Stocks and Precious Metals Charts - Audacious Oligarchy

 

"This disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition, though necessary both to establish and to maintain the distinction of ranks and the order of society, is, at the same time, the great and most universal cause of the corruption of our moral sentiments."

Adam Smith, The Theory of Moral Sentiments, 1759


"But the complaint is damning because what James alleges is not especially complex and does not require much imagination or financial numeracy.  The figures are all right there in filings and documents, rather than lost in the miasma of vagueness and mob-boss talk Trump often uses in other venues.  Either the documents say what James says they do and Trump was juking the stats, or they don’t and he’s been unfairly maligned.

At the very least the claims accord with lots of existing evidence, uncovered by WNYC, ProPublica, and other news organizations.  They match up with rumors that have swirled around Trump for years, and with the disdain with which many actual New York real-estate titans treat the Trump Organization.  And they also fit in with what we know about Trump’s dealings in other ventures, like the fraudulent 'Trump University' or the Trump Foundation, the self-dealing so-called charity that James forced to shut down in a 2019 settlement.

The schemes alleged are so remarkable because they don’t involve tricks like filing false documents. Trump wasn’t doctoring the numbers on forms; he was just brazenly telling different things to different people and assuming that he wouldn’t get caught, and that if he did, he could settle (as he tried to do with James this month) or bluff his way through or it make it go away with a countersuit.  For a long time, he was right.  Any prosecutor with the will and the manpower could have connected the dots on parts of this alleged fraud long ago.

The parallels between this alleged approach and Trump’s presidency are easy to see.  I have written that Trump ran his campaign and administration the way he did his businesses, but it is also the case that he ran his business like he did his administration: by saying whatever he needed to say at any given moment, not sweating contradictions, and overall treating reality not as a fixed thing but as something malleable and contingent, to be warped according to his needs at any given moment.

If James is successful, those conditions could be a fatal blow to the Trump Organization, effectively ending its run as a family business and a going concern in New York. Whether that will happen, of course, is up to a judge and not up to her, and Trump will have his chance to respond. He is likely to do so with blustering brazenness and flagrant misrepresentations, and given his past record, that just might work."

David Graham, The Atlantic, It's Fraud All the Way Down


"We are coming apart as a society, and inequality is right at the core of that. When the 90 percent are getting worse off and they’re trying to figure out what happened, they’re not people like me who get to spend four or five hours a day studying these things and then writing about them — they’re people who have to make a living and get through life. And they’re going to be swayed by demagogues and filled with fear about the other, rather than bringing us together."

David Cay Johnston,  Inequality's Looming Disaster, May 2014


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

Tacitus


More bread, more circuses.

Are you not entertained? 

At least distracted?

The Fed raised 75 bp today as expected, but it was the projections of future increases that threw the risk markets for a loop.

I have highlighted them in the daily economic data report that I posted below.

The Dollar rocketed higher on the expectations of higher rates, sinking a close on the 111 handle.  Wow.

This is the highest that index DXY has been since 2000.

Gold and silver finished slightly higher, most likely diverging from stocks on a 'flight to safety.'

Interestingly the VIX finished relatively flat.

I have often wondered if the large number of gold and silver contracts that certain banks post on the COMEX clearing reports for 'customers' include the funds and ETNs for which they have custodial responsibilities.

Let's see what the rest of the week brings.

Have a pleasant evening.

Stocks and Precious Metals Charts - Those Who Are Not

 

"Since 1998, in our corrupt political system, the private healthcare sector has spent more than $10.6 billion on lobbying and over the last 30 years it has spent more than $1.7 billion on campaign contributions to maintain the status quo.  We have the highest prices in the world for prescription drugs, and the pharmaceutical industry right now has 1,500 paid lobbyists in Washington, D.C. to make sure that in some cases we pay 10 times more for the medicine that we need."

Bernie Sanders, September 2022

"Yet the system of corruption depends on another factor beyond secrecy, one that is perhaps even more important: impunity.  Impunity means that the rich and powerful escape from punishment even when their malfeasance is in full view.   Impunity is epidemic in America.  The rich and powerful get away with their heists in broad daylight.  When a politician like Bernie Sanders calls out the corruption, the New York Times and Wall Street Journal double down with their mockery over such a foolish 'dreamer.'  Our major institutions, the ones that should know better, are often gross enablers of impunity."

