Stocks and Precious Metals Charts - The Crumbling Edifice

 

"The period of financial distress is a gradual decline after the peak of a speculative bubble that precedes the final and massive panic and crash, driven by the insiders having exited but the sucker outsiders hanging on hoping for a revival, but finally giving up in the final collapse."

Charles Kindleberger, Manias, Panics, and Crashes, 1978

"It has been more profitable for us to bind together in the wrong direction than to be alone in the right one. Those who have followed the assertive idiot rather than the introspective wise person have passed us some of their genes. This is apparent from a social pathology: psychopaths rally followers.”

Nassim Taleb, The Black Swan, April 17, 2007

"The whole edifice of modern financial theory is, as described earlier, founded on a few simplifying assumptions.  It presumes that homo economicus is rational and self-interested.  Wrong, suggests the experience of the irrational, mob-psychology bubble and burst of the 1990's.  A further assumption: that price variations follow the bell curve.  Wrong, suggests the by-now widely accepted research of me and many others since the 1960's. Well, the Efficient Market Hypothesis is no more than that, a hypothesis. Many a grand theory has died under the onslaught of real data.”

Benoît B. Mandelbrot, The (Mis)Behavior of Markets, 1997

"And such was the attitude of their minds that a shocking crime was dared by a few, with the blessing of more, and the passive acquiescence of all."

Tacitus, The Murder of Galba, Histories: Book I, XXVIII

"Complex systems that have artificially suppressed volatility tend to become extremely fragile, while at the same time exhibiting no visible risks. In fact, they tend to be too calm and exhibit minimal variability as silent risks accumulate beneath the surface. These artificially constrained systems become prone to 'Black Swans' — that is, they become extremely vulnerable to large-scale events that lie far from the statistical norm and were largely unpredictable to a given set of observers.  Indeed, the longer it takes for the blowup to occur, the worse the resulting harm in both economic and political systems."

Nassim Taleb, The Black Swan of Cairo, Foreign Affairs 1 June 2012


Stocks were in rally mode today.  

VIX fell sharply.

The Dollar dropped.

Gold and silver rallied.

Bitcoin bounced.

SpaceX is flopping around after a long distributional decline.

Crude oil back off a bit.

The wars in the Middle East and the Ukraine continue to worsen, badly.   If these do not concern you greatly you need to change your news habits.

The global impact of energy disruption in petroleum products and natural gas is going to impact the world economies very hard later this year.

We are heading to a major conflagration.  And it will leave a mark.   

US GDP came in light of expectations in the second quarter.

Inflation is looking more pernicious, and will probably continue to build.

It looks like we are heading for stagflation, which is the product of bad governance and blowback from inept fiscal policy.

Today was a 'technical rally.'   We will be getting snap back rallies like this going forward. 

But the markets are skidding on a slippery slope that is likely going to hit us all very hard.

If the power elite come back to the public with their hands outstretched for yet another bailout, just saying 'no' is probably not going to be enough to correct this appalling state of moral hazard. 

As Hermann Hesse wrote in Journey to the East, "His suffering became too great, and you know that when the suffering becomes acute enough, one moves forward." 

We are heading for the killing floor.  And it will try our hearts and our minds—  and perhaps put steel in our hearts for meaningful reform, equality under law, and for justice.

Have a pleasant evening.  

"Hard times is here and everywhere you go,
Times are harder than ever been before.

You know that people they are driftin' from door to door
But they can't find no heaven, I don't care where they go.

People, if I ever can get up off a-this old hard killin' floor,
Lord, I'll never get down this low no more. 

You know you'll say you had money, you better be sure,
'Cause these hard times goin' kill you, just drag on slow."

Skip James, Hard Time Killin' Floor Blues, 1931

Stocks and Precious Metals Charts - A Murderous Sickness of the Heart

 

"Self-regulation is a vulnerable strategy in any human concern involving trust, but is absolute folly in an industry where the emphasis and incentives are based on the ruthless pursuit of performance at any cost, and where such behaviour is rewarded.

There is little doubt that strong personality types can hijack an organization, a political party, a sub-culture, or even for a time a nation, given the right environment of moral exceptionalism driven by fear and greed, and indoctrination.  They bring the ambivalent and the weak-willed along with them."

