Stocks and Precious Metals Charts - Lions, and Tigers and Bears, Oh My

 

"Unequal enforcement of the law will distort and destroy any capitalist society, and we may be witnessing just such a downward spiral in the financial sector.  Capitalism is not an abstract idea.  It is an economic system with a distinct set of underlying principles that must exist in order for the system to work.  One of these principles is equal justice.  In its absence, parties will stop entering into transactions that create overall wealth for our society.  Justice must be blind so that both parties — whether weak or powerful — can assume that an agreement between them will be equally enforced by the courts.

There is a second, perhaps even more fundamental, reason that equal justice is essential for capitalism to work.  When unequal justice prevails, the party that does not need to follow the law has a distinct competitive advantage.  A corporation that knowingly breaks the law will find ways to profit through illegal means that are not available to competitors.  As a consequence, the competitive playing field is biased toward the company that does not need to follow the rules.

The net result of unequal justice is likely to be the destruction of the overall wealth of our society.  I don’t mean the wealth of individuals; I mean the total wealth of goods and services that are the benefits of healthy competition.  To the extent that unequal justice prevails, entities that are exempt from the laws will, in all likelihood, be more profitable than law abiding competitors.  Then they use their profits to further weaken competitors by using their illegal profits to further build their businesses at the expense of competitors.  All of this business building activity is based on a foundation of sand, and ultimately the entire industry — or even the larger economy — becomes distorted.  The 'rogue' company gains power, changes markets, and destroys direct and indirect competitors because it is playing by different rules."

Bruce Judson, For Capitalism to Survive, Crime Must Not Pay, April 12, 2012
 

"Back in December of 2012, when it was proved in U.S. court that billions of dollars of drug money had been laundered through HSBC and yet somehow it was also found that HSBC was NOT guilty of laundering and neither was anyone in the bank, there was an outcry.  Who in the bank knew about this? Evidence uncovered by investigations into HSBC’s activities revealed, 'senior bank officials were complicit in the illegal activity.'

In the UK it was noted that during the time the laundering was going on, the chief executive of HSBC in 2003 who then became its chairman in 2006, was Lord Green, who is now the UK trade minister. So obviously no great concern to get to any truth about HSBC, in the hierarchy of the UK establishment.

Senator Elizabeth Warren asked, 'So what does it take? How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this?'

Warren’s question, ‘What does it take?’ was finally answered by U.S. Attorney General Eric Holder in March 2013, when he told the U.S. Judiciary Committee that the Justice department had decided not to pursue any criminal prosecution of HSBC.  The U.S. Justice Department felt it could not criminally prosecute the bank because a criminal conviction would mean the bank would lose its license to bank in the US which would kill it and a whole range of other institutions, which the bank relies on to buy its debts and its investment products would be prohibited from doing so as soon as the bank was deemed to be criminal.

Twenty-eight banks are officially above the law and WILL NOT be criminally prosecuted no matter what they do.  Remember that’s not me saying this.  It is the U.S. Department of Justice saying it.

Not only twenty-eight banks but all their senior executives, chairman/woman and board members.  It would be very difficult to find a senior person in a bank to be criminally guilty but yet not find the institution guilty. So we could compile a list of people who are now, at least as concerns any financial and professional actions, also above the law.

When we say a bank is above the law, not only should we remember that this means specific people are above the law (at least in how they make money) but we should also remember that this also means the assets in those banks are above the law. This means if a banks does things which are illegal but lucrative – such as laundering money in order to get the use of those laundered billions to then use them as, lets say, capital to underpin loans or for speculating, for example, and by doing those illegal things it makes out sized profits for its shareholders and staff, that money, those profits are also above the law.

Since the bank and its senior staff are above the law and breaking the law is profitable, a) no one has an interest to say no, b) shareholders and staff will directly benefit from breaking the law. They will make more money by participating in law breaking or by investing in a bank which is law breaking. They will, in fact have an interest making sure it continues."

Golem XIV, The Twilight of Justice, March 2013

"Let your love be sincere.   Hate what is evil, and hold on to what is good.   Love one another with with the love of a family.   Be an example in showing respect to others.  Do not be neglectful in your service, but enthusiastic in spirit, as a servant of the Lord.  Rejoice in hope; be patient in suffering, and faithful in prayer.  Contribute to the needs of the holy ones, and provide hospitality to strangers.

Bless those who provoke you.  Pray for them, and do not curse them.   Rejoice with those who rejoice; weep with those who weep.  Live in harmony with one another.   Do not be arrogant, but associate with the humble.  Do not claim to be wiser than you are.  Do not repay anyone evil for evil, but have a regard for what is good in the sight of all.  If it is possible, as best as you can, live peaceably with all.   Friends, never avenge yourselves, but leave room for the judgement of God, for it is written, 'Vengeance is mine, and I will do justice, says the Lord.'”

Romans 12:9-19

 

Stocks managed to extend their rally and edged a little higher.

This has the hallmarks of a squeeze on those who took cash or short positions as a result of the new hostilities in the Mideast.

VIX continues to wallow with its MACD histogram now at a low for the year.

Gold and silver endured a major bear raid this morning, no doubt led by the bullion banks and their cronies.  

The Banks are the dreadnoughts in the ongoing financial and currency wars.

Speaking of gold, analyst Jan Nieuwenhuijs believes that the People's Bank of China is covertly buying large amounts of gold in preprartion for a change in the global monetary structure. You can read the full article here.

