Stocks and Precious Metals Charts - And It Is

 

"The problem with movies and books is they make evil look glamorous, exciting, when it's no such thing.  It's boring and it's depressing and it's stupid.  Criminals are all after cheap thrills and easy money, and when they get them, all they want is more of the same, over and over." 

Dean Koontz

 

"Is it that we are that dumb, or they are just that brazen?" 

Jesse, 2008 

 

“I wish I had an answer to that because I'm tired of answering that question.” 

 Yogi Berra 

 

"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.” 

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

 

“Crime, once exposed, has no refuge but in audacity.” 

Tacitus

 

“He did not care for the lying at first.  He hated it.  Then later he had come to like it.  It was part of being an insider, but it was a very corrupting business.” 

Ernest Hemingway, For Whom the Bell Tolls

 

And there it is, ladies and gentlemen.   

Another precious metals futures option expiration on the Comex.

Another wash and rinse in the equity markets.

Don't blame Powell.  He is just the messenger, another manservant for Mackie Messer and the moneyed interests. 

Blame all those 'very important people' who tolerate a dirty rotten system in the hopes of getting a little more than they deserve for themselves. 

And the band played on.

Have a pleasant evening.

 

SP 500 and NDX Futures Daily Charts - Policy Errors by Hacks, Par Excellence

Please see the gold/silver commentary above for my take on the FOMC statement.

Some called it a 'balanced statement.'

I considered it a muddied statement, with a little something for everyone.  This is not due to some serene objective wisdom on the part of the Fed.  Rather, they were purposely vague and misdirecting, in order to keep their options open, because they have no idea what they hell is going one or what they are doing.   As a default they are serving their masters in the Banks, that's all. 

They are, in the vernacular, 'scared shitless.'    And well they should be, since they are standing on a wreckage of their own devices.  And I doubt that there will be rooms for them at the compound in Paraguay.

By the end of the day, the fear trade dominated bonds and equities.  Stocks went out on their lows.

 

Perhaps some of the financial results from puffballs like Facebook will help to distract Wall Street from the gathering storm.

Changing the subject from vacuous statements by hacks about economic realities and policy that miss the mark, here is a link to an open letter that I posted today from the new Greek PM Alex Tsipras. It says much about modern economics and public policy that is worth noting well. You may read it here.

The Fed, and the fiscal authorities commonly known as policy making politicians in consultation with the corporate paymasters, are not only proving to be ineffective in nurturing The Recovery.

They are almost sociopathic in their pursuit of further misery and oppression of the public by propping up a financial system that is the cause of many of our current woes, because it is shamefully corrupt. And they wrap it all in bunkum, secrecy, and lies.

This will not end well. I just hope that out of all of this comes a renewal of the freedom, and a change in our priorities. But in the short term, as Yeats put it so well, 'the best lack all conviction, while the worst are filled with passionate intensity.'

Have a pleasant evening.

 

 

 

 

 

The Fed's Forecasting Methodology: Making Astrology and Weathermen Look Good

 

The Fed Statement

Good News! The Fed stands ready to buy Treasuries, but not yet so don't worry about monetization. Will they or won't they?

Oh by the way:

The Federal Reserve continues to purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand the quantity of such purchases and the duration of the purchase program as conditions warrant.

As you may recall, the foreign central banks have been dumping Agency debt en masse and using the proceeds to buy Treasuries, generally in the five to ten year duration of the curve.

So the Fed is buying those Agencies, but not buying Treasuries which would be monetization right? But somehow buying Agency debt is not monetization if it is the foreign central banks who are buying the Treasuries, right?

If the Fed uses its Balance Sheet to buy financial assets at above market prices, essentially providing a subsidy to the holders of those assets, this is not inflationary since that debt already existed, right? Oh, as long as it is at a loss, because as everyone can figure out buying them at 1000 times more than they are worth or marked on the holder's books would surely be inflationary, right? If the Fed buys my stamp collection at 1000 times it true value, that would be inflationary unless they sterilized the transaction. Is the Fed sterilizing all their transactions? Hah!

Will they or won't they indeed. They already are, indirectly. More misdirection from the transparent Fed.

From Tinker, to Evers, to Chance.


Press Release
Release Date: January 28, 2009

For immediate release

The Federal Open Market Committee decided today to keep its target range for the federal funds rate at 0 to 1/4 percent. The Committee continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.

Information received since the Committee met in December suggests that the economy has weakened further. Industrial production, housing starts, and employment have continued to decline steeply, as consumers and businesses have cut back spending. Furthermore, global demand appears to be slowing significantly. Conditions in some financial markets have improved, in part reflecting government efforts to provide liquidity and strengthen financial institutions; nevertheless, credit conditions for households and firms remain extremely tight. The Committee anticipates that a gradual recovery in economic activity will begin later this year, but the downside risks to that outlook are significant.

In light of the declines in the prices of energy and other commodities in recent months and the prospects for considerable economic slack, the Committee expects that inflation pressures will remain subdued in coming quarters. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.

The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. The focus of the Committee's policy is to support the functioning of financial markets and stimulate the economy through open market operations and other measures that are likely to keep the size of the Federal Reserve's balance sheet at a high level.

The Federal Reserve continues to purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand the quantity of such purchases and the duration of the purchase program as conditions warrant.

The Committee also is prepared to purchase longer-term Treasury securities if evolving circumstances indicate that such transactions would be particularly effective in improving conditions in private credit markets.

The Federal Reserve will be implementing the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses. The Committee will continue to monitor carefully the size and composition of the Federal Reserve's balance sheet in light of evolving financial market developments and to assess whether expansions of or modifications to lending facilities would serve to further support credit markets and economic activity and help to preserve price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Dennis P. Lockhart; Kevin M. Warsh; and Janet L. Yellen. Voting against was Jeffrey M. Lacker, who preferred to expand the monetary base at this time by purchasing U.S. Treasury securities rather than through targeted credit programs.