Stocks and Precious Metals Charts - Risk Off! Rate Cuts! - As Makes the Angels Weep

The God of the Market

"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 (though sometimes badly mismanaged) 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


"Hot money seeks out the conscious mispricing of risk.  Capital, in the form of both money and personal talent, increasingly flows into malinvestment and the gaming of markets. 

The productive economy languishes, left wanting for the lack of creative resources and attention. The bubble rises to unsustainable valuations— and fails, and a nation's capital is consumed.

Are you not entertained?  As Egon von Greyerz noted, the next five years are not about winning, but surviving.   So, then let us then proceed."

Jesse, 5 August 2019


“During the Summer of 1929 the stock market was marked by wild swings, violent up and down price movements, that left market participants feeling dizzy and almost exhausted. Whatever may or may not come, now might be an excellent time to take inventory of your finances, and provisions for the future. And you may wish to order your affairs to be more resilient in the face of risks, both hidden and mispriced.”

Jesse, 10 August 2019


“But man, proud man,
Dress'd in a little brief authority,
Most ignorant of what he's most assur'd—
His glassy essence—like an angry ape
Plays such fantastic tricks before high heaven
As makes the angels weep..”

William Shakespeare, Measure for Measure


"O Nebuchadnezzar, we do not need to defend ourselves before you in this matter. If we are thrown into the blazing furnace, the God we serve is able to save us from it, and he will rescue us from your hand, O king.

But if not, even if he does not preserve us, we want you to know, O king, that we will not serve your gods or worship the images of gold you have set up and commanded us to worship."

Daniel 3:16-18

As a reminder, there will be a stock market option expiration on Friday.

I pray daily that God will give us the light, and the strength, to know His will, and to resist the temptation to join in the hatred, the madness, and the worship of the darkness of this world, that seems to possess so many of our countrymen, day by day.

'But if not, I will not bow, and God grant that we will never bow, before the gods of evil.'

Have a pleasant evening.

The Dark Power Behind the Frauds and Financial Asset Bubbles - Whose Fool Are You?

"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.

As in the United States in the late 1920s and Japan in the late 1980s, the case for a central bank ultimately to burst that bubble becomes overwhelming. I think it is far better that we do so while the bubble still resembles surface froth and before the bubble carries the economy to stratospheric heights. Whenever we do it, it is going to be painful, however.”

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


“I recognise that there is a stock market bubble problem at this point, and I agree with Governor Lindsey that this is a problem that we should keep an eye on....We do have the possibility of raising major concerns by increasing margin requirements. I guarantee that if you want to get rid of the bubble, whatever it is, that will do it.”

Alan Greenspan, September 24, 1996 FOMC Minutes


"Where a bubble becomes so large as to pose a threat the entire economic system, the central bank may appropriately decide to use monetary policy to counteract a bubble, notwithstanding the effects that monetary tightening might have elsewhere in the economy.

But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy? We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability."

Alan Greenspan, December 5, 1996, Speech to the American Enterprise Institute


"It was incredible. It was distressing to me how simple and outrageous it was. It wasn't so complicated that you said, "Wow, at least they're smart in the way they're doing it." It was simple. It was brazen. The evidence of it was overwhelming. It's just that it hadn't been revealed to the public, and that's why could get away with it...

Over the past decade we've wanted to deregulate, and we've said, "Let's get government out of the business of looking at these issues, and permit industry to control itself, because we can trust them." Maybe that's been a very good thing in some ways.

One of the things that is eminently clear from our investigation is that all the compliance departments, all the self-regulation is nothing. They watched it, but they did nothing. So we've got to think this through, and it's not only the financial community. There are a lot of sectors where we have said self-regulation is the answer. We've got to think about it."

Eliot Spitzer, The Wall Street Fix, March 16, 2003

This is the same Larry Lindsey who was fired by G. W. Bush as his economic advisor for stating that the Iraq War could cost as much as 200 Billion dollars when Rumsfeld estimated less than 50 billion.

And of course this is the same Alan Greenspan who, after a personal visit from Treasury Secretary Robert Rubin, decided that maybe the stock market was not so exuberant after all, and let les bon temps rouler into the dot com bubble and bust.

Who can know why these bubbles happen?  Who can see them coming?  As Upton Sinclair noted, It is difficult to get a man to understand something, when his salary depends on his not understanding it.

And as for Spitzer, he was the target of a Federal investigation into the activities of a single high priced call girl, and was exposed for having sex with her.   And so he was publicly disgraced and taken out of play, as a professional courtesy to the Banks.  And a fine example to other would be reformers he was.

Neil Barofsky puts our current dilemma quite succinctly in this 2012 interview below.

"I was trained to be a government employee and to take my oath of office very seriously. But I wasn't really interested in their reindeer games. And I felt a real obligation and sense of duty to fulfill the oath that I took in Secretary Paulson's office on December 15th, 2008 to do the job that I was sent down there to do. But I wasn't really tempted with a big job on Wall Street. And frankly, if it meant getting a judgeship, compromising the job that I needed to do and was supposed to do, it just wasn't interesting to me.

When I had my incident with the assistant secretary that my deputy, who had come down from-- who's another former federal prosecutor, who did narcotics work, said to me, Kevin Puvalowski. And he said to me, 'Neil, you were just offered the bullet or the bribe, the gold or the lead.'

And what he was referring to was a society just like that, which was Colombia, back in the day when Pablo Escobar and the drug kingpins really controlled society. And what he was referring to is that basically to corrupt society Escobar would go to a magistrate or a police officer, police chief, a politician, and say, "You have two choices. You can either take this giant pile of money and do my bidding. Or you can get the lead, a bullet in your head."

