I'm back! with more news

Reformed Borker (Bork Bork Bork!) - Goldman's reasons for the market going higher. Even Gary Tanashian is taking this seriously.

New Yorker - is there a stock market bubble? OK boys, if that meme has gotten as far as the New Yorker, I think we can call it a non-issue.

WSJ Boneymeat - Fed will fuel dollar rally with more confidence. Note that (as Shaoul said) a lot of EM currencies are puking right now. Also note that Bernanke's beard will be near a microphone Wednesday, with many people worried about an end to QE this year: so fingers on the PM buy and sell triggers everyone!

BI - how the market will react to Bernanke speech on Wednesday. Dunno, but they'll react somehow. I've upped my cash a bit by dumping failed breakouts - probably a bit of a worry-wart but whatever.

Bonddad - but gasoline prices roar back. So we can assume a crapping of trend for the US economy over this summer, if this continues.

Mineweb - the touchy situation for gold demand in India. When they're calling for anything from a boost to 1000 tons to a collapse to 500 tons, that is not a time I want to invest in gold.

IMF - paper on the middle income trap (pdf). Read this if you have any interest at all in the merging markets. Like, for example, interest in whether or not gold ever goes up again.

Mineweb - Brent Cook on reading drill data. But who the fuck cares when nobody's drilling, right?

Newsbits

More later, but here's some stuff to inspire thought among the open-minded and anger among the closed-minded:

Ritholtz - what is your market context? Good article that goes into the fact that this market is not the 1999 market, or the 1982 market, or the 1987 market - many characteristics are vastly different this time, and if you don't take those into account your calls are going to be wrong. He even addresses the "PEs never got low enough" argument that I was having with Jojo:

Problem is, P/E ratios never quite got low enough and dividend yields never got high enough. However, the credible counter argument is simply low rates removed the expected competition. Without risk-free US Treasuries yielding 14%, the major competitor to equities never materialized. Hence, stocks were prevented from finding their natural floor.

In a crash, the PE bottom is going to be the point where difference in stock and bond yields make stocks a no-brainer buy. Bond yields were so low in the last crash that you can't expect stocks to have bottomed this cycle at a 6 PE.


FT Alphaville - Goldman Sachs calls for S&P 2100. Hey, guys? Next time you rip off my ideas, please add a link to my blog, okay?

WSJ Japan Realtime - yup, Japan's money is definitely moving overseas. Foreign debt and real estate are the targets.

JC Parets - is the crude breakout for real? He's rather noncommittal - seems to feel that recent history demonstrates USO is prone to lots of false breakouts. Maybe it's just not going anywhere at all? There's certainly no fundamental reason for it to go up.

Calculated Risk - lumber prices decline sharply. And before the US haters can pop in and say "therefore real estate is a lie!", he notes that lumber will remain vulnerable to the downside as long-idled capacity is brought back online. Also, though, China has pulled back sharply from buying lumber - that again adds to the EM bear thesis.

Mineweb - massive drop in gold exploration. Gets into cash costs and marginal price of production too.

More about not being impressed

Each of these charts has a lot of damage to repair and the weekly view makes it quite fucking apparent.

Nice day for a one day rebound, but....

Ooh ahh gold silver and the miners, eh?

Here's GLD:

Nothing particularly convincing about the volume, and the price has only moved from -3SD to -1.5SD.

Wake me when it pops above the EMA(16) and stays above it from now on.

Nothing particularly convincing about the volume, and all it's done is move from -3SD to -1SD.

If SLV doesn't manage to take the EMA(16) at $22.64, stay above the EMA, and start an upward trend, after a large one-day move like this, then it's a total sack of bullshit. And it's been a total sack of bullshit for a while so I'm not guessing it's ready to change now.

And GDXJ is still a total joke.

I am certainly encouraged, yes, to see a one-day reversal from a stupid Sunday night Globex puke into nonexistent bids. And it would sure be nice if all the shorts got viciously burned.

But there are still people out there who want to puke this stuff, so until the puking is swamped out by buying I'm happy to sit this out.

Margins too high, eh?

So stock margins are too high, and therefore this bull move is only temporary before the US market stalls out, eh?

BI - Two wall street anal cysts independently published devastating defenses of record high profit margins

And next in the series of milestones, the R2K

RUT 1000, bitches!

But no, you should most definitely stay in the junior miners, because that little white candle being printed today that only barely got silver and gold and GDXJ and GDX back above -2SD really means the bottom is in, yuppers.

CAT chart

Caterpillar:

So it hit a cluster of resistance at $90.

