THIS IS WHY WHEN YOU THINK "GERMANY" YOU DON'T THINK OF NICE THINGS: The Krugginator versus Angela Merkel

I read an article on der Spargel's website this weekend that included this:

The dispute between Berlin and Paris was of a fundamental nature -- a conflict between two mentalities, but also between two schools of economic thought. Whereas the Germans were of the opinion that the supply side had to be strengthened and conditions for investment improved through reforms, the French called for buttressing the demand side. In times of recession, the French argued, the state must invest.

Although the Germans called it savings, a term with positive connotations, across the rest of Europe, many considered it to be the specter of "austerity," a cold-blooded, anti-growth policy. "The Body Economic: Why Austerity Kills," a book by Oxford Professor David Stuckler, has become a kind of bible for opponents of austerity. It's a brand of thinking that really hasn't taken hold in Germany, even though it is dominating the public debate in large swaths of Europe. It also shows just how far apart the Europeans really are from each other, despite being linked by a common currency.

By "brand of thinking" they mean "empirically verified economic theory", y'know.

I guess Kruggers must read der Spargel too, because he just came out with this:

Paul Krugman - I keep saying that Keynesian economics is right but the Germans won't listen. Wherein he says:

I’m scrambling on last-minute course prep, so not much blogging today. But yesterday’s Steve Rattner article, misuse of labor cost data aside, had me thinking about an issue that has had me annoyed ever since this crisis began: the constant efforts on the part of Very Serious People to turn discussions away from monetary and fiscal policy, recessions and sluggish recoveries, to the supposedly more fundamental issues of structural reform and long-term growth. Rattner dismisses the austerity/stimulus debate as “simplistic”; Jeff Sachs calls Keynesian concerns “crude”; many, many people (I’d guess an especially large fraction of those at Davos) are eager to get away from all this deflation stuff and talk about how what they imagine to be, or wish were, the really important issues like Big Data and a world that’s even flatter.

There were people like that during the Great Depression too — dismissing as naive any notion that you could put the unemployed back to work just by spending more, and surely technological unemployment was the real story, and anyway we should be looking at the broad sweep of history and institutions, right?

The Merkel smackdown alarm is sounding....

Second, more or less Keynesian macroeconomics — the macroeconomics of short-run fluctuations driven by aggregate demand — has worked very well in this long slump. While people were very seriously intoning that it was simplistic and crude to think that those little models could be of any use in a changing world yada yada, macroeconomists were making remarkable, counterintuitive predictions — about inflation (or the lack thereof), about interest rates, about the effects of austerity — that came true and were, if you think about it, an intellectual triumph. Yes, good macro tends to be simple, at least conceptually; but simple and simplistic aren’t the same thing, and by and large people who solemnly declared that things are more complicated than that ended up with lots of egg on their faces.

Oh cripes! He breaks out the nuclear weapon of empirical truth!

Merkel smackdown in 3, 2, 1...

Third, what’s really striking about all the talk about how long-run structural issues are the real thing is how fuzzy the thinking is. In a world that is short of demand, how, exactly, is structural reform that enhances the supply side (if it does) supposed to solve the problem?

Bam!

If Europe’s problem is lack of competitiveness, why doesn’t a weaker euro solve it — and for that matter, why is Europe as a whole, and Germany in particular in trade surplus? For people who are supposedly so serious, the Very Serious seem remarkably casual about thinking things through.

Sometimes it takes a professor to sufficiently mock the fuzzy thinkers.

But of course Germans are famous for their thick skulls and bullheadedness, so don't expect them to clue in and thence save Europe for... I dunno, at least another ten years?

Or until, yet again, they leave Europe as a smouldering ruin with millions dead and millions more starving.

So here's some weekend news

Here's some weekend news, including several links especially for new commenter Tim Harrington:


Calculated Risk - real Q4 GDP at 2.6%. However, PCE increased at 4.3%, and there was even a 0.3% decline in prices paid which means an improvement in real income. The damage was done by a 1% drop in trade (which you already expected, right?) and yet another drop in government spending, which conservatives want anyway so what's the problem?


Calculated Risk - there is no problem. Quote:

Residential investment (RI) increased at a 4.1% annual rate in Q4. Equipment investment decreased at a 1.9% annual rate, and investment in non-residential structures increased at a 2.6% annual rate. On a 3 quarter trailing average basis, RI is moving up (red), equipment is moving sideways (green), and nonresidential structures dipped a little (blue).

Note: Nonresidential investment in structures typically lags the recovery, however investment in energy and power provided a boost early in this recovery.

I expect investment to be solid going forward (except for energy and power), and for the economy to grow at a solid pace in 2015.

So quit piddling your frilly pink panties and buy the damn S&P 500.


Bespoke - most negative revisions since the depths of the financial crisis. However, importantly, you and the rest of the market already bloody well know this and have already sold everything off accordingly, so:

the spread so far this season is much worse than any of the other negative spreads seen in recent years. It looks like either companies were caught way off guard or they are throwing in the towel on 2015. Looking on the bright side, though, this gives the market a big opportunity to surprise on the upside.

