Wednesday, September 26, 2012

Silver Wheaton - $SLW - WOW!

The chart of #SilverWheaton, ticker $SLW, 5yr weekly shown below shows an absolutely outstanding flag pattern.


Delightful impulsive break out move through the upper band earlier this month on volume and now we wait. I am waiting on:

1) a re-test of the top of the flag (upper blue line) which would represent an entry point for those that missed the break out and 2) a move though the recent high of and

2) a break out thought the recent high just above 40 which is also the prior resistance lower high from the move down in early 2011.

For those wishing a longer term view of this gem, have a peek a the 10yr monthly below.



Tuesday, September 11, 2012

The Fed, Lunatics and Anonymity

I want you to take a moment if you haven't already, and click the link here and watch CNBC's interview with former Reagan OMB director David Stockman. You don't have to wait very long for the money quote for at about the 1:30 mark Stockman unleashes with this classic that will go down in history;

"The Fed, and the lunatics who are running it, are basically telling the whole world untruths about the cost of money, about the cost of risk, about how you allocate capital."

And yes people that just about sums things up. Regular readers may notice that this very fact is something I have been harping on since this Twilight zone began. I also realize that we live in a country where pedigree and breeding count for much more than substance so maybe just maybe people might listen to a former OMB Director rather than an anonymous blogger. 

While on the topic of anonymity, which is a subject I have wanted to write about for some  time, I have a few things to say. Those not wishing a cure for insomnia may want to change the web channel now.

Few discuss it but I'd like to point out the distinct and sacred place anonymous writing and speech has in this country's society. I have come across some lucid well thought out defences of anonymous speech with few better than "Tyler Durden's" over @ZeroHedge, who put it this way;

"Anonymity is a shield from the tyranny of the majority. It thus exemplifies the purpose behind the Bill of Rights, and the First Amendment in particular; to protect unpopular individuals from retaliation- and their ideas from suppression- at the hand of an intolerant society."

We have all been taught or told the admonition not to judge a book by its cover yet few seem to remember this when the subject of anonymity comes up. People tend to forget that Mark Twain wrote under the psydonym 'Samuel Langhorne Clemens'. Founding fathers Alexander Hamilton, James Hamilton and others wrote under the nom de plume 'Publius' for the Federalist Papers. The widely read Economist magazine is basically and entirely anonymous publication. 20 yr old college juniors could be writing in it, with the help of fancy proof reading and editing gurus, for all we know.

Think to the venom of the economic debate in this country we have. I have often said that if many of the economic and financial pronouncements, analysis and conclusions of Fed governors, Treasury officials, senior Wall St. executives, Ivy league MBA's were uttered by a high school drop out who is roofing your house (no offence to roofers the country over who bust their ass but I need an example right now) we would dismiss them as horseshit but when an Ivy league educated, former Wall St. executive tells the planet Armageddon is coming if we don't bail out his golf buddies we check our brains at the door as we bow down and worship thy pedigreed guru.

Martin Luther King Jr's famous quote "I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character" epitomizes the not judging a book by its cover mantra

I bring this up because Finance and Economics has an extraordinary infatuation with pedigree and your DNA stock. I have seen statistics that are a bit dated but I would believe to still hold true that approximately 90+% of Econ faculty members have their PhD from a top 10 school. Yes, I know top 10 based on what? Content of the work, the merit of the ideas or on the DNA makeup of the family semen?  

Years ago I got into a civil yet passionate debate with an Administration professor I had- who was also the VP Academic at my university -regarding school policy of putting your name and student number on all papers and exams. I argued vehemently but without success for 'student ID number only' as this would remove bias on the part of professors. I had seen another university's study showing a student final grade hovered very near his first piece of works grade. So if you first paper was a B odds showed you were B+ to B- range bound. The statistical spreadsheets bore this out. I do know of people who submitted papers that 6 years prior were good for an A but for a C+ student were only good for a B-. Needless to say he was a good man with a good heart who I will always respect and admire but he was caught in a system that as they saying goes "the nail that sticks out gets hammered".

