Stocks and Precious Metals Charts - On to Jackson Hole

 

"Dallas Fed President, Robert Kaplan, wasn’t just trading like an aggressive hedge fund kingpin in 2020, he’s been doing the same thing for five years at the Dallas Fed while simultaneously having access to non-public, market moving information from the Federal Reserve’s interest-rate setting FOMC meetings and other confidential communications."

Martens, Trading Like a Hedge Fund Kingpin for Five Years while President of the Dallas Fed, September 2021

"It's a small group with a lot of power.  A lot of wealth.  They don't necessarily - they're not necessarily always the names, the household names that spring to mind, in this kind of context. But they are the people who could pull the strings.  Who have the influence.  Who call the shots.

The oligarchs are flush with victory, and feel that they are firmly in control, able to subvert and direct any popular movement to the support of their own fascist ends and unslakable will to power.  This is the contempt in which they hold the majority of American people and the political process: the common people are easily led fools, and everyone else who is smart enough to know better has their price. And they would beggar every middle class voter in the US before they will voluntarily give up one dime of their ill gotten gains."

Simon Johnson

“The euphoric episode is protected and sustained by the will of those who are involved, in order to justify the circumstances that are making them rich.  And it is equally protected by the will to ignore, exorcise, or condemn those who express doubts.”

John Kenneth Galbraith, A Short History of Financial Euphoria, 1990

Stocks plunged again.   Oh my.

But voila, they finished up the day unchanged.

Just another stock index options expiration three card monte game.

The Dollar fell.

Gold and silver finished up all right at the end of the day.

Silver actually managed to close out the week unchanged after another wild ride.

The spokesmodels continue to babble in a fast, breathless patter of nonsense.

Groupthink will be descending on Jackson Hole next week as the Fed gathers for the annual conference hosted by the venerable Kansas City Fed.

Besides being mired in a legendary self-inflicted scandal of insider trading, the Fed has managed to engineer another financial asset bubble and soon to follow bust, the third such economic frankenstein since 2000.

I have heard there will be a FOMC walk of atonement into the conference hall with a rhythmically chiming gong, and a following crowd from the mid-western banks intoning, 'shame, shame.'

I'd say you can't make this stuff up, but they do.   More and more every day.

"What we give to the poor for Christ's sake, is what we carry with us when we die."

Peter Maurin

People blind themselves with distractions and embellishments to what they are becoming.  

And it's a long lingering sickness of the spirit, unto death.

Hi ho.

Have a pleasant weekend.

Stocks and Precious Metals Charts - Crescendo - Metals Expiry Tomorrow, Jackson Hole Friday

 

“The real conflict is the inner conflict.  Beyond armies of occupation and the catacombs of extermination camps, there are two irreconcilable enemies in the depth of every soul: good and evil, sin and love.   And what use are the victories on the battlefield if we are ourselves are defeated in our innermost personal selves?”

Maximilian Kolbe

"God has created me to do Him some definite service; He has committed some work to me which He has not committed to another. I have my mission— I never may know it in this life, but I shall be told it in the next.

Yet I have a part in this great work; I am a link in a chain, a bond of connexion between persons.  He has not created me for naught.  I shall do good, I shall do His work; I shall be an angel of peace, a preacher of truth in my own place, while not intending it, if I do but keep His commandments and serve Him in my calling.

Therefore I will trust Him.  Whatever, wherever I am, I can never be thrown away.  If I am in sickness, my sickness may serve Him; in perplexity, my perplexity may serve Him; if I am in sorrow, my sorrow may serve Him.  My sickness, or perplexity, or sorrow may be necessary causes of some great end, which is quite beyond us.

He does nothing in vain; He may prolong my life, He may shorten it; He knows what He is about.  He may take away my friends, He may throw me among strangers, He may make me feel desolate, make my spirits sink, hide the future from me—still He knows what He is about."

John Henry Newman, Meditations and Devotions

"Holiness consists simply in doing God's will, and being just what God wants us to be.   Our Lord does not look so much at the greatness of our actions, or even at their difficulty, but at the love with which we do them.  Without love deeds, even the greatest, count as nothing.   Our Lord's love shines forth as much in the simplest of souls as it does in the most highly gifted, as long as there is no refusal of His grace."

Thérèse Martin de Lisieux

"Those who have faith had better keep in the state of grace, and those who have neither had better find out what they mean, for in the coming age there will be only one way to stop your trembling knees, and that will be to get down on them and pray. The most important problem in the world today is your soul, for that is what the struggle is about."

Fulton J. Sheen


Stocks managed a bounce today in what was otherwise another wide-ranging day.

The Dollar chopped sideways, at a lofty 108+ handle.

Gold and silver managed to edge higher.

The VIX dropped.

Tomorrow is an option expiration for precious metals on the Comex.  Contract-wise it is more significant or silver than gold, but that may have little effect with those who manage the markets.

Jay Powell is speaking at Jackson Hole Fed Symposium on Friday, and the markets seem to be hlding their collective breath ahead of that performance.

I have never been to Jackson Hole or Wyoming.

But I used to really like taking the family on a road trip in the early autumn to visit the Skylands Resort on the Blue Ridge Parkway.   We would look at the leaves, make sidetrips to various attractions around the area, and day hike sections of the nearby Appalachian Trail. 

Be warned, the leaves turn and snows come early.

In a week or so it will be the fifth anniversary of when I bid a farewell to the queen.

Here's looking at you, kid.

Have a pleasant evening.

