Jesse's Café Américain: Stocks and Precious Metals Charts

"While everyone enjoys an economic party the long-term costs of a bubble to the economy and society are potentially great. They include a reduction in the long-term saving rate, a seemingly random distribution of wealth, and the diversion of financial human capital into the acquisition of wealth. As in the United States in the late 1920s and Japan in the late 1980s, the case for a central bank ultimately to burst that bubble becomes overwhelming. I think it is far better that we do so while the bubble still resembles surface froth and before the bubble carries the economy to stratospheric heights. Whenever we do it, it is going to be painful, however.”

Larry Lindsey, Federal Reserve Governor, FOMC Minutes, September 24, 1996

“I recognize that there is a stock market bubble problem at this point, and I agree with Governor Lindsey that this is a problem that we should keep an eye on. We do have the possibility of raising major concerns by increasing margin requirements. I guarantee that if you want to get rid of the bubble, whatever it is, that will do it.”

Alan Greenspan, Federal Reserve Chairman, FOMC Minutes, September 24, 1996

"Where a bubble becomes so large as to pose a threat the entire economic system, the central bank may appropriately decide to use monetary policy to counteract a bubble, notwithstanding the effects that monetary tightening might have elsewhere in the economy. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy? We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability."

Alan Greenspan, Speech to the American Enterprise Institute, December 5, 1996

"As you may recall, Greenspan was taken aside by Treasury Secretary Robert Rubin after that 'irrational exuberance' speech. And that was that. The bubble denial by the bankers became vehement, until everything collapsed in 2001. And then it was observed, 'who could have seen it coming?'"

Jesse, It's Always Something, 27 July 2021

"I was aware that the loosening of mortgage credit terms for subprime borrowers increased financial risk. But I believed then, as now, that the benefits of broadened home ownership are worth the risk."

Alan Greenspan, The Age of Turbulence, September 2007

"The most valued characteristic of our system seems to be the willingness of the individual to surrender themselves to the unspeakable— to do whatever they are told to do, say anything that they are told to say, attend whatever institution and join whatever organization that may be required, and to profess anything with fervent conviction that they are told to believe. And to never, ever violate the secrecy and carefully crafted image of the ruling class.

Whether this servile attitude comes from a total lack of character, a sociopathic obsession with power and money, or on the negative side a susceptibility to sexual or financial blackmail, for example, it just a spectrum of a system that has degenerated into a secretive series of schemes, scams, and cons, hidden behind an official mythology of manufactured stories under a blanket of closely guarded secrecy."

Jesse, The Higher Immorality of the Elite, 25 October 2024

"Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population. Federal policy is increasingly dictated by the wealthy, by the financial sector, and by powerful industries. These policies are implemented and praised by these groups’ willing servants, namely the increasingly bought-and-paid-for leadership of America’s political parties, academia, [corporate media], and lobbying industry.

If allowed to continue, this process will turn the United States into a declining, unfair society with an impoverished, angry, uneducated population under the control of a small, ultra wealthy elite. Such a society would be not only immoral but also eventually unstable, dangerously ripe for religious and political extremism. Thus far, both political parties have been remarkably clever and effective in concealing this new reality. In fact, the two parties have formed an innovative kind of cartel— an arrangement I have termed America’s political duopoly. Both parties lie about the fact that they have each sold out to the financial sector and the wealthy. So far both have largely gotten away with the lie, helped in part by the enormous amount of money now spent on deceptive, manipulative political advertising."

Charles Ferguson, Predator Nation, 2012

Irrational exuberance all over again.

And despite what the steady propaganda that is put out by the moneyed interests, who are the beneficiaries by far of these repeating asset bubbles, the corporate world has been not over taken by government. Rather, it is government that has been taken by the moneyed interests.

This is what the decade long, very well-funded campaign to overturn New Deal regulations, including Glass-Steagall, was all about.

But you cannot reason with those who have replaced thinking with listening to and repeating slogans and well-crafted propaganda.

So why bother. Follow the money. And you may find the truth.

Stocks rallied again today, moving to new highs.

The VIX fell.

The Dollar rose.

Bitcoin fell in the usual wash and rinse.

Gold and silver both rocketed higher.

On an 'ordinary' trading day I would say this looked like a flight to safety.

However, this was a triple witch stock option expiration day, which we get four times per year.

So for now we'll just mark it up to the short term shenanigans that are so common in US markets today.

The exogenous risks being ignored by the US markets make my skin crawl.