Or, of course, you could just keep piddling your frilly pink panties as the market corrects a whole damn 5% lower from here. Oh god won't that be horrible! A 5% loss! Sorta like owning B2Gold for a whole day!


Bonddad - just how strong is the US economy? Well, how's about we check the data instead of the clickbait crap from Business Insider? Household debt to GDP continues to go down, consumer spending has constantly been improving, gross private domestic investment has constantly been improving, the four primary coincident indicators remain positive, and the LEIs are still positive. There is nothing here to worry about. Nothing.


Calculated Risk - restaurant performance index is awesome. It's only a minor indicator of discretionary spending, but it's the best it's been since 2004, and so confirms everything else above. Panties, frilly pink (n): quit piddling them.


Reuters - Mastercard beats expectations as customers spend more. But I would like to point out that MA is down 2% since AXP reported their earnings. Why? Because Wall Street Whitey keeps looking for reasons to sell. He's forgotten that MA has gone up by 270% over the past 5 years, which is triple the return of SPY and far better than AXP. Probably because Whitey pays too much attention to bullshit hype from Ray Dalio, who has significantly underperformed the S&P 500 over the past 5 years, though of course he still gets to charge 2%/20% to all the suckers who let him throw their money down the fucking bottomless hole that is his fucking executive compensation.


And by the way, our swarthy deep-voiced investor friend with the supposedly-private RSS feed says the employment and credit growth data out of Japan suggest their economy is about to accelerate.


Reuters - EU wins Greek backing to extend sanctions. Contrary to the gloating Soviet-funded pro-Putin propaganda at Zerohedge,

According to Italy's foreign minister, Kotzias announced to the meeting: "I am not a Russian puppet."

which makes Kotzias a hundred times more principled than the insider-trading Soviet-funded son of a Bulgarian secret service agent who ran an article suggesting Greece was about to leave the EZ and join the Soviet sphere of influence. Who's a Russian puppet, Danny? That's right, you are!


Mining.com - consensus 2015 gold forecast is down. Yeah? And yet, how many of these guys predicted that gold would ding $1300 in January? I mean, I know I did, I know I told you all to buy, but apparently the LBMA doesn't consider me to be a significant enough "gold analyst" to include me in their little survey. So I guess we can just ignore them.


Geekologie - gay dinosaur erotica available on Amazon. With titles like Gay T-Rex Law Firm Executive Boner and My Billionaire Triceratops Craves Gay Ass, you've just got to admit you've now heard every single utterable sequence of words in English and will have to learn a new language before you can continue the adventure of life. Note to all you banksters reading my blog: feel free to click through, the link is certainly safe for work!

MY GOD SHELDON YOU MAGNIFICENT BASTARD: an Ottotrans for the ages

I was looking at horrible charts today, and took at a gander at Keek:

Corporate anti-violence policies: a primer

Those of you who are professionals working at large corporations probably already know this, but just to be sure:

As long-time readers know, I used to work at an S&P-listed engineering consultant. Anyway, every HR and Legal department in Canada (and maybe at least the more enlightened parts of the US, I'm not sure) has been spending the past few years churning out document after document of policies and practices meant to stop the company from getting their honky ass sued.

In my corporation's case, all we had to do was sign a form saying that we read them - that was a big sticking point with me, because (after consulting with my brother, who's been a senior managing engineer himself) I knew that simply having an employee's signature on a form is worth nothing: you have to have proof that he's read and understood it. (In my office, I had to spend about 2 weeks just to read through all the forms.)

One that we had was a corporate anti-violence policy. It addressed all the usual stuff - threatening behaviour, racism, sexism, bullying, dealing with the public e.g. at demonstrations, violence outside the office, and so on.

Well, one section that I remembered dealt with "violence" (term always broadly used in this policy) from clients.

I remembered it because we had a project where we were a subconsultant to an American engineering company whose lead project manager (let's just call him "Steve") was threatening and rude to staff at our office. He never hit anyone, he'd only call over the phone, but he was definitely one of those bosses whose behaviour was well over the line. One of our staff quit partially because of him, and there was also a secretary who disappeared from our office after the project ended who was said (I got this from the boss) to have thereafter brought a suit against us (I wasn't told the reason).

So I was very interested when a couple years later I saw that our corporate anti-violence policy said the following (not quoting verbatim, remember they laid me off):

When any employee is faced with violent, aggressive, discriminatory or threatening behaviour from a client, it must be reported immediately. Our company's management shall:

1) immediately stop all work on the project,
2) inform that threatening person's supervisor that our company will no longer perform any work for that client unless they immediately remove that individual from any contact with our company.

Now this is engineering. You do not stop work on a project, period. But, I guess there had been sufficient problems with clients - or at least enough lawsuits, cos you know it's the lawyers that ultimately draft policy documents - that my company felt they had to institute this policy.

Given the recent newsflow, I'd just like to remind all the banksters reading this blog that they do, most likely, have a corporate anti-violence policy, they signed off on it, and they should go familiarize themselves with the damn thing in case, y'know, they get punched by a client.

Saudis told us they were going to break the price of oil in 2012.

