23 July 2014

SP 500 and NDX Futures Daily Charts - The Pretenders

The metals were a dull trade today, although the miners were beleaguered by the usual mischief.

There was nothing of real interest to report in the Comex activities from yesterday. The Comex will soon have less relevance of an exhibit at the Smithsonian.
"Look Johnny, this is where people used to pretend to trade things they didn't even have. And they were adults like mommy and daddy!"
Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Tragedy Tomorrow, Comedy Tonight

Facebook announced 'better than expected' numbers after the bell. The stock sold off a bit because apparently the 'whisper numbers' were higher.

AT&T posted a miss.

Unemployment claims out tomorrow, as if anyone cares.

The IMF has lowered its US growth estimates and suggests Fed easing could extend beyond 2015.

Have a pleasant evening.

22 July 2014

Gold Daily and Silver Weekly Charts - Capping The Recovery™ By Distributing Paper Wealth

"It would convert the Treasury of the United States into a manufactory of paper money. It makes the House of Representatives and the Senate, or the caucus of the party which happens to be in the majority, the absolute dictator of the financial and business affairs of this country.

This scheme surpasses all the centralism and all the Caesarism that were ever charged upon the Republican party in the wildest days of the war or in the events growing out of the war."

James A. Garfield,  on a resolution offered by the Greenback Party that the government should issue all money, 1880

The number of ounces of silver that were 'stopped' is well over 15 million now for the month.

Next month the emphasis may shift back to gold. Today silver was the stalwart but most metals were capped.

Other than that, not much of consequence is happening in the Comex metals market these days. Bullion gets pushed around the plate in a daisy chain of short term speculation.

The real metals markets are already moved to EurAsia and the Mideast.

When the real markets reconverge with the paper markets, the resulting adjustment may be quite noticeable.

There was some related intraday commentary:  Green Slime: The Return of Franken-Money 

The lack of a recovery in the real economy, coupled with the background growth in artificial and short term focused money is setting up a particularly nasty set of scenarios for the US.  Stagnant wages will not support aggregate demand and generate organic growth, no matter how much money the Fed can create and shovel into the Wall Street Banks and the one percent.  Most despots would fear those numbers.

The Fed and the government have tried to cobble together a whole economy out of the corrupt and rotting pieces of a failed system and the dead bones of false economic theories, and sought to bring life to it with the lightning bolts of huge money infusions into the Wall Street Banks.  And what they have created is a monster, inimical to real growth and organic life.

How broken and dysfunctional is this system?   The US Congress has a record low approval rating of seven percent, and they simply do not care, and are inclined to change nothing.

The 'trickle down approach' does keep down the growth of wages and 'inflation,' as well as productive economic activity versus financializing activity,  but it sets up an absolutely deadly reckoning that may stretch the moral fabric of the Republic in ways not seen in our lifetimes certainly.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts

"If you follow issues like Too-Big-To-Fail or Wall Street corruption long enough, you realize that the reason things don't get done about them by our government has very little to do with ideology or even politics, in the way most of us understand politics.

Instead, it's a bizarre, almost tribal mentality that rules our capital city – a kind of groupthink that makes extreme myopia and a willingness to ignore the tribe's ostensible connection to the people who elected them a condition for social advancement within."

Matt Taibbi, Neil Barofsky's Adventure in Groupthink

The market can keep drifting higher on low volume and easy money.

I believe that the Holy Grail of IPO's, Alibaba, is going to be pushed back further into August from its lucky number 8-8 date.

APPL after the bell.

Have a pleasant evening.

Green Slime: The Return of Franken-Money

"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.

When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin!

Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out."

Andrew Jackson

The reason that there is a 'currency war' underway globally, and why there is increasing civil and political tension domestically, is not because of an envy for the Anglo-American one percent's way of life.

The reason is that the monetary system and the Western economies have gone off the rails with financialization and speculation, and there is a commensurate revulsion from it from those who are in a position to seek alternatives wherever they may. Those who cannot will be victims.

This system is fragile, and will not cohere.

This is why the precious metals have spiked, and will contain to struggle against the very obvious financial repression that is being driven by the Banks.  It is an exercise in the abuse of power and the corruption of governance.