Then it dropped down and successfully retested its Bollinger mean, EMA(16) and SMA(50), its lower trendline, its pivot at $86, and its RSI=50 and MACD lines.

Now it's going back up.

Not much of a risk/return here, unless you buy a higher high at $90 if it prints, but even still this sort of looks like the kind of stock pick that's a slam dunk.

Problem I have it that it's EM exposed.

Boy if only junior miners were easy like this.

Oh wait, they were. Back in 2010.

NBG - how's this for a chart?

National Bank of Even Moreso Now Holy Shit Look at That Chart:

Really, honestly, I'm not lying, I did sell out my remainder at $2.10 or so on Thursday.

And I wouldn't be crying too much today cos I'd bought in at $0.91.

The question is, buy back now? Wait for a drop to $1.22, the Bollinger mean? Wait for a retest of the SMA(50)? Or a retest of the late-April pivot at $1.19?

Or just assume it was an irrational hedge fund pump, and stay away cos the outbound stampede has broken this stock?

Marc Faber is a twat

BI - Marc Faber says "The US Can 'Artificially Depress' Prices And Confiscate Your Gold".

Oh good, Marc.

In that case, why were you telling all your little muppets to buy gold all these years?

What a fucking twat.

Some morning news

Ha! I feel better about having sold NBG, now that the price popped back down below my sell price. I guess it's a good thing to fear volatility, as long as you fear it at the right moment?

So should I buy back at $1.70? Or $1.38? Ideas, people?

And by the way - as a refresher, the reason I give you all that India and China news below is because the India & China situation is critical to the future of commodities, including gold.


Because then if someone you like reading shows complete willful ignorance on the topic of EM economies, you can stop reading them and save yourself time (and possibly a fuckton of money).

Anyway, here's some news:



FT Alphaville - the risk of a Japanese VaR shock. It would be sad if a Japanese market collapse, and subsequent international liquidity event, were caused by something as stupid as risk-model-induced selling. To me, that indicates a systemic mistake. What kind? I know nothing about VaR modelling and probably couldn't do the math, but if a risk model can create an existential threat just like that on a stupidly small change in bond yields, your risk model is beyond wrong.


BI - A CAT:C relative chart, and what it suggests. Interesting! It also suggests something changed in the end of 2011, just like Bespoke's little S&P PE chart and the peak $HUI chart.

Now, did your favourite intermarket analysis news source catch this sea-change that occurred in late 2011? That starting in fall 2011, S&P PEs turned around and began trending up, while stocks exposed to global real estate turned around and began underperforming stocks exposed to US real estate? And what that means for secular shifts in the global economy? If he didn't, why not?


Reuters - China's president takes charge of sweeping reform plans. This is the wildcard for gold over the next few years.


South China Morning Post - Dongguan is essentially bankrupt, warning sign for Chinese economy. Cities and businesses now have to walk a thin line.


FT - China's national problems start with local government. I guess if the central government passed a land tax or property tax pronto, that might be the best of possible first reforms. If the FT has identified revenue inequity as a significant concern, the government must already be on the case, no?


PIIE - an estimate of Chinese corporate borrowing. The problem is too much debt, to the point it no longer stimulates growth. If Xi reforms interest rates, will that be a kind of economic shock doctrine that kills off highly indebted businesses and cities?


India Reuters - consumer stocks shine in EM gloom. Importantly, "JPMorgan Asset Management attributes the emerging earnings slump to cyclical rather than structural factors, meaning it should start to ease as global economic growth recovers." I.e., once Europe turns the corner, Japan moves into growth, and the Rethuglicunts quit sabotaging the US economy. And they would say that, since they're reading my blog every day. Seriously.


India Reuters - weakened Congress Party wondering if early elections will help. A bit of a positive wildcard - we'll have find some data and see if the BJP has the power to knock out these clowns.


India Reuters - S&P reaffirms negative rating for India. Because despite all the promises, the government is so paralyzed that it can't even pass the bills that ultimately won't accomplish anything due to official-sector ineptitude.


BI - El-Arian on gold. Funny stuff. Read this extended quote, and afterwards I'll give you the hidden truth if you don't yourself notice it:

El-Erian's argument is that essentially gold had a brand and it had a story, and that story was that it would inevitably go up, as central banks stimulated more.

While lower inflationary expectations and surging equities played a role, the real catalyst for the dramatic price drop was a rumour that Cyprus could be forced to sell its holdings by its European partners. This involved a tiny amount of gold (valued at less than $1bn at the time), but it made investors suddenly pay attention to the possibility of significant supply hitting the markets from other European economies (particularly Italy with holdings of some $130bn).