And Kevin was joking that I just received the Washington white collar equivalent of the gold or the lead. And it was funny, at the time, but that's kind of what happens in a society where the rewards and incentives are, again, nobody's getting shot in the head thank goodness. But it's a breakdown of the system.

And in some ways, it creates this false illusion that there are people out there looking out for the interest of taxpayers, the checks and balances that are built into the system are operational, when in fact they're not. And what you're going to see and what we are seeing is it'll be a breakdown of those governmental institutions. And you'll see governments that continue to have policies that feed the interests of -- and I don't want to get clichéd, but the one percent or the .1 percent -- to the detriment of everyone else.

Neil Barofsky in a 2012 interview with Bill Moyers

And once again the public institutions of justice are under assault because they are inconvenient to the oligarchs and their courtiers. And the pundit class and the media go along for the ride, because as so many professionals they are inclined to follow the money flowing into their pockets.

And the corruption slowly infects all. But those who stand firm to the end, who hold true to their oaths, will be saved.

Sounds corny, doesn't it?   Not us, we are exceptional— different.  What a fool believes. As Brother Andrew asked, "I am a fool for Christ. Whose fool are you?"

Know whom you serve, for you will be theirs in God's economy.

Stocks and Precious Metals Charts -- A House of Desolation

"God who gave us life gave us liberty.   Can the liberties of a nation be secure when we have removed a conviction that these liberties are the gift of God?  Indeed I tremble for my country when I reflect that God is just, that His justice cannot sleep forever."

Thomas Jefferson Memorial, Northeast Portico


“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.”

Czesław Miłosz


"I urge you, brothers and sisters, to beware of those who cause arguments and put obstacles in your way with things that are contrary to the teachings you have learned. Keep away from them.  For such people are not serving our Lord, but their own vain appetites and inclinations.   By smooth talk and flattery they deceive the minds of naive people."

Romans 16:17-18

Stocks set new highs, and gold and silver corrected a bit on a quiet Comex option expiration. The charts continue to exhibit interesting patterns and excesses.

The economic news of The Recovery™ meanders along its mediocre path, with a rise in long term unemployment and the sluggish growth in the broader economy driven by an exhausted middle class and staggering working poor.

Several fellows sought to engage me in conversation yesterday, challenging the observation that 23 million people will be denied affordable access to healthcare for themselves and their families by this abomination that has slouched out of our House of Representatives.

Their points, while differently expressed, were that since these unfortunates do not have such access to reliable and affordable healthcare now, it is no great loss for them.   It is as if this is the result of the natural order, and not of a damnable system of apportioning out the wealth of the country, its products, and its benefits in a corrupt and distorted manner that is without equity, compassion or mercy.

And therefore it is implied that the fate of the weak, the elderly, the children and the disabled is deserved, because they are not life fully worthy of life.  If they were then they would be rising up in the world on its own terms through their innovation and diligent power as do the exceptional and the elect of this world and its favored few.

We all seem to be gifted with a rare talent for knowing the right things to do, and yet rationalizing exceptions to those principles for ourselves, not of any real necessity when you get right down to it, but for our convenience.  And we have a remarkable talent for broadly blinding ourselves to the nature and consequences of our own actions.

We are truly masters of deflection and self-deception. We see our elite boldly standing on their vain pedestals of patriotic righteousness and credentialed authority.  And can we not help but think that we have learned nothing, both from history and from the words of the prophets.

If our Lord came back, not as we expect in glory as the Son of Man, but as a humble lamb of innocent perfection, there should be little doubt that we would stand by while those from the established power structure would crucify Him again.

And this certainly is not because He would deserve it, not in the least.  Although there can be no doubt that we would hear some fine sounding reasons for it.

It is because by His very nature He is truth, and is therefore inconvenient to the established order of worldly powers, and the gods of the market that seek to measure the value of all in their twisted scales.  His casting of a light is the greatest offense of all to the lords of the darkness of this world.

If you ask any of our elite what they intend with their actions, none would say that yes, I set out this morning to damn myself eternally, with lies and profits from the abuse of the innocent.  No, they have achieved great wealth and power because they are the most capable, the most virtuous, the hardest-working:  exceptional.

In their own minds they might even see themselves as serving the order of God, or at least the god that they have erected themselves, and chosen to honor and obey.  And yet they do, if not in the rigorous sense, but in all practicality damn themselves in their selfishness and pride, and blind themselves to it.

Most cannot even imagine such a judgement as applying in their own case. We may think that there is no higher power than themselves and, if there is, that it is some immanent and disinterested source of power that is there for us to use, as in every other case, for our own ends.

After all, the elite have been able to use their words and their cunning wit to rise to such positions of power, and maintain on so many other occasions, that surely they will not fail them in their final reckoning.   Even God Himself could not find the ability to best them in their arguments and authority.

But the simple truth of the matter is this—  they will not serve any other but themselves.  Non serviam.

Surely those striving for power and rule over the well-being of others have taken on a higher obligation for justice by.

But before we cast judgement on others, we must look at ourselves, and in our own hands see the lash of vanity and the hammer of greed.  We too are wielding them against our brothers and sisters, the least of these, at the very foot of His cross.  Hypocrites and sinners, are we all.

And yet hope and forgiveness is there, if we will but take it, and cast off our blindness and see.

Forget now and go on, and do not thank or acknowledge His truth in any way, or take any obligation or restraint for ourselves that we do not willingly place there, at our pleasure, convenience, and discretion.

We will decide what is enough for Him. For this is what we do, every day, in our foolish blindness.

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.

640">