Gold Daily and Silver Weekly Charts - Remembering

More tiresome histrionics from LavaGirl and the money masters today.

When their positions finally implode, perhaps they will make pretty sparks in the night sky for the children. And then they will be gone, their gifts and talents not only wasted, but their names blackened shamefully, and forgotten as if written in ashes.

Silver is carving out a massive triangle pattern on the weekly chart.

Gold is a little more guarded here, but the next week or so should give it a clearer voice.

Below I remember those who are worth remembering, and forget those who have been weighed, and are found wanting.

On 22 February 1943, Scholl, her brother Hans and their friend Christoph Probst were found guilty of treason and condemned to death. They were all beheaded by executioner Johann Reichhart in Munich's Stadelheim Prison only a few hours later, at 17:00 hrs. The execution was supervised by Walter Roemer, the enforcement chief of the Munich district court. Prison officials, in later describing the scene, emphasized the courage with which she walked to her execution. Her last words were:

"How can we expect righteousness to prevail when there is hardly anyone willing to offer themselves up individually for a righteous cause?

Such a fine, sunny day, and I have to go."

The White Rose
Fourth Leaflet
Munich, 1942

We will not be silent.

"...It is the time of the harvest, and the reaper cuts into the ripe grain with wide strokes. Mourning takes up her abode in the country cottages, and there is no one to dry the tears of the mothers. Yet Hitler feeds those people whose most precious belongings he has stolen and whom he has driven to a meaningless death with lies.

Every word that comes from Hitler's mouth is a lie. When he says peace, he means war, and when he blasphemously uses the name of the Almighty, he means the power of evil, the fallen angel, Satan. His mouth is the foul maw of Hell, and his power is at bottom accursed. True, we must conduct a struggle against the Nazi terrorist state with rational means; but whoever today still doubts the reality, the existence of demonic powers, has failed by a wide margin to understand the metaphysical background of this war.

Behind the concrete, the visible events, behind all objective, logical considerations, we find the irrational element: The struggle against the demon, against the servants of the Antichrist.

Everywhere and always demonic powers lurk in the dark, waiting for the moment when man is weak; when of his own volition he leaves his place in Creation, as founded for him by God in freedom; when he yields to the force of evil, he separates himself from the powers of a higher order; and after voluntarily taking the first step, he is driven on to the next and the next at a furiously accelerating rate.

Everywhere, and at times of greatest trials, men have appeared, prophets and saints who cherished their freedom, who preached the One God and who His help brought the people to a reversal of their downward course. Man is free, to be sure, but without the true God he is defenseless against the principle of evil. He is a like rudderless ship, at the mercy of the storm, an infant without his mother, a cloud dissolving into thin air..."

Please distribute this as widely as possible.

"God has a way of standing before the nations with judgment. And it seems that I can hear God saying to America, 'You're too arrogant! And if you don't change your ways, I will rise up and break the backbone of your power, and I will place it in the hands of a nation that doesn't even know my name. Be still, and know, that I'm God.'"

Martin Luther King, It's A Dark Day In Our Nation, 30 April 1967

SP 500 and NDX Futures Daily Charts - Downdraft Day as Europe Scares Risk Off

The markets pulled back sharply today as traders took profits and felt for support to gain a toehold in the prices from which to consolidate.

The trading desks are squaring up for news, on the US economy in the Jobs Report on Friday, and on the Greek bailout, perhaps on Thursday.

I should not care to fight the market on this one, although it has yet to fully tip its hand. Recall that the current rally has never had a major correction, only slight pullbacks of which this is, so far at least, one.

Caution is advised.

I did take down a significant portion of my oversized 'short stock indices' positions today. I may have been early.

The Failure of the Current Banking Model and the Deliberate Mispricing of Risk For Personal Gain

“Fraud and falsehood only dread examination. Truth invites it...Whoever commits a fraud is guilty not only of the particular injury to him who he deceives, but of the diminution of that confidence which constitutes not only the ease but the existence of society."

Dr. Samuel Johnson

This enlightening essay excerpted below is remarkable because the author strikes right to the heart of the matter, rather than endlessly talking around technical details of how to 'fix' things, adjusting this and that, which is what people close to, if not caught up in, the financial problem are often wont to do.

And such a tinkering discussion  of it is a trap.