Jesse, Psychopaths on Wall Street,  17 March 2012

"Power attracts pathological personalities. It is not that power corrupts but that it is magnetic to the corruptible. Such people have a tendency to become drunk on violence, a condition to which they are quickly addicted."

Frank Herbert, Chapterhouse Dune, March 1985

"Psychopaths rival pedophiles in the panoply of those we despise and fear.  Given this fascination with psychopathy, and the public's current negative view of Wall Street, it is no surprise that Twitter, the blogosphere, and traditional media have been buzzing about "The Financial Psychopath Next Door," an article in CFA Magazine by Sherree DeCovny.

The headline-grabbing factoid in the article was an estimate that 10% of people in the financial services industry are psychopaths. And that's a conservative estimate, according to Christopher Bayer, a Wall Street psychotherapist cited by DeCovny.

DeCovny describes 'financial psychopaths' as individuals who seek thrills, lack empathy, don't care about what others think, are charming and intelligent, and are skilled at lying and manipulation. Citing Richard Peterson, managing partner of MarketPsych, DeCovny notes that these are some of the traits that also predict success on Wall Street.

To understand the implications of this it helps to define psychopathy.  It is a psychological condition based on well-established diagnostic criteria.  These include glibness and superficial charm, conning and manipulative behavior, lack of remorse and empathy, refusal to take responsibility for one's behavior, and others.

There are some true psychopaths on Wall Street, as there are in all walks of life. The odds increase further when we consider the competitive advantage that some of the characteristics of psychopathy, including willingness to take risks, can provide in the field.

The only way to deal with a true psychopath is to get him or her out of the organization as fast as possible. While full-blown psychopaths are not deterred by fear and do not learn from punishment, 'almost psychopaths' (and borderline sociopaths) can get the message that adverse consequences will follow misconduct. As a result, strictly enforced firm policies can be effective in deterring those who may be tempted to engage in illicit conduct.  As long as the firm wants to deter them." 

Ronald Schouten, Psychopaths on Wall Street, Harvard Business Review, 14 March 2012

“I think that the depth of Satan's pride is difficult for humans to understand, and therefore it is easy to fall into this error and partake of it, thinking, all the while, that we are instead doing something great and beautiful.”

Fyodor Dostoyevsky, The Brothers Karamazov, 1880

The powerful create a mythology of exceptionalism to justify their success.  This can become a self-reinforcing cultural bias, that embeds itself in a system of thought.  And it can be used to justify terrible crimes and abuses, which too often end in murder en masse.   Over and over again.

Stocks managed to shake off the dodgy start of the talks in Switzerland between the US and Iran. 

Gold and silver faded a bit again ahead of a Comex futures option expiration later this week on Thursday the 25^th.

The Dollar is bumping up against resistance now.   We will have to see if it can extend.

SpaceX is now underwater from its IPO last week.   That was a quick trip. 

The situations in Iran and the Ukraine continue to evolve.  The risks are immense.  The consequences are severe.  The rewards are for a powerful, soulless few.

"When one knows it is possible to kill without risking either punishment or blame, one kills; or at least one surrounds those who kill with encouraging smiles. If one feels a little disgust, one keeps quiet about it, and before long one extinguishes it, for fear of seeming to lack manliness. One is swept up; it is an intoxication impossible to resist without a strength of soul I am obliged to consider exceptional."   Simone Weil, Paris, 1938

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

Have a pleasant evening. 

Stocks and Precious Metals Charts - The Wages of Sin

 

"Price discovery is not a sexy function of markets, but it is critical to the efficient allocation of scarce capital and resources, and to the preservation of the long term wealth of investors and the economy as a whole.  If price discovery is compromised by manipulation, then we will all be gradually impoverished and the economy will be imbalanced and unstable."

London Banker, Lies, Damn Lies, and Libor, 10 July 2012

"What is most offensive is not their lying — one can always forgive lying — lying can be a delightful thing, for it leads to truth.  What is offensive is that they lie, and they worship their own lying."

