14 December 2018

Stocks and Precious Metals Charts - US Debt 'Riskier' than Chinese Debt - FOMC and Stock Option Expiration

"In the Incarnation the whole human race recovers the dignity of the image of God.  Thereafter, any attack even on the least of men is an attack on Christ, who took on the form of man, and in his own Person restored the image of God in all. 

Through our relationship with the Incarnation, we recover our true humanity, and at the same time are delivered from that perverse individualism which is the consequence of sin, and recover our solidarity with all mankind."

Dietrich Bonhoeffer

“We are slow to master the great truth that even now Christ is, as it were, walking among us, and by His hand, or eye, or voice, bidding us to follow Him.  We do not understand that His call is a thing that takes place now.  We think it took place in the Apostles' days, but we do not believe in it; we do not look for it in our own case.

And yet the ever-blessed Spirit of God is here, ten times more glorious, more powerful than when He trod the earth in our flesh."

John Henry Newman

“To escape the pain caused by regret for the past or fear about the future, this is the rule to follow: leave the past to the infinite mercy of God, the future to His good Providence, and give the present wholly to His love by being faithful to His grace.”

Jean-Pierre de Caussade, Abandonment to Divine Providence

Stocks made yet another morning rally attempt.

But as it has so often been doing, it faded in late morning, and a slide began that ended up going out on the lows.

The spokesmodels fearfully wonder why the puppies are not eating their puppy chow.

This is not constructive action for any kind of market reversal.

Next week we will have an FOMC meeting. The Fed is almost universally expected to raise rates by 25 bp. The key factor will be the language they employ about the outlook for next year.

Some bullishness may be provoked by the way in which the Fed positions their interest rate stance for next year, whether it is substantial or not.

There will be the December stock option expiration on Friday.

This sets up the stage for a sharp relief or rebound rally IF the Trump-Trade-Brexit-Riots factors are at least benign, or ideally more optimistic.

And in another impressive feat and MAGA moment, for the first time in history, US 1Yr Treasuries are market priced as riskier than similar Chinese sovereign debt.
"Here’s another reason Donald Trump is “not at all happy with the Fed” and will continue to be frustrated by the world’s No. 2 economy. He is the first president to suffer the new normal of China becoming more creditworthy than the U.S. That’s right: America now pays more to borrow money than China does."
I would not necessarily lay all of this on the Fed.   How about another tax cut for corporations and the uber-wealthy with increased military spending?  Oh yeah, deficits don't matter.  For entitlements that serve the ruling elite.

Nothing to see there.  Move along.   (Got gold?)

Please remember the least of His creatures in these hard, barren months.

We have taken an abundant Eden, and turned it into a savage garden for the benefit of a few.

"Father, forgive them, for they do not know what they are doing."

Have a pleasant weekend.

13 December 2018

Stocks and Precious Metals Charts - Swing Kids - The Gathering Storm

"The NSDAP was nationalistic, respectful of the armed forces, socially conservative, disdainful of laziness, hostile to eccentric or incomprehensive ideas that came from cities, disapproving of homosexuals and other unconventional human types, and avid to achieve 'greatness' for Germany."

Walter Rinderle and Bernard Norling

“Hitler’s oratory moved people and appealed to their hopes and dreams.   But his speeches malevolently twisted hope into some gnarled ghastly entities, and appealed to the latent, darkest prejudices of Germans.”

Richard M. Perloff

"If there had been a strong democratic sentiment in Germany, Hitler would never have come to power.   No doubt men deserved what they got, when they went round crying for a 'hero.’"

AJP Taylor

"Our country is in a moment of crisis decades in the making, a moment in which America’s middle class has been hollowed out, working people have been betrayed, and democracy itself is under threat.   While it is easy to blame President Trump for our problems, the truth is that our challenges began long before him.   And without serious reforms, they are just as likely to outlast him."

Elizabeth Warren

Stocks continued to swing today, although the breadth of the highs and lows was not quite as great as has been usual. 

This cheered the spokesmodels a bit.  I wrote it off to fatigue and lack of interest.

The rally effort with which the markets charged in this morning once again failed into the afternoon.

Gold move a little lower, with silver and the Dollar going sideways.

The markets are hyper-focused on trade, with big swings following every indication of some change or new development in the trade spat between China and the US.

It does provide a decent distraction from the real situation, and the renewed stagnation that seems to be swirling around the feet of the real economy's tenuous grasp on the hillside of recovery.

The FOMC will meet next week, and very likely will raise interest rates a final 25 bp for 2018.  If they do not do so it would shock the markets.  But we may hear some slightly dovish sounds from those Solons of modern finance.

Actually this comparison is probably an injustice to Solon, who did engage in substantial monetary reforms and improvements during his time in ancient Greece. 

Without significant and genuine reform there will be no sustainable recovery.  But I would not underestimate how content many of the ruling class are with the current system as it is.  It has been paying them very, very well for many years.  And their comfortable smugness and insularity informs them that 'all is well'.

We seem to have a winter storm of sorts rolling in this afternoon.  The temperature has been dropping, and the air smells like snow.   Needless to say it is a raw kind of a gloomy day out there, and so Dolly and I have retreated to the warmth of the house, with warmth and good smells emanating from the pots simmering in the kitchen.

Have a pleasant evening.

12 December 2018

Stocks and Precious Metals Charts - Equities Rally, Fade in the Afternoon - Sitting In a Savage Garden

"It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud.   The behaviour that caused the mortgage bubble and financial crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident." 

Charles H. Ferguson 

“Thus did a handful of rapacious citizens come to control all that was worth controlling in America. Thus was the savage and stupid and entirely inappropriate and unnecessary and humorless American class system created. Honest, industrious, peaceful citizens were classed as bloodsuckers, if they asked to be paid a living wage. 

