Ben Bernanke Deals Out One Last Rally

Hate on the man all you like, Ben Bernanke will go down in history as the greatest Federal Reserve chairman who ever lived. He played this market like a fiddle, and bent even the most staunch opponents to his will. All while sporting a ridiculous beard and a speaking voice that would make a rhetorician cringe.

You are nothing next to the legacy of The Bearded Clam.

This guy smote the short sellers effortlessly at a time when they had all the momentum and benefit of the doubt needed to sink the indices as low as they wanted to go, then kept the market running higher for five years on nothing but empty promises and that devilish smirk.

The guy pulled more than three trillion dollars worth of asset purchases out of his hat, meaning greater than 75% of the Federal Reserves balance sheet was hand selected by Bernanke alone. His predecessors have nothing on his influence.

Bernanke is king. Meanwhile, forgotten media favorite Greenspan doesn’t have two shillings worth of reputation left to rub together.

It’s been just an astounding five years. This is the most fitting end to the Bernanke era I could possibly think of.

It’s nothing too severe – less than 1% – but I’m getting wacked to start off 2014 nonetheless.

The selloff in my account is led by HCLP, as mediocre fund managers caught padding their positions, trying to save their unspectacular careers, let go the Potemkin equity stakes.

Silver caught a nice bounce into the first of the year, but we have been here before, have we not? I’m mentally prepared for silver to go to $0.00…being shelled out for free at every street corner. Why not? It has no utility, after all…excluding all its utility.

My positions are AEC, MAA, NRP, HCLP, BAS, CCJ, RMCF, UEC (small), BALT, physical silver, and some TSLA puts (a third of which are about to expire worthless on the 18th of this month).

From the warmth of the 9th floor, the hearth putting out the low crackle of burning logs, I wish you the happiest in the the new year. Your night of celebration brought you much cheer, I trust. You probably cannot read this now, as you doze in the arms of a plush chair by the windowsill; beyond which the dusting of powdered snow creates a picturesque tapestry of natures glory.

But when the time arrives and you welcome yourself again to my hallowed halls, know that I thought kindly for you. May our new year bring fresh blessings and renew old ones. May our disagreements be few and readily surmountable.

And may the riches pile ever higher.

HCLP is up 5% in today’s tape. Since I started accumulating the position in August at $23.99 a share, the partnership is up 59%.

HCLP collects royalties on the special composition of sand used in advanced well services – like natural gas fracking.

HCLP alone accounts for 8% of my now 28% gains this year.

Much of the rest was from the RGR trade earlier this year, and profitable trading around core positions.

My biggest loser for 2013 was hands down physical silver.

I’m still only performing with the markets for 2013, but at least the last few days closed the gap between myself and the S&P a little more.

My underperformance is easy to identify. Greater than 25% of my net assets are tied up in the uranium sector, of which 95% is just CCJ common stock. I have been investing in the fuel for nuclear power for almost three years now.

So long as uranium remains passive, it will be a monumental feat for me to keep pace with the markets. Keep that in perspective – I only performed with the stock market this year, but I did so with my largest position going nowhere; one hand tied behind my back.

I was able to keep up with the pack by having big hits in my smaller positions, such as buying the bottom of the firearms market via RGR after the Sandyhook massacre last December.

But should my confidence in the uranium market be proven correct (this year?…) then I am quite sure that I will be leaving the averages in the dust. Word from the miners and the nuclear sector has me very interested still. Things remain bleak on the surface, but beneath the waves, in the depths, something stirs…

Welcome and I pray your week long festivities were of a convivial nature. Good food and and good friendship for you.

The year is coming to a close, and what a year it was.

With the stock market reopened, I am up a small amount for the day. The year has been well, though I find that I have merely performed the lower end of the indices this year.

So far, I am up a little over 25% for the year. An investment in the S&P would have outperformed me. It seems late for that to change now.

But I am content. I favor where I am at, and feel it will bring good blessings.