Fyodor Dostoevsky, Crime and Punishment, 1866

"They often come across as arrogant, shameless braggarts — self-assured, opinionated, domineering, and cocky.  They love to have power and control over others, and seem unable to believe that other people have valid opinions different from theirs.  What makes psychopaths different from all others is the remarkable ease with which they lie, the pervasiveness of their deception, and the callousness with which they carry it out.  The majority of people and workplaces are easy prey, because we still want to believe that people are inherently good. We don't really want to believe that such people exist. Wherever you find money, prestige and power you will find them. We are far more likely to lose our life savings to an oily-tongued swindler than our lives to a steely-eyed killer."

Robert D. Hare, Without Conscience, November 1993

"Evil when we are in its power is not felt as evil, but as a necessity, or even a duty."

Simone Weil, La pesanteur et la grâce, 1947

"Crafty and penetrating as he is, yet his thousand eyes and his many instruments avail him nothing against the majestic serene silence, the holy imperturbable calm which reigns through the providences of God.  He makes a guess here, or does a bold act there, but all in the dark.  If even devils, sagacious as they are, spirits by nature and experienced in evil, cannot detect His hand while He works, how can we hope to see it except by that way which the devils cannot take, by loving faith."

John Henry Newman, Christ Manifested in Remembrance, 7 May 1837

"When Judas, his betrayer, saw that Jesus had been condemned to death, he was seized with regret, and returned the thirty pieces of silver to the ruling priests and the elders, saying, ‘I have sinned. I have betrayed innocent blood.’  But they said, ‘What is that to us? That’s your responsibility.’  So he threw the money into the temple, and went and hanged himself."

Matthew 27:3-5

"We have been silent witnesses of evil deeds: we have been drenched by many storms; we have learnt the arts of equivocation and pretence; experience has made us suspicious of others and kept us from being truthful and open; intolerable conflicts have worn us down and even made us cynical.  Are we still of any use?  What we shall need is not geniuses, or cynics, or misanthropes, or clever tacticians, but plain, honest, straightforward men."

Dietrich Bonhoeffer, After Ten Years, New Year's Day 1943


The stock futures had a serious plunge down to their lows at about 3:50 PM today, but then recovered to come back to their gradual lift off the lows.  After the bell the futures fell back down again sharply. 

Certainly interesting and worth noting.

Silver was just hammered today, ahead of the option expiration for the silver May contract option expiration on the Comex on the 27th.  I posted this chart regularly for the last few days.

 VIX did its usual bipolar boogie woogie.

The Dollar has been chopping sideways in a trading range for quite some time.  

As you may recall I have highlighted the antiquated composition of the DXY index many, many times in the past going back to my old site in 2003.   It is heavily weighted to the world after the Bretton Woods agreement, with the appropriate alterations for the introduction of the euro.  

Although there are better, more up to date trade weighted indices, this is the one that Wall Street trades.

We are heading into what may turn out to be a significant weekend.   Israel wants to resume their military operations against Iran/Lebanon quite badly.   

Trump sees himself falling into a snare that is likely to cost his party quite a bit, given the lack of any benefit to the US for this.

Let's see what the competing forces of evil and lesser evil come up with for us.  For now righteousness is a shining light in the dark, guiding the faithful, but not yet come into its ascendancy in the world.

Have a pleasant evening. 

Stocks and Precious Metals Charts - Dark Triad: A Deep Well of Sickness

 

"If at the start this cancerous growth in the nation was not particularly noticeable, it was only because there were still enough forces at work that operated for the good, so that it was kept under control.  As it grew larger, however, and finally in an ultimate spurt of growth attained ruling power, the tumor broke open, as it were, and infected the whole body."

The White Rose, Second Leaflet, Munich 1942

"Coined by psychologists Delroy Paulhus and Kevin Williams in 2002, the term 'Dark Triad' describes three distinct but overlapping traits: narcissism, Machiavellianism, psychopathy.  Each carries its own texture — grandiosity, manipulation, coldness — but they share a common core: callousness and exploitation. Think of it as a psychological Venn diagram. 

• Narcissism craves admiration. 
• Machiavellianism craves control. 
• Psychopathy craves thrill and dominance.

