Friday, May 26, 2017
Apologies btw for not posting more recently.
The US equity market is doing very little, the US economy isn't generating much consequential news, and gold seems to be unable to drag GDX with it.
Meanwhile, I've been reading ahead for next year's classes. I'm very interested in taking transportation geography after reading the textbooks this summer, and I also want to get ahead of the curve in econometrics.
I've also been reading Kim Gordon's Girl in a Band, and have these thoughts:
1) It's never a good idea to write a book right after your marriage breaks up.
2) She talks a lot more about art and stuff than she does Sonic Youth.
3) Apparently Michael Gira is a cunt, well colour me surprised!
4) Goddamn it those chapters are short.
Generally, despite me liking Sonic Youth more than Everything but the Girl, I vastly preferred Tracey Thorn's autobiography and would recommend it over Kim Gordon's book. Girls to the Front was also a better bio on girls in bands.
at 9:49 AM
Thursday, May 25, 2017
Two days before the Conservative Party leadership election, the Conservative insiders have set it up so that the new leader can hit the ground running:
Fraser Institute - Prime Ministers and government spending: a retrospective (pdf).
You don't have to click through. The point is that the Fraser Institute is calling Justin the spendiest PM in the history of PMs.
Specifically, they say he's spending more than any other PM outside of wartime or a recession.
The puppet press of the Reform party picked the
Financial Post - Justin's the spendiest PM ever! Quote:
Prime Minister Justin Trudeau began to increase per person spending immediately after his election in October 2015. The Harper Conservatives originally planned for per person spending to reach $7,342 in 2015 but the Trudeau Liberals cranked up spending to $7,557. Put differently, the Trudeau Liberals increased per person spending in 2015 by almost three-per-cent more than the previous Harper government had planned.Which is a lie, since Canada's qoq GDP was negative in Q1 & Q2 2015 (that's 2 consecutive quarters of negative GDP growth right before Trudeau was elected, which is a recession), plus borderline in Q4 2015, and negative again in Q2 2016.
Spending was further increased in 2016 and the federal government plans to spend $8,337 in the current fiscal year (2017–18). This is only $38 shy of the all-time-high level of per person spending recorded in 2009–10 by the Harper Conservative government ($8,375). The peak spending under the Harper government, however, was done during a significant global recession.
Conversely, the near-peak spending planned by the Trudeau government is done without any recession or large-scale military conflict, which are the two main characteristics of almost every other previous spike in federal spending.
You might remember there were these little things called an oil price collapse and the Fort McMurray fire. You might also remember Trudeau explicitly arguing for stimulus spending to counteract these two negative shocks to the economy.
The Fraser Institute doesn't remember any of that.
No, actually, they do, but mentioning any of that doesn't provide the next Conservative leader with a talking point.
Anyway, the whole point of this post is to let you know ahead of time that the new Conservative Party leader will be hitting the ground running, accusing Trudeau of "wwharrr spending more money than any PM before him!"
Which should be okay, since he gets to finance his spending at 1.458%.
But Conservatives don't know anything about finance. Even the study authors, one of whom supposedly has an MBA (from Windsor even!).
Wednesday, May 24, 2017
So Sandstorm's lost a third of its value since the story got out that it was buying Mariana.
Let's see if I understand this.
Mariana owns 30% of the Hot Maden project in Turkey, and Sandstorm is putting many eggs into one basket by taking Mariana's 30% in a buyout and then trying to convert that into a stream.
OK, so number one, if Sandstorm only wants a stream and not mine ownership, then I'd think they should have worked out the stream ahead of time. Otherwise, they're counting on their Maden partner's good nature to seal this deal after buyout. Otherwise, they'll be building a mine, which they don't have any expertise at, as the Colossus affair demonstrated. They're giving up stream negotiating power by buying into this project.
But hey, maybe their partners are good guys? Well, let's see what Google tells me.
Apparently, their partners are Lidya Madencilik Sanayi ve Ticaret A.S.?
They're a subsidiary of Çalık Holding A.S.?
Çalık Holding's CEO from 2007 to 2013 was Erdoğan's son-in-law, Berat Albayrak, now Turkey's Minister for Energy and Natural Resources? Apparently Wikileaks asserts they published a bunch of his private emails, alleging that he was helping smuggle Islamic State oil into Turkey? But Turks can't read about this because Erdoğan has banned the media from reporting any of it, which isn't hard since he and Albayrak have bought much of the media anyway, via Çalık? And by the way, Berat's brother is still on the Board at Çalık?
As a junior mining investor, at this point I give up. I don't bother trying to corroborate or disprove any of this stuff. I don't care whether the Islamic State stuff is true or the other allegations about Albayrak are true: I only care that Mariana's majority partner was once run by the son-in-law of the president of a third-world country aligned with Russia. Given typical third-world political economy, that alone is enough to give this deal the cooties.