Jeffrey Sachs, The Age of Impunity, May 2016


"There is now abundant evidence of widespread, unpunished criminal behavior in the financial sector.  The evidence is now overwhelming that over the last thirty years, the U.S. financial sector has become a rogue industry.  As its wealth and power grew, it subverted America’s political system (including both political parties), government, and academic institutions in order to free itself from regulation.

As deregulation progressed, the industry became ever more unethical and dangerous, producing ever larger financial crises and ever more blatant criminality.  Since the 1990s, its power has been sufficient to insulate bankers not only from effective regulation but even from criminal law enforcement.  The financial sector is now a parasitic and destabilizing industry that constitutes a major drag on American economic growth.

The rise of predatory finance is both a cause and a symptom of an even broader, and even more disturbing, change in America’s economy and political system.  The financial sector is the core of a new oligarchy that has risen to power over the past thirty years, and that has profoundly changed American life."

Charles Ferguson, Predator Nation


Stocks had another ranging day, ending slightly higher.

Gold dropped, under pressure most of the day.

Physical inventories are very thin in Hong Kong.

Silver moved higher, taking back some of its recent decline.

The Dollar chopped sideways.

The VIX receded after the big rise yesterday.

Who do the powerful of this world serve?  The simple truth of the matter is this— non serviam.  In all things they will not serve any other but themselves. 

May God have mercy and forgive us, especially in that moment when we will finally see ourselves as we really are, stripped of all worldly ornaments and illusions, and then know what we have done, and what we have failed to do, with perfect clarity.

Have a pleasant evening.

 

Stocks and Precious Metals Charts - Financial Dreadnoughts

 

BILL MOYERS: And you say that this oligarchy consists of six megabanks.   What are the six banks?

JAMES KWAK: They are Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo.

BILL MOYERS: And you write that they control 60 percent of our gross national product?

JAMES KWAK: They have assets equivalent to 60 percent of our gross national product. And to put this in perspective, in the mid-1990s, these six banks or their predecessors, since there have been a lot of mergers, had less than 20 percent. Their assets were less than 20 percent of the gross national product.

BILL MOYERS: And what's the threat from an oligarchy of this size and scale?

SIMON JOHNSON: They can distort the system, Bill. They can change the rules of the game to favor themselves. And unfortunately, the way it works in modern finance is when the rules favor you, you go out and you take a lot of risk. And you blow up from time to time, because it's not your problem. When it blows up, it's the taxpayer and it's the government that has to sort it out.

BILL MOYERS: So, you're not kidding when you say it's an oligarchy?

JAMES KWAK: Exactly. I think that in particular, we can see how the oligarchy has actually become more powerful in the last since the financial crisis.  If we look at the way they've behaved in Washington. 

For example, they've been spending more than $1 million per day lobbying Congress and fighting financial reform.  I think that's for some time, the financial sector got its way in Washington through the power of ideology, through the power of persuasion. 

And in the last year and a half, we've seen the gloves come off.  They are fighting as hard as they can to stop reform.

Bill Moyer's Journal, The Financial Oligarchy in the US, April 16, 2010

It was risk on today, as stocks rallied pretty much until the end of the day, going out on the highs.

VIX dropped as one might expect.

The Dollar gave up the 110 handle and more.

Gold and especially silver rallied hard off the recent price suppression.

Silver was kicking butt with both legs.

Let's see is this was just a flash-in-the-pan bear market relief rally or the beginning of a genuine bottom.

There was intraday commentary Authoritarianism of the Utopias.

Have a pleasant evening.

Stocks and Precious Metals Charts - Almost Time to Head for Higher Ground

 

"Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population.  Federal policy is increasingly dictated by the wealthy, by the financial sector, and by powerful industries such as telecommunications, health care, automobiles, and energy. These policies are implemented and praised by these groups’ willing servants, namely the increasingly bought-and-paid-for leadership of America’s political parties, academia, and lobbying industry.

If allowed to continue, this process will turn the United States into a declining, unfair society with an impoverished, angry, uneducated population under the control of a small, ultrawealthy elite.  Such a society would be not only immoral but also eventually unstable, dangerously ripe for religious and political extremism."

