18 January 2019

Stocks and Precious Metals Charts - Risk On - US Markets Closed on Monday

"For what does it profit a man, if he would gain the whole world, but lose his soul?"

Mark 8:36

"The word of God is a living thing, and works among us. It is sharper than a double-edged sword, and penetrates even to the dividing of soul and spirit, the joints and the marrow; it judges the innermost thoughts and inclinations of every heart.   Nothing in all of creation is hidden from the sight of the Lord.  Everything is uncovered and laid bare before the eyes of Him to whom we will some day give an account."

Hebrews 4:12-13

"And some of us who have already begun to break the silence of the night have found that the calling to speak is often a vocation of agony, but we must speak.   We must speak with all the humility that is appropriate to our limited vision, but we must speak."

Martin Luther King, A Time to Break the Silence, Riverside Church, 4 April 1967

"But if not, I will not bow, and God grant that we will never bow, before the gods of evil."

Martin Luther King, But If Not, Ebenezer Baptist Church, 5 November 1967

“Now the problem is not only unemployment.  Do you know that most of the poor people in our country are working every day?   And they are making wages so low that they cannot begin to function in the mainstream of the economic life of our nation.  These are facts which must be seen, and it is criminal to have people working on a full-time basis and a full-time job getting part-time income.”

Martin Luther King, 18 March 1968

"For we wrestle not against flesh and blood, but against principalities and powers, against the rulers of the darkness of this world, against spiritual wickedness in high places."

Ephesians 6:12

We murder the prophets and persecute those of good will, while paying lip service to their memories, and dishonoring their words, and our own solemn oaths and responsibilities.  

Are we not exceptional?  Are you not entertained?

There were stories in the financial media, increasingly upbeat stories about the US-China trade talks, both yesterday and today. Interestingly enough the story tellers were deliberate in having their 'sources' as considering the stories well worthy of skepticism. Supposedly China will be promising to buy 1.5$ trillion in US goods over the next six years to correct the trade deficit.

The market could use the boost I would imagine, and Trumpolini likes the spectacle of big numbers. Let us see if there is any substance in this going forward, or is this just a further spray of mist in the fog of currency war.

Nevertheless it was fully risk on into the stock market option expiration and a three day weekend.  As you know US markets will be closed on Monday in observance of Martin Luther King day, a martyr to conscience whose principles are given lip service, but not observed, in the official conduct of our credentialed class and ruling elite.

Gold and silver were down a bit sharply and the Dollar was higher.

Stocks soared on an obvious short squeeze, but finished off the highs.

Trumpolini says he will make a ‘major’ announcement on Saturday about border and shutdown.

There will be some rough winter weather heading into the Eastern US over the weekend.

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

Have a pleasant weekend.

"O Jerusalem, Jerusalem, you who kill the prophets and abuse those whom God has sent as messengers to you.  How often I have longed to gather your children together, as a hen gathers her young under her wings.  But you would not let me. As you willed, your house is now yours— but is made desolate.’”

17 January 2019

Stocks and Precious Metals Charts - Who Could See It Coming? - Dead Reckoning the Minsky Moment

"In particular, over a protracted period of good times, capitalist economies tend to move from a financial structure dominated by hedge finance units to a structure in which there is large weight to units engaged in speculative and Ponzi finance."

Hyman Minsky, The Financial Instability Hypothesis

"Twenty-five years ago, when most economists were extolling the virtues of financial deregulation and innovation, a maverick named Hyman P. Minsky maintained a more negative view of Wall Street; in fact, he noted that bankers, traders, and other financiers periodically played the role of arsonists, setting the entire economy ablaze. Wall Street encouraged businesses and individuals to take on too much risk, he believed, generating ruinous boom-and-bust cycles. The only way to break this pattern was for the government to step in and regulate the moneymen.

Many of Minsky’s colleagues regarded his 'financial-instability hypothesis,' which he first developed in the nineteen-sixties, as radical, if not crackpot. Today, with the subprime crisis seemingly on the verge of metamorphosing into a recession, references to it have become commonplace on financial web sites and in the reports of Wall Street analysts. Minsky’s hypothesis is well worth revisiting."

John Cassidy, The Minsky Moment, The New Yorker, 4 February 2008.

"The period of financial distress is a gradual decline after the peak of a speculative bubble that precedes the final and massive panic and crash, driven by the insiders having exited but the sucker outsiders hanging on hoping for a revival, but finally giving up in the final collapse."

Charles Kindelberger, Manias, Panics, and Crashes: A History of Financial Crises

"The sense of responsibility in the financial community for the community as a whole is not small.  It is nearly nil.  Perhaps this is inherent.  In a community where the primary concern is making money, one of the necessary rules is to live and let live.  To speak out against madness may be to ruin those who have succumbed to it.  So the wise in Wall Street [and in the professional and credentialed class] are nearly always silent."

John Kenneth Galbraith, The Great Crash of 1929

"People who lost jobs — and those are in the millions in 2008, 2009, and 2010 — have now gotten jobs, that’s true, but the jobs they’ve gotten have lower wages, have less security and fewer benefits than the ones they lost, which means they can’t spend money like we might have hoped they would if they had got the kinds of jobs they lost, but they didn’t...

