Friday, February 6, 2015
Really reaching for news here. You know by now that the US economy isn't in freefall after all, and instead of decent commentary on Greece all you're getting is uninformed bullshit from American talking-head clowns like Michelle Caruso-Cabrera whose only claim to fame is having once interviewed a few Greeks.
So, instead of piling that bullshit onto your plate, here's some completely different news:
The Week - Katy Perry is recruiting for the Illuminati again?!? Yup, IKN was right after all. Though y'know, it is kinda amateurish for a secretive one world government organization to go out of the way to reveal all their plans in hidden messages during the goddamn Superbowl half-time show. I mean, someone might be watching, right?
The Scotsman With Nae Trews - Lawyer jailed for reporting that Nazis were going to bomb the London Olympics with stolen Russian nuke. The real tragedy here is that, with all their budget and all the surveillance cameras, MI6 still did Nazi this coming.
BBC - Dutch chimps learn Scottish accent. Aw, come on - just because they learned to make low-pitched grunts doesn't mean they sound Scottish. They also have to learn how to swear and how to throw up tikka masala.
HuffPo - Texas dildo laws are "crazy" says Florida congressman. Yup, Texas has a law that says you can't have six or more dildos in your possession. That's some small government you've got there, Rick Perry!
Bloomberg - Bible Belt can't wait for "Fifty Shades of Grey" movie. Because S&M is godly.
NY Daily News - large-breasted webcam girl who did a library striptease and you've already clicked through haven't you.
Now, before y'all go buying junior miners, just remember that gold was in a highly correlated trend with a bunch of other things.
Which means you don't want the other trends to stop.
So check out these charts:
Gee, those banks suck. I mean just take a look at the cha-
Wait... they don't suck now? I mean, they suck less than they used to, to the tune of a 10% gain in one fucking week?
Really, the big ones don't suck anymore either?
What brought this on, Whitey?
Oh, you mean you realized just now that it's stupid to buy UST10s at a 1.7% yield when you can buy bank ETFs at a 2% yield and expose yourself to 10 years of capital growth and dividend growth*?
What trends end next, Whitey? And are you going to try to get in front of the next one, or will you instead continue momoing til you're the last sucker on the wrong side of the boat?
* - OK sure, Bank of America truly sucks, and a lot of the other big banks suck, and none of them are in it for their shareholders or to follow the law, but even still, economic growth sometimes begets at least a bit of share price appreciation, and anything's better than locking in to 1.7% for 10 years.
Here's a song for the goldbugs:
See, she's living in a city full of goldbugs with deformed faces and lumpy heads, but then she goes and invests in the S&P 500 just in time for the start of a ten-year bull market.
It's all over, goldbugs, here's your wakeup call.
Thursday, February 5, 2015
Wednesday, February 4, 2015
Here's some edification:
Calculated Risk - inflation, unemployment and demographics. Among other things, he notes that the retirement of the baby boomers and replacement with the new cohort of just-turned-working-age twentysomethings could be a demographic contributor to low aggregate wage growth, as the retiring boomer is paid a lot more money than the young kid who replaces him. If so, you better hope the Fed knows this and takes it into account.
Bespoke - Ford truck sales rebound in a big way. So quit selling Ford, dumbass!
IKN - Scotia on Captsone Mining. I am enthralled by the elegant brushstrokes of MS Paint. What's so great about textboxes, anyway? Textboxes are like fascism.
Oregon Live - Stephen Fry calls god a maniac. No argument here! Quote:
Gabriel "Gay" Byrne, the 80-year-old host of the show, asked Fry what he would say to God if he found himself standing in front of the Pearly Gates.Also,
Fry didn't hold back.
"I'd say, 'Bone cancer in children? What's that about? How dare you. How dare you create a world in which there's such misery that's not our fault. It's not right. It's utterly, utterly evil. Why should I respect a capricious, mean-minded, stupid God who creates a world that is so filled with injustice and pain?' That's what I would say."