I've been following my blog stats these past couple days, making a list of all the financial services corporations who've been coming here looking for Clive Johnson news, and noticed someone hitting on an old post of mine from 2012:

this blog - oil will go to $60 or lower. says who? the Saudis.

Huh! Who woulda thunkit, eh? Here's a quote reprinted from the original article:

“… you have to understand our geo-political equation and vulnerability. Our two most dangerous enemies are Iraq and Iran. Both are Shia, and both are trying to destabilize the Arab world and our Sunni kingdom by funding terrorism. Our only weapons against them are our wealth and our oil. Their current vulnerability is their financial fragility. Their financial reserves are a fraction of ours, and they desperately need money to prop up their economies. The ruling council has decided that over the next two years we have a brief window of opportunity to impoverish and weaken them by driving down the price of oil. Iraq and Iran need to produce and sell their oil at well over one hundred dollars a barrel. In the next twenty four months, we will gradually increase our production with the objective of breaking the price of crude down to sixty dollars a barrel. Aramco is raising its capacity to produce significantly more crude. Note that at the same time Iraq, Russia, and Libya are already increasing their exports, and Iran and Venezuela also need to sell more. Strategic reserves in the consuming countries all over the world have been topped out, and large amounts of oil are stored in tankers.”

“… we have the wind at our backs because of Europe’s problems and the weak global economy. Under normal recessionary circumstances, we would be reducing production to maintain current prices. Instead, we will be flooding a weak market already suffering indigestion.”

Whether or not the quote is believable is up to you - it was unattributed. However, if you can see it being true, then you should quit fucking piddling your panties about an imminent recession and global economic collapse.

Peter Brandt still doesn't impress me

Peter Brandt - major eruption ready to occur in global markets. Euch. Look how he starts off:

I have for several weeks and months maintained that the NYSE Composite will be the bell-weather for U.S. stocks. It has the clearest chart picture. The NYSE Composite is forming a near textbook continuation H&S pattern. The key upside levels are indicated on the chart. An upside penetration of these chart levels will usher in a sustained advance in U.S. equity prices.

It should be noted that this exact price configuration has produced giant price advances in the past. Charts of Gold and the DJIA are shown as examples.

OK, right there he's already made four mistakes.

1. The NYSE Composite (nowadays, at least) includes a large number of non-equities. It is its own beast, part bond and part equity. Don't try comparing it to things, you'll get burned.

2. He then compared a 6-month consolidation in the NYSE with an eighteen year consolidation in the DJIA.

3. Oh and the 18-year Dow consolidation had a fundamental basis that the 6-month NYSE consolidation doesn't.

4. And anyway, the H&S is not a continuation pattern.

I like the other things he says in the post, and can see a fundamental basis for thinking them, but as far as TA goes this just makes me shake my head.

Cam Hui with a great post on commodities

Humble Student of the Markets - on the commodity downturn. He addresses commodity definancialization, and Isabella Kaminska's argument that USD strength indicates withdrawal of US liquidity to the world which results in commodity collapse, I guess.

Supply and demand theory, when applied to currencies in this way, really makes me feel uneasy. Part of the reason is that US economic strength correlates positively with a strong US dollar, so sure US dollar strength means excess demand for USD but it doesn't mean the rest of the world is entering a depression.

Though yes, EMs correlate positively with commodities, so sure the EMs will be entering a secular bear market, partially because they make money exploiting commodity production and partially because they need cheap US capital to subsidize growth and (I keep harping on this) Jim Rogers came up with all that ten years ago so it's not exactly news.

And yeah, some other smart guy also just posted that he thinks all the negative EZ and Japan news is baked in, so we should expect upside surprises to global growth this year from the developed world, who after all are the biggest chunk of the world economy. And I'd add that China is not an emerging market anymore.

Still, this post is a great read and will hopefully foster a constructive frame of mind re commodities, so do please go read it.

It's still all about The Clive

Blog stats:

Seriously, don't all you analysts have any real work to do?

I mean, a bunch of crappy juniors just announced dilutive financings! Aren't you supposed to be flogging those worthless stocks to all your big-shot clients?

Friday videos: again with the new york noisecore revival

Here's Autodrone:



Remind me more of Band of Susans more than anything else, I'd say.

Wow, something of note from the Fraser Institute

Financial Post - low rates are the new normal. Michael Walker is a senior fellow at the Fraser Institute, so you'd expect him to cynically spew fascist right-wing propaganda advocating the enslavement of the working class and the handing over of the country to the kleptocratic elites.

But instead, he writes this:

The false hopes and predictions of economists arise from the application to current circumstances of a model about economic behaviour that was built for a period of history that had a very different structure. All of the models and most of the theory behind them were built for an epoch of history – the first two thirds of the 20th century — in which brisk population growth was a constant. While some model architects knew that constant population growth was necessary for the models to work, none of the current users seem to grasp it.

Why does population growth and its fluctuations matter for interest rates? Because it determines the relative number of (net) savers and borrowers in the population of a country. Young people are generally borrowers. Middle aged and old people are generally savers. The relative number of savers and borrowers and the size of their need for one or the other have a determinative impact on the market for loanable funds.

