Stocks and Precious Metals Charts - Old As Babylon, And Evil As Sin - Comex Option Expiration

 

"The whole town and all its inhabitants are quite drowned in carnival din, masks and confetti.  And on top of that the news of the Reichstag fire.  Dancing on a volcano."

Alban Berg, Letter from Berlin, September 1, 1933


“When Fascism came into power, most people were unprepared, both theoretically and practically.  They were unable to believe that man could exhibit such propensities for evil, such lust for power, such disregard for the rights of the weak, or such yearning for submission.  Only a few had been aware of the rumbling of the volcano preceding the outbreak.”

Erich Fromm, Escape from Freedom


"There are so many ways of escaping from that which one fears, and not the least of these is hatred.”

Philip Kerr, Berlin Noir


"When you legitimize yourself entirely by inventing enemies, the truth ceases to matter, normal restraints of civilization and decency cease to matter, the checks and balances of normal politics cease to matter.  

The dangers of fascist politics come from the particular way in which it dehumanizes segments of the population.  It limits the capacity for empathy among other citizens, leading to the justification of inhumane treatment, from repression of freedom, mass imprisonment, and expulsion to, in extreme cases, mass extermination."

Jason Stanley, How Fascism Works

"Fascism begins the moment a ruling class, fearing the people may use their political democracy to gain economic democracy, begins to destroy political democracy in order to retain its power of exploitation and special privilege."

Thomas Clement Douglas


"Behind the concrete, the visible events, behind all the objective, logical considerations, we find that which goes beyond the merely rational: the struggle against evil, against the servants of the antichrist. 

Everywhere and always demonic powers lurk in the dark, waiting for the moment when man is weak; when of his own volition he leaves his place in Creation, as founded for him by God in freedom; and when he yields to the forces of evil, he separates himself from the powers of a higher order; after voluntarily taking the first step, he is driven on and on to the next and to the next, at a furiously accelerating rate."

Die Weiße Rose, Fourth Leaflet, Munich, 1942


“Each day we are becoming a creature of splendid glory, or one of unthinkable horror.”

C. S. Lewis


Stocks were able to rally today, and managed to hold on to the gains and go out near the highs.

The Dollar declined back to the bottom of the 102 handle.

Gold and silver rallied well, but were sold back down during the afternoon, still managing to hold on to some of their gains.

There will be a fairly significant precious metals option expiration on the Comex this Wednesday the 25^th.

 Pricing shenanigans are customary.    It's what they do.

Have a pleasant evening.

Stocks and Precious Metals Charts - Liars and Pipers

 

"Whoever is without love does not know God, for God is love.   In this way the love of God was revealed to us: God sent his only Son into the world so that we might have life through him."

1 John 4:7-8

 

“Each day we are becoming a creature of splendid glory, or one of unthinkable horror.” 

C. S. Lewis

 

“The pull of fascist politics is powerful.  It simplifies human existence, gives us an object, a 'them' whose supposed laziness highlights our own virtue and discipline, encourages us to identify with a forceful leader who helps us make sense of the world, whose bluntness regarding the 'undeserving' people in the world is refreshing.  Fascism thrives under conditions of economic uncertainty, where fear and resentment can be mobilized to set citizens against one another,

When you legitimize yourself entirely by inventing enemies, the truth ceases to matter, normal restraints of civilization and decency cease to matter, the checks and balances of normal politics cease to matter.

The dangers of fascist politics come from the particular way in which it dehumanizes segments of the population. It limits the capacity for empathy among other citizens, leading to the justification of inhumane treatment, from repression of freedom, mass imprisonment, and expulsion to, in extreme cases, mass extermination."

Jason Stanley, How Fascism Works

 

"Fascism begins the moment a ruling class, fearing the people may use their political democracy to gain economic democracy, begins to destroy political democracy in order to retain its power of exploitation and special privilege." 

Thomas Clement Douglas

 

Ask God to show you your sins, especially those to which you have been blinded, and so easily explain away and rationalize, out of habit and pride.

This is the beginning of our salvation, when we still have a choice for acceptance and true repentance.

Stocks were volatile again today, with deep lows and a bit of an afternoon recovery.

Big cap tech, the flag-bearers of this particular market bubble, led the way lower.

