Stocks and Precious Metals Charts - Of Black Swans and Cooked Goose

 

“Never, never, never believe any war will be smooth and easy, or that any one who embarks on that strange voyage can measure the tides and hurricanes he will encounter.  The Statesman who yields to war fever must realise that once the signal is given, he is no longer the master of policy but the slave of unforeseeable and uncontrollable events. 

Antiquated War Offices, weak, incompetent or arrogant Commanders, untrustworthy allies, hostile neutrals, malignant Fortune, ugly surprises, awful miscalculations — all take their seat at the Council Board on the morrow of a declaration of war.  Always remember, however sure you are that you can easily win, that there would not be a war if the other man did not think he also had a chance. ”

Winston Churchill, My Early Life 1930, p. 229

"The Commonwealth of Rome grew great by the misery of the rest of mankind.  The Romans, like others as soon as they grew rich, grew corrupt; and in their corruption sold the lives and freedoms of themselves, and of one another.”

Samuel Johnson, Review of Memoirs of the Court of Augustus, 1756

"Trust in God, but everyone else shows the data.  Check the facts and the underlying assumptions.  The reason should be obvious, but people deal with the complexities of life by using assumptions, which are a kind of shorthand way of breaking reality down into manageable chunks.  Everyone does it. 

But it is useful, and prudent, to check those assumptions you make, and that other people are making, to see if they are still valid, especially if they involve things that are important (cf. Long Term Capital Management).  Is there a bus coming down the road you are crossing?  Are you financially solvent?  Have you allowed for lower probability but potentially corrosive and existential risks? (Taleb's famous Black Swan).  Those sorts of things."

Jesse, Investment Performance for 2007,  December 21, 2007

"All governments [and organizations] suffer a recurring problem: power attracts pathological personalities.  It is not that power corrupts, but that it is magnetic to the corruptible."

Frank Herbert, Chapterhouse Dune, March 1985

"Psychopaths don’t feel they have psychological or emotional problems, and they see no reason to change their behavior to conform with societal standards they do not agree with.  Psychopaths see the rules and expectations of society as inconvenient and unreasonable impediments to their own behavioral expression.  They make their own rules, both as children and as adults. 

Many of the antisocial acts of psychopaths lead to criminal charges and convictions.  But not all psychopaths end up in jail.  Many of the things they do escape detection or prosecution, or are on 'the shady side of the law.'  For them, antisocial behavior may consist of phony stock [and crypto] promotions, questionable business practices, spouse or child abuse, and so forth.  Many others do things that, though not necessarily illegal, are nevertheless unethical, immoral, or harmful to others: philandering or cheating on a spouse to name a few."

Robert Hare, How to Spot Predators Before They Attack, December 5, 2017

"They know of no solutions to the paradoxes of the Middle East and Europe, the Far East and Africa except the landing of Marines. Being baffled, and also being very tired of being baffled, they have come to believe that there is no way out—except war—which would remove all the bewildering paradoxes of their tedious and now misguided attempts to construct peace. In place of these paradoxes they prefer the bright, clear problems of war—as they used to be. For they still believe that 'winning' means something, although they never tell us what.

Some men want war for sordid, others for idealistic, reasons; some for personal gain, others for impersonal principle. But most of those who consciously want war and accept it, and so help to create its 'inevitability,' want it in order to shift the locus [epicenter] of their problems."

C. Wright Mills, The Causes of World War III, 1958 pp. 86-89


Stocks slumped and then rallied hard into the close.

This was the usual Monday short squeeze where they jam up the specs who took short positions in the market as a safeguard over the weekend.

Gold and silver were slammed, but they both bounced, with silver showing an impressive rise for a decent gain.

I wonder if Bessent and his oligarch buddies are running low on ammo like Hegseth is.

VIX came in hot with slumping stocks this morning, and then collapsed back down into the afternoon.

The Dollar popped at the open of NY trading, and then fell sharply into the close.

The market here is largely smoke and mirrors.  Be careful.

Bitcoin managed to hold a decent bounce.  Good for them.  Enjoy it while it lasts.

A little economic data on jobs from ADP will be coming out tomorrow morning. 

Wednesday is the more important release when we get some inflation data.  Alas, it's already a bit dated because it will not take into account the inflationary effects of the Iran war.

I keep playing scenarios on the outcome of this global adventurism, and they always seem to come out from very bad to disastrous.

As I have said, the US decision to participate in Netanyahu's war will be viewed in retrospect with the Germany invasion of Russia in Operation Barbarossa.

The way things are going if we are able to have unimpeded midterm elections, not by any means a sure thing, then the GOP will probably lose their Congressional majority and the Democrats will be able to make some headway in reining in this imperial presidency.

Even better, if the Democrats can displace Schumer and Jefferies from their leadership we might see some more meaningful reform.  But that does not seem likely at the moment. 

Have a pleasant evening. 