It is a very intriguing theory, and he supplies a nice table that shows that average interest rates for countries with different age/population makeups. So there's correlation backing him up. Which is weak in itself, except that demographics is an overpowering force in economics.

Then again, I'd like to know how much of the supply of loan capital comes from "old people" as opposed to the capitalist oligarchs, banks and corporations.

Because, after all, ultra-low interest rates and transfixion at the zero bound might all just be the end-point of Piketty's r>g.

Maybe you should run a second analysis to see if there's any correlation between a country's 10Y rates and, say, the percentage of national wealth owned by the 1%?

Let me know when you put your paper out, Mike: I'll be at university then, and will certainly want to read it so I can write an essay on it and/or mock it openly. Hopefully it's a serious paper and the profs will let me take it seriously.

HEY CLIVE, BARRY CRITCHLEY AT THE FINANCIAL POST JUST CALLED YOUR MOM FAT

Financial Post - fisticuffs, blood at TD mining conference. Good, that should make it more memorable. Quote:

People who were there claim that Johnson was acting in a manner that Earle thought was not appropriate. In essence, Earle — who according to Bloomberg research, doesn’t cover the company (that’s done by his colleague Steven Green) — told Johnson that he should settle down a bit.

That message was something that Johnson allegedly wasn’t keen on hearing. As one witness claimed: “Dan said something to Clive who retaliated with a choke hold on Dan. The crowd broke up the initial altercation. Clive went back at him, threw a couple of punches which didn’t connect. Dan took a couple of shots, which very much connected to Clive’s right eye. His glasses were broken and Clive was bleeding.”

This witness added that after those two punches, the fight was broken up. The witness further claimed: “About 10-15 minutes later, Dan went to leave, Clive went after him but was restrained by staff at the restaurant. You expect that behavior from a bunch of 19-year olds not the CEO of a public company.”

Another witness alleged: “Clive sucker punched Dan twice in the face, Dan retaliated after the second one.”

What do the various parties say?

Reached by email, B2Gold’s Clive Johnson said, “there was a misunderstanding which was resolved. It was not business related.”

And TD said it was “aware of the incident. This is an internal matter and we are taking appropriate steps to address it.”

Damn right they're aware of the incident! I got 300 hits from TD alone today. Frankly I think they need to institute some sort of internet usage policy at that office. Probably should block my website too. I mean, I post videos of Ukrainian pole dancers.

As for Dan "The Hammer" Earle? Give the guy a raise for fuck's sake, TD. You didn't fire him for that disastrous fucking Canaco reccie, you shouldn't fire him for this.

HOW HARD IS IT TO STOMP A MUDHOLE IN CLIVE JOHNSON? here's what you need to know!

Here's all the news that's not fit to print:


Calculated Risk - weekly initial unemployed claims drop to what, now? Since that doesn't fit the "OMG deflation sell sell" narrative, expect it to be spun for a new "OMG the Fed will raise early sell sell" narrative.


Simon Wren-Lewis - dear journalists, quit pretending Conservatives are good for the economy. Yeah, forget it, doc. The media will always spin the "no, really, Conservatives don't destroy economies!" story. Because who owns the fucking media?


IKN - how Daniel Earle stomped a mudhole in Clive Johnson's ass and walked it dry. Aw god, Clive! You got spanked like a naughty little schoolgirl by a mining analyst. One who used to like Canaco for fuck's sake! The gossiping fishwives of the junior mining world are already all over this story, too: you don't want to see how many thousands of hits I got for that post.

So I guess we can expect you to be replaced by one of your underlings for the PDAC presentation, Tuesday at 2:40PM?


Mining.com - here's how metal-eating bacteria will make asteroid mining possible. Yeah, Cecilia, I'm really sure they figured out how to make bacteria survive without atmospheric pressure or water. Because those abilities would definitely have been evolved here on earth. Not gonna see their innards spontaneously explode. Pull the other one.

Charts of miners that suck™

Well, gold's decided that the big runup is completed, and so it's going to go back down for a while. Was that the end of the January pop? Or do we get another 50% pop before PDAC as usual?

I'd have to think this wasn't the end of it, except that all the hedgies apparently went long gold, and they're usually the last suckers in.

Anyway, here's some junior gold charts that have suddenly exhibited a stink:

 Not horrendous yet, there's worse.

 Asanko's cliffdiving. You think they'll be able to close the CAD$2.02 bought deal now?

Like I said, there's a big magnet at $2.20 for all those who are underwater BTO, which is everyone who bought since August 2010.

Did these guys announce a financing too? I feel smarter having sold at $2.35.

Oh well. I'll keep my fingers crossed for a second bounce - I came across an old post from last year and it turns out there was another mini-crash just like this in the last week of January 2014 too.

I just got out and now they want to drag me back in

Sigh....

I'm still waiting for those bribes.

Dividend stocks: a commentary

Here's P&G:

It's down 10%, but it yields 3% today. Would you buy that, or a 10Y UST?

Hold on, before you answer: their dividend also goes up by about 6% a year. Literally. I mean I checked the chart and I don't see a time when they've ever cut their dividend over the past 20 years. So, if you were to buy this and reinvest the dividends, that would be the same as a bond yielding 3.83%. That is, if the stock price remained constant, which it hasn't, it's gone up 50% over the past 10 years and that timeframe includes a market crash.