The big tax cut last December, 2017, gave an awful lot of money to the richest Americans and to big corporations.  They had no incentive to plow that into their businesses, because Americans can’t buy any more than they already do.  They’re up to their necks in debt and all the rest.

So what they did was to take the money they saved from taxes and speculate in the stock market, driving up the shares and so forth.  Naive people thought that was a sign of economic health.  It wasn’t.  It was money bidding up the price of stock until the underlying economy was so far out of whack with the stock market that now everybody realizes that and there’s a rush to get out and boom, the thing goes down."

Richard Wolff, The Next Economic Crisis Is Coming

Bubbles most often resolve their imbalances irresponsibly and jarringly, with a correction that is sharp and destructive.  It is often triggered by some seemingly trivial event, especially if its predatory mispricing of risk has been allowed to fester for an extended period of time..  How can this be?

Credit cycles explain bubbles in modern finance, but the elite protect themselves and their banks from the effects. Hence, only the middle and working class loses. And this has been the case for many years now. Hence the growing unrest abroad, and the decisions by the electorate at home that seem to puzzle and provoke the very comfortable 'credentialed' class.

The reason for this is quite easy to understand. Those who benefit the most from the bubble both actively and passively help sustain it.   They are reluctant to surrender any potion of their enormous advantage and personal gains, even if it might be better for them in the long term.

They do not consider the damage that may be done to the underlying social fabric that supports and protects their wealth.  Contrary to all of the familiar assumptions, they are not acting rationally or prudently, even for themselves.  Their focus is short term and short-sighted.  They are drunk on their own success.

The interpreters and creators of the prevailing narrative are themselves beneficiaries of the bubble economy, and will go to great lengths to misdirect the public discussion from any root causes, and often from its very existence.  They will distract the public with inflammatory issues, economic fear,  stage-managed spectacles, and manufactured complexity.   And finally, in the extremes of their shamelessness, they will seek to blame the victims for their lack of sophistication and the government for its efforts to restrain their predatory frauds.

This enables the cycle of boom and bust to repeat and worsen beyond all reasonable expectations.

The lesson from history is that a system based on the ascendant greed of powerful insiders is rarely rational and self-correcting, and is often spectacularly self-destructive.  And those with the most power, in their wonderful self-delusion, simply do not care until it is too late.  They are blinded by the moment, in their competition with each other, and the insatiable nature of greed itself.  'Enough' is not in their reckoning.

To this end governments are fashioned, and people organize themselves from the damage that can be done to society as a whole by a few.   Unfortunately people forget, and it seems that at least once every generation or so the madness slips loose its restraints, and this sad lesson from history repeats.

And so once again the world must face its rendezvous with destiny.

The box scores for today's market action are shown in the graphs below.

Apparently rough weather is heading towards the east coast. The local grocery store was a nuthouse even in the early afternoon. I am making some chicken soup for myself and Dolly. Even if I could coax her out of her fuzzy blanket and pillows, Dolly would offer limited assistance.  She is clearly just in it for the chicken.

Have a pleasant evening.

16 January 2019

Stocks and Precious Metals Charts - The Last Refuge of Scoundrels

“Not everyone who says to me, ‘Lord, Lord,’ will enter the kingdom of heaven, but the one who does the will of my Father who is in heaven."

Matthew 7:21

Stocks were attempting to rally again today, led by the SP500 futures, but gave up much of their gains into the close.

Gold and silver were up a bit, but still remain within a short term trading range, caught below overhead resistance and underlying support.

Individual company earnings reports are driving much of the stock action now.

The marcoeconomic results are still rather lackluster despite the 'enthusiasm' of Wall Street when it is convenient for their ends.

It is noticeable how often some sites seek to stir up outrage and indignation, making big things out of little ones, distorting and amplifying issues and events to keep people from thinking clearly and rationally, filled with hate and fear and contempt for each other.

Lies roll all too easily off the lips of this self-loving, hard-hearted generation.

Be as careful what you may put into your minds, as you would the quality of food and water in your mouths.

Have a pleasant evening.

15 January 2019

Stock Market and Precious Metals Charts - No Exit For Brexit - Bubblicious Disregard for Risks

British PM Theresa May's Brexit proposal went down to an historic defeat in Parliament today.

There will be a no confidence vot tomorrow but that seems largely perfunctory. No one wishes to sit in that hot seat, and there is a remarkable lack of popular counter-proposals to her plan.

There will be additional deliberations and votes this week. Hopefully the bickering and posturing will be put aside. The best part of the debates after the vote today was the amiable wit of the speaker of the House of Commons, John Bercow. 

Stocks managed to go out on the highs as signs of a dovish pause in US interest rate increases seemed to be in the air, especially based on commented by the Kansas City Fed's Esther George.

Seemingly at odds to this, the US Dollar moved higher, while gold and silver were commensurately off a bit.

There will be a stock markeet option expiration on Friday.  Let's see if the bubbly optimism of stocks will carry through until then.

We will be getting more individual company financial results now that we are in the reporting period again.   These may help to sway the markets in some direction, or not.

The market seemed to be shrugging off the results being shown by the financials thus far.

Mispricing risk is the new normal, apparently.   The assumption is that the stock market is now in hand and will be fine—  unless something startles it.

Have a pleasant evening.