 

Stocks and Precious Metals Charts - Synthetic Assets: Bupkis from the Land of Zilch

 

"Ordinarily, the financial risk in a market, and hence the risk to the economy at large, is limited because the assets traded are finite.  There are only so many houses, mortgages, shares of stock, bushels of corn, [bars of silver], or barrels of oil in which to invest.  But a synthetic instrument has no real assets.  It is simply a bet on the performance of the assets it references.

That means the number of synthetic instruments is limitless, and so is the risk they present to the economy.  Increasingly, synthetics became bets made by people who had no interest in the referenced assets.  Synthetics became the chips in a giant casino, one that created no economic growth even when it thrived, and then helped throttle the economy when the casino collapsed."

Carl Levin, US Congress, Wall Street and the Financial Crisis, April 27, 2010

"The tyrant dies and his rule is over; the martyr dies and his rule begins.”

Søren Kierkegaard, The Journals of Søren Kierkegaard, 1938

"They have ignored the abuses of my people. 'Peace, peace!' they say, where there is no peace. They have acted shamefully, committing many atrocities. And they are not ashamed, they do not even know how to blush. Therefore they will be among the fallen; in the time of judgement they shall fall."

Jeremiah 6:14-15

"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, meeting with Bankers in Philadelphia, February 1834


Gold and silver are assets without counterparty risk if held directly because the bullion itself is the asset. 

Obviously there is pricing involved, because the value of all goods is determined in markets these days.

Synthetic assets, on the other hand, are literally propositions that are weighed upon in varying degrees by counter-party risk. 

The less tied to a tangible asset through a valid legal instrument, the greater the risk.

Certain new 'digital assets' are as the distillation of a synthetic instrument, with virtually no inherent value. 

They are the hallmark of this new era.  Such are the times.

The Non-Farm Payroll report was a disastrous miss, which *could* be a play to provoke the Fed to cut interest rates.

But this accumulation of sovereign debt increases the counterparty risk of holding Treasuries and Dollars, which are debt instruments of zero duration, economic theories to the contrary notwithstanding.  Physical force is a very artificial asset upon which to rely.

Gold and silver rallied.

Uncle Buck slipped off the 99 handle.

Bitcoin has gone to backtest its recent breakout from its trading range.  It does not appear to be a valid 'flight to safety asset' and is heavily correlated to speculation in the tech stock bubble. 

But let's keep an open mind.

The 'war' with Iran has been planned with a surprisingly short attention span.  And its progress shows.

I am deeply concerned about a cycle of escalation by Netanyahu and Trump to what has been so far been 'unthinkable' to US policy-makers.   And these are just the guys who would do it. 

Need little, want less, love more.  For those who abide in love abide in God, and God in them.

And have a pleasant weekend. 

Stocks and Precious Metals Charts - They Become Creatures of Unthinkable Horror

 

"I wonder whether people who ask God to interfere openly and directly in our world quite realise what it will be like when He does. It will be God without disguise; something so overwhelming that it will strike either irresistible love or irresistible horror into every creature. It will be the time when we discover which side we really have chosen, whether we realised it before or not. Now, today, this moment, is our chance to choose the right side. God is holding back to give us that chance. It will not last for ever."

C. S. Lewis, Mere Christianity, 1944

"They live out their days in prosperity, and slide peacefully down into hell."

Job 21:13

"Hell for all eternity for so little in exchange. A life of good or evil, the hope of Heaven or the despair of Hell, Faustus stands as a reminder that the choice between these two absolutes also falls to us. The lofty mind of man can be imprisoned by the artifices of its own making. If there are damned souls in Hell, it is because men blind themselves.”

E.A. Bucchianeri, Faust: My Soul Be Damned for the World, 2008

“Each day we are becoming a creature of splendid glory, or one of unthinkable horror.”

C.S. Lewis, Mere Christianity, 1952

“There was a certain rich man who was splendidly clothed in purple and fine linen, and who lived each day in luxury.  At his gate lay a poor man named Lazarus, who was covered with sores.  As Lazarus lay there longing for scraps from the rich man’s table, the dogs would come and lick his sores.

Finally, the poor man died and was carried by the angels to be with Abraham.  The rich man also died and was buried, and his soul went to the place of the dead.  There, in torment, he saw Abraham in the far distance with Lazarus at his side.

The rich man shouted, ‘Father Abraham, have some pity!  Send Lazarus over here to dip the tip of his finger in water and cool my tongue.  I am in anguish in these flames.’  But Abraham said to him, ‘My son, remember that during your lifetime you had everything you wanted, and Lazarus had nothing.  So now he is here being comforted, and you are in anguish.  And there is a great chasm separating us.  No one can cross over to you from here, and no one can cross over to us from there.’

Then the rich man said, ‘Please, Father Abraham, at least send him to my father’s home.  For I have five brothers, and I want him to warn them so they don’t end up in this place of torment.’  But Abraham said, ‘Moses and the prophets have warned them. Your brothers can read what they wrote.’