At first glance, the narcissist dazzles.  They radiate confidence, charm, and certainty.  They know how to light up a room, and how to make you feel lit by their glow.  But beneath the sheen lies fragility.  The narcissist is addicted to admiration-craving it like oxygen.  Without it, their grandiosity cracks.  Criticism cuts deeper than a blade.  Rejection feels like annihilation.  What marks narcissism in the Dark Triad isn't just self-love, it's exploitation.  Others become mirrors, reflecting back validation.  Relationships become stages for their performance. In modern culture, narcissism thrives because it's rewarded. Influencers curate endless self-image. CEOs spin their charisma into power. Politicians build cults of personality. The narcissist doesn't just survive in today's world-they're celebrated for the very traits that corrode intimacy and truth.

Where the narcissist craves the spotlight, the Machiavellian prefers the shadows.  Cold, calculating, and relentlessly strategic, the highly Machiavellian treat life as a chessboard.  People are pawns.  Relationships are leverage.  Morality is optional.  High-Machs aren't impulsive like psychopaths. They're patient. They bide their time, cultivate influence, and strike when it counts.  This makes them dangerous not for their explosions, but for their persistence. In workplaces, they thrive in office politics.  In relationships, they use charm and deception as tools.  In leadership, they cloak self-interest as pragmatism.  Where narcissists want applause and psychopaths want chaos, Machiavellians want control.  And they'll wait as long as it takes to get it.

If narcissism dazzles and Machiavellianism plots, psychopathy devours. Psychopaths are marked by callousness, impulsivity, and thrill-seeking. They feel little fear, little remorse, and little empathy. To them, people are not companions or colleagues-they are tools, obstacles, or prey. Unlike narcissists, they don't hunger for admiration. Unlike Machiavellians, they don't always wait patiently for the long game. Psychopaths live for the immediate rush-risk, dominance, the thrill of breaking rules.

The dark psychology of psychopathy lies in its emotional poverty.  Charm without care.  Action without regret.  Desire without restraint.  It's not always violent crime.  Sometimes it's the executive who cuts thousands of jobs with a smile.  Sometimes it's the partner who betrays without a flicker of guilt.  Sometimes it's the leader who gambles with millions of lives, chasing only their own win.  The predator doesn't always snarl.  Sometimes it shakes your hand."

Mark Hussey, The Dark Triad, The Brink, 29 August 2025

"The mood may be summed up thus: a shocking crime was committed on the unscrupulous initiative of few individuals, with the blessing of more, and amid the passive acquiescence of all."

Tacitus, The Murder of Galba, Annals

Stocks did their usual pop on Monday, as those who hedged their positions over this weekend of war were squeezed by the wiseguys.  

Machine-gunning lifeboats is one of their favorite plays. 

There will be an option expiration at the end of this week.

There will be an FOMC rate decision on Wednesday afternoon.

I am have little doubt that Bessent is lobbying hard for a rate cut, at Donnie's behest.

The Dollar slipped off the 100 handle.

Bitcoin is hold in the low 70's.  

This market is pumped by the bubble fluffers in the Treasury and NY Fed, and their Banker friends who will hitch an easy ride on any wash and rinse, especially if it is backed by the Administration. 

It is set up for what could prove to be a fairly impressive correction.

The 'war' is not going well at all.  My major concern is that someone is going to do something monumentally foolish and cross the mother of all red lines.

We are caught in a deep well of sickness, made by the servants and enablers of the Dark Triad.

What is surprising is how slowly people are coming to recognize this dilemma we are in. 

Have a pleasant evening. 

Stocks and Precious Metals Charts - Of Black Swans and Cooked Goose

 

“Never, never, never believe any war will be smooth and easy, or that any one who embarks on that strange voyage can measure the tides and hurricanes he will encounter.  The Statesman who yields to war fever must realise that once the signal is given, he is no longer the master of policy but the slave of unforeseeable and uncontrollable events. 

Antiquated War Offices, weak, incompetent or arrogant Commanders, untrustworthy allies, hostile neutrals, malignant Fortune, ugly surprises, awful miscalculations — all take their seat at the Council Board on the morrow of a declaration of war.  Always remember, however sure you are that you can easily win, that there would not be a war if the other man did not think he also had a chance. ”

Winston Churchill, My Early Life 1930, p. 229

"The Commonwealth of Rome grew great by the misery of the rest of mankind.  The Romans, like others as soon as they grew rich, grew corrupt; and in their corruption sold the lives and freedoms of themselves, and of one another.”