Gold and silver caught a bounce after the mugging dealt to the metals yesterday.

The Dollar chopped sideways.

As I have said before, underlying the equity market is a simmering volcano of mispriced risks.

Lies and manipulation are prevalent in far too many areas of our society. 

As people grow more cynical, abandoning their souls of themselves and their children for some material fear or advantage, the instability in the markets and social discourse will become more pronounced.

Of course they do not believe it, preferring to see the fault in 'them' and not in the madness of their own hardened hearts, often wrapped in fantasies of 'righteous anger' in response to some grievance.

It is a story as old as Babylon, and evil as sin.

Have a pleasant evening.

 

"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

 

The Controversial 1935 Nobel Peace Prize For Speaking Truth to Power

"We cannot speak to the conscience of the world when our own conscience is asleep."

Carl von Ossietzky


"Only one who spent the years following the First World War in Germany can fully understand how hard a battle it was that a man like Ossietzky had to fight. He knew that the tradition of his countrymen, bent on violence and war, had not lost its power. He knew how difficult, thankless and dangerous a task it was. to preach sanity and justice to his countrymen who had been hardened by a rough fate and demoralizing influence of a long war.

In their blindness they repaid him in hatred, persecution and slow destruction; to heed him and to act accordingly would have meant their salvation and would have been a true relief for the whole world.

It will be to the eternal fame of the Nobel Foundation that it bestowed its high honor to this humble martyr and that it is resolved to keep alive the memory of his work.

It is also wholesome for mankind today, since the fatal illusion against which he fought has not been removed by the outcome of the last war.

The abstention from the solution of human problems by brute force is the task today as it was then.

Albert Einstein, Out of My Later Years, 1956


"Those who cannot remember the past are condemned to repeat it."

George Santayana


"The German people slumber on in their dull, stupid sleep and encourage these fascist criminals; they give them the opportunity to carry on their destruction; and of course they do so.  Is this a sign that the Germans are brutalized in their simplest human feelings, that no chord within them cries out at the sight of such deeds, that they have sunk into a fatal consciencelessness from which they will never, never awake?"

Sophie Scholl, The White Rose, Second Leaflet, Munich 1942

This time, we will not be silent.

Who will be among those who remember the moral imperative to speak truth to power, and nominate Julian Assange for the Nobel Peace Prize?

In memory of Carl von Ossietzky, an investigative journalist and editor of Die Weltbühne who died in hospital in Gestapo custody after being held in various prisons and concentration camps.

He was awarded the Nobel Peace Prize in 1935. The award was controversial because von Ossietzky had been imprisoned for revealing the illegal steps the German government had been taking to rearm militarily.

There are those who believe that no matter what a country may do, it is the duty of its citizens to obey their laws without objection. And there are those who hold the primacy of natural law and private conscience and moral duty to resist evil even when it has been declared by a temporal authority to be legal.



Carl von Ossietzky was born in Hamburg, the son of Carl Ignatius von Ossietzky (1848–1891), a Protestant from Upper Silesia, and Rosalie (née Pratzka), a devout Catholic and Social Democrat. His father worked as a stenographer in the office of a lawyer and senator, but died when Carl was two years old.

During the years of the Weimar Republic (1919 – 1933), his political commentaries gained him a reputation as a fervent supporter of democracy and a pluralistic society. He was convicted in 1931 of revealing state secrets, the illegal German militarization, and served 18 months in prison. He was released in 1932.

Ossietzky continued to be a constant warning voice against militarism and Nazism when, in January 1933, Adolf Hitler was appointed Chancellor and the Nazi dictatorship began. Even then, Ossietzky was one of a very small group of public figures who continued to speak out against the now ruling Nazi Party.

On 28 February 1933, after the Reichstag fire, he was taken by the police and held without trial in 'protective custody' in Spandau prison. Ossietzky underestimated the speed with which the Nazis would go about ridding the country of unwanted political opponents. He was detained afterwards at the concentration camp KZ Esterwegen near Oldenburg, among other camps.

He was visited while in the camp by Swiss historian Carl Jacob Burkhardt, as a representative of the International Red Cross. Burkhardt described Ossietzky as “a deadly pale broken creature, who seemed numb, with one eye swollen over, and his teeth broken.” Ossietzky said,

“Tell my friends that I have come to the end, soon it will be over and that is good. I hear my wife tried to visit me. I only wanted peace.”