The rich man replied, ‘No, Father Abraham! But if someone is sent to them from the dead, then they will repent of their sins and turn to God.’  But Abraham said, ‘If they won’t listen to Moses and the prophets, they will not be persuaded, even if someone rises from the dead.’”

Luke 16:19-31

The sin of the rich man in the parable of Lazarus was not that he had been given great wealth, even though has no gratitude, and thinks that it is all because of his own merits.  No, his sin is that his pride made him blind to the suffering of Lazarus, who sat every day on his doorstep.  He saw, but did not care.

It was in the torment of the abyss that the rich man's eyes were opened.  Looking across the great chasm he finally sees Lazarus and holy Abraham.  And the first thing that the rich man does is to beg for favors and comfort for himself. 

He feels no shame, no repentance, never once saying that he is sorry.  Even as his eyes were opened, his heart remained hardened in the grip of his greed.  His sins are the chasm that separates him from salvation.  He holds himself apart from the abundant grace of God.

Nations that have been blessed can blind themselves to the misuse of their power and good fortune, given to them by God, to oppress and subjugate others, and please their greed and vanity.  They exalt themselves as the greatest good, the exceptional— even as they oppress and plunder and murder.  Until at long last God breaks the backbone of their power, and with chastisements humbles them.

One has come back from the dead and spoken to us, we who oppress the weak and murder the prophets. 'The more secret God's hand is, the more powerful — the more silent, the more awful.'   And you will see the hand of God, chastening the powerful, and bringing low those who murder his sheep. 

The Dollar is hanging on to the 99 handle. 

VIX ticked higher.

Gold and silver were once again hit by program selling.

There will be a Non-Farm Payrolls report tomorrow.

Stocks were slumping but managed to finish off the lows.

The mispricing of risk in the asset markets is being clouded by the fog of war, led by a vanguard of lies and hubris.

"Do not be deceived, for God is not mocked.  What a man sows, so shall he reap."
Galatians 6:7

The head of DHS, Kristi Noem, was fired today and will be replaced by a more adeptly verbal knucklehead who has been getting a lot of play recently on the servile news outlets. 

The appeals of this Administration to Christian nationalism in aggressive military actions is as repugnant a display of blasphemy as we have seen since they were burning crosses for hatred in the 1930s.

We are in the grips of madness. 

And we are ill-served by our leadership and their elite, and the mainstream media that are failing to keep the American public honestly informed. 

Have a pleasant evening. 

Stocks and Precious Metals Charts - Deceits of the Predator Class

 

"Time and again we hope for better leaders, but all too often those hopes are dashed.  The reason is that power causes people to lose the kindness and modesty that got them elected, or they never possessed those sterling qualities in the first place.  In a hierarchically organised society, the Machiavellis are one step ahead.  They have the ultimate secret weapon to defeat their competition.  They’re shameless.”

Rutger Bregman, Humankind: A Hopeful History, 2020

"The concentration of psychopathic and sociopathic personalities in positions of power, whether it be in the workplace or in political areas, emphasizes the need for balance of power, transparency, and the rule of law.  

Utopian designs for social organization that rely on perfectly rational and naturally self-governing individuals is not very practical. The fact that for some percentage of the population, from one to five percent, the lack of a conscience is a very real factor in their own behaviour, knocks down flat anarchical frameworks where reliance is placed upon some assumption of 'natural goodness' of everyone.  Not everyone is just like everyone else.  

There is a reason why throughout human history good people have found it necessary to organize themselves for their own protection. Not everyone is good, and laws provide for the protection of the weak, the vulnerable, and the innocent from the predators among us."

Jesse, Snakes in Suits: Predators Among Us, 26 April 2017

"We may make ourselves popular by telling our fellow citizens that they have made discoveries, conceived inventions, and made improvements.  We may boast that we are the chosen people; we may even thank God that we are not like other men.  But after all it will be but flattery, and the delusion, the self deceit of the Pharisees."

John Adams, Letter to John Taylor, 29 July 1814

 

Tonight is Daisy's monthly visit to the vet.  She has allergies that require a monthly injection in addition to the pills she takes every day.  She also has a heart murmur that requires some monitoring and daily medication.  She is worth it.

So here are the charts as they are at this time.  I will adjust any differences in the chart postings tomorrow.

I think it is pretty evident that this Administration has a keen eye on the stock markets, and frosting reality to make it appear better than it really is.

Bitcoin looks to be staging a breakout attempt for the long wedge I highlighted yesterday.  If it succeeds then it may run higher a bit.  And if it fails, then the wedge may continue working forward.

Gold and silver have been gaining the attention of Wall Street this week.  The shorts may be using this opportunity of relaxed oversight and increased market 'tinkering' to square up those short positions.

Or they may be doubling down.  And a turn of events in the geopolitical situation could crush them.   

What is unsustainable will not be sustained.

The leadership of today is perishing.  They do not yet realize it.  But their regret and surprise when the time comes will be as monumental as their egos. 

Have a pleasant evening.