Samuel Johnson, Review of Memoirs of the Court of Augustus, 1756

"Trust in God, but everyone else shows the data.  Check the facts and the underlying assumptions.  The reason should be obvious, but people deal with the complexities of life by using assumptions, which are a kind of shorthand way of breaking reality down into manageable chunks.  Everyone does it. 

But it is useful, and prudent, to check those assumptions you make, and that other people are making, to see if they are still valid, especially if they involve things that are important (cf. Long Term Capital Management).  Is there a bus coming down the road you are crossing?  Are you financially solvent?  Have you allowed for lower probability but potentially corrosive and existential risks? (Taleb's famous Black Swan).  Those sorts of things."

Jesse, Investment Performance for 2007,  December 21, 2007

"All governments [and organizations] suffer a recurring problem: power attracts pathological personalities.  It is not that power corrupts, but that it is magnetic to the corruptible."

Frank Herbert, Chapterhouse Dune, March 1985

"Psychopaths don’t feel they have psychological or emotional problems, and they see no reason to change their behavior to conform with societal standards they do not agree with.  Psychopaths see the rules and expectations of society as inconvenient and unreasonable impediments to their own behavioral expression.  They make their own rules, both as children and as adults. 

Many of the antisocial acts of psychopaths lead to criminal charges and convictions.  But not all psychopaths end up in jail.  Many of the things they do escape detection or prosecution, or are on 'the shady side of the law.'  For them, antisocial behavior may consist of phony stock [and crypto] promotions, questionable business practices, spouse or child abuse, and so forth.  Many others do things that, though not necessarily illegal, are nevertheless unethical, immoral, or harmful to others: philandering or cheating on a spouse to name a few."

Robert Hare, How to Spot Predators Before They Attack, December 5, 2017

"They know of no solutions to the paradoxes of the Middle East and Europe, the Far East and Africa except the landing of Marines. Being baffled, and also being very tired of being baffled, they have come to believe that there is no way out—except war—which would remove all the bewildering paradoxes of their tedious and now misguided attempts to construct peace. In place of these paradoxes they prefer the bright, clear problems of war—as they used to be. For they still believe that 'winning' means something, although they never tell us what.

Some men want war for sordid, others for idealistic, reasons; some for personal gain, others for impersonal principle. But most of those who consciously want war and accept it, and so help to create its 'inevitability,' want it in order to shift the locus [epicenter] of their problems."

C. Wright Mills, The Causes of World War III, 1958 pp. 86-89


Stocks slumped and then rallied hard into the close.

This was the usual Monday short squeeze where they jam up the specs who took short positions in the market as a safeguard over the weekend.

Gold and silver were slammed, but they both bounced, with silver showing an impressive rise for a decent gain.

I wonder if Bessent and his oligarch buddies are running low on ammo like Hegseth is.

VIX came in hot with slumping stocks this morning, and then collapsed back down into the afternoon.

The Dollar popped at the open of NY trading, and then fell sharply into the close.

The market here is largely smoke and mirrors.  Be careful.

Bitcoin managed to hold a decent bounce.  Good for them.  Enjoy it while it lasts.

A little economic data on jobs from ADP will be coming out tomorrow morning. 

Wednesday is the more important release when we get some inflation data.  Alas, it's already a bit dated because it will not take into account the inflationary effects of the Iran war.

I keep playing scenarios on the outcome of this global adventurism, and they always seem to come out from very bad to disastrous.

As I have said, the US decision to participate in Netanyahu's war will be viewed in retrospect with the Germany invasion of Russia in Operation Barbarossa.

The way things are going if we are able to have unimpeded midterm elections, not by any means a sure thing, then the GOP will probably lose their Congressional majority and the Democrats will be able to make some headway in reining in this imperial presidency.

Even better, if the Democrats can displace Schumer and Jefferies from their leadership we might see some more meaningful reform.  But that does not seem likely at the moment. 

Have a pleasant evening.