Ossietzky's international rise to fame began in 1936 when, already suffering from serious illness that was not being treated, he was awarded the 1935 Nobel Peace Prize after an international campaign of people who hoped to achieve his release through this recognition and honor. Despite intimidation and protests directed against the Norwegian government, the Nazis had been unable to prevent this, but they now refused to release him so that he could travel to Oslo to receive the prize.

In an act of civil disobedience, after Hermann Göring, then Minister of the Interior for Prussia and head of the police, prompted him to decline the prize, Ossietzky issued a note from the hospital saying that he disagreed with the authorities who had stated that by accepting the prize he would cast himself outside the deutsche Volksgemeinschaft (community of German people).

'After much consideration, I have made the decision to accept the Nobel Peace Prize which has fallen to me. I cannot share the view put forward to me by the representatives of the Secret State Police that in doing so I exclude myself from German society. The Nobel Peace Prize is not a sign of an internal political struggle, but of understanding between peoples. As a recipient of the prize, I will do my best to encourage this understanding and as a German I will always bear in mind Germany's justifiable interests in Europe.'

The award divided public opinion, and was generally condemned by conservative forces. The leading conservative Norwegian newspaper Aftenposten argued in an editorial that Ossietzky was a criminal who had attacked his country "with the use of methods that violated the law long before Hitler came into power" and that "lasting peace between peoples and nations can only be achieved by respecting the existing laws".

Ossietzky's Nobel Prize was not allowed to be mentioned in the German press, and a government decree forbade German citizens from accepting future Nobel Prizes.

The Nobel Peace Prize money was sent to Germany where it was stolen by Ossietzky's Nazi 'defense attorney.'

In May 1936 he was sent to the Westend hospital in Berlin-Charlottenburg because of his tuberculosis, but under Gestapo surveillance. He was largely forgotten during the period of favorable international regard for the Third Reich, sparked in part by the massive public relations campaign surrounding the 1936 Berlin Olympics and the German 'economic miracle.'

Ossietzky died in the Nordend hospital in Berlin-Pankow, still in police custody, on 4 May 1938, of tuberculosis and from the after-effects of the abuse he suffered in the concentration camps. In 1938 Time Magazine named Adolf Hitler as their "Man of the Year."

In November of that year, the Reich entered a new phase of their oppression of dissent and undesirables and those to be cast outside the community of the German people, such as the mentally ill, the disabled, Gypsies, homosexuals, socialists, and trade unionists, with Kristallnacht.

In 1991, the University of Oldenburg was renamed Carl von Ossietzky Universität Oldenburg in his honor. This could be seen as a political statement, as Ossietzky's case was being decided upon by the German courts at the time. In 1992 the Federal Court of Justice shamefully upheld his 1931 conviction. After all, as Marin Luther King once noted, what the Nazis did 'was legal.'

I would like to join those people of conscience from around the world who nominate Julian Assange for the Nobel Peace Prize, for speaking truth to power, and upholding the moral imperative for freedom of the press.

Please make as many copies of this as you can and distribute it.

The Roots of the Next Crisis, and the Dark Hallway Beyond

“Those who fail to exhibit positive attitudes, no matter the external reality, are seen as maladjusted and in need of assistance. Their attitudes need correction...

Suddenly, abused and battered wives or children, the unemployed, the depressed and mentally ill, the illiterate, the lonely, those grieving for lost loved ones, those crushed by poverty, the terminally ill, those fighting with addictions, those suffering from trauma, those trapped in menial and poorly paid jobs, those whose homes are in foreclosure or who are filing for bankruptcy because they cannot pay their medical bills, are to blame for their negativity.

The ideology justifies the cruelty of unfettered capitalism, shifting the blame from the power elite to those they oppress."

Chris Hedges

Here is a recent conversation I had with a friend about the current state of the US recovery.  As an accountant with a wide range of exposures, I enjoy hearing his perspective since I no longer have that sort of current insight into the corporate culture in America.  I have years of background running large businesses in corporations, and some forays into large scale M&A work, so I have seen quite a bit of it. The methods rarely change, merely the guises and degrees.

