Rising Interest and Prices, Report

By Keith Weiner

For years, people blamed the global financial crisis on greed. Doesn’t this make you want to scream out, “what, were people not greedy in 2007 or 1997??” Greed utterly fails to explain the phenomenon. It merely serves to reinforce a previously-held belief. Far be it from us to challenge previously-held beliefs (OK, OK, we may engage in some sacred-ox-goring from time to time), but this is not a scientific approach to explaining observed events. To properly understand a crisis, you have to look for the root cause. And if the crisis did not occur previously, your theory needs to explain why not then, and why only now.

Suppose an old company, XYZ, goes out of business. “Times change,” people say, to explain an economic phenomenon. Or, perhaps slightly less imprecisely, “the market changed.” Sometimes they’ll get even closer to saying something. They say, “Company XYZ did not adapt to changes.”

These statements are copouts.

Continue reading Rising Interest and Prices, Report

No Confirmation of a Gold Bull Market, Yet

By Steve Saville

The ‘true fundamentals’ began shifting in gold’s favour in October of last year and by early-December the fundamental backdrop was gold-bullish for the first time in almost a year. However, there is not yet confirmation of a new gold bull market from the most reliable indicator of gold’s major trend. I’m referring to the fact that the gold/SPX ratio is yet to achieve a weekly close above its 200-week MA. Here’s the relevant chart:


The significance of the gold/SPX ratio is based on the concept that the measuring stick is critical when determining whether something is in a bull market. If a measuring stick is losing value at a fast pace then almost everything will appear to be in a bull market relative to it. For example, pretty much everything in the world has been rising in value rapidly over the past few years when measured in terms of the Venezuelan bolivar. It should be obvious, though, that not everything can be simultaneously in a bull market. To determine which assets/investments are in a bull market we can’t only go by performance relative to any national currency; we must also look at the performances of assets/investments relative to each other.

Continue reading No Confirmation of a Gold Bull Market, Yet

Newmont Buys Goldcorpse

By Otto Rock

…and with this deal, David Garofalo cements his reputation as the luckiest mining executive in the world. Because it wasn’t talent that made him rich.

There are many ramifications to this (NR here), but one small one that keeps floating back to my mind is how worried CNL.to must be now. Another would be that WRN.to must be happy. Another, bet you that Bristow tries for the 40% od Pueblo Viejo they don’t own. Lots of things, here.

The other angle that comes to mind is B2Gold, as it’s no longer whether but when it gets bought out. And while thinking about suitors, don’t overlook Barrick, as having Top Dog status snatched away so quickly by Newmont/Goldcorpse (anyone for Newcorpse?) won’t go down well with somebody who’s idea of fun is shooting large animals and posing for photos next to their dead bodies.

PS: On reflection and if ever faced with the choice of buying one or the other, there’s no contest. I’d take Randick over Newcorpse every single time, the latter is going to become one bloated corporate pig.

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January Opex Week

By Rob Hanna

Opex week overall has typically been a bullish part of the month for the market. But over the last 20 years, January has been a major exception to this rule. The table below shows results of buying the Friday before options expiration week in January and then selling at the close of option expiration Friday, which is the 3rd Friday of the month.


15 of the last 20 January opex weeks have closed down. And the average January opex week lost about 1%. The max run-up during the week was about 0.8%, while the average drawdown during the same period was about 3x that, at 2.2%. And the stats are all this poor despite last year posting the 2nd strongest up move on a January opex week over the 20-year sample. Here is a chart that shows how the edge has played out over time.

Continue reading January Opex Week

Pretium (PVG) Investigates Itself

By Otto Rock

NR link here, short’n’sweet text below:

VANCOUVER, British Columbia, Jan. 10, 2019 (GLOBE NEWSWIRE) — Pretium Resources Inc. (TSX/NYSE:PVG) (“Pretivm” or the “Company”) reports that it has retained independent legal counsel to initiate an investigation of unusual trading activity in its shares.

We had a good old discussion about this on Twitter yesterday evening and I don’t really feel like going over it all again. Here I’ll just say that this is a net positive. At the very least, it shows the willingness of PVG CEO to get to the bottom of the criminal activity in/around his company. It’s also a damage control move, as PVG needs to regain credibility and trust. Finally, even if the third party investigation (which is likely to concentrate on the internal chain of custody of non-public material information) turns up nothing for future public consumption, it will at the very least strike fear into the source(s) of the leak and that alone should stop any further repeats. Nothing certain in this world however, let’s see how things play out.

