SP 500 and NDX Futures Daily Charts - Sell Off on Weak Global Economic Data

Late in the afternoon there was a bombing incident at the Boston Marthon that took the already sold off stocks a bit deeper.

VIX spiked up sharply. I took some hedges off.

Breaking News: Two Explosions Rock Finish Line Area At Boston Marathon

Reports are mixed, but the latest is that the explosions occurred on Boylston Street across from the Boston Public Library.  This is very near the finish line of the Boston Marathon.

A photo of one of the explosions was put on twitter.  It is shown below.

Police are evacuating the area and have put the nearby Fairmont and Lenox Hotels under lockdown.

Secondary devices have been found in the area.  This appears to have been a deliberate event.

At least one of the explosions is said to have come from a trash can.  

Two explosions at Boston marathon finish line
From ASSOCIATED PRESS
3:05 PM, April 15, 2013

BOSTON — Authorities are investigating a report of two explosions at the finish line of the Boston Marathon.

There were two booms heard from near the finish line inside the Fairmount Copley Plaza Hotel.

Race officials locked down the hotel because of the report.

The sound of two booms, which sounded like thunder, had come a short time earlier.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

As Bloomberg TV said today, 'gutsy call by Goldman Sachs to short gold last week.'

As you can see the premiums are generally negative. We have not seen anything like this in quite some time.

A Plea for Civility

"When once the forms of civility are violated, there remains little hope of return to kindness or decency."

Samuel Johnson


"As citizens we have to be more thoughtful and more educated and more informed. I turn on the TV and I see these grown people screaming at each other, and I think, well, if we don't get our civility back we're in trouble."

Emmylou Harris


“Civility means a great deal more than just being nice to one another. It is complex and encompasses learning how to connect successfully and live well with others, developing thoughtfulness, and fostering effective self-expression and communication. Civility includes courtesy, politeness, mutual respect, fairness, good manners...”

Pier Massimo Forni

I recall having cautioned you all that we have entered a period of hysteria several times. I saw this phase coming years ago. And here we are.

1.Exaggerated or uncontrollable emotion or excitement.

2.A psychological disorder whose symptoms include conversion of psychological stress into physical symptoms, selective amnesia, susceptibility to autosuggestion.

At other times I have referred to what follows from hysteria as 'the madness.' That is when hysteria is driven into action, sometimes by those who would seek to use that madness for their own ends. And as you recall I often say, 'the madness serves none but itself.'

I have read some things today on the web from fellow bloggers that were utterly 'over the top.' I am not talking about those sites that seek to whip up hysteria in order to provide them a following and 'clicks' for pay because that is to foolishly expect the unexpected, that is, civility from sites that serve their own ends, often political but always commercial.

There are professional people who make a living doing this on television.  Ann Coulter and Rush Limbaugh come to mind.  Most of the others are legitimate shock comedians and their humour is dark, but sometimes rather funny.  But these others are just vile people pandering to what is most ugly in the human condition.

The bloggers I follow are people from whom I would expect better, because I can tell from their writing that they are informed, most often sincere and intelligent.   And I am disappointed.

I think that saying to one of the mothers of a child that was killed at Newtown that they are an "incompetent and defective sack of meat -- your son is dead because you are unfit to be parents" because they have spoken out in favor of gun control laws to be completely over the top and inexcusable,  even by today's remarkably low standards.

And although it ought not to matter, I happen to be a long time gun owner, and have participated in regional matches, albeit in my younger years.  And my son carries on in this. I don't speak of this much because it is not relevant to what I do intend to talk about.  And I am in favor of background checks and licenses for things that can pose a danger to other people in their use, like airplanes, automobiles, and firearms.

And although I know that markets are made up of differences of opinion, remarking on the fairly heavy handed bear raid on the precious metals sector by saying "Where the fuck is your Gold Messiah now?" is a bit much.   I mean, really. This is analysis?

I can look at the record and see how and where the selling came from as well as these others. And the rest of what follows is about as insubstantial and based on mere opinion rather than anything approaching analysis. I found the sneering takedown of those who are following a long term strategy to be particularly obtuse. Are we all not supposed to be day traders now? 

I think the system as we knew it is changing. And the lack of reform in the financial markets is going to break the confidence of the public.  And those who make their living off the markets may give some mind to speaking out for reform, or learn a useful trade doing something else. Not everyone remembers what the 1970s were like for trading, but some do.

I won't even respond further, because I only do so with public figures speaking out in favor of policy. And sometimes I do use humour and satire. That is what I do. That is what it is called when the weaker party like myself takes on the more powerful. When the more powerful figure takes on the weak the same way, it is just bad manners and bullying. This is why I get so incensed sometimes at the way in which powerful figures beat up the little guys, even while they are taking advantage of them.

I am even breaking a long standing tradition by commenting directly on what other bloggers say. Things are tough enough without those who are operating outside the mainstream fighting amonst themselves, and I probably won't do it again.  That is how formidable I think things are going to be.