The patient does not require a pill or a poultice, a better diet or dental health regime, but surgery, and the sooner the better. The Volker Rule is a dulled knife, but directionally correct.  And the banks fear it, and hate it, as they do all meaningful reform. Theirs is the art of privileged deception, and it is the common cause they find with their political systems.

And of course and unfortunately it is the same with their central banks and the corporations that have grown up around them, who are upholding the exorbitant privilege, and danger, of the dollar reserve currency, which is to their benefit, by the massive mispricing of risk every day in the bond and currency, metal and derivatives markets. And the interval between major interventions is decreasing, such is the decay of their position.

The ongoing and conscious mispricing of risk is going to cause a second financial crisis that will be much worse than the first, which was also due to the conscientious mispricing of risk with the intent to take advantageous profit, which is a euphemism for fraud.

Fraud is corrosive, and impinges on what Samuel Johnson called that confidence which constitutes the ease and existence of society. And taken to the extreme levels which we have seen from the Wall Street Banks, the manipulating of markets to achieve personal profits, even under the excuse of governmental ends, becomes an assault on society as a whole.

The author is David Malone, a second generation documentary film maker.

And a special thanks to friend and City maven 'Harry' for sending this my way. And for passing along the amusing commonplace in the City of JPM and GS as Professor Moriarity and Colonel Sebastian Moran.

I have previously imagined the US Ratings Agencies with a Pythonesque twist, as The Crimson Permanent Assurance. And perhaps in a similar whimsical vein, JPM and GS are more like Captain Flint and Long John Silver, with Canary Wharf as Dry Tortuga.

And Bernanke is the Parrot. Pieces of Eight!   Arrrrrr.

Propaganda Wars : Our Version – Risk Weighted Lies. 1
By Golem XIV
February 28, 2012

The core claim of the Big banks and those who support them is that the financial system, as it is presently constituted, is not only fair and fit for purpose, but essential for our continued welfare. People should therefore stop complaining and knuckle down to suffer whatever deprivation is necessary. All must serve the greater good. Or as it should really be known – the Good of the Greater.

The banks are not frightened by a bank failure or two. As long as governments are prepared to force their people to bleed for the banks’ welfare it can actually be an opportunity. A bank failure is just a chance for the better connected ones to predate. Neither are they worried by a case of fraud here or an indictment there. They will settle for a sum which is of no significance to them, in return for a “no admission of guilt” clause. If necessary they are even prepared to throw one of their own to the baying crowd. No one in banking shed a tear for Fred the Shred. And why should they? Call him greedy if you want. See if he cares. He’d already sucked his millions from the wreak he left behind.

What scares the banks is any criticism that goes beyond claims of greed or fraud or even incompetence, and instead questions the system itself. The sanctity and perfection of the system and its right to ‘regulate’ itself, is what they are totally committed to protect. The system is what gives them their status and wealth. Question that and you threaten them where they are vulnerable.

It seems to me therefore that it is high time we questioned not just the probity, or even the solvency of the big global banks but their very intellectual foundation. It is time for us to wrench back the initiative from the banks. The financial elite have spent all this last year rewriting history so that blame for the banking crisis has been turned away from them and laid instead at the door of ‘people’ and then entire nations who ‘took’ on debts they coudn’t afford.

It is time to counter-attack and make the case, that it was and is the way that banks and banking go about their normal business that caused this crisis and are still causing it. We have to show that it was not a break down in an otherwise fine system which caused this crisis but that it was a result and consequence of a system which is an utter failure at doing what it prides itself most on being able to do – managing risk. Not just a onetime failure but a systemic failure which presents an on-going danger to the rest of us.

So let’s be clear. There is no systemic risk at all in welfare spending, no matter how large it becomes, for the simple reason that there is no surprise in welfare spending. It does not jump out at you unexpectedly. Welfare and social spending are a slow moving behemoths that can be seen coming for decades ahead. The only danger is they will trample you to death if you are stupid enough to stand there for decades listening, slack jawed, to the competing teams of witless cretins whose flatulent play-acting is all that remains of our political process.

There is, I suggest, a very clear, present and on-going systemic risk and danger from global banking. It was, after all, banking not welfare which gave us the phrase ‘systemic risk’. Bankers deal in risk. The welfare state deals in…welfare. Like it or loath it, there is no ‘risk’ in welfare or in social spending. They are linear and entirely predictable problems. Banking on the other hand not only deals in risk, it manufactures it. Risk is what bankers bank on.

