The Great Deformation

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This is going to be a review of David Stockman’s 768-page tome The Great Deformation, and 0831-deform
although I never thought it was possible, it makes me angry to write this book review.

I’m not angry because I don’t like the book. On the contrary, this is the best economics book I’ve ever read. Indeed, it may be the best and most influential book I’ve ever read in my life. I only wish I had read it the moment it was published in April 2013. I only finished reading it today, and for the entire time I’ve been plowing through it, I’ve been trying to think of what I would say in this review.

Why am I angry, then, to write this? Bluntly stated, because nothing I can say will make what I want a reality. And what I want is for every literate person in the United States to read this book, cover to cover. I want them to read it. I want them to understand it. I want them to agitate for the changes that it recommends. (more…)

Taupe: It’s Not Just For The Oval Office Anymore

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Whether it’s politics or business one thing remains the same: if you are designated or perceived as the leader, everything you say or do is viewed with an eye searching for obvious and hidden meanings. While at the same time the higher the level or more commanding the position, that search goes from the naked eye to one looking via an electron microscope.

Words matter, the way they are said can matter even more, yet what is just as important is the posture, and yes – that can include even your choice of attire. (more…)

HUI Timing Boxes

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In the previous post it was mentioned that the 2013-2014 would-be bottoming grind in HUI has been almost exactly the duration of the 2010-2011 topping grind. Here is a visual to put with that statement.

hui

The current yellow box is an exact duplicate of the 2010/11 box, which came with an over bought MACD crossed down. The breakdown candle implies that September would be the month that a break UP candle comes into play if this relationship has any predictive power.

Taking it further, as also noted in the previous post, the Ukraine noise does not help the sector and indeed could hurt in the short-term, because it keeps the wrong gold bugs on the tout. So NFTRH keeps open some minor downside targets.

Taking it further still, those downside targets would end up being buying opportunities if gold’s macro fundamentals start to improve, which despite the emails I get to the contrary, really has not happened yet beyond a few ongoing positives. But it had not happened yet in 2000 either.

Longing for Change

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As exciting as August began for the bears, it turned out to be The Month of Lifetime Highs. The VIX got crushed back to 11, profitless companies like Tesla exploded in value (in TSLA’s case, over $33 billion), and big-boy indexes like the S&P 500 were at levels never before seen in human history.

In light of all this, I’ve dug up a few stocks which still have promising-looking patterns on the long side, without having run off with themselves like so many other long setups already have. I will say, however, as if it weren’t obvious, that I neither own these, nor do I intend to, in light of the price levels on indexes for which “nosebleed” is really an insufficient metaphor.

I am, in all candor, shorter than I have ever been in my life, because the quantity and quality of short setups boggles the mind. Undaunted clarity, or misguided foolishness? Only time will tell. Setting that aside, though, here are a few bullish charts for you: (more…)

Gold Miners and Inflation

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A constant struggle in writing about the precious metals is in trying to be clear about the differences between the gold stock sector and other sectors when it comes to inflation. That is because there are two types of bullish environments for gold stocks…

  1. The ‘play’, where all the inflatables rise with inflation expectations; this would be the ‘gold is silver is copper is oil is hogs is corn’ trade. This is the play where the inflation and commodity gurus tell you to buy resources to protect yourself from the US dollar crash that is going to happen any day now. A problem is that in this environment many resources often out perform gold, thus hurting miners’ fundamentals.
  2. The other is a longer trade or dare I say it, investment. This is where commodity prices are declining and the USD is firm. Gold is stronger than silver and the inflation oriented gold bugs get bearish because they can’t understand how gold will not go down with oil and indeed, inflation expectations.

(more…)