Today, the UK government formally offered Alan Turing a pardon. This pardon was delivered by the hand of the Queen Elizabeth II to restore the good name of Alan Turing.

There are just two seminal problems with this pardon. The first is that Alan Turing has been dead 60 years. The second is that he never should have needed “pardon” in the first place.

Each of you is intimately familiar with the work of Alan Turing, although you may not realize it yet.

In the turn of the 20th century, the mathematician David Hilbert proposed mathematics redirect itself to a task worthy of the Zeitgeist of those early years, aiming to spurn mathematical intuition at the alter of the positivists.

The primary aim of the program was to demonstrate that all of mathematics could effectively be replaced by a computer approach to proof and a set of well chosen axioms (without getting into the mostly now-worthless terminology of long forgotten philosophical movements, let’s just call them the “MASTER AXIOMS”). These were the practical aims – however, beneath the surface were other goals. The destruction of metaphysics, the removal of the “mathematics problem” to the positivist worldview, the death of Platonic reasoning, and the emergence of a permanent state of pure-empiricism.

The real tangible quest of the movement was to demonstrate three things: that mathematics was (1) consistent, (2) complete, and (3) decidable.

The first (and in some respects final) blow against the Hilbert program was struck in 1931 with the publication of Uber formal unentscheidbare Satze der Principia Mathematica und verwandter Systeme (On formally undecidable propositions of Principia Mathematica and related systems) by Kurt Godel. In his paper, the young Godel brought havoc on the positivists and the Hilbert program, by demonstrating that axiom derived mathematics was both not-consistent and not complete.

However, after the Hilbert program came crashing down, there were remnants and the third element of the program remained unanswered.

It was Alan Turing who helped take down the final pillar of the Hilbert program. He did this by creating the hypothetical machine, known as the “Turing Machine”. A device that could return a true or false answer for any decidable statement, the Turing machine enabled Alan Turing in 1936 to demonstrate critically that all of mathematics is also not decidable. This laid to rest the rampant idealism that had seized mathematics while also helping to demonstrate, alongside the great work of the likes of Godel, Church, or Von Neumann, some of the barriers to which mathematics can be successfully employed.

And it is his machine through which each of you is intimately familiar with Alan Turing as you read this on your electronic devices. The Turing machine was the architectural great grandfather of what would become the modern day computer.

A code breaker in the second World War, Alan Turing was the unsung champion of the triumph of the Allies. Employing his earliest computational devices, he engaged in the immensely complex task of breaking the German enigma – the ingenious pre-computer method of sending coded messages. The information the Allies gained from these decoded messages was of such importance, without it most of the Alan Turing’s home country, the UK, would have been overrun by invading forces otherwise. But by Turing’s hand, the Allies frequently knew of German plans before even German infantry.

At the complete of the war, peace returned in a form to Europe. But not for Turing. No ceremonies or honors were waiting for him. No peace, either.

A homosexual, and the status quo that had carried his necessity now behind them, Alan Turing was prosecuted and convicted in 1952 for indecency and subjected to castration.

He killed himself in 1954.

The loss of Alan Turing was a tragedy. His final work was moving into the subject of complexity theory. Between his sentencing and the time of his suicide, Turing began answering questions in mathematical biology (some of the most complicated around). This path eventually leads towards the direction of genetic algorithms or non-linear systems. Consider that recent papers written between 2012-2013 have concluded that photosynthesis follows many of the same behaviors of quantum mechanics. Turing clearly had the prowess to answer this level of inquiry. How much further along would we be today if he had lived?

I do not know who has pushed to have Turing pardoned by the state. Then prime minister Gordon Brown did formally apologize for the plight of Turing in 2009. However, pardon is nonsense. Alan Turing needs no pardon – you pardon criminals as an act of forgiveness. But the sin rests squarely on the shoulders of the UK. If they really want to make amends they should denounce the original conviction, and drag the names of those that persecuted this titan of the mind through the mud, striking them of any honors.

Then on the nation’s behalf, they can beg the memory of Alan Turing for pardon.