Here are excerpts from his side of the conversation with only one parenthetical comment of my own.

"I don’t think we’re seeing profits in a traditional sense. Instead, it appears to me that we’re watching a long, drawn out LBO’ing of America. It appears that companies are liquidating capital and returning it as opposed to earnings spreads on revenue.

It seems like we’re seeing the final blow-off phase that started with the stock option becoming the primary form of compensation for corporate talent. By drawing out the LBO, they re-stock their options each year with a guaranteed return thanks to the Fed and their own Treasury Departments.

The problem is that you can’t have systematic corporate buybacks with employment/economic growth as they create diametrically opposite outcomes. The more work I do, the more I conclude that the US economy has not expanded since 2006.

I was looking at mutual fund data the other day and it showed that people moved their fixed income money into domestic equity - $185 billion in liquidated bond funds to buy $175 billion in equity funds. This happened after the Fed announced tapering was on the table. Just like the gold market, I suspect that “someone” forced the liquidation of bond funds and herded the money into equity funds to keep the rally going.  (I think it is perfectly reasonable to flee bond funds at any time that interest rates are turning higher.  Bond funds often take it on the chin in such a deleveraging of a long term interest rate trend.   However, I think the whole taper thing was hyped and used by the wiseguys, as are most things these days by our financial masters of the universe. - Jesse)

Coincidentally, corporations used half a trillion in cash flow on buybacks. It’s a liquidity game but with limitations. What’s the next asset that can be liquidated or levered? They’re still working on gold but sometime soon, the price of gold will be set in the East, where the gold resides. Agricultural commodities are being liquidated but that ensures a drop in planting next year. Oil is too valuable on the geopolitical front to liquidate.

There are certainly winners in this economy but far more losers. At some point, the weight of the losers acts against the winners, many of whom are levered up with confidence. Corporations can liquidate equity capital but we all know how the LBO’d companies operated in the 1990’s. In many ways, they’ve gotten corporations to behave like consumers did in the 2000’s, only this time they’re trained to buy back their own stock. Every cycle has natural limits.

We know that corporate cash flow is no longer growing and we know that it’s more expensive to sell debt today than a year ago. We also know that the Fed sees the stock market as their proof of success. So how does this shakeout? If corporations are a lemon, how much juice can you squeeze out of the lemon?"

Although I do not wish to be an alarmist, I have to say that this trend of attempting to sustain the unsustainable has gone on longer than I had previously thought possible.

I am fairly sure that the next crisis will bring these things to a head and some sort of resolution. But therein also lies great danger. Philosophies that have grown time can have deep roots, and when faced with what to them is an intolerable change, can react somewhat excessively. They may even welcome the opportunity to act excessively and decisively, at least in their own minds, as the path to winning.

When a ruling subculture that has become accustomed to crushing and liquidating things for its own power and pleasure, whether it is natural resources, the environment, crops, animals, land, or social organizations, eventually runs out of things, it can become frustrated and angry in its seeming impotence to continue on, to keep expanding.

Indirectly and somewhat benignly at first, but with a growing efficiency and determination over time, it will begin with the weak and the defenseless, attacking and objectifying them, even in the most petty of ways and impositions. It will turn to its critics, and then everyone who is defined by them as 'the other.'

That is when a predatory social and economic philosophy can turn into pure fascism, and start liquidating people.  And finally it liquidates and consumes itself.

But really, no one wakes up one morning and suddenly decides, 'Today I will become a monster, and wantonly kill innocent women and children.'

Otherwise ordinary people get to that point slowly, one convenient rationalization for their 'necessary and expedient' behavior at a time. After all, they are the good people, they are the strong, they are the most successful and the favored.

 They are the entitled, and not these others who would seek to drain them, drag them back down. They are the champions of progress and achievement and civilisation, the hardest working, and the epitome of mankind.  

What could possibly go wrong? 

"He prompts you what to say, and then listens to you, and praises you, and encourages you. He bids you mount aloft. He shows you how to become as gods. Then he laughs and jokes with you, and gets intimate with you; he takes your hand, and gets his fingers between yours, and grasps them, and then you are his."

