Are They Trying To Break Me Down?

1,571 views

As if we weren’t already on a knife’s edge, watching Greece meltdown the euro and China burn to cinders, now we are treated to major financial outages here at home.

Is someone trying to ignite a panic? Because they’ll pull it off.

For the moment I guess those of us who have heavy supplies of guns and ammo rest easiest at night. You unarmed peace and love types have fun, knowing you’re the first targets of Fly’s junta, should civilization fail.

I for one welcome our new feudal system.

Greeks Vote “No” In Razor Thin 60/40 BLOWOUT

1,361 views

I don’t know what is wrong with Journalism in the 21st century, but I have some ideas.

And those ideas can pretty well be summed up by the press coverage of the Greek referendum going into today. The projections by the press of a close vote belied the truth and gave away all the problems facing modern Journalism.

The Odds Don’t Justify This

In order to have projected a close vote in the Greek referendum, with Greece voting so overwhelming “no”, the press would have had to talked to the “yes” vote population at a ratio of almost 3:2 “yes” to “no”. That’s a 20% swing away from a true sampling of the Greeks. Such a linear combination screams bias on the part of a profession that still has the nerve to call itself the eyes and ears of the planet. If you just fed a phone book into a random number generator, the odds of you being this wrong are astronomically bad.

Consider Bernoulli trials. If you sampled just 100 people who had a 60/40 preference for some outcome, what are the odds of a random sampling of the same population telling you the result would be 50/50 or worse in favor of the 40% position?

The answer is soundly less than 3%.

Even if I give the people that forecast such an unclose race as a close race some serious leeway, it still falls apart pretty quickly. There’s only an ~18% chance of predicting a 55/45 turnout or worse from real data; that’s the cliff’s edge of a 50/50 +/-5% poll, folks.

In order to be this bad, there’s almost no way it happened naturally. Which leaves two likely scenarios. Either the media didn’t actually talk to anyone. Or…

Living In A Bubble

One of the most pernicious problems with Journalism today is that Journalists and media personalities appear to increasingly consider themselves not as mere impartial observers, but as actual participants in the goings on of the world themselves.

This isn’t to say that Journalists shouldn’t have their own preferences. They all do, of course. And being open and frank about those things is actually an improvement from the old way of doing things, where a Dan Rather sinks or elevates stories based on a preferred outcome and for decades nobody calls him on it.

But Journalism has taken it all a step further, to actually mixing cultures almost exclusively with the rich, affluent, and active socialites. Journalism sees itself as being “refined” and “elite” in status, and my suspicion is that Journalism almost never gets out anymore, to talk to the masses of real people who actually make the world work day to day.

Take this Vox article that Dylan Matthews decided it would be great to write on the 4th of July, of all moments.

I’m not sure what type of delusions it takes to write an article like that on the birthday of America. But I am getting increasingly sure that the conditions for those delusions include isolation from everyday life.

America’s Top 4 media companies NBC, CBS, ABC, and Fox are all headquartered in either Washington DC or New York City. The decisions on what to run nationally come from Washington DC or New York City. The perceptions of what current events mean come from Washington DC or New York City.

If you’re a major media outlet trying to be the unbiased sight of a nation, then having every nerve ending routed through America’s capital (a place hardly renown for its realism or connection with the rest of the country) or a single small island of billionaires in the Atlantic is probably a rough means of getting there.

The same problem is going on in Europe. The European Union is probably the least thought out idea to have been implemented in the past 50 years. I would challenge you to find a worse example. Yet, because of how it was created, Europe’s elite class (and I use the word “elite” quite lightly here) are totally wedded to the concept.

Despite the grand enthusiasm on the parts of rich multinational businessmen and suddenly elevated technocrats, there has been little in the way of success on the part of the EU to improve the lives of ordinary Europeans. The sudden resurgence of nationalism is not a mere unexpected bout of nostalgia for the old countries and their fading sovereignty. The lives of men and women across Europe have markedly declined since the formation of the EU.

Where is the coverage of these people? European media is firmly in bed with the EU project. They feel like they are an active part of it and root for its success. They physically cry at the thought of it failing.

