. Well, that sounds good.
Skymet - heavy rain in Madhya Pradesh, Chhattisgarh. Well that's not bad either.
Hindu Business Line - quit piddling your frilly pink panties. Sowing has gone well so far compared to last year:
“Sowing is progressing well, but August will be crucial since 25 per cent of sowing remains and the flowering stage is in mid-August. With good rains so far, there was timely sowing, and the expectation is that there will be good production for the Kharif season. At present, it is going parallel to the 2013-14 season,” said JS Sandhu, Agriculture Commissioner and Deputy Director-General, Crop Science, Indian Council of Agricultural Research.You have to wonder if the clowns at Reuters actually read the Indian news.
Pulses like arhar (tur), urad and moong, have been sown over 8.24 mh, up nearly 21 per cent over the 6.82 mh covered at the same time last season. Acreage of moong and urad, in particular, has registered increases of 32.2 per cent and 29.5 per cent, respectively.
Acreage of oilseeds such as groundnut, soyabean, sesamum and castor are up 9.5 per cent at 14.9 mh (13.6 mh). Soyabean planting is up 11.17 per cent while that of groundnut is up 10.5 per cent.
Coarse cereals have been sown over larger tracts in central India where rainfall has been lower, and have covered 14.9 mh compared to 12.6 mh at the same time last year. Jowar acreage is higher by 26.12 per cent and bajra by 28.8 per cent.
Rice, the main Kharif foodgrain, has been covered on 22.8 mh – up 6.1 per cent from 21.5 mh earlier. Sugarcane acreage is also up marginally by 2 per cent.
Stuff for reading:
New Deal Demoncrat - weekly indicators. For some reason he says they all sucked this week. Yet housing yoy looks great, money supply is great, initial claims and tax withholding are okay, and intermodal is okay. NDD, quit piddling your panties you fucking sissy.
Calculated Risk - hotels post best week ever. Minor indicator shows that the US is still doing fine.
Paul Krugman - inflation paranoia as a tribal marker. Once again, Kruggers shows that he's a better econ prof than most because he's actually read some stuff in a real empirical discipline, sociology:
It seems increasingly clear to me that what we’re looking at here has nothing to do with intellectual discourse as we normally understand it. It is, instead, about tribal identities: there’s a certain kind of person who rails against policies that debase the dollar, and that kind of person admires others who do the same no matter how wrong their predictions and disastrous their financial advice. As I said in a brief note on Ron Paul, it’s a form of Madoff-style affinity fraud, even if the perpetrator of the scam believes his own derp.And yet certain bloggers don't get that they're aligning themselves with the John Birchers and David Duke when they foam at the mouth about the neocon canard of the day.
Why all the respect for what would ordinarily be considered a record of repeated bad judgment coupled with a lamentable unwillingness to learn from experience? The answer, surely, is that within the conservative tribe issuing dire warnings against inflation is considered virtuous whether or not they are right; it’s a way of showing that you’re their kind of guy, that you belong to the tribe.
Worthwhile Canadian Initiative - this is how fiscal transfers work. Pay attention, Germany: let Canada show you how to build a currency union out of rich and poor provinces! And nobody in our country gets pissed off at giving free money to the poor people out east - except maybe for the Albertans, who always have been hateful assholes. And now that oil has crashed, they won't whine cos they expect they'll get handouts as the Alberta economy collapses.
The Economist - why do Mexicans love Morrissey so much? Seriously, why? Does his gay schtick translate into Mexican machismo?