This does not mean that austerity or repression are the solution, anymore than mindless stimulus in pursuit of a top-down recovery of a corrupt, wealth transfer system is either. 

The nature of the cure is in equal justice and significant reform, the protection of the weak from the overreach and encroachments of the powerful and the wealthy, whether they are allied in a foul bargain with the state or not.

We may try scheme after scheme, from clever gimmicks to 'new' theories, until we will stand exhausted on a wreckage of our own devices. There is no substitute for transparency, justice, and reform.


21 July 2014

Upton Sinclair: The Moneychangers - An Historical Novel of the Financial Crisis of 1907

"It had all worked out beautifully, according to the schedule. The stock market was falling to pieces—some of the leading stocks were falling several points between transactions, and Wyman and Hegan and the Oil and Steel people were hammering the market and getting ready for the killing. And at the same time, representatives of Waterman in Washington were interviewing the President, and setting before him the desperate plight of the Mississippi Steel Company.

Already the structure of the country's finances was tottering; and here was one more big failure threatening. Realising the desperate situation, the Steel Trust was willing to do its part to save the country—it would take over the Mississippi Steel Company, provided only that the Government would not interfere. The desired promise was given; and so that last of Waterman's purposes was accomplished.

But there was one factor in the problem upon which few had reckoned, and that was the vast public which furnished all the money for the game—the people to whom dollars were not simply gamblers' chips, but to whom they stood for the necessities of life; business men who must have them to pay their clerks on Saturday afternoon; working-men who needed them for rent and food; helpless widows and orphans to whom they meant safety from starvation.

These unhappy people had no means of knowing that financial institutions, which were perfectly sound and able to pay their depositors, might be wrecked deliberately in a gamblers' game. When they heard that banks were tottering, and were being besieged for money, they concluded that there must be real danger—that the long-predicted crash must be at hand. They descended upon Wall Street in hordes—the whole financial district was packed with terrified crowds, and squads of policemen rode through upon horseback in order to keep open the streets.

"Somebody asked for a dollar," was the way one banker phrased it. Wall Street had been doing business with pieces of paper; and now someone asked for a dollar, and it was discovered that the dollar had been mislaid.

It was an experience for which the captains of finance were not entirely prepared; they had forgotten the public. It was like some great convulsion of nature, which made mockery of all the powers of men, and left the beholder dazed and terrified. In Wall Street men stood as if in a valley, and saw far up above them the starting of an avalanche; they stood fascinated with horror, and watched it gathering headway; saw the clouds of dust rising up, and heard the roar of it swelling, and realised that it was a matter of only a second or two before it would be upon them and sweep them to destruction.

The lines of people before the Gotham Trust and the Trust Company of the Republic were now blocks in length; and every hour one heard of runs upon new institutions. There were women wringing their hands and crying in nervous excitement; there were old people, scarcely able to totter; there were people who had risen from sick-beds, and who stood all through the day and night, shivering in the keen October winds.

Runs had begun on the savings banks also; over on the East Side the alarm had reached the ignorant foreign population. It had spread with the speed of lightning all over the country; already there were reports of runs in other cities, and from thousands and tens of thousands of banks in East and South and West came demands upon the Metropolis for money. And there was no money anywhere.

And so the masters of the Banking Trust realised to their annoyance that the monster which they had turned loose might get beyond their control. Runs were beginning upon institutions in which they themselves were concerned. In the face of madness such as this, even the twenty-five per cent reserves of the national banks would not be sufficient.

The moving of the cotton and grain crops had taken hundreds of millions from New York; and there was no money to be got by any chance from abroad. Everywhere they turned, they faced this appalling scarcity of money; nothing could be sold, no money could be borrowed. The few who had succeeded in getting their cash were renting safe-deposit boxes and hiding the actual coin."

Upton Sinclair, The Moneychangers, 1908

Gold Daily and Silver Weekly Charts - Cap, Cap, Cap

Gold and silver had the lid slammed all day, although the miners recovered nicely from an early morning smackdown.

The next Comex option expiration will be next Monday.

Have a pleasant evening.