J. H. Newman, The AntiChrist

If you are one who thinks that the above 'could not possibly happen here,' and I am sure that there are many, you may wish to read the following vignette from modern US history. Alan Nasser, FDR's Response to the Plot to Overthrow Him

MIchael Lewis and the Heart of the US Economic Policy Failure and Crisis

"Corruption is a tree, whose branches are
of an immeasurable length: they spread
Everywhere; and the dew that drops from thence
Hath infected some chairs and stools of authority."

Beaumont and Fletcher, The Honest Man's Fortune

Michael Lewis has written an excellent pocket analysis of the financial crisis in The New Republic, in his review of Greg Smith's book about why he left Goldman Sachs.  I have to admit some prejudice, because he says all of the things which I have been saying, and says them very well.

Crony capitalism has always been with us, but it took wing in the 1990's, and has brought us to this place where we would not wish to be.

Michael Lewis does an excellent job of distilling the problem and its solution to the basics, without necessarily touching on the need to reform the political campaign process, and the revolving door that enriches the politicians and regulators through betraying the spirit, if not the technical word, of their oaths of office.

Is a policy error still an 'error' if it is done purposefully? 

I had hoped that Obama might have risen above that as an 'outsider' with a mandate for change, but that notion was quickly dispelled in his first 100 days in office.  He has pursued a policy of subsidy and appeasement and failed leadership that is killing the legacy and effectiveness of his administration, but enriching many participants in the process. And it works, because the US has become a culture of personal greed. 

One can speculate on motives endlessly, but we'll leave that one to history.  The end result remains the same.  And the pity is that the 'opposition party' is even worse, even more servile to special interests.

And the oddest thing is that this is almost a general phenomenon throughout the developed world, and not some anomaly of the US. And the culture of greed and economic repression was spread by highly placed political appointments affiliated in many cases with the same handful of US-UK banks.

In the aftermath of the first Great Depression there was a general spread of militant fascism, and a great world war.  So why not a rise of oligarchies employing financial repression this time, with a global currency war?  There appears to be some precedent of corruptible, power mad people rising to the occasion.

The Western governments have come to resemble competing crime families, more than an open democratic process of policy formulation for the good of the entire nation through constructive give and take.  It's mostly take, with the common people being taken, while the media and the pundits weave an alternative reality for them with words and emotion.

So, here we are.

What do you want to do tonight, Marty?

"Stop and think once more about what has just happened on Wall Street: its most admired firm conspired to flood the financial system with worthless securities, then set itself up to profit from betting against those very same securities, and in the bargain helped to precipitate a world historic financial crisis that cost millions of people their jobs and convulsed our political system.

In other places, or at other times, the firm would be put out of business, and its leaders shamed and jailed and strung from lampposts. (I am not advocating the latter.) Instead Goldman Sachs, like the other too-big-to-fail firms, has been handed tens of billions in government subsidies, on the theory that we cannot live without them. They were then permitted to pay politicians to prevent laws being passed to change their business, and bribe public officials (with the implicit promise of future employment) to neuter the laws that were passed—so that they might continue to behave in more or less the same way that brought ruin on us all.

And after all this has been done, a Goldman Sachs employee steps forward to say that the people at the top of his former firm need to see the error of their ways, and become more decent, socially responsible human beings. Right. How exactly is that going to happen?

If Goldman Sachs is going to change, it will be only if change is imposed upon it from the outside—either by the market's decision that it is no longer viable in its current form or by the government's decision that we can no longer afford it. There is a bizarre but lingering aroma in the air that the government is now seeking to prevent the free market from working its magic in the financial sector-another reason that the Dodd-Frank legislation is still being watered down, and argued over, and failing to meet its self-imposed deadlines for implementation.

But the financial sector is already so gummed up by government subsidies that market forces no longer operate within it. Could Goldman Sachs fail, even if it tried? If someone invented a cheaper way to finance productive enterprise, would they stand a chance against the big guys?

Along with the other too-big-to-fail firms, Goldman needs to be busted up into smaller pieces. The ultimate goal should be to create institutions so dull and easy to understand that, when a young man who works for one of them walks into a publisher's office and offers to write up his experiences, the publisher looks at him blankly and asks, 'Why would anyone want to read that?'"

Michael Lewis, The Trouble With Wall Street