He then added that if he met the 12 Greek gods at heaven's entrance, "I would have more truck with it. They didn't pretend not to be human in their appetites, and in their capriciousness, and in their unreasonableness. They didn't present themselves as being all-seeing, all-wise, all-kind, all-beneficent. Because the god who created this universe, if it was created by a god, is quite clearly a maniac. Utter maniac. Totally selfish. We have to spend our life on our knees thanking him? What kind of god would do that?"Bam!
Tuesday, February 3, 2015
As I said earlier, Jeffrey Kleintop went and spewed a bunch of doomer graffiti all over Liz Ann Sonders' latest market commentary:
Liz Ann Sonders - Kleintop decided to butt in because he thinks girls are stupid or something.
So let's nail down some of the obvious Kleintop additions to this market commentary. And remember for later, this note was dated January 30th.
We see the possibility for a decent sized correction in the US stock market for the first time in several years. We believe the secular bull market remains intact, but believe we are in a phase of heightened volatility not unlike the late-1990s. Valuation expansion has likely gone as far as possible in this environment, leaving earnings to do more of the heavy lifting. But with the aforementioned pressures on earnings, the market may have a tougher time generating the kind of gains investors have grown accustomed to.
Pretty unequivocal, no? Of course, since then the market's gone nowhere but up. Um... just like it did thoughout the late 1990s.
Along with the uncertainty regarding global growth and US Fed policy, the potential spark for a selloff could come from a crisis associated with the fall in the price of oil. With oil down well over 50% in the past six months, there are likely to be short-term negative dislocations, even if the majority of US businesses and consumers are beneficiaries.
How's oil been doing recently, Jeffy?
Remember, the plunge in oil prices in 1986 helped trigger the Savings and Loan crisis in Texas, while the dramatic drop from 1996-1998 was associated with both the Russian crisis and the Long-term Capital Management (LTCM) debacle.
Wow, he's warning us of another imminent LTCM crash or S&L crash!
Could commodities be signaling something more sinister?
Sinister, Jeffy? Really? Well, in that case, what did commodities signal today, just two goddamn days after your bearish letter came out?
But the news has not been all good. The latest durable goods report was well-below expectations, with the key core capex reading weak; the Dallas Fed survey showed signs of cracks in the Texas economy; and retail sales have been underwhelming (albeit volatile).
Yes, Jeffy! Let's use backward-looking data sets as an indication of forward problems in the economy! Because stuff and reasons!
We believe the ECB’s actions alone are insufficient to resolve Europe’s problems—due to the lack of comprehensive structural reform, and recent political shifts, as seen in Greece, towards unwinding the small progress on reform that had been made in recent years.
What's happened in Greece over the past, um, two days, Jeffy? You seem to fret a lot over what's already happened - did you know there's this thing called "the future", and the past isn't indicative of results in the future?
The head of the Eurozone finance ministers is meeting with Greece’s new Prime Minister this week, prior to the start of any formal negotiations. Greece will probably not get everything it wants, and the negotiations will likely stretch out for months before reaching a deal. A deal will likely be reached by the end of June when another tranche of needed bailout funds will be unlocked.
This has even the slightest bearing on US markets how, Jeffy?
In the meantime, the Greek banks are likely to continue to suffer.
OK, except National Bank of Greece is up 50% since you shat all over Liz's note, Jeffy.
Volatility has risen and the potential for a correction in the near term appears more likely.
I eagerly await this correction, Jeffy.
In the meantime, could you please keep your hands off Liz's work? Your clients, Jeffy, are much better served by you keeping your goddamn mouth shut and letting Liz-Ann Sonders take care of the serious analysis.
Let every daily rise from the lows of January 30th remind you of this, Jeffy.
Reformed Borker (Bork Bork Bork!) - Buffett's million dollar bet was a slam-dunk. Quote:
Results are in for the seventh year of what’s sometimes called The Million-Dollar Bet—Warren Buffett’s 10-year wager that the S&P 500 would outperform a sampling of hedge funds—and, for now at least, it’s looking like a rout for the CEO of Berkshire Hathaway.
