Author Archives: Michael

     

 

 

Shifting Patterns

In the last issue of Seasonal Insights I have discussed Bitcoin’s seasonal pattern in the course of a year. In this issue I will show an analysis of the returns of bitcoin on individual days of the week.

 

Bitcoin, daily – since bottoming in early December, BTC has advanced quite a bit. It remains an excellent trading sardine. [PT]

 

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Welcome to Acting Man's Forum!

It has come to our attention that the Voy Forum, that has inter alia provided a space where the so  -called 'Kitco refugees' could congregate and exchange their views, has run into grave problems. Either the forum is not loading at all, or if it does load, it has become impossible for users to log in.

 


 

You will find access to post after free registration, the forum button is located in the upper menu bar … or click here.

 


 

We have therefore decided to provide an alternative for this forum on the Acting Man site (other readers of our site are of course more than welcome to use it as well). This can either become a permanent home for the 'refugees' if they so wish, or a temporary one they can use in times of need (such as right now).

Similar to how the Voy forum worked, it will simply thread messages in chronological order. Essentially it will use the same process that is currently in use in our comments section, but a separate link to the forum page will be at all times visible at the top of the home page. Users who are not yet registered with us will have to register, as we need to guard against spammers (please see our privacy policy – your e-mail address will definitely never be passed on to third parties by us).

Depending on whether it catches on, we may at a later stage upgrade the forum page. Please be aware that if several links to outside sources are posted at once, the posts sometimes need to await approval (this is also to guard against spam). As a workaround, it may therefore sometimes be better to not post too many links at once in a single message.

 

Post away!

 


 

     

 


Euro Hysteria At A Fever Pitch

Monday was so chock-full with at times bewildering news items that one hardly knows where to begin. We decided therefore to focus on what one might call a case of official hysterics. The increasingly dubious mental state of the personae dramatis indicates that it would be reasonable to expect their unhinged mental disposition to influence  decision making at the highest level.

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A Debt Agreement Is In The Works – But Does It Really Matter?

Reportedly, Congress has now agreed on a plan to raise the US debt ceiling, or is close enough to agreement to make it a mere formality (at the time of writing anyway), which if true should remove this particular 'trigger event' from consideration for the markets.

In all likelihood this will lead to a number of  short term trend reversals, but it remains open to question whether some of the recent short term trends aren't the beginning of new medium term trends. As we noted last week, our impression was that stocks and bonds were mostly driven by the recognition that the economy is softening rather than the debt ceiling debate, as it has in any case been deemed unlikely that an agreement wouldn't be arrived at in a timely fashion. Some markets like e.g. gold and the 'save haven' currencies (i.e., the yen and the Swiss franc) were probably supported by the debt ceiling debate and t-bills came under pressure as money market funds investing in t-bills experienced large outflows last week (this underscores that there is indeed a difference between money and credit instruments, even the 'near cash' ones).

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…  in a 2:45 long video

Clarke and Dawes, in inimitable fashion, make the debt crisis accessible to everyone, by explaining exactly what the problem is. A friend sent us this video earlier today, and we felt we had to help spreading it, since it really hits the nail on the head. There's nothing that says we can't laugh while the ship sinks – it's better than pulling out one's hair (or what's left of it, depending).

 

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Most read in the last 20 days:

  • Do You Hear a Bell Ringing?
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  • Sovereign Bonds – Stretched to the Limit
    Anti-Vigilantes We dimly remember when Japanese government debt traded at a negative yield to maturity for the very first time. This happened at some point in the late 1990s or early 2000ds in secondary market trading (it was probably a shorter maturity than the 10-year JGB) and was considered quite a curiosity. If memory serves, it happened on just one brief occasion and it was widely held at the time that the absurd situation of a bond buyer accepting a certain loss if the bonds were...
  • The Motte and Baley Fallacy - Precious Metals Supply and Demand
      Spoofers vs. the Underlying Trend The price of gold fell seven bucks, but the price of silver was up $0.16. In other words, the gold-silver ratio did a little more reverting to that long-forgotten mean.   Launceston Castle in Cornwall, an example of a motte and baley fortification. The castle was built in 1067-1071 AD, either by the Count of Mortain (the half-brother of William the Conqueror) or Brian of Brittany. [PT] Photo credit: P. Vincent   Some story or...
  • Global Stock Markets: Danger Lies Directly Ahead
      A Global Pattern You are no doubt aware of the saying “sell in May and go away”. It is one of the best-known and oldest stock market truisms.   Mark Twain's famous saying about stock market speculation (the other one was “There are two times in a man's life when he should not speculate – when he cannot afford it, and when he can”).  From a seasonal perspective he was definitely right about September and October. [PT]   The saying is in fact justified...
  • Bond Yields in the Netherworld - Precious Metals Supply and Demand
      A Record Amount of Bonds with Negative Yields to Maturity Last week the price of gold went up $22, while the price of silver dropped ¢17. The big news last week was that the yield on all German government bond maturities is now negative. They are also all negative in Switzerland. And in Denmark, all maturities out to 20 years are negative. Interest rates are dropping rapidly in the US as well.   More than $14 trillion in bonds now trade at negative yields to maturity –...
  • Retail Holders Sell Their Gold - Precious Metals Supply and Demand
      A Myriad of Reasons to Buy Gold – But Small Holders are Selling Big moves occurred in the prices of the metals last week, with that of gold up $57 and silver $0.77. We have now reached a price of gold (if not silver) not seen since 2013, when it was on the way down. What is causing this sudden spike in price and renewed interest in gold?   A well-known depiction of investor emotions over a complete market cycle. Interestingly, it appears as though many retail gold holders...
  • Rising Stock Market Volatility – Another Warning Sign
      Bad Hair Days Are Back We recently discussed the many divergences between major US indexes, which led us to expect that a downturn in the stock market was close (see The Calm Before the Storm for details). Here is an update of the comparison chart we showed at the time:   The divergences between various indexes seem to be resolving as expected.   The next chart shows analogous divergences between the S&P 500 Index and two major foreign stock markets:   US...
  • Getting to a Special State of Ugly
    Suspicious Phrases There are certain phrases – like “trust me” or “I got this” – that should immediately provoke one’s suspicion.  When your slippery contractor tells you, “trust me, your kitchen renovation will be done before Christmas,” you should be wary.  There is no way it will be done before late spring.   USD-CNH (offshore yuan) exchange rate – the support/resistance level at 7 finally breaks amid escalating trade war rhetoric. [PT]   Or...
  • Interest Rate Watch and Bond Market Curiosities
    Things To Keep An Eye On Below is an overview of important US interest rates and yield curve spreads. In view of the sharp increase in stock market volatility, yields on government debt have continued to decline in a hurry. However, the flat to inverted yield curve has not yet begun to steep – which usually happens shortly before recessions and the associated bear markets begin.   2-year note yield, 3-month t-bill yield, 10-year note yield, 10-year/2-year yield spread,...
  • Bitcoin – From Greed to Fear
      A Noteworthy Sentiment Change Bitcoin and other cryptocurrencies have declined quite sharply in recent days. Here is an overnight snapshot of the daily chart:   Bitcoin corrects again...   It is difficult to gauge sentiment on BTC objectively, but there is a service that tries to do just that. According to its greed & fear barometer, the recent decline seems to have triggered quite a bit of apprehension:   The BTC sentiment measure of alternative.me has...
  • Writing on the Wall
    Not Adding Up One of the more disagreeable discrepancies of American life in the 21st century is the world according to Washington’s economic bureaus and the world as it actually is.  In short, things don’t add up.  What’s more, the propaganda is so far off the mark, it is downright insulting.   Coming down from the mountain with the latest data tablet... [PT]   The Bureau of Labor Statistics (BLS) reports an unemployment rate of just 3.7 percent.  The BLS also...

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