"The PBoC is in a hurry to buy enormous amounts of gold, indicating it’s preparing for substantial changes in the dollar-centric international monetary system.  

Based on information from industry sources and my personal calculations, total gold purchases by the Chinese central bank (reported and unreported) in Q3 accounted for 179 tonnes.  Year-to-date the PBoC bought 593 tonnes, which is 80% more than what it bought in the first three quarters last year.  Its total estimated gold holdings are 5,220 tonnes, more than twice what’s officially disclosed at 2,192 tonnes.

The movement towards gold by central banks is showing no sign of slowing down. Mainly the Chinese central bank is on a voracious buying spree since 2022, and it’s obtaining way more metal than what is officially reported."

I think we're going to need a bigger boat.

The big, tectonic changes happen slowly, gradually, and then like an avalanche or earthquake of revelation, all at once.

Have a pleasant evening.

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 - And There's the Rinse - Quad Witch on Friday

 

"If I speak with the words of men and of angels, but do not have love, I am a resounding gong or a clashing cymbal.  And if I have the gift of prophecy and comprehend all mysteries and all knowledge; if I have the faith to move mountains but do not have love, I am nothing.  If I give away everything that I have, and if I hand myself over for sacrifice but do not have love, I gain nothing.

Love is patient, love is kind.  Love does not envy, is not boastful, is not conceited, does not act improperly, is not selfish, is not provoked, and does not keep a record of wrongs.  Love finds no joy in wickedness but rejoices in the truth."

1 Corinthians 13:1-7

"Then it will be God without disguise; something so overwhelming that it will strike either irresistible love or irresistible horror into every creature.   It will be too late then to choose your side.   That will not be the time for choosing: it will be the time when we discover which side we really have chosen, whether we realised it before or not."

C. S. Lewis, 1944

"Those among the rich who are not, in the rigorous sense, damned, can understand poverty, because they are poor themselves, after a fashion; they cannot understand destitution. They will be moved, to the sound of beautiful music, at Jesus’s sufferings, but His Cross, the reality of His Cross, will horrify them. They want it all out of gold, bathed in light, costly and of little weight; pleasant to see, hanging from a woman’s beautiful throat."

Léon Bloy

"A true opium of the people is the belief in nothingness after death, the huge solace, the huge comfort of thinking that for our betrayals, our greed, our cowardice, our murders, we are not going to be judged.”

Czeslaw Milosz, Discreet Charm of Nihilism

'Woe to that man by whom the Son of man is betrayed.'

Mt. 26:24


The headline yesterday here was 'Wax On, Wax Off.' 

The spike rally of the last two days was the 'wax on.'

Guess what today was?

There is a triple witch option expiration on this Friday, based on the calendar I have been posting.

In short, this was a trading setup for the quad witch.  What a surprise.

We even had the usual talking heads muttering about a 100 bp increase by the Fed in September.

What did we say before?   75 bp is baked in, the pivot is an delusion, and 100 bp is highly unlikely.

The Dollar rocketed higher today, slamming gold and silver.  

I didn't think they had much of a shot at moving higher, especially given the dearth of physical in Hong Kong.  They need to scour some coin out of a few of the ETFs. 

I would be a little more constructive on the metals after today, with due caution.

Stock market volume was nothing to write home about.   No real panic.

This is another indication that this was a fairly cynical trading gambit.

And the volatility will get worse, as long as regulation stays so subdued, and the risk reward for cheating is so favorable.

So Jay, how is that 'internal investigation' coming along into that brazen insider trading by the Fed Governors?

Have a pleasant evening.

 

Stocks and Precious Metals Charts - Waschen und Spülen - Bankers' Jawbone Jab Jolts Markets

 

"And so without justice, what are kingdoms except great robber bands?  For what are robber bands except little kingdoms?  The band also is a group of men governed by the orders of a leader, bound by a social compact, and its booty is divided according to a law agreed upon.  

If by repeatedly adding desperate men this plague grows to the point where it holds territory and establishes a fixed seat, seizes cities and subdues peoples, then it more conspicuously assumes the name of kingdom, and this name is now openly granted to it, not for any subtraction of greed, but by addition of impunity. 

For it was an elegant and true reply that was made to Alexander the Great by a certain pirate whom he had captured.  When the king asked him what he was thinking of, that he should molest the sea, he said with defiant independence:  'The same as you when you molest the world!  Since I do this with a little ship I am called a pirate.  You do it with a great fleet and are called an emperor.'”

Augustine of Hippo, City of God IV


"Nothing from the rising to the setting of the sun is enough for them.  Among all others only they are compelled to attack the poor as well as the rich.  Plunder, rape, and slaughter they falsely call empire; and where they make a desert, they call it peace."

Tacitus

 

I would like to say that today was something different, but it was not.

It was more of the same old wash and rinse, on an economy sized scale (pun), designed to benefit a relatively few insiders at the expense of all the rest.

Fed Chair Powell came out and laid on a heavy tone of hawkish, and the 'rally' from yesterday went into a meltdown, tout de suite.

The public and real economy must once again pay the price for the sins of the Banks and their bubbles.

Everything was down in the risk assets, improperly priced as they were from the rally just yesterday. 

What a coincidence.

Gold and silver took a hit.

The Dollar rose on the rise in short term interest rates.

Many of the miners were clocked, although some bounced back a little at the end.

September could be a dangerous month for the markets as I have cautioned previously.

The bulls need to take out the second high on the Crashtrak model.  

Today they were going in the wrong direction.

There are some benefits to staying on the higher ground.

Have a pleasant weekend.