Would you buy that, or a 10Y UST?

Sure, it's underperformed SPY since 2002, but we're not talking about equities, we're talking about fixed income.

I'm not the type of person who buys P&G, but dammit why are people selling this?

Thursday morning news

Well, the market's still looking weak, mainly because Americans are big sissies who have no pride in their country.

Here's the news:

Bespoke - domestics outperforming internationals in 2015. Well, yeah - because people are selling internationals and buying domestics, cos they can read the USD chart.


Polemic's Pains - three bells in a row and euphoric highs. My new favourite blogger, this guy has some interesting two-steps-ahead-of-Whitey arguments about the market:

I have suggested before that with bond yields at zero any equity paying a dividend can be priced up to near infinity and still give better yield, but now with bond and cash in bank yields going negative we can say that an equity doesn't even have to pay a dividend to give a better yield. How strange it would be if we end up with negative dividend equities where holders are charged each year for the pleasure of owning the stock, but I guess that's only what a company doing countless rights issues is actually doing.

So whilst various quarters remark on the equity valuations being at historic stupid highs, with respect to earnings expectations rolling and dividend payouts, on a yield basis they are very good value. Add to that the fact that the market has been fighting every up move and is not monstrously allocated to equities I can still see those babies moving higher. It ain't over 'til the euphoria is at its highest but the market, like a clubber afraid of missing the fun, is only just fumbling in its pocket for the pill.

This of course applies to European equities more than the US, which is just coming down from its own MDMA (Monstrous Debt Monitising Action) induced high. Considering the mood toward Europe expressed by every US commentator from November to mid-January I would be very surprised if any of them are not longer than 'very short' which suggests there is plenty more Edward the Seconding to be administered to those positions.

Read him, he's great and he even mocks bitcoins.


Bespoke - Dow stocks having a rough January. This post is telling:

24 of the 30 Dow stocks currently have a higher dividend yield than the 1.72% that the 10-Year Treasury Note is yielding. Key Tech stocks in the index like Cisco (CSCO), Intel (INTC), Microsoft (MSFT) and IBM are all yielding at or close to 3% right now. After steep drops for a lot of these largecap names to start the year, these dividends are looking more and more enticing compared to a "risk-free" rate of 1.72%.

So as above, why in the name of god and all that is holy would you buy a 10Y UST and earn under 2% coupon for 10 years, when you can buy a stock yielding 3% today and expose yourself to worldwide growth? I guess it must be because you think there won't be any worldwide growth for ten years? Is that it? Is there a good reason for a risk premium for stocks being 1% above the 10Y?


FT Alphaville - the Fed and the NAIRU. Of course, you could argue that the NAIRU goes lower in a deflationary setting. But that would mean the proper course of action for the Fed is to stay ultra-accommodative til unemployment is low enough to stabilize inflation at 2%, at which point they're setting up to knock all those people out of employment when deflation abates.


Mining.com - mining M&A: private equity can't run away fast enough. And it's all because of you bankers and mining CEOs.


Chronicles of Brodrick - blah blah oil blah blah oil. Yabut seriously lots of interesting perspective here. That production chart is especially interesting, for those who worry about US oil production.


IKN - The Clive is a big meanie. Quote:

Also, Clive Johnson is still an employee of B2Gold and has not been fired as yet, according to our latest information. However Clive, IKN and its burgeoning mailbox can confirm that without a shadow of a doubt you're not as popular in the mining world as you think you are. And you owe apologies, too.

Come on, dude. I'm sure there are equally burgeoning mailboxes out there full of well-considered opinions about you and me, too. Being cunts is what makes us special. If people don't hate you, you're not contributing to the world.

IS CLIVE JOHNSON A MANLY MAN? the answer may shock you!

IKN - breaking news - Clive Johnson got beaten up by an analyst. Wow.

Quote:

Unconfirmed though decently sourced.

Clive Johnson, CEO of B2Gold (BTO.to) (BTG) and Daniel Earle, sell side analyst at TD Sec, got into a fistfight last night and according to reports picked up at IKN Nerve Centre, The Clive came off second best and today has a black eye and a pair of broken glasses for his troubles.

Red wine was a third party in the fracas.

UPDATE: I've taken the rest of this post down, and not because of any complaints or threats whatsoever. Matter of fact, it's been popular.

But in the words of Jon Stewart, "I'm not your trained monkey".

The Clive is probably a pretty good guy, or at least he's still better than 95% of the junior mining CEOs out there. And I have no clue who Daniel Earle is but he certainly turned out to be a man who can hold his liquor and throw a good punch, and I'm Irish enough to respect that.

But I don't like the rest of the people from the industry who've been reading that post, and frankly I'm not writing this blog to entertain bankers and sell-side analysts. You're the problem with junior mining, not (so much) Clive.

Basically I'd rather entertain Clive Johnson than that lot.

So, just for The Clive, here's a gif of dancing cats:

Note: please don't ever grab your cat by the forelegs, it can injure them badly.