I know that people who speak out for and against some thing get abused sometimes by those who hold the other side of the opinion. I get it. And since I happen to be a center progressive I get it a lot, and sometimes from both sides at the same time! For me that is why spam filters exist, and why I do not take the time to monitor comments on my site, preferring to take them privately instead and use what is factual and ignore what is not. Lashing out at those who attack you with ridicule and viciousness merely takes you down to their level where they will beat you with the energy of excessiveness.

I think there is a lot of fear and uncertainty out there. And it is going to get worse. And in such a time it is even more important to stick to the facts, maintain your composure, keep a cap on the rhetorical flourishes and excesses, and remember that if you do not know what will happen, that the other guy might be right as well. Age has taught me that those who see things in pure black and white are often just color blind and nearsighted.

It is those who can proceed calmly and with serenity who will pass through this period relatively well, and even if they do suffer some unavoidable misfortune, they can do so without regret.

"So let us begin anew, remembering on both sides that civility is not a sign of weakness, and sincerity is always subject to proof."

John F. Kennedy

And if you wish you can aspire to something even higher,  probably not fully achievable as a goal based on my own experience, but worthy of an attempt as a way of life.

“People are often unreasonable and self-centered. Forgive them anyway.
If you are kind, people may accuse you of ulterior motives. Be kind anyway.
If you are honest, people may cheat you. Be honest anyway.
If you find happiness, people may be jealous. Be happy anyway.
The good you do today may be forgotten tomorrow. Do good anyway.
Give the world the best you have and it may never be enough. Give your best anyway.
For you see, in the end, it is between you and God. It was never between you and them anyway.”

Mother Teresa

Gold Daily and Silver Weekly Charts - Shock and Awe in the Currency Wars - Silver Shenanigans

“This is an orchestration (the smash in gold). It’s been going on now from the beginning of April. Brokerage houses told their individual clients the word was out that hedge funds and institutional investors were going to be dumping gold and that they should get out in advance.

Then, a couple of days ago, Goldman Sachs announced there would be further departures from gold. So what they are trying to do is scare the individual investor out of bullion. Clearly there is something desperate going on....

I have assumed from the beginning that it is the Fed’s concern with the dollar because the dollar is being printed in huge quantities at the same time that other countries are abandoning the use of the dollar as international payment.

The exchange value of the dollar is (being) threatened, and if that collapses the Fed loses control over interest rates. Then the bond market blows up, the stock market blows up, and the banks that are too big to fail, fail.

So it’s an act of desperation because they’ve got to establish in people’s minds that the dollar is the only safe place, it is the only safe haven, not gold, not silver, and not other currencies.

And to help protect this policy they have convinced or pressured the Japanese to inflate their own currency. The Japanese are now going to print money like the Fed. They are lobbying the ECB to print more. So I see this as a dollar protection policy.

...I know where the gold is coming from in the market, it’s just paper. It’s naked shorts, there is no gold there. If somebody wanted to take delivery on those contracts nobody would be able to provide it. I don’t know what the source of the (physical) gold is. Some people are saying that the actual stocks available for possession are rapidly declining...”

Paul Craig Roberts, Fed Orchestrated Smash in Gold

I am not so sure that Paul Craig Roberts is right in manner of degree.  But it does make some sense, certainly more sense than the theories being put forward by the mouthpieces of the status quo.

I am sure this metals action was a lively point of discussion at Jim Sinclair's talk in Toronto today.

I do not see anything related to option expiration.  The next stock option expiration is next week on the 19th, and the next Comex expiration is the Thursday after that on 25 April.

Personally I think the wheels are falling off the economies of the West, and the financial engineers are hitting the panic button in advance. The BRICs are going to be in open rebellion if the rest of the G7 joins Japan in massive printing.

The Anglo-American banking cartel is doing what they do best: engaging in opaque market operations to shift the pain to the broad mass of innocent people when their schemes start to fall apart.   They have used their usual resources to spread the word in advance.

The kind of mass selling we saw today was not designed to be profit maximizing.  It was designed to flatten price to affect market sentiment and provoke additional selling.   I would imagine we will see some more activity along those lines before this is done.

Andrew Maguire says that there is no physical gold for sale at these prices.  I did check a few websites that post decent amounts of gold and silver for sale and the premiums over spot are widening.

This assault on property and savings is not all that different that what is occurring in Europe, except it is happening on a global scale.  Time for a grand bail-in, and the mechanism will be the yen, pound, euro and dollar.  The banks must be saved and all must pay.

All we can do is be on our watch, and remember who we are, what we know, and what we believe.  

SP 500 and NDX Futures Daily Charts - Overturning the Last Remnants of the New Deal

"Obama’s $3.8 trillion budget proposal released April 10 included language that said the sale of the TVA and similar programs that have achieved their original objectives and no longer require federal participation, can help put the nation on a sustainable fiscal path.”

I see where Obama's budget considers the privatization of one of the last remnants of the New Deal, the Tennessee Valley Authority.

To say Obama is no progressive is an understatement.   

Today's Gold Smackdown Portrayed on a June Futures Chart, 5 Minute Intervals

Why would the government turn a blind eye to this?

Well, in addition to allowing your cronies to make boatloads of money by gaming the markets, there is a not so subtle message wrapped within this chart from the financial engineers of the current banking system.  This is all a part of the currency wars.