I liked this movie better the first time I saw it, when it was called Simandou.
And so Sandstorm is buying 30% of a mining project in Turkey, thinking that these partners, i.e. possibly the family of president Erdoğan, are going to happily cut them a fair streaming deal. And that they'll actually get paid for the life of the deal.
I don't own Sandstorm now, and I guarantee you I won't after reading this.
Nolan, if you wise up and cancel this offer, which you should if you love your company and its future, then please send me $50,000 for my consulting contribution. It's money well earned, it'll save you millions personally, and your shareholders even more if you're into that sort of thing. You can get in touch with me thru Daniela Cambone.
It's funny that just two weeks ago a guy who should know something about third world governments and mining was calling Sandstorm cheap at $3.40 and the Mariana deal a good one.
Friday, May 19, 2017
Thursday, May 18, 2017
Wednesday, May 17, 2017
I guess people are selling S&P 500 today because they think Trump is about to be impeached? Is that it?
Anyway, here's some great reading for you:
New Deal Demoncrat - is the rental affordability crisis abating? If rents have quit increasing in the US, that'll mean more money in the pockets of the poor, which is how you build a sustainable economy. But I'm sure Trump will fuck that up somehow.
FT Alphaville - healthy pickup in capex predicted, again. Last time it was predicted, it didn't happen. Will this time be different? Not if you read some of the economic theory stuff I've been reading: the reason we're in capex stagnation is because more and more corporate earnings are being captured as rents by the power elite - the same reason government bond yields are at silly lows, btw.
Macro Tourist - the $VIX article no-one will like. Quote:
The narrative overwhelmingly embraced by most of the street is that there is a monster VIX short position out there, and that this volatility selling is a disaster in waiting. This camp has some impressive alumni. For the past year, the smart as a tack Jesse Felder, has been writing pieces about this risk. If you want to understand his point of view, check out the article from last summer - “The Short Vol Trade has gotten completely out of hand”. I love Jesse’s writing, and taking the other side of his trade gives me pause, but I respectfully suggest he might be wrong on this one.
He takes the "every seller is matched with a buyer" assumption and runs with it, arguing that there's a monster $VIX long position out there. The kill-shot comes when he notes it's actually the Vix long ETF that has built the monster position: apparently XIV's shares outstanding has been collapsing! That's convincing enough for me.
AEON - human capital theory was a cold war propaganda campaign. Really interesting long essay about how the Ayn Rand club invented the term "human capital" as a counterweight to Soviet communism. I'm skeptical of the whole Mont Pelerin Society conspiracy theory, but I also know that people like Milton Friedman were propagandists and not economists. In fact, if you decide to model human capital, you'll find that a monopsonist employer will use their market power to underpay for it - in which case worker exploitation simply becomes more obvious.
BBC - Avril Lavigne is dead again. The old "Avril Lavigne died in 2003 and was replaced by an exact replica" story has returned. Oh, and entirely parenthetically, her new album comes out this year.
Tuesday, May 16, 2017
Engadget - China hit hard by Wannacry because they use pirated software.
Yes, it was true as of Saturday that Wannacry spread so aggressively through China, India and Russia because those three countries are third-world shitholes where the entire nation runs off of one pirated copy of XP.
But then the killswitch got tripped. The worm stops spreading entirely if it connects to the killswitch website.
The reason the virus has continued to spread through China after Saturday was because their nation firewalls the killswitch website.
at 8:10 AM
Monday, May 15, 2017
The Register - Microsoft tells governments to quit hoarding exploits. Quote:
In the midst of the ongoing WannaCrypt attacks, Microsoft has issued an unusually strongly-worded warning to governments around the world to quit hoarding vulnerabilities.
The bug exploited by the attack was hoarded by the United States national security agency (NSA), leaked earlier this year and since patched by Microsoft – but patches aren't perfect, rollouts take time and WannaCrypt locked up a lot of machines in its first wave.
Microsoft is not pleased, and in this post, renews its call for a “Digital Geneva Convention”, and its long-standing demand that governments disclose vulnerabilities to vendors instead of stockpiling them.
“An equivalent scenario with conventional weapons would be the U.S. military having some of its Tomahawk missiles stolen,” writes Brad Smith, Redmond president and legal boss.
Noting the “unintended but disconcerting” link between nation-state activity and criminal activity, Smith adds that governments need “to consider the damage to civilians that comes from hoarding these vulnerabilities and the use of these exploits”. The “Digital Geneva Convention” Redmond recommends would therefore require governments “to report vulnerabilities to vendors, rather than stockpile, sell, or exploit them”.
With the caveat that these exploits are generally the result of poor programming, partially because Bill Gates would rather farm the work out to idiots in Bangalore instead of paying his domestic coders a decent wage, and the "Digital Geneva Convention" was probably written to benefit Microsoft and not the civilized world, I otherwise agree.