That is my personal belief in how you get media outlets trumpeting a close referendum outcome all week, only to have this happen. So many large media outlets projected a close race because somewhere in their minds they feared it wouldn’t be one, and a 50/50 call is the best hope they could give the outcome that they really wanted.

There’s no other explanation I can think of for this type of behavior. It is hardly the only isolated incident; I see this kind of awful, detached commentary almost daily.

Journalism needs to start getting off its island and away from its money if it wants to be taken seriously as the trustworthy record keepers of a civilization again.

Update:

Here’s a fun fact. Since so many media outlets claimed their polling was based on thousands of responders, I re-ran my numbers.

The odds of predicting a 50/50 vote or greater in favor of “Yes” from a 60/40 outcome in favor of “No”, based on 1,000 responders, is 1 in 10 billion.

I Can’t Tell Yet If This Is An Awful Move

1,480 views

I’ve decided more or less to cling to the oil stocks I had before last year’s implosion. BAS and HCLP remain in my portfolio, and into the decline I added VOC.

On the face of it, this is a bad move. The oil price decline was a classic collapse and these things have a way of being dead money for prolonged periods of time after the big drop off.

I can think of things like uranium prices or old school tech where the market tanked and people sat around, wasting their lives, waiting for a redemption that still hasn’t come. (On that note, I still own CCJ too, and am getting quite impatient with the Japanese).

But if there’s one market that breaks the mold, it has to be oil.

Oil has dumped spectacularly, twice in the past seven years, and it always returns right back to new highs. Not since before the ’90’s has oil been truly dead money.

The world is modernizing and despite all the hoopla about pretty battery packs you can adorn your house with, if humanity is to fully push into 21st century modernity, then it will need oil and lots of it.

This isn’t just about gasoline for cars. I mean it certainly is about gasoline, as a young society will need cheap options available to create a footing. But it’s also about raw material for industrials.

So I have decided, despite horrendous 30% losses last year, to more or less stay put. Everyone is so negative right now, but if recessions and corrections were so obvious and always about to happen, then they wouldn’t be so devastating or rare now would they?

I’m On Vacation

1,359 views

I didn’t realize I was on vacation; it sort of sneaked up on me.

May brought the turn of the weather in Michigan, and it is just so beautiful out that I cannot bring myself to sit in front of a computer. So I am out of work until next Friday and spent the entire day doing some gardening around the house.

Gardening is one of those activities that calms me down. It’s back burning work and tires you out. You’re under the sun with fresh air bending around you. Much superior to any time spent in a stuffy office, where the air circulation was modeled after a submarine.

I’ve been keeping a soft eye on the markets and generally speaking here is my position: foreign sovereign bonds have inverted themselves sharply from showing severe distress to a much more favorable normalcy. Paying countries to hold onto your money is terrible practice and a bad omen. The EURUSD has also been acting favorably, staging a rally off the lows. These things could be suggesting a bought of good data out of Europe finally, which is being priced in by markets (or not). For the moment, they have led a strong rebound in oil and have helped reverse the oil glut which has been building in the US.

The oil build we’ve been seeing has two components. The first component is what you might call global demand for oil, which is in question following weak data out of China, Europe, South America, North America…okay why am I writing this?…the whole planet Earth.

But the second component is much more localized. An uncompetitive dollar has actually acted to erect a trade wall around the US, which is in a sense trapping our oil products domestically. This has led to weak demand for US industrials and so our oil is pooling.

Global demand will still weigh down things, but if the second point is corrected, then global demand notwithstanding you could still see the US oil glut correct itself very quickly.

A spate of oil inventory draw downs and good news for US oil names is not then directly dependent on strong growth numbers around the globe. That would obviously help but adjustments to the dollar could serve much the same purpose.

That’s more or less why US oil names have rallied so hard recently.

For my part I am hunkered down and will be avoiding making transactions. But I like what I’m seeing in terms of the EURUSD and bonds.

Something to be cautious about however; you could also argue that low bond yields have forced pensioners and fixed income positions to take on additional risk by chasing stock prices for dividends to supplement yield. In that sense, stocks are rigged with a weak element that could quickly cascade. Positive bond yields are good, but too much yield is bad. If yields run too high, I wouldn’t be at all surprised if it sparked a significant correction.