---

PS. I've saved the old content though, and will repost it if provided a sufficient bribe. I do have principles, but I like money more. I especially like it in large quantities.

---

PPS. Buy Dalradian, Ross Beaty loves them! Get in before it's too late!

THAT OFFENSIVE GODADDY PUPPY COMMERCIAL: this is why the world hates liberals

Apparently, the animal rights crowd in America is in an uproar over this supposedly offensive Godaddy commercial, so much so that it's now been pulled from the Superbowl:

(I like clickthroughs cos they make me money)

MAMTA BADKAR GOT A PROMOTION: here's what you need to know

Mamta Badkar was one of the few writers at Business Insider who I had any respect for whatsoever.

Well, it seems she's now quit that dump and moved on to a new, much higher-paying gig at the Financial Times website!

Not too shabby, and definitely a more deserved job for a Columbia journalism grad than working for a bunch of click-whores at BI.

Now she can write articles that don't have "ANNIHILATED" or "DESTROYED" in the title, or photos of nuclear explosions or Marc Faber.

Good on ya!

Today's news

Previously on Buffy the Vampire Slayer, it was noted that Greece is being sold down to nothing due to fear of imminent socialist revolution of the exploited proletarian masses against the kleptocratic neofascist oligarchs who secretly run Europe (and the rest of the world) on behalf of their alien overlord Davros.

Otherwise, Apple is awesome, Americans don't know whether to buy or sell their own country (funny how American pride evaporates when your leader is an uppity knee-grow), and who the hell buys Microsoft stock anyway?

So, here's a bit of news:

New Deal Demoncrat - idiots forecasting recession because oil. A steep collapse in the oil price indicates the end of a recession, not the beginning. However, NDD says supposed "investment professionals" are saying a recession is imminent because reasons, and he even gives us a link to prove he's not just making this shit up. Quote from this idiot link:

SAN FRANCISCO (MarketWatch)—The price of oil is about $17 a barrel away from signaling that a global recession is inevitable, according to a new survey of investment professionals.

The survey from ConvergEx Group polled 306 investment professionals, asking, among other things, what oil price would show that a global recession was inevitable.

“The idea behind this question was simple — at some point oil prices aren’t just a nice theoretical tailwind for global economies,” said Nicholas Colas, chief market strategist at ConvergEx, in a note. “Rather, they become a signal that worldwide demand is contracting so quickly that oil prices must quickly decline to reflect that fact.”

The most common answer was $30 a barrel, from 26% of respondents, with $35 a barrel being the second most common answer (16% of respondents). All told, 62% of respondents said $30 or lower crude was a global recession’s canary in a coal mine.

More than half those surveyed represented buy-side firms such as asset managers and hedge funds, and about a quarter of them were from sell-side firms such as banks or broker dealers, according to ConvergEx.

Thankfully we have investment amateurs out there like NDD who can give us actual US economic data that proves there's no damn recession. Convergex, your survey is bad and you should feel bad.


New Deal Demoncrat - consumer confidence. And yet people say the market's topping and a recession is imminent. Really, we're just seeing a big rotation due to a few trillion dollars of investment capital having been horribly fucking wrong for the past couple years.


Bloomie - China's 2014 gold imports tumble 32%. On the one hand, that's not good for gold. On the other hand, since this is 2014 data, that drop was already reflected in the physical market in 2014. Then again, is this the start of a worrying trend, especially given Xi is continuing his fight against corruption? But then again then again, over the next decade the trend should still be up, if the asset mix of Chinese should be expected to remain reasonably steady over time.

So basically, ignore the fucking news and just follow the fucking chart. The price is smarter than you.


The Krugginator - I agree entirely with My Own Market Narrative, which is a brilliant blog written by a super-genius who should just be handed an Econ Ph.D. instead of having to go to school for 7 years. He splains exactly why you're not going to see a war over Greek debt, despite the intensity of today's "OMG sociamalism" selloff.

I still wouldn't buy NBG or GREK just yet, since only investment money flows are going to determine when they stop going down; but right now I'd say both resemble a juicy fastball right in the wheelhouse.

Then again, they also resemble falling knives.

Eek it's Keek

I've been getting a lot of hits recently for this post:

I Am Awesome - More Sheldon Inwentash news.

Including just today a hit from Pietree themselves:

So I was wondering what the heck is so exciting? After all, he dumped all those junior mining shares a couple months ago, right?

Well, there was that new venture of his, Keek:

Wow! That's some mighty fine investing, Lou!

For all those wondering where to plow their Dalradian profits....

Now that Ross Beaty's shown everyone's hand with this crazy financing and Dalradian's about to get bought out at something crazy like $2.00*, where do you want to put your massive pile of profits?

Hey, National Bank of Greece is no worse than the junior mining garbage you normally put your money into.

And, speaking as someone who's familiar with the work of separatists here in Canada, it's not as if Tsipras is really going to pull Greece out of the EZ or even precipitate a bank funding crisis.

Right?

I dunno, when I see something tank 60% on "fear of the evil socialist revolution" my antennae get twitching. Easy fucking slam-dunk money, except of course when it ain't. And a 100% win would even cover the fucking exchange rate premium that the fucking Bilderbergers charge me.