Exploits are potential weapons of mass destruction, very much like Tomahawk missiles. When a hack gets out into the wild, it can at least cause millions of dollars of damage, and at most bring down worldwide communications and commerce: we've seen that happen in the past.
We're okay with the military having weapons of mass destruction, because we expect them to have the tools to effectively attack national enemies. But we also expect the military to damn well keep them under lock and key, and not just let some contractor walk out the door with them to sell them on the black market.
We do this with plutonium, sarin and anthrax, so let's also do this with hack tools.
Oh, as an aside: when we find out some Russian is making sarin in his kitchen, we kill him and then lock up everyone he's ever met. We also don't let him sell it on the darknet and take payment in Bitcoin.
I think governments will take this seriously, and I still think Bitcoin's days are numbered.
at 7:21 AM
Saturday, May 13, 2017
Krebs on Security - NHS hit by ransomware attack.
Bleeping Computer - Ransomware using NSA exploit leaked by Shadow Brokers is on a rampage.
Avast - ransomware spreading aggressively, over 50,000 victims.
The big story going around right now is that a ransomware worm is locking up computers by the tens of thousands.
I haven't yet read anything that has clearly explained how it's spreading, so I don't want to fire up my old Vista even if I disconnect from the net and disconnect my data drive beforehand.
I've heard people say it gets into systems via good old-fashioned email attachments and website drive-by infections, and then spreads internally on a company's LAN via MS networking protocols, exploiting a MS networking security hole that I obviously don't have here at home. So I'd be competely safe. But I've also read that it sets up a bunch of processes to attempt connection to random IPs via port 135 and port 445, and that scares me.
I was hacked by the 135 worm long long ago, and I'm pretty sure my Windows system locks down those two ports nowadays and the exploits are long gone.
But still, I was hacked remotely by the port 135 worm long long ago, and I don't ever want to go through that again. Worms are a real bitch.
So I'll just keep my Vista shut off for now, thank you.
Too bad you lost another Windows customer, Microsoft! At least you can count on the Linux development community remaining so fucking stupid that they can't ever develop anything to replace you, since they don't even know how to fucking write a startup routine that can wake a fucking Dell LAN card.
As for the hacker who did this, if we are to believe Russia, they apparently made the mistake of making the Russian Interior Ministry one of their targets. So if that's to be believed, I'm pretty sure the guy is going to end up in a wood chipper by next weekend.
He went way too large with this attack, and he attacked the wrong people. Stupid.
But what I find funny are comments like these on Krebs' site:
So uk and world hospitals should buy now bitcoins.
then when attack comes then they are ready and it will save many lifes.
Goverments now should prepare their bitcoins reserves.
OK, so obviously Krebs gets a load of lowlife children on his comments pages; most of them are little hackers who have probably DDOSed him.
But really? Governments and hospitals should stockpile bitcoins? Really? To be prepared in case of future ransomware attacks?
How about this: MI6 tracks down everyone associated with Bitcoin and fucking kills them for being members of a terrorist organization. It actually makes better sense, fiscally.
And as far as the conspiracy theory that this was actually a targeted attack by the NSA, just look at the map, Russia is the biggest victim here?
Well, if that were so, then it's only so because all of fucking Russia is operating off one pirated copy of Windows XP that they've never bothered to update.
at 12:33 PM
Stuck in linux right now because with all that's going on I'm not sure I have the guts to fire up my Windows. More on that later.
Weekend market reads:
Calculated Risk - retail sales up 0.4% in April. And up 4.5% above last year.
Calculated Risk - LA port traffic increased in April. Container volumes way higher than last year. Unfortunately, unless there's enough demand to mop that up, we'll just head into another inventory correction. As an aside, why is meat 50% more expensive than it was last year?
New Deal Demoncrat - real wage growth set to resume. Don't worry, Trump will find a way to fuck the working class.
New Deal Demoncrat - weekly indicators. Geez, looks like the whole summer will be a low-volume boredom melt-up.
FT Alphaville - US too expensive? Consider Japan. That's not exactly positive on the surface. Then again, Japanese yields are also stupid low. And that hints at the real reason: all assets are expensive, because there's insufficient supply of assets, while demand is high because the kleptocracy has sucked tens of trillions of dollars out of the economy into their own pockets. It's really that simple.
FT Alphaville - panic and $VIX. Ex-Jesus and Mary Chain lead singer Jim Reid says this:
ultra low vol doesn’t necessarily predict bad returns going forward but returns are generally higher when vol starts at a higher point than current levels or when it is ultra high. Quite high but not ultra high tends to be the worst starting point. There is therefore some evidence that future returns from this starting point might be sub-trend but no particular evidence of an imminent big problem looking at the historical data alone.Which really just boils down to "buy low sell high", which means Jim just wasted my fucking time with this crap. No wonder William can't stand being in a band with him.