And they saw that praise was reserved henceforth for those who devised means of getting paid enormously for committing crimes against which no laws had been passed. Thus the American dream went belly up, turned green, bobbed to the scummy surface of cupidity unlimited, filled with gas, and went bang in the noonday sun.”

Kurt Vonnegut, God Bless You, Mr. Rosewater

"Call me dark, but what I see here is a toxic relationship between deregulation, underpriced risk, and exorbitant, inefficient pay scales that contribute to the growth of inequality, not to mention the shampoo economy (bubble, bust, repeat)."

Jared Bernstein, A Striking Picture of Pay and Deregulation in Finance

"The Walrus and the Carpenter
Walked on a mile or so,
And then they rested on a rock
Conveniently low:
And all the little Oysters stood
And waited in a row.

'The time has come,' the Walrus said,
'To talk of many things:
Of shoes—and ships—and sealing-wax—
Of cabbages—and kings—
And why the sea is boiling hot—
And whether pigs have wings.'"

Lewis Carroll

The Lord of the Flies
Stocks were in risk on, rally mode today.

And once again that brisk exuberance faded in the afternoon.

This is not constructive action for the bullish case.

That is not to say that the bulls are not overstaying their welcome in a mispriced risk bubble— but they checked with their Financial Advisors and received a dispensation to 'remain fully invested.'

Gold and silver edged higher just a little as the Dollar gave up some ground.

Theresa May won the confidence vote of her Conservative Party, 200 to 117.   Well, the good news is that she can remain the PM.  The bad news is that with a vote like that from her own party, good luck with trying to get any kind of a Brexit resolution adopted in the broader Parliament.

But no matter.  For today the pundits have declared that they indeed see daylight, dead ahead.

There was intraday commentary about the 'yellow vests' protests in France posted here.

Please remember to feed the least of His creatures during these hard and barren months.  They will reward you with a song of joy and contentment.

And ease your hearts with a mindful regard for His three great gifts:  repentance, forgiveness, and thankfulness, for all His consolations, and kindness, and tender mercies.

Have a pleasant evening.

Why Are the 'Yellow Vests' Protesting

"Four weekends of mass protests in Paris and in towns and villages across France have hampered economic activity while hurting the country’s image with investors, the government said Monday...

He [Macron] did not mention changing course on the most business-friendly overhaul of the French labor market in decades. The omission was a signal to investors that, despite the recent chaos, Mr. Macron plans to stick with his strategy for re-energizing Europe’s third-largest economy by pursuing changes that had stalled for more than a decade...

His mostly unyielding attitude underscores the stakes for France as he eases business regulations to seed dynamism. His plans include altering the country’s strict labor code to encourage hiring, and making budget adjustments during his first year in office that hit low-income earners and retirees especially hard, even as he cut taxes for wealthy people."

NY Times, Unrest in France Hinders Macron’s Push to Revive Economy

"The headline of an article [NY Times] on the protests in France told readers 'Unrest in France hinders Macron’s push to revive economy.'

The policies in question include ending a wealth tax on the rich, cutting retirees' Social Security benefits, and a series of measures designed to reduce the power of unions. While it is possible that Macron has taken these steps because he really does believe that this is the best to boost economic growth, it is also possible that he has taken these steps because he wants to give more money to rich people.   In this respect it is worth noting that Macron is a former investment banker. Therefore he is likely to be very rich, and to have rich friends."

"The problem of the last three decades is not the 'vicissitudes of the marketplace,' but rather deliberate actions by the [captured] government to redistribute income from the rest of us to the one percent."

Dean Baker

If a neoliberal agenda remains economically ascendant, and if a ruling elite continues to blind itself to the damage that it is causing to the broader public, over a long period of time through the enforcement of self-serving policies, even in the name of 'growth,' which is most often a rationale for a policy of 'more for us,' then we may very well expect what history suggests will happen.

It makes no difference what I or you want.  Don't hide behind the caution of 'be careful what you wish for', especially as a cover to avoid the consequences for years of deception and corruption.   You may find yourself trying to silence the very voices that you will need to speak out for justice with reason and mercy, when history comes knocking on your door.

We need to be talking about what is happening and why, and where it will lead unless we engage in meaningful reform of a system that has become a wealth extraction machine for a privileged few.

But that is not likely to happen, since the powerful now control most of the means of discussion and its platforms.  And, sad to say, both political parties.  Don't expect the utterly craven GOP, or even the self-satisfied, arrogant, corporate Democrats to stand for real reform.  They are creatures of the same rotten system, with their own fig leaves with which they hide themselves from their conscience.

Remember, it is 18 Democrats who are blocking the reaffirmation of 'net neutrality.'   And not surprisingly they are wearing the feed bags of the corporate lobbyists.  They talk a very good game, but in the end, they serve the powerful interests who pay them.

And so we will continue rolling forward into what increasingly appears to be inevitable.
"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason. But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right. The sensitivity of the poor to injustice is a trivial thing compared with that of the rich."

John Kenneth Galbraith

Tsar Nicholas II:  I know what will make them happy. They're children, and they need a Tsar! They need tradition. Not this! They're the victims of agitators.  A Duma would make them bewildered and discontented. And don't tell me about London and Berlin. God save us from the mess they're in!

Count Witte:  I see. So they talk, pray, march, plead, petition and what do they get?  Cossacks, prison, flogging, police, spies, and now, after today, they will be shot.  Is this God's will?  Are these His methods?  Make war on your own people?  How long do you think they're going to stand there and let you shoot them?   YOU ask ME who's responsible?  YOU ask?