Under the terms of the wager, Buffett is betting (with his own money, not Berkshire’s) on the stock market performance of an S&P 500 index fund while Protégé Partners, a New York money manager, is banking on five funds of hedge funds (the names of which have never been publicly disclosed) that Protégé carefully picked at the outset. Through the seven years, Vanguard’s 500 index fund, as represented by its Admiral shares, is up 63.5%. That’s the portfolio carrying Buffett’s colors. Protégé’s five hedge funds of funds are, on the average—the marker the bet uses—up an estimated 19.6%. (The “estimated” takes into account that not all of the five funds have final figures for 2014).
Oh and by the way, Berkshire Hathaway has outperformed SPY over the same period.
Maybe this is because hedge funds are run by stupid idiots, while BRK is run by an investing genius.
Or maybe it's only because of the parasitic sucking of that 2%/20%.
But holy shit, who lets a hedge fund manage their money when they underperform the S&P 500 by two thirds? That's money you'll never get back, guys.
You have to wonder why the hedgies didn't buy railways, Apple, credit cards or biotech. Any of those would have boosted their returns above SPY over the past 6 years.
Then again, why should they when they're getting paid 2%/20%?
Check out this junk:
Kinda looks to me like people have quit freaking out about high-yield debt.
BTW, if you want to do something educational, sit down right now and write out a list of all the reasons you've been hearing about why you should dump all your US equities.
Then come back to it and read through it again after the S&P's gone up 10%.
And if the crybaby freakout trends are ending imminently, this chart is interesting:
because it indicates first and second month futures still have a long way to fall to get back to sensibility, which means this:
might finally be in a position to make us a bit of money.
Then again, it could still all end in tears.
What's more important is that Jeffrey Kleintop will have bottom-ticked the US market with his "OMG a 20% correction is imminent" graffiti all over Liz Ann Sonders' latest market report. And that would be great cos then maybe she could tell him to keep his filthy paws off her expert commentary.
I think the January US equity market was driven by two big forces. This:
was making everyone freak out about the small portion of high yield debt in the oil world while underestimating the benefit of lower oil prices to other areas of high yield.
Also, it was making them grossly overestimate the importance of oil production to the US economy and grossly underestimate the benefit of lower gasoline prices.
And it was making everyone worry about a worldwide deflationary collapse.
Now the trend is reversing.
Was making everyone dump internationally-exposed US stocks, and making them freak out about a coming economic collapse due to a higher dollar.
That trend looks like it might be stopping too - or, at least, it's not unreasonable to expect that two hyperemotional narratives could come to an end at the exact same time.
And that still has me concerned about this:
Because you'd have to think that at least a part of the buy volume in gold has come from stupid white-ass honky crackers from Wall Street who have been wetting their beds over the USD and oil stories.
Here's some more reading for y'all:
Brett Steenbarger - on negative divergences in the market. Again, this guy is clever. Then again, this is really just intermarket analysis, isn't it?
FT Alphaville - negative rates and Gesell taxes. Interesting points made peripherally here: for the average consumer, we pay negative rates to hold our money every day. Banks might pay us a marginal rate of interest, but then they screw us with service charges. And then when we do try to spend our money, we find out that its value deflates every month due to ever-increasing prices that the government fails to pick up in its inflation stats because of bullshit like chained CPI. The working class hasn't made a positive rate of return on deposits in a long time. So maybe banks deserve to experience a negative rate of return?
FT Alphaville - US labour compensation update. The argument always is that wage pressures are just around the corner. This argument tends to come from right-wing economists, though: are they maybe blind to the fact that they have destroyed workers' power through 30 years of anti-labour agitation? And maybe the worldwide deflationary collapse is a result of the victory of the kleptocratic elite?
New Deal Demoncrat - oil prices have probably bottomed. Gutsy call, er, probably. Speaking of which: I wonder if some of the gold action recently is the artefact of a long-gold-short-oil trade? I mean, that's a sensible pair to put on when you're betting on worldwide deflation, no?
Mining.com - aluminium F-150s secretly tested at Barrick mine. Good for Ford! People will still want to buy their trucks after all. So quit selling!