Don’t take my word for it. Andrew Haldane is the Executive Director for Financial Stability at the Bank of England. In his speech at the London ‘Future of Banking’ conference held in July 2010 he said rather clearly (Page 14),

…banks are in the risk business…’

His entire paper was analysing the ways in which banks create risk and then systematically mislead us and even each other about what they have created.  He goes on to say (Page 14),

…it should be no surprise that the run-up to crisis was hallmarked by imaginative ways of manufacturing this commodity, with a view to boosting returns to labour and capital. Risk illusion is no accident; it is there by design. It is in bank managers’ interest to make mirages seem like miracles.

The mirage he refers to is the contribution banks claim to make to our over all economic well-being and security...

Read the rest here.

Net Asset Value Premiums of Certain Precious Metals Trusts and Funds

Gold Daily and Silver Weekly Charts

LavaGirl huffs and puffs, like one of her ponies, in the most repetitive and tedious of ways.

SharkBoy is staring into the abyss, blaming all others but himself.

Time for a little music, and then a nap.

Zzzzz....

Django Reinhardt et Le Quintette du Hot Club de France

The Chief Architect Surrounded and Trapped by Her Nemesis

SP 500 and NDX Daily Futures - Blue Skies and Paper Moons

"In 1929 the discovery of the wonders of the geometric series struck Wall Street with a force comparable to the invention of the wheel."

John Kenneth Galbraith, 'In Goldman Sachs We Trust,' The Great Crash of 1929

The Great Crash of 1929 by PBS: American Experience is one of the best documentaries on the subject of a stock market bubble and collapse that I have seen. I hear it is available on Netflix streaming. It is also occasionally available on the internet.

Here are two excerpts.

Net Asset Values of Certain Precious Metal Trusts and Funds

JP Morgan's Blythe Masters Is the 2011 Queen of Commodities - Sharkboy and LavaGirl

Blythe Masters is the chief of commodity trading at JPM, and the apparent mastermind behind their gargantuan short position in silver.

Previously, Ms. Masters attained fame for having helped to create credit default swaps.

Their fierce performance in crushing Goldman Sachs in the commodity pits has earned Jamie Dimon and Blythe Masters the fearsome nicknames, "Sharkboy and Lava Girl."

"Isabelle can't cope with our superior platform and industry connections," a certain dark Mistress of the Universe has been heard to say.  If you are the Queen you don't make markets; you own the markets. And everyone, including  Goldman, pays.

The Independent
JPMorgan's British commodities chief notches up $2.8bn
By Jim Armitage
03 March 2012

Blythe Masters, the British woman who runs JPMorgan's commodities division, has steered the department to record turnover exceeding $2.8bn (£1.8bn) in 2011, more than long-time industry leaders Goldman Sachs and Morgan Stanley.

Reuters research shows that Cambridge-educated Ms Masters beat her arch-rival, Isabelle Ealet at Goldman Sachs in London, whose commodities division's revenues stagnated at $1.6bn. JPMorgan's performance, a threefold leap in revenues, is a huge bounceback for one of the most powerful women on Wall Street.


In 2010 there had been serious concerns about staff defections and sluggish growth, but Ms Masters, who started at the bank aged 18 as an intern in London, had the firm backing of the chief executive, Jamie Dimon, and investment banking head, Jes Staley. He praised her for being "one tough kid" and stuck with her.

Ms Masters gained notoriety for pioneering credit default swaps, blamed by many for the financial crisis. She acknowledged in a 2008 speech that she had been branded "the woman who created weapons of mass destruction", although she defends the products, saying the people using them were at fault.

Ms Masters built the bank's commodities business through acquisitions including the takeover in 2010 of Royal Bank of Scotland's Sempra Commodities, a large trader of natural gas.

By contrast, rivals have stumbled lately, with Morgan Stanley's revenues shrinking for a third consecutive year, the worst streak since at least 1995, and Goldman Sachs' commodity unit nursing a large drop in revenues since raking in more than $4.5bn in 2009.

The blunt-speaking Ms Masters told staff in 2010 rivals were "scared shitless of us", adding: "They'd better be. This is a platform that's going to win."

Dramatic re-enactment of JPM's Pan European Commodity Victory Tour from Zurich to London