A House Divided: A Synopsis of Bernanke's Speech at Jackson Hole, and What It Means

When listening to a speech like this, one has to remember who is speaking and under what conditions. A Fed Chairman has a thousand watt megaphone attached to his chest, and so he must speak quietly and calmly, in order not to disrupt markets and place the Fed in the middle of political controversies. Unless you have actually been close to or in a position of power, where your words carry great significance, it is all too easy to forget this.

Bernanke addressed his problem with the dysfunctional Congress, gridlocked by luddites and libertines, and the serpentine leadership style of Obama.  He is trying to stand his monetary policy on a two legged stool, and it is not working.  The all important fiscal side of economic governance is broken.  Not so much that it is doing the wrong things.  Rather, the process itself is broken, hopelessly frozen by ideological warfare and implacable extremes.

He reiterated that the Fed has the additional policy tools to deal with the situation, in addition to the unprecedented actions they have taken already, although there is a lack of consensus on his own Fed. It is significant that they have expanded their September meeting from one to two days in order to discuss this more fully.

Bernanke gave a particularly sharp rebuke to the Congress, at least by Fed Chairman standards, for the debt ceiling deadlock and discussions that recently shook confidence in the markets.

There is little doubt in my mind that the Fed will put some additional scalable programs in place before the end of the year. The introduction of new programs during a Presidential election year is typically considered to be only acceptable at extreme risks to the banking system and obvious duress to the economy.

As a reminder, there will be another Non-Farm Payrolls number out next week.

There are forces in the US that are on the offensive, and pushing for a crisis in order to better obtain their objectives. What Bernanke is doing is positioning the Fed on the sidelines as best he can, while signaling that they will act once again, overtly or quietly, to prevent a major financial breakdown.

But he is stressing that the Fed has done quite a bit already, and they cannot do it alone. The monetary actions are ineffective without a fiscal counterpart. Like most observers, the Fed sees a broken governance process, and the new super-committee is likely destined to fail in more gridlock. The Fed will not act again except under the duress of an approaching crisis, although they will have the programs in place in anticipation of that crisis.

The US is a house divided against itself. Until the system of governance is repaired, the Fed cannot be reasonably expected to take up the burden of the nation's problems on its own.

So for the future, listen to what the Fed says, but more importantly, watch what the Fed does. And some of that may be opaque, at least for the time being.

This is not necessarily what I think, or what I would do if, God forbid, I was the Fed Chairman. This is what Bernanke is thinking in his own words, and what I believe he is doing, and to some extent, why he is doing it.

Fri Aug 26, 2011 10:00am EDT

JACKSON HOLE, Wyoming, Aug 26 (Reuters) - The following are highlights of Federal Reserve Chairman Ben Bernanke's speech on Friday to a central bank conference sponsored by the Kansas City Federal Reserve Bank.

On economic growth, inflation outlook:

"The recent data have indicated that economic growth during the first half of this year was considerably slower than the Federal Open Market Committee had been expecting, and that temporary factors can account for only a portion of the economic weakness that we have observed.   Consequently, although we expect a moderate recovery to continue and indeed to strengthen over time, the Committee has marked down its outlook for the likely pace of growth over coming quarters.

"With commodity prices and other import prices moderating and with longer-term inflation expectations remaining stable, we expect inflation to settle, over coming quarters, at levels at or below the rate of 2 percent, or a bit less, that most Committee participants view as being consistent with our dual mandate."

On what the Fed's recent policy decision means:

"We indicated that economic conditions -- including low rates of resource utilization and a subdued outlook for inflation over the medium run -- are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013. That is, in what the Committee judges to be the most likely scenarios for resource utilization and inflation in the medium term, the target for the federal funds rate would be held at its current low levels for at least two more years."

On what other tools the Fed has:

"In addition to refining our forward guidance, the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus. We discussed the relative merits and costs of such tools at our August meeting. We will continue to consider those and other pertinent issues, including of course economic and financial developments, at our meeting in September, which has been scheduled for two days (the 20th and the 21st) instead of one to allow a fuller discussion. The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability."

On market volatility:

"Financial stress has been and continues to be a significant drag on the recovery, both here and abroad. Bouts of sharp volatility and risk aversion in markets have recently reemerged in reaction to concerns about both European sovereign debts and developments related to the U.S. fiscal situation, including the recent downgrade of the U.S. long-term credit rating by one of the major rating agencies and the controversy concerning the raising of the U.S. federal debt ceiling. It is difficult to judge by how much these developments have affected economic activity thus far, but there seems little doubt that they have hurt household and business confidence and that they pose ongoing risks to growth. The Federal Reserve continues to monitor developments in financial markets and institutions closely and is in frequent contact with policymakers in Europe and elsewhere."

On long-term economic growth prospects:

"It may take some time, but we can reasonably expect to see a return to growth rates and employment levels consistent with those underlying fundamentals ... Notwithstanding the severe difficulties we currently face, I do not expect the long-run growth potential of the U.S. economy to be materially affected by the crisis and the recession if -- and I stress if -- our country takes the necessary steps to secure that outcome."

On the impact of monetary and fiscal policy:

"Normally, monetary or fiscal policies aimed primarily at promoting a faster pace of economic recovery in the near term would not be expected to significantly affect the longer-term performance of the economy. However, current circumstances may be an exception to that standard view ... The quality of economic policymaking in the United States will heavily influence the nation's longer-term prospects. To allow the economy to grow at its full potential, policymakers must work to promote macroeconomic and financial stability; adopt effective tax, trade, and regulatory policies; foster the development of a skilled workforce; encourage productive investment, both private and public; and provide appropriate support for research and development and for the adoption of new technologies."