Monday, February 2, 2015
Let Saint George explain it for you:
WSJ - Obama has a better understanding of economics and democracy than Merkel. Took him 6 years to grow a spine, but look what he's up to now:
President Barack Obama expressed sympathy for the new Greek government as it seeks to roll back its strict bailout regime, saying there are limits to how far its European creditors can press Athens to repay its debts while restructuring the economy.
“You cannot keep on squeezing countries that are in the midst of depression. At some point there has to be a growth strategy in order for them to pay off their debts to eliminate some of their deficits,” Mr. Obama said in an interview with CNN’s Fareed Zakaria aired Sunday.
He said Athens needs to restructure its economy to boost its competitiveness, “but it’s very hard to initiate those changes if people’s standards of livings are dropping by 25%. Over time, eventually the political system, the society can’t sustain it.”
It's nice of him to give Merkel a basic education in economics and democracy. I mean, she comes from the GDR, and they didn't exactly teach anything about economics and democracy in the schools over there. Not that she would have taken it anyway: she studied chemistry.
He goes on:
“More broadly, I’m concerned about growth in Europe, ” he added. He said fiscal prudence and structural changes are important in many eurozone countries, but “what we’ve learned in the U.S. experience...is that the best way to reduce deficits and to restore fiscal soundness is to grow. And when you have an economy that is in a free-fall there has to be a growth strategy and not simply the effort to squeeze more and more from a population that is hurting worse and worse.”
Again, squeezing more and more from a population that is hurting worse and worse is a viable strategy in a communist command economy, so no wonder Merkel's in favour of it. And it's not as if the Soviet bloc was ever any good at economic growth.
Er mah gerd:
Whine whine, copper's collapsing whine-dee-fucking-whine.
You're going to have to start paying attention to these charts I'm posting:
Copper hasn't even taken out last March's $3 low yet.
Oh sure, it has done in US dollars, but only cos the goddamn US dollar has gone up almost 20% against pretty much all other currencies. For the rest of the world, copper is still rangebound in the local currency.
Quit your gutless whining. My dad would have taken his fucking belt to you by now to give you something real to whine about.
Here's some news:
Calculated Risk - demographics and GDP. Ignore demographics at your own peril.
Liz Ann Sonders - I would have told you to quit piddling your frilly pink panties, but Jeffrey Kleintop came along and fucked up my entire market report. This week's report is shitty because that clown Kleintop had to insert a bearish "holy fuck sell everything" call at the end of every single paragraph. Liz, tell Kleintop to go fuck himself and stay away from your reports in future, you're so much better than him.
Gavyn Davies - how low can interest rates go? It would be kinda interesting if it turned out, after all, that rates can go below zero and stay there - then again, real rates are already below zero everywhere, so why aren't we seeing cash hoarding already, Gavyn? And I do like the idea that negative rates are a tax on wealth: it seems like a way to use market forces to combat the Piketty problem.
Mining.com - the new GFMS gold survey. I'll have to look for an article that actually has a functioning link to the survey.
Qwghlm.com - the Daily Mail-o-matic. A Daily Mail headline generator: not as good as you'd think, but it still turns out some real gems. Here's some examples:
COULD GYPSIES GIVE YOUR CHILDREN CANCER?
ARE BRUSSELS BUREAUCRATS GIVING YOUR MORTGAGE SWINE FLU?
WILL CHANNEL 4 KILL YOU?
Here's gold as the rest of the world sees it, with the US dollar factored out:
Looks for now like just a drop to work off overbullish momentum. That white candle on Friday getting us back to where we were is nice. We'll have to see how it goes from here.
And the weekly:
Gold still looks fabulous to the rest of the world, having gone up 20% in little more than a month, winning back most of its losses of 2013.
But Whitey can't see this because Whitey thinks the US dollar means something to gold.
I find it promising, btw, that even Whitey is talking up that "gold has zero yield" story, in the context of all world bonds and interest rates having dropped to below zero. Hey, so owning gold is better than owning a bond?
It has nothing to do with that, of course, but Whitey puts his investment capital into all sorts of stupid things anyway.