For the moment, the negative yield environment was a pretty recent phenomenon, so let’s not get ahead of ourselves. But we do need to see bonds set a floor at some point in the not too distant future or my optimism could turn dark in a hurry.

Cameco & Canada Enter Uranium Agreement With India

1,437 views

Here’s the scoop. This has been a rumor for a while now, but India and Canada finally signed an agreement to deliver nuclear fuel to India for their power generation. This comes as India’s economy is (finally?) making it out of the 19th century and power requirements are growing.

Nuclear energy is on the way back in, because it has to be. Environmentalist groups are basically anti-everything, but they have upset the balance in one key aspect – a large block of the population, about half, believe that traditional carbon emitting forms of fuel will end all life on Earth.

While I’m sure Greenpeace would love to block every form of power generation conceivable, their victories against coal are going to create momentum for nuclear power. You cannot block the main source of fuel and also block development of all the other sources of fuel. I mean, advancements in solar are impressive, but we’re still in the midst of a decades long process of incorporating that into the grid. And let’s be honest, Greenpeace hates constructing those too.

The sane folks are going to slowly latch onto the anti-coal message (and by and large already have), but they aren’t going to embrace the hardcore environmentalist message…ever. So that means we’re going to get more nuclear power as public policy shifts to fuel diversification.

Japan restarts are being held up by some asshole judge. That’s actually fine for the Japanese for the moment since import pricing have presumably fallen sharply with the recent oil selloff. But how long do you really think that will last? Eventually power generation costs jump and they have to restart.

India is running to nuclear because growing nuclear is going to provide air pollution free generation, which they need same as China. My guess is CCJ stock jumped yesterday on confirmation that, yes, this is actually happening and not just a pipe dream.

A Free Sample Of The Income Investment Report

996 views

As a token of goodwill and affection, I have decided to hand out a free page from the Income Investment Report.

Feel free to click on the link to preview the research behind my ALDW position. Unfortunately, not all of the functionality will be operational, but that is the penalty of free.

To see the report in all of its raw glory, sign up for the service.

Are They Trying To Break Me Down?

1,571 views

As if we weren’t already on a knife’s edge, watching Greece meltdown the euro and China burn to cinders, now we are treated to major financial outages here at home.

Is someone trying to ignite a panic? Because they’ll pull it off.

For the moment I guess those of us who have heavy supplies of guns and ammo rest easiest at night. You unarmed peace and love types have fun, knowing you’re the first targets of Fly’s junta, should civilization fail.

I for one welcome our new feudal system.

Greeks Vote “No” In Razor Thin 60/40 BLOWOUT

1,361 views

I don’t know what is wrong with Journalism in the 21st century, but I have some ideas.

And those ideas can pretty well be summed up by the press coverage of the Greek referendum going into today. The projections by the press of a close vote belied the truth and gave away all the problems facing modern Journalism.

The Odds Don’t Justify This

In order to have projected a close vote in the Greek referendum, with Greece voting so overwhelming “no”, the press would have had to talked to the “yes” vote population at a ratio of almost 3:2 “yes” to “no”. That’s a 20% swing away from a true sampling of the Greeks. Such a linear combination screams bias on the part of a profession that still has the nerve to call itself the eyes and ears of the planet. If you just fed a phone book into a random number generator, the odds of you being this wrong are astronomically bad.

Consider Bernoulli trials. If you sampled just 100 people who had a 60/40 preference for some outcome, what are the odds of a random sampling of the same population telling you the result would be 50/50 or worse in favor of the 40% position?

The answer is soundly less than 3%.

Even if I give the people that forecast such an unclose race as a close race some serious leeway, it still falls apart pretty quickly. There’s only an ~18% chance of predicting a 55/45 turnout or worse from real data; that’s the cliff’s edge of a 50/50 +/-5% poll, folks.

In order to be this bad, there’s almost no way it happened naturally. Which leaves two likely scenarios. Either the media didn’t actually talk to anyone. Or…

Living In A Bubble

One of the most pernicious problems with Journalism today is that Journalists and media personalities appear to increasingly consider themselves not as mere impartial observers, but as actual participants in the goings on of the world themselves.