Either way I hope you enjoyed what Stockman had to say, and maybe just maybe in the future we all can look more closely at the content of the idea rather that the packaging said idea comes in. Have a great day!

Monday, September 10, 2012

Facade

According to the cats at Dictionary.com

fa - cade:  [fuh-sahd]
noun

1. a superficial appearance or illusion of something

That pretty much sums things up today now doesn't it.

UK Daily Mail report last week that performer Lady Gaga has about 30 million followers with only 29% of those tweeting regularly. You do the math, real math now, not Wall St. twilight zone math that got us into this mess, but honest to goodness math and it reveals a fakery rate of about 70%. This report on Lady Gaga twitter fakes follows a report from late last week that the President has almost 19 million followers with claims that more than half of 'em don't exist. Half! Should we even hazard a guess as to the number of 'fake' followers the walking, talking, android Mitt Romney has as followers. Should we really be surprised, the come-ons I receive via the net offer 2k twitter followers for the bargain basement price of $15.

Facebook, the much heralded social media outfit that makes nothing, produces nothing which makes it the prototype for a -- sheering of the public, excuse me, I meant to say a vaunted much publicized Wall St. IPO. Actually I am being a bit harsh and overly critical when I proclaim that Facebook makes and produces nothing because it actually permits one to waste vast quantities of time doing nothing, most often while on the company dime. Did I mention Facebook also likes buying less than 2yr old companies with no revenues, no profits for about a billion dollars. Yes I like alchemy over math as well. I actually heard a story that Facebook is going aggressively after spam and fake accounts. Of course Facebook and its IPO handlers on Wall St. knew none of this pre-IPO and have only discovered this now, post IPO. Can anyone in the room spell due diligence? Anyone? Bueller? Anyone? Bueller?

But it doesn't end there. Take the executive Yahoo hired to run their outfit? Seems Scott Thompson fudged his resume a little bit by claiming he had a computer science degree that he actually didn't have one. Oops. Not like he said he varsity lettered when he really was only intramural.

Or the jobs number from last week. When more people drop from the labor force Wall St. and Washington math dictate the unemployment rate goes down. At least we all know how we can officially get unemployment down to 0.0%.


I could go on and on with yet dozens of episodes from the dotcom facade and the Wall St. thugs like Henry Blodget, Jack Grubman, Mary Meeker and their ilk but you have heard them and if not you can Google them. It is an epidemic of fakery and fraud has and continues to spread like locusts across the country. Remember how the banks were having a 'liquidity' problem back in 2009? That purported liquidity problem was so great they had to send in their professional water boys and stooges to get FASB 157 passed.

FASB 157 was the suspension of mark to market accounting on holdings to mark-to-make-believe. Yup, free market capitalism. But you're an idiot blogger when you call it what it is crony or criminal capitalism but you're a contributing regular to financial shill TV when you tow the party propaganda.  I still remember former Fed imbecile Bob McTeer's comments on the benefits of allowing his country club buddies to market securities to any level they deemed. Club memberships do have their privileges right?  Sure Bob, why would the public want to trust an open public market price discovery mechanism to value toxic waste, absolute garbage securities all you buddies and cronies are neck deep via 50:1 leverage when one can simply rely on the honesty, integrity of NINJA/Liar loan offering, robo signing, front running, LIBOR fixing, money laundering management of those same financial institutions? But why take my word for it when you can read what noted sober money manager (emphasis on sober) Paul Singer of Elliot Management had to say on this subject in his most recent communique.


"Decades ago, the balance sheets of the Financial Institutions contained most of the information you needed to know to understand their risks. Today the picture is profoundly different, predominantly due to the growth of leverage through derivatives....As a result, there is no major Financial Institution today whose financial statements provide a meaningful clue about the risks of the firm’s entire panoply of assets and liabilities including derivatives, nor how the firm’s performance, or even survival, will be affected by market movements in the future."

Whatever you do today do not look at the chart of this relic of an economic indicator because in doing so you may see through the facade.