---

* - yeah you're right, I totally made that up.

Syriza says "screw you guys"

BBC - Syriza says "screw you, capitalist pigs". Some quotes and commentary:

It is unrealistic to expect Greece to repay its huge debt in full, the chief economics spokesman for the victorious Syriza party has told the BBC.

"Nobody believes that the Greek debt is sustainable," Euclid Tsakalotos said.

Exactly. If the Troika felt their debt was unsustainable before they demanded that Greece destroy their own economy, why would they think it's sustainable now that Greek GDP is a fraction of what it was?

But you can bet the EZ will never, ever, even for a second, admit their failure. Because the capitalist exploiter class has continued to make their fortunes.

"It's going to be a very funny and a very dangerous Europe with very strong centrifugal political forces if they signal that after a democratic vote they're not interested in talking to a new government.

"It will be a final signal that this is a Europe that can't incorporate democratic change and it can't incorporate social change."

They already hate democracy. It's already been proven. How can you tell? Because they've already been demanding that government policies enacted with democratic support be eliminated, in favour of the "new democracy" of the European kleptocratic elite.

All you have to ask is "austerity for whom?" and you see what's really been going on in Europe.

So why are investors not in a state of frenzied panic? Why have the euro and stock markets bounced a bit? One slightly implausible explanation is that investors believe the eurozone would actually be stronger without Greece, so long as no other big country followed it out the door.

Unfortunately, once you take all the weak countries out of the EZ, you're left with what's essentially a Deutschmark. Germany's economy will collapse because there'll be nothing to stop their currency from appreciating to the stratosphere again, and they'll be unable to export goods again.

German government spokesman Steffan Seibert stressed it was important for Greece to "take measures so that the economic recovery continues".

What economic recovery? Again, yet more proof that the Germans are living in a meticulously-constructed fantasy world.

Ross Beaty likes Dalradian

Yahoo Finacne - Ross Beaty plumps for $11M with Dalradian. Our buddy says this placement is highly significant, especially with this financing closing even before the exercise date of the existing February warrants.

I guess Beaty wanting to own some Dalradian is good, and the 90 cent floor he's set is good, but I don't see specifically how this impacts the value of my Feb warrrants.

Anyway, yay someone famous now likes Dalradian. And I guess they've got an extra $11M cash.

Oh, the hold period ends in mid-June, so make sure you don't own DNA then.

Morning news

Dow is off strongly because people are taking Oberhelman's cautious, highly conservative outlook as a reason to sell, I guess. Guys, his frickin' job is to keep Caterpillar in business: that's why he's being so conservative in his outlook.

Meanwhile CNBC is still putting that ignorant clueless idiot Santelli on in the mornings to shout and scream about how the US is going to hell in a handbasket.

Anyway, here's news, for what it's worth:


Brett Steenbarger - SPY redemptions. He flagged a large wad of SPY share creation a couple weeks ago, and noted forward performance after such an event is negative, so chalk one up for him. Now, he's flagged a large number of SPY redemptions since then, and notes forward performance after this sort of event is positive. 


BI - CAT Q4 earnings. Um... none of this should have been a surprise.


FT Alphaville - the US will soon have a budget surplus. Apparently, the CBO has been infected with Republican idiots, because their entire US deficit case is based on completely unrealistic interest rate numbers. Matt Klein:

More than all of the projected increase in the US federal budget deficit between now and 2025 is expected to come from higher interest payments on the existing debt.

Now, it’s entirely possible that interest rates will rise and that the debt service burden will increase commensurately. In fact, one would hope that borrowing costs eventually go up given that low rates are being driven by weak demand for credit and low expectations for real growth and inflation as far as the eye can see.

That said, we have several reasons to suspect the CBO’s forecasts.

First, it isn’t clear why interest rates would jump so much given their economic projections. Nominal GDP growth is only expected to be about 4.2 per cent per year from 2018 through 2025. The jobless rate, which is currently 5.6 per cent, is expected to float around 5.4 per cent for the next decade. Inflation is expected to be quiescent and employment growth is expected to slow to a crawl.

Those projections fit with the notion of a static tax take and persistently high levels of government spending despite cuts in discretionary programmes, but not with sharply higher interest rates.

Seems like the simplest explanation is that Obama's black and the CBO has a problem with that.


FT Alphaville - a reminder about disinflation. Again, sensible commentary from Matt Klein:

Falling prices in the euro area are one reason why the European Central Bank announced last week’s bond-buying programme. Deflation is dangerous when it leads to falling incomes and higher debt burdens. But it can also be benign if it boosts real incomes and increases purchasing power. Maybe Draghi was right the first time.

After all, the government of the world’s marginal consumer of industrial commodities recently decided that it requires much less coal, iron ore, copper, and oil than producers had been expecting. The resulting imbalance between supply and demand is currently being reconciled by a collapse in prices. At the same time, buyside investors are coming to the realization that commodities are not an asset class with a positive long-term real return, which is making the price swings even bigger than you might expect using purely fundamental analysis.

The deflation hysteria is overblown, basically. Or rather, they're not looking at the real source of bad disinflation - government austerity policy.