This isn’t to say that Journalists shouldn’t have their own preferences. They all do, of course. And being open and frank about those things is actually an improvement from the old way of doing things, where a Dan Rather sinks or elevates stories based on a preferred outcome and for decades nobody calls him on it.

But Journalism has taken it all a step further, to actually mixing cultures almost exclusively with the rich, affluent, and active socialites. Journalism sees itself as being “refined” and “elite” in status, and my suspicion is that Journalism almost never gets out anymore, to talk to the masses of real people who actually make the world work day to day.

Take this Vox article that Dylan Matthews decided it would be great to write on the 4th of July, of all moments.

I’m not sure what type of delusions it takes to write an article like that on the birthday of America. But I am getting increasingly sure that the conditions for those delusions include isolation from everyday life.

America’s Top 4 media companies NBC, CBS, ABC, and Fox are all headquartered in either Washington DC or New York City. The decisions on what to run nationally come from Washington DC or New York City. The perceptions of what current events mean come from Washington DC or New York City.

If you’re a major media outlet trying to be the unbiased sight of a nation, then having every nerve ending routed through America’s capital (a place hardly renown for its realism or connection with the rest of the country) or a single small island of billionaires in the Atlantic is probably a rough means of getting there.

The same problem is going on in Europe. The European Union is probably the least thought out idea to have been implemented in the past 50 years. I would challenge you to find a worse example. Yet, because of how it was created, Europe’s elite class (and I use the word “elite” quite lightly here) are totally wedded to the concept.

Despite the grand enthusiasm on the parts of rich multinational businessmen and suddenly elevated technocrats, there has been little in the way of success on the part of the EU to improve the lives of ordinary Europeans. The sudden resurgence of nationalism is not a mere unexpected bout of nostalgia for the old countries and their fading sovereignty. The lives of men and women across Europe have markedly declined since the formation of the EU.

Where is the coverage of these people? European media is firmly in bed with the EU project. They feel like they are an active part of it and root for its success. They physically cry at the thought of it failing.

That is my personal belief in how you get media outlets trumpeting a close referendum outcome all week, only to have this happen. So many large media outlets projected a close race because somewhere in their minds they feared it wouldn’t be one, and a 50/50 call is the best hope they could give the outcome that they really wanted.

There’s no other explanation I can think of for this type of behavior. It is hardly the only isolated incident; I see this kind of awful, detached commentary almost daily.

Journalism needs to start getting off its island and away from its money if it wants to be taken seriously as the trustworthy record keepers of a civilization again.

Update:

Here’s a fun fact. Since so many media outlets claimed their polling was based on thousands of responders, I re-ran my numbers.

The odds of predicting a 50/50 vote or greater in favor of “Yes” from a 60/40 outcome in favor of “No”, based on 1,000 responders, is 1 in 10 billion.

I Can’t Tell Yet If This Is An Awful Move

1,480 views

I’ve decided more or less to cling to the oil stocks I had before last year’s implosion. BAS and HCLP remain in my portfolio, and into the decline I added VOC.

On the face of it, this is a bad move. The oil price decline was a classic collapse and these things have a way of being dead money for prolonged periods of time after the big drop off.

I can think of things like uranium prices or old school tech where the market tanked and people sat around, wasting their lives, waiting for a redemption that still hasn’t come. (On that note, I still own CCJ too, and am getting quite impatient with the Japanese).

But if there’s one market that breaks the mold, it has to be oil.

Oil has dumped spectacularly, twice in the past seven years, and it always returns right back to new highs. Not since before the ’90’s has oil been truly dead money.

The world is modernizing and despite all the hoopla about pretty battery packs you can adorn your house with, if humanity is to fully push into 21st century modernity, then it will need oil and lots of it.

This isn’t just about gasoline for cars. I mean it certainly is about gasoline, as a young society will need cheap options available to create a footing. But it’s also about raw material for industrials.

So I have decided, despite horrendous 30% losses last year, to more or less stay put. Everyone is so negative right now, but if recessions and corrections were so obvious and always about to happen, then they wouldn’t be so devastating or rare now would they?

I’m On Vacation

1,359 views

I didn’t realize I was on vacation; it sort of sneaked up on me.

