- Gold and Gold Stocks – A Meaningful Reversal?
A Negated Breakdown
There have been remarkable gyrations in the gold sector lately. The typical rebound out of a November/December low (typical in recent years after the end of the tax loss selling period) was initially cut short in January in the course of the global stock market decline. This was a bit surprising, because it was widely held that the recovery in the gold price was a result of said stock market decline.
Photo via genius.com
We suspect that in it was...
- The Walking Dead: Something is Rotten in the Banking System
A Curious Collapse
Ever since the ECB has begun to implement its assorted money printing programs in recent years - lately culminating in an outright QE program involving government bonds, agency bonds, ABS and covered bonds - bank reserves and the euro area money supply have soared. Bank reserves deposited with the central bank can be seen as equivalent to the cash assets of banks. The greater the proportion of such reserves (plus vault cash) relative to their...
- The Bank of Japan – Ringing in the Endgame?
Let's Do More of What Doesn't Work
It is the Keynesian mantra: the fact that the policies recommended by Keynesians and monetarists, i.e., deficit spending and money printing, routinely fail to bring about the desired results is not seen as proof that they simply don't work. It is regarded as evidence that there hasn't been enough spending and printing yet.
BoJ governor Haruhiko “Fly” Kuroda: is that a windshield I'm seeing?
Photo credit: Yuya Shino / Reuters
- The FOMC Decision: The Boxed in Fed
An Imaginary Bogeyman
What's a Keynesian monetary quack to do when the economy and markets fail to remain “on message” within a few weeks of grandiose declarations that this time, printing truckloads of money has somehow “worked”, in defiance of centuries of experience, and in blatant violation of sound theory?
In the weeks since the largely meaningless December rate hike, numerous armchair central planners, many of whom seem to be pining for even more monetary insanity than the...
- The Bubble Deflates - And Crash Risk Rises
A Harrowing Friday – Momentum Stocks Continue to Break Down
The release of Friday's payrolls report was the worst of all worlds for the US stock market. This typically happens in bear markets: suddenly fundamental data that wouldn't have bothered anyone a few months ago are seen as a huge problem. Why was it seen as problematic?
The report somehow managed to be weak and strong at the same time – it showed weakness in payrolls growth, but the entirely artificial U3 unemployment rate,...
- Skyscraper Mania Goes Global
New Skyscrapers Wherever one Looks
Readers may recall our recent discussion of the construction of the Jeddah Tower (see “Soaring to Bankruptcy” for details). This skyscraper is a typical symptom of an artificial boom that has moved past its due date, so to speak. The idea behind the skyscraper index is that in light of the immensity of projects that involve the construction of the tallest building in the world (or one of the tallest), they are only realized once the notion that boom...
- Gold's “Monkey Magic” - An Update on Gold and Gold Stocks
Has a Bull Market Begun?
Gold stocks have risen so much and so fast recently that a pullback, resp. consolidation either has begun already or is likely to begin soon. We have therefore decided to post a brief update on the situation in order to discuss what might happen next. Back in late November, we made a few remarks in order to clarify why we have focused so much on the gold sector again since last summer.
Processing plant of the Driefontein mine in South Africa
- Softening up the Rubes – the War on Cash Continues
More Anti-Cash Propaganda by Bloomberg
Former NYC mayor Bloomberg is probably one of the worst nannycrats who ever strode upon the US political scene. No-one has done more to take the fun out of New York than this man (we have chronicled the efforts of people of his ilk in “America's Killjoys”). It always amazes us to no end when successful businessmen - once they have made enough money to last them a thousand lifetimes – suddenly discover their penchant for socialism and State...
- China’s $6.6 Trillion Toxic Loan Problem
“As long as you’re green, you’re growing. As soon as you’re ripe, you start to rot,” once remarked Ray Kroc, mastermind of the McDonald’s franchise empire.
At the moment, no truer words can be spoken for China’s ripe economy. The Middle Kingdom’s 30-year economic boom is being overcome with the unpleasant odor that befalls rotting vegetables. What’s more, there’s no way to reverse it.
Photo credit: fmh
- In Praise of Sarah Palin…
Up and Down
MUMBAI, India – The Dow dropped 208 points on Monday – or about 1.3%. After last week’s pause, it will be interesting to see if the sell-off resumes.
“Global equities in turmoil,” reads a CNBC headline.
“A month after raising rates, Fed faces darker global economy,” suggests an AP newswire report. Neither of these is true. The world has not changed significantly in the last month.
What has changed? The squiggly lines are going down instead...