SP 500 and NDX March Futures Daily Charts

See SP 500 Intraday Chart: Credibility Gaps Abounding for today's stock chart commentary.

As a reminder, tomorrow is the US Non-Farm Payrolls report.

Gold Daily and Silver Weekly Charts

Non Farm Payrolls tomorrow.

SP 500 March Futures Intraday at Noon: Credibility Gaps Abounding

Here is an additional interpretation of the big inverse H&S bottom from July 2010 showing a target around 1280 that appears to have been met.

I cannot stress enough how manipulated these markets are, so use caution if you choose to play on their tables.

I was watching some individual stocks on Level II quote feeds and they were marching the prices up and down using 100 share bid/ask transactions. There was a noticeable lack serious buying at most times.

The intraday price manipulation in these markets, and particularly in silver, is becoming so blatantly obvious as to be getting almost silly. It reminds me of our little girl showing me one of her 'card tricks' when she offers me the deck with one card sticking way out and says 'pick one,' and then moves the deck around furiously if I try to pick one of the others.

I think there is a nice setup for a 'flash crash' developing with perhaps some trigger event this time that will be used as a justification for that and perhaps other things.

These fellows on Wall Street and in Washington have gotten through most of their lives by using special privilege, private influence, and simply cheating. By now dishonesty and deception is like a familiar friend that they turn to whenever the going gets tough, so how can we be surprised?

As a reminder, The Quiet Coup - Simon Johnson

“For every credibility gap there is a gullibility fill.” Richard Clopton

Gold Daily and Silver Weekly Charts

"Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: "Account Overdrawn."

Ayn Rand

Gold Over $2,000 and Silver Over $50 in 2011 - John Embry (KWN)

I used today as an opportunity to buy a little more broadly in gold and silver near the lows as bullion approached some short term oversold levels below 1370 and 29.00 respectively. These were plays in bullion primarily with little or no leverage, with some paired trades for hedging.

SP 500 and NDX March Futures Daily Charts: Drôle de Guerre Against Fraud

"The more gross the fraud the more glibly will it go down, and the more greedily be swallowed, since folly will always find faith where impostors will find imprudence."

Charles Caleb Colton

I had the opportunity to speak with a pit trader the other day, and he described the mood amongst traders as cautious. They see the stock market rising and cannot get in front of it, as the buying is too well backed. But the volumes are so thin and the action so phony that they cannot get comfortable on the long side either, so are buying insurance against a correction even while riding the rally higher.

This is a market setup for a flash crash.

Gold Daily and Silver Weekly Charts

Non-Farm Payrolls report on Friday.

"On a side bar. remember a couple of years ago, when I went on CNBC to talk to them about things that were happening in the markets in the afterhours that didn't make sense, and looked like an "outside force" was moving them? And they laughed at me, and told me to take my theory to Hollywood, and see if they would make a movie of it! And then a month or so later, a guy came out and proved my theory? Well. I have to believe that the rise of Gold and Silver, the rise of Treasury yields, and Oil, all being reversed on a dime, smells like PPT. it walks like PPT. and it talks like PPT." Chuck Butler, Everbank World Markets

Fool the people? Yes we can. For a little while, anyway.

"Our government... teaches the whole people by its example. If the government becomes the lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy." Supreme Court Justice Louis D. Brandeis

SP 500 and NDX March Futures Daily Charts

Desperately Seeking Suckers

Gold Daily and Silver Weekly Charts

SP 500 and NDX March Futures Daily Charts

Taking Private Pensions

I would have liked this article better if it had been a 'straight news story' from the Monitor, which I respect for its objectivity, and not from an associated blog with a strong bias to libertarianism, even though I might sympathize with many of their ideals.

I cannot help but notice that reforming the financial system or taxing the windfall profits from financial fraud are never considered as alternatives. Still, it brings forward some interesting facts, and touches on deep concerns held by individuals in many nations.

I suspect this search for the remnants of the people's wealth will continue by the same ravenous corporations and their friends in governments around the world.

The solution to official corruption is not burning down city hall and firing the police force. This just makes it easier for the white collar criminals behind the corruption to operate in the anarchy that follows. This is the modus operandi that has been practiced by these same institutions throughout the third world for the greater part of modern history. And now they come home to eat their own.

It is the dying ember of the efficient market hypothesis that is backed by Wall Street and its demimonde in the press and the academy, and the romantic fantasies of what used to be called 'useful idiots' who would knock down the laws to chase the devil.

The solution is in the hard work of restoring the rule of law, and taking the crooks and throwing them in jail, and their friends out of public offices. History informs us that freedom for the individual is never natural or easy given the reality of human nature in all its manifestations. Corruption is resilient. People band together for their common protection against danger, both natural and of human invention.  The destruction of those bonds of commonality are always the objective of the predator class.

The Adam Smith Institute Blog
European Nations Begin Seizing Private Pensions
By Jan Iwanik
January 2, 2011

People’s retirement savings are a convenient source of revenue for governments that don’t want to reduce spending or make privatizations. As most pension schemes in Europe are organised by the state, European ministers of finance have a facilitated access to the savings accumulated there, and it is only logical that they try to get a hold of this money for their own ends. In recent weeks I have noted five such attempts: Three situations concern private personal savings; two others refer to national funds.

The most striking example is Hungary, where last month the government made the citizens an offer they could not refuse. They could either remit their individual retirement savings to the state, or lose the right to the basic state pension (but still have an obligation to pay contributions for it). In this extortionate way, the government wants to gain control over $14bn of individual retirement savings.

The Bulgarian government has come up with a similar idea. $300m of private early retirement savings was supposed to be transferred to the state pension scheme. The government gave way after trade unions protested and finally only about 20% of the original plans were implemented.

A slightly less drastic situation is developing in Poland. The government wants to transfer of 1/3 of future contributions from individual retirement accounts to the state-run social security system. Since this system does not back its liabilities with stocks or even bonds, the money taken away from the savers will go directly to the state treasury and savers will lose about $2.3bn a year. The Polish government is more generous than the Hungarian one, but only because it wants to seize just 1/3 of the future savings and also allows the citizens to keep the money accumulated so far.

The fourth example is Ireland. In 2001, the National Pension Reserve Fund was brought into existence for the purpose of supporting pensions of the Irish people in the years 2025-2050. The scheme was also supposed to provide for the pensions of some public sector employees (mainly university staff). However, in March 2009, the Irish government earmarked €4bn from this fund for rescuing banks. In November 2010, the remaining savings of €2.5bn was seized to support the bailout of the rest of the country.

The final example is France. In November, the French parliament decided to earmark €33bn from the national reserve pension fund FRR to reduce the short-term pension scheme deficit. In this way, the retirement savings intended for the years 2020-2040 will be used earlier, that is in the years 2011-2024, and the government will spend the saved up resources on other purposes.

It looks like although the governments are able to enforce general participation in pension schemes, they do not seem to be the best guardians of the money accumulated there.

The US Economic Recovery In One Picture

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained recovery.