May brought the turn of the weather in Michigan, and it is just so beautiful out that I cannot bring myself to sit in front of a computer. So I am out of work until next Friday and spent the entire day doing some gardening around the house.

Gardening is one of those activities that calms me down. It’s back burning work and tires you out. You’re under the sun with fresh air bending around you. Much superior to any time spent in a stuffy office, where the air circulation was modeled after a submarine.

I’ve been keeping a soft eye on the markets and generally speaking here is my position: foreign sovereign bonds have inverted themselves sharply from showing severe distress to a much more favorable normalcy. Paying countries to hold onto your money is terrible practice and a bad omen. The EURUSD has also been acting favorably, staging a rally off the lows. These things could be suggesting a bought of good data out of Europe finally, which is being priced in by markets (or not). For the moment, they have led a strong rebound in oil and have helped reverse the oil glut which has been building in the US.

The oil build we’ve been seeing has two components. The first component is what you might call global demand for oil, which is in question following weak data out of China, Europe, South America, North America…okay why am I writing this?…the whole planet Earth.

But the second component is much more localized. An uncompetitive dollar has actually acted to erect a trade wall around the US, which is in a sense trapping our oil products domestically. This has led to weak demand for US industrials and so our oil is pooling.

Global demand will still weigh down things, but if the second point is corrected, then global demand notwithstanding you could still see the US oil glut correct itself very quickly.

A spate of oil inventory draw downs and good news for US oil names is not then directly dependent on strong growth numbers around the globe. That would obviously help but adjustments to the dollar could serve much the same purpose.

That’s more or less why US oil names have rallied so hard recently.

For my part I am hunkered down and will be avoiding making transactions. But I like what I’m seeing in terms of the EURUSD and bonds.

Something to be cautious about however; you could also argue that low bond yields have forced pensioners and fixed income positions to take on additional risk by chasing stock prices for dividends to supplement yield. In that sense, stocks are rigged with a weak element that could quickly cascade. Positive bond yields are good, but too much yield is bad. If yields run too high, I wouldn’t be at all surprised if it sparked a significant correction.

For the moment, the negative yield environment was a pretty recent phenomenon, so let’s not get ahead of ourselves. But we do need to see bonds set a floor at some point in the not too distant future or my optimism could turn dark in a hurry.

Cameco & Canada Enter Uranium Agreement With India

1,437 views

Here’s the scoop. This has been a rumor for a while now, but India and Canada finally signed an agreement to deliver nuclear fuel to India for their power generation. This comes as India’s economy is (finally?) making it out of the 19th century and power requirements are growing.

Nuclear energy is on the way back in, because it has to be. Environmentalist groups are basically anti-everything, but they have upset the balance in one key aspect – a large block of the population, about half, believe that traditional carbon emitting forms of fuel will end all life on Earth.

While I’m sure Greenpeace would love to block every form of power generation conceivable, their victories against coal are going to create momentum for nuclear power. You cannot block the main source of fuel and also block development of all the other sources of fuel. I mean, advancements in solar are impressive, but we’re still in the midst of a decades long process of incorporating that into the grid. And let’s be honest, Greenpeace hates constructing those too.

The sane folks are going to slowly latch onto the anti-coal message (and by and large already have), but they aren’t going to embrace the hardcore environmentalist message…ever. So that means we’re going to get more nuclear power as public policy shifts to fuel diversification.

Japan restarts are being held up by some asshole judge. That’s actually fine for the Japanese for the moment since import pricing have presumably fallen sharply with the recent oil selloff. But how long do you really think that will last? Eventually power generation costs jump and they have to restart.

India is running to nuclear because growing nuclear is going to provide air pollution free generation, which they need same as China. My guess is CCJ stock jumped yesterday on confirmation that, yes, this is actually happening and not just a pipe dream.

A Free Sample Of The Income Investment Report

996 views

As a token of goodwill and affection, I have decided to hand out a free page from the Income Investment Report.

Feel free to click on the link to preview the research behind my ALDW position. Unfortunately, not all of the functionality will be operational, but that is the penalty of free.

To see the report in all of its raw glory, sign up for the service.

Previous Posts by Mr. Cain Thaler