It’s not even the most serious problem at PVG either. If I were long I’d be looking at the reserve ounce grade, looking at that 11.5g number this week and muttering WTF under my breath. But that, as Hammy Hamster said, is another story.

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Or better yet, subscribe to NFTRH Premium for an in-depth weekly market report, interim updates and NFTRH+ chart and trade ideas to get even more bang for your buck. You can also keep up to date with plenty of actionable public content at NFTRH.com by using the email form on the right sidebar. Or follow via Twitter @BiiwiiNFTRH, StockTwits or RSS. Also check out the quality market writers at Biiwii.com.

Post-CPI Summary

By Michael Ashton

Below is a summary of my post-CPI tweets.

  • A few minutes to CPI. Consensus 0.2%, 2.2% y/y on core, pretty much on the dot. That’s slightly lower on core than last month, which ALMOST rounded to 2.3%, but dropping off a strong Dec ’17. Remember Median is 2.82%, near the highs.
  • it will be hard to get a ‘handle surprise’ on core CPI today. But watch Apparel, which has been weirdly weak despite tariff tensions. Used cars/trucks has been strong for a couple months and is due to be back normal, but not to “retrace” as it was too low before.
  • In general, look at core goods, which last month went flat after a long time in deflation. And keep an eye on core-ex-shelter, which is near multi-year highs.
  • 21% on core, 2.21% y/y. Basically a consensus number.
  • Pretty stable last few months of core.

Continue reading Post-CPI Summary

Why Interest Rates Are Not Likely To Rise Much In The Near Future

By Anthony B. Sanders

Ford Cutting Thousands Of European Jobs, China Car Sales Plunge 13% YoY, Etc.

Since early November 2018 when the 10-year Tteasury note yield hit 3.24%, both the Treasury yield and 30 year mortgage rate (MBA) have plunged.


Partly to blame is the slowing economies around the globe, particularly in Europe (check out Ford’s announcement of job cuts in Europe: Ford Motor Co. will shed thousands of jobs at its European operations as part of a bid to return the business to profitability with a broad restructuring that could include shuttering factories).

Continue reading Why Interest Rates Are Not Likely To Rise Much In The Near Future

You Know it’s Coming

By Jeffrey Snider

After a horrible December and a rough start to the year, as if manna from Heaven the clouds parted and everything seemed good again. Not 2019 this was early February 2015. If there was a birth date for Janet Yellen’s “transitory” canard it surely came within this window. It didn’t matter that currencies had crashed and oil, too, or that central banks had been drawn into the fray in very unexpected ways.

Actually it did, at least with that last one. The world’s default setting remains central bankers. No matter how thoroughly they discredit themselves, in times of trouble people really, really want to believe there exists this technocratic savoir.

They can get it wrong time after time after time, but when things appear most dire it is almost like a defense mechanism this running back to “home” the Yellen’s, Bernanke’s, and Powell’s. The world looks like it is falling apart leading a central bank, any central bank to try something and for a time it appears to work.

Continue reading You Know it’s Coming

Mnuchin Massacre Christmas Eve Bottom?

By Kevin Muir

Can’t deny that it’s been a wild few weeks in the financial markets. Although it seems like an eternity, it’s only been ten trading days since U.S. Secretary of the Treasury, Steve Mnuchin, called a special meeting of the President’s Working Group on Financial Markets to ensure that banks had “ample liquidity”. It was Sunday night, a day before Christmas Eve, and the stock market had been falling precipitously for the previous few weeks. Mnuchin was under a lot of pressure from Trump to fix the problem and he figured he needed to do something.

Continue reading Mnuchin Massacre Christmas Eve Bottom?

Pretium (PVG) is an Illegal, Fraudulent Operation

By Otto Rock

…as today has proven to the satisfaction of anyone with a stock market brain. As noted this morning when PVG suddenly fell of a cliff on XXL volumes, “If this dump today turns out to be yet another leaky boat moment from PVG and Q4 production comes in weak, I don’t see how we can ever trust this company again.”

And sure enough, it was. And we cannot, because they perpetrated a fraud in front of our eyes. The 96,342oz production on poor average head grade missed the target, one that was reiterated mere weeks ago, by over 10k oz and if the playing field were level every penny of the drop we saw today would be in tomorrow’s trading. But it’s not, because this is Canada and the crooks behind this scheme can get away with murder. It’s not as if it’s the first time insiders have been tipped off on PVG results before the rest of us and piled into the market for the stock either, just two quarters ago we saw the same type of suspicious pre-announcement activity in the market and sure enough, the ones with the secret information were on the right side of the trade.

Continue reading Pretium (PVG) is an Illegal, Fraudulent Operation