Charles Ferguson, Predator Nation, June 2012


"Our plutocracy, whether the hedge fund managers in Greenwich, Connecticut, or the Internet moguls in Palo Alto, now lives like the British did in colonial India: ruling the place but not of it."

Mike Lofgren, The Deep State: The Fall of the Constitution and the Rise of a Shadow Government, 5 January 2016

"The American economy increasingly serves only a narrow part of society, and America's national politics has failed to put the country back on track through honest, open, and transparent problem solving.  Too many of America's elites — among the super-rich, the CEOs, and many of my colleagues in academia — have abandoned a commitment to social responsibility.  They chase wealth and power, the rest of society be damned."

Jeffrey Sachs, The Price of Civilization, January 2012


“If you can feel that staying human is worth while, even when it can't have any practical result whatsoever, you've beaten them.”

George Orwell

Stocks came in a little stronger this morning, but then reversed and turned sharply lower, and went out at the lows of the day as well.

Gold and silver were lower as most everything that was not the Dollar or Treasuries were getting sold.

It resembled a liquidation event, or at least the prologue to one.

Smells like teen spirit.

The Fed spooked the markets that are now pricing in a trio of 50 basis point rate increases this year.

At some point either the Fed or the markets are going to blink.

Let's see what happens.

I'm making the national dish of England for dinner this evening— tikka masala.

Have a pleasant weekend.

Stocks and Precious Metals Charts - The Fall of the Republic - The Oligarchy Is Audacious

 

"According to several reports, the administration is considering Michael Barr for the vice chair of supervision slot.  Barr is a veteran of the Clinton and Obama years who is now the Sanford Weill Dean of Public Policy at the University of Michigan.  (Weill was the former CEO of Citigroup, whose merger with Travelers Insurance triggered the end of Glass-Steagall and the beginning of the mega-bank era.)

As assistant Treasury Secretary for financial institutions in the Obama years, Barr was the key right-hand man to Tim Geithner and liaison with Congress on the Dodd-Frank reforms.  Sheila Bair wrote considerably in her memoir of that time about how Barr defended the financial industry from aggressive regulation at every turn, seeking to eliminate strong derivatives regulations, weaken the Volcker Rule that attempted to prevent banks from engaging in risky trading with customer money, and preserve the ability for future bailouts.  He infamously gave the quote to New York magazine that the bill could have broken up big banks if Treasury had agreed to it, but they decided against it.

Barr was also the lead designer of HAMP, the failed foreclosure mitigation program that allowed banks to trap borrowers in predatory schemes.  Barr kind-of sort-of apologized for the failure to stop the foreclosure wave in a 2020 book, saying that the White House should have “acted more forcefully from the start.” He also led the investigation into fraudulent evictions with phony documents, promising things would change within a year. (They didn’t.)"

David Dayen, The Return of Michael Barr


"Impunity is epidemic in America. The rich and powerful get away with their heists in broad daylight. When a politician like Bernie Sanders calls out the corruption, the New York Times and Wall Street Journal double down with their mockery over such a foolish 'dreamer.'   The Journal recently opposed the corruption sentence of former Virginia governor Bob McDonnell for taking large gifts and bestowing official favors — because everybody does it.  And one of its columnists praised Panama for facilitating the ability of wealthy individuals to hide their income from 'predatory governments' trying to collect taxes.  No kidding.

Our major institutions, the ones that should know better, are often gross enablers of impunity.

Jeffrey Sachs, The Age of Impunity, 2016

 

The wiseguys wanted to take stocks up today in a risk on wash cycle, but the bombshell miss by Netflix broke the script, and weighed heavily on the big cap tech stocks.

These are, as you may recall, once again the bloated heart of a 'new era' stock bubble.

Gold and silver bounced.

The Dollar fell back hard from 101 but managed to hang on to the 100 handle fairly well.

A strong Dollar hurts the real economy, but does well for the financiers who can buy up foreign assets on the cheap.

The VIX fell in the spirit of a wash cycle attempt.

This will end.  But it is going to end badly for many. 

You know what to do. It is the same in every age.

But we are such faithless cheats and swindlers that we convince ourselves that we do not, because we do not wish to do what we have been told to do, what has been written on our hearts. 

Greed and pride kill.  But love covers a multitude of sins.

And the band played on.

Have a pleasant evening.