This simple change was enough to bring the gold price down 15 per cent in less than a week. Since then, the metal has struggled to re-establish a firm footing, (it is currently trading at about $1,345 a troy ounce).

El-Erian then goes onto liken this to Apple. One moment it's on top of the world, and infallible. And then suddenly the story changes, and people value the company in a completely different way.  

OK, got that?

Paragraph 1: Gold was a momentum play. I.e. the only reason "people" were buying it was cos it was going up.

Paragraph 2: Now the momos are selling gold cos they see a possible downside. These momos, by the way, don't understand that Italy won't sell its gold, it has no reason to sell gold, and its gold was sold off years ago by JP Morgan and is presently part of 110 million Indian dowries.

Paragraph 3: The momos all stampeded for the door.

Paragraph 4 (the key): Apple? Ha! Know why Apple flew up from $300 to $700? Because every momo hedge funder bought Apple, is why! Know why Apple then puked back down to $400? Because every momo hedge funder sold Apple! Has Apple's fundamental "story" changed at all in all that time? No!

And who are the "people" el-Arian is talking about? Is he referring to Indian and Chinese consumers, or those people buying Kruggerands who created so much demand that South Africa has now become a gold importer?

No. He's made it quite obvious, subtextually, that the "people" he's referring to are the hedge funds.

So El-Arian is basically explaining to you, in code of course, that gold went down because the ignorant hedge funds who momoed it up are now momoing it back down.

Which you already knew cos you read that comment by Peter Tchir that I pointed out to you a few weeks ago that you should have read by now.


Mining.com - Marcus Grubb from WGC gave a good interview that calms your fears about gold... and then the Jew-controlled media took it down. Seriously. It was a great interview, and Grubb is still very confident about the long-term prospects for gold (basically agreeing with me that it depends on continued Chinese and Indian wealth growth, the present drop is just a silly ETF puke), and then Bloomberg took it down.

Why the hell does Josh Brown give a permawrong clown like Felix Zulauf the time of day?

OK, so Felix Zulauf has put out a gloomgasm this week that has gotten play from the Reformed Borker (Bork Bork Bork!) and Joey the Weasel.

Don't follow any of those links though.

Instead please read these other dire predictions from Felix Zulauf:

Reformed Borker (Bork Bork Bork!) - Felix Zulauf Growls, 21 Jan 2013. Yet the market went up.

Reformed Borker (Bork Bork Bork!) - "We are witnessing the biggest market manipulation of all time", 9 Jun 2012. Yet the market's up since then.

Credit Writedowns - "The Euro will break apart", 14 May 2011. And it didn't.

I leave it up to you to find more instances of this twat being a fucking broken record of dooooom.

The guy's another fucking Hussman.

Ignore list for Zulauf.

Check out silver

Kaboom!

Apparently related to yen margin stops or something. Yeah right.

Oh fuck I'm linked to from Zerohedge

Some dude with a blog wrote a big rant about gold that I could care less about.

Then he got it reposted to Zerohedge.

This is no problem or concern of mine, except his post linked to my Credit Suisse criticism, and now I'm getting a fuckton of inbound traffic from fucking Zerohedge. I've tried breaking the link and it doesn't work.

So just as a clarification for anyone new here,

1. Zerohedge are a bunch of crypto-Nazi queers.
2. In the dystopian Zerohedger fantasy future, they'll all be sucking queerboy cocks for silver rounds.
3. Basing your investment strategy on "niggers are bad with money so nigger presidents must be even worse" is fucking queerboy talk.
4. Basing your investment strategy on "Jews are plotting to enslave gentiles so Jew central bankers are enslaving us even more" is fucking queerboy talk too.
5. Again, they're dumbass fucking queers.
6. Ayn Rand was a mentally-unstable bitch who spent her life whining about how commies stole her daddy's money, then she went on fucking welfare. She contributed absolutely nothing of value to the world, nor could she, because she had no skills or education whatsoever (or sanity) and so was destined to be nothing but a leech on productive society. Bitch couldn't even contribute by getting married and tending house cos she was so fucking mentally ill.
7. Libertarians are fucking pedophiles too. Ever wonder why so many of them move to third-world countries with poor policing and a low age of consent?
8. Gold miners suck™.
9. Ron Paul is also a queer.
10. And all your other neocon hereoes? Fudgepacking queers the lot of them.

I'm not worried about any blowback from this post because (as this guy Pater Tenebrarum demonstrated) nobody at Zerohedge ever reads the content of blog posts.

Cos if they'd actually read and understood my Credit Suisse articles they wouldn't have liked them.