BBC - Greece debt repayment in full is impossible, says Syriza. Frankly, they shouldn't even want to: the Troika assured them that the structural reforms would make their debt-to-GDP better, and instead the reforms destroyed Greece's GDP to the point where debt-to-GDP is just as bad as it was before - but now with the added benefit of a crippling economic depression. More on this later, it really pisses me off.


BBC - Saudi men call for no girls on twitter. Hey, guys? The stone age called, they'd like to know when you're coming back home.


Mining.com - money still pouring into gold ETFs. It's good for the supply-demand balance, as long as the gold doesn't get sold back out a week later....


Mining.com - hedge funds raise bullish gold bets to 2-year high. Eesh! These are not the people I want to be long with. I am now getting out of gold.


Tumblr - penis shaped clouds. Yes, a whole tumblr page with nothing but clouds shaped like penises. It's the most competent commentary on the market that you'll find anywhere today.

All the Tsipras that the lamestream media continues to hide from you

They love calling him a "radical communist", but they don't love giving Tsipras even 30 seconds to speak his mind. Instead they'd rather quote neofascists like Weidmann and ignorant propagandizing clowns like George Osborne.

Can't let the commie speak directly to the people of the world, can we? I mean, they might listen to him!

So here's a couple Tsipras quotes for you that the lamestream media has never bothered to print:

"There are no winners and losers. Those who have been defeated are the elite and oligarchs, the vested interests that destroyed our country.”

and

"The verdict of the Greek people, your verdict, annuls today in an indisputable fashion the bailout agreements of austerity and disaster."

And meanwhile, here's Kruggie's take on the whole affair:

Krugman - Greece has already gone through a 16% internal devaluation. And they've had to because they don't own their currency, and Germany has no interest in inflating their own internal economy to rebalance flows. Oh, and because the EZ is a currency union with no internal fiscal transfers, unlike real monetary unions like Canada.

Basically, the oligarchs know they screwed up, and are prepared to do whatever it takes to paper it over for as long as they can, til they can move all their money to a new offshore tax haven.


Krugman - they call Syriza "radical". But the real radicals were the EZ officials who ignore basic economics. Quote:

As we head for the big Greek face-off, Francesco Saraceno makes a point I’ve also made on a number of occasions: although many of the press reports describe Syriza as “far-left”, it’s actually preaching fairly conventional economics, while the supposedly responsible officials of Brussels and Berlin have been relying on radical doctrines like expansionary austerity and a growth cliff at 90 percent. The same has to a certain extent been true in the US context.

Once again: textbook macroeconomics says that focusing on deficit reduction in a depressed economy, where the zero lower bound constrains the effectiveness of monetary policy, is a very bad idea. And although nobody will believe it, textbook macro has actually been a very good guide to the economy since the financial crisis, as Jared Bernstein also emphasizes.

Some Monday news

Yeah, you already know the "radical leftist Syriza party" won the Greek elections and will now destroy Europe. Frankly, I'm happy that Tsipras was all-guns-blazing right after his victory speech: you win a fight against these EZ clowns by punching hard and fast.

And frankly, nobody cares about the "imminent re-rating" from the kleptocrats at Standard & Poor's: the Eurozone holds all Greece's debt, and they're running a primary budget surplus. Matter of fact, I wouldn't expect that a drachma, introduced at par today, would drop very much at all.

And Tsipras knows there's a whole pile of money just waiting to be taxed, in the hands of the kleptocrats who own Greece and who have been best buddies of the Germans for decades.

Anyway, here's some reading:


New Deal Demoncrat - weekly indicators. LLIs all positive.

Gavyn Davies - the Fed accused of complacency. More opinion on when tightening comes.

BNN - Cookie Monster! He's still going on about your anium, but at least he teaches us some useful things about the deposits. Too bad BNN's site doesn't work in Firefox with script blockers and there's a fuckton of commercials at the start.

IKN - best of the VRIC interviews. Strangely, he places Kaiser's interview among "the best", even though he really doesn't like Kaiser.

Gold's already back to $1600. For me, anyway.

Here's a chart of gold in Canadian dollars:

And as you can see, as of last weekend, it's almost completely recovered from the waterfall collapse of April 2013.

Here's gold in Euros:

It's not recovered entirely yet, but maybe in the next few weeks with the Syriza victory?

Apparently Jeffrey Currie has given up the ghost on $1050 gold (and Marcy Nicholson at Reuters gave him a free pass, repeating his original 2015 gold target of $1200 and not the more recent $1050), so maybe this is about as far as gold can get without some consolidation?

I guess it depends on whether the Americans have all already finished going long gold.

We'll have to watch GLD flows for clues, I guess.

In the meantime, what does $1600 gold and lower fuel costs mean for Canadian miners? Is that good?

OMG, Shakira used to be Alanis Morrissette

This:



used to do this:



Humble beginnings, eh?

Amazing pole dancer on Ukrainians Got Talent

I came across this video of this stunning Ukrainian pole dancer girl, Anastasia Sokolova, on Ukrainians Got Talent and sprained something sprained everything and of course you've all already clicked through.