"One of the central facts about modern America is that everything is political; on the right, in particular, people choose their views about everything, from environmental science to gun safety, to suit their political prejudices. And the remarkable recent rise of “goldbuggism,” in the teeth of all the evidence, shows that this politicization can influence investments as well as voting.

What do I mean by goldbuggism? Not the notion that buying gold sometimes makes sense. Gold has been a very good investment since the early 2000s, and it’s probably not all bubble. One way to think about this is that gold is like a very long-term bond that’s protected from inflation; and actual long-term inflation-protected bonds have also seen big price increases, reflecting a general perception that there aren’t enough alternative good investments.

No, being a goldbug means asserting that gold offers unique security in troubled times; it also means asserting that all would be well if we abolished the Federal Reserve and returned to the good old gold standard, in which the value of the dollar was fixed in terms of gold and that was that. And both forms of goldbuggism soared after 2008."

Paul Krugman, Lust for Gold

You see, gold is not an investment decision, it is a 'lust.'  And since it does what Mr. Krugman does not wish it to do, it is irrational, and something from his evil adversaries on the right. 

There is nothing quite so cheaply formed as this type of toss off piece from an establishment economist in defense of the status quo. 

This is the common thread I see amongst financial engineers and theoreticians.  The weakness in their theories and models always seems to turn to the brute force of financial market repression when their schemes get into trouble, based on some inherent weakness or false assumption that makes them unstable.  That certainly is the picture in Europe. 

Here is a piece I wrote some time ago about the 38 Year Cycle in Monetary History

Here is a detailed picture of the gold trading on the Comex today. You can look at it and judge for yourself.

There was no news to provoke this kind of a massive sell off in a quiet market and on heavy volume. 

This is just shock and awe in the currency wars.  And everyday people are collateral damage.  And there are always those who will beat the drums, on cue. 

Elizabeth Warren: How the Regulators Are Protecting the Banks From Disclosure of Fraud

"Fraudus est celare fraudem." 
The concealment of fraud is a fraud.

Take a careful listen to Senator Elizabeth Warren pulling out the truth from Daniel P. Stipano, Deputy Chief Counsel, Comptroller of the Currency, and Richard Ashton, Deputy General Counsel, Federal Reserve.

"You have made a decision to protect the banks but not to help the families who were illegally foreclosed on. Families get pennies on the dollar for being the victims of illegal activities. And you know of cases where the banks broke the laws, but you are not going to tell the homeowners.

People want to know that their regulators are watching out for the American public, not the banks."

Senator Elizabeth Warren

Other people are doing a much better job of covering this than I am, notably Yves Smith at Naked Capitalism, and I regularly include their links on my site.

It is a shame and a scandal that is representative of what is wrong with the current structure of the economy and the markets, the regulatory capture that favors insiders and special financial interests over basic law and justice for the public.

And I think it is a failure of the liberal agenda that calls blindly for stimulus, but at best pays lip service to significant reform.  As for those who call for austerity without reform, they are at best useful for the one percent, and of harm to most everyone else. 

The genuine reformers are found on both the right and the left, and might best be called progressives.  Unfortunately they are a group without a party or a portfolio these days, except for a few shining lights like Warren and Sanders.  From what I hear the situation in the UK and Canada is equally as bleak.  Oligarchies abound elsewhere.  As for Europe, it is just a mess of conflicting interests that one might strain to call a governing body of the most powerful special interests and their outside supporters.

Net Asset Value Premiums of Certain Precious Metal Funds and Trusts - Part II

I normally don't post this twice in one day, but I do wish to document this price action for future reference.

Heavy selling in paper has triggered a water fall decline that is seriously testing some very long term lows today, going back to gold's original ascent out of the cup and handle.

The selling in the related sectors such as the miners has been particularly brutal. As one of the paid pundits said today, 'They are clearing out the casual allocators.'

This is Street talk for skinning the little guy and the non-insider, the average, frightened investor.

Intraday gold tagged 1491.

I have gone back and marked the current chart with past support and resistance figures. Those are indicated on a segment of a chart from 2011 included below. The current chart will come out at the regular time.

Watch silver for an indication of a subsidence in selling.

Don't even ask, because I will not tell you when to sell or to buy. At most I may occasionally give some indication of what I am thinking.

And today I am thinking that this is a major test of the bull market by some very determined hedge funds and bullion banks who are overpowering the real physical markets. And they are doing so almost fearlessly because they know that the punishments, if any, are a minimal share of the profits.  And they most likely have the approval of the Anglo-American banking establishment. 

If you believe that the monied interests will only apply their financial repression to the weak, the disabled, the elderly, the poor, and immigrants you are kidding yourself, and falling for the oldest ruse in the book.

If you wish to do something, support the efforts for reforming the financial system.

Michael Hudson: Obama's Cat Food Social Security Budget Strategy and Stealth Tax Increases

What some of the 'conservatives' have figured out is that 'chained CPI' is also a threat to those who rely on incomes.

The chained CPI would also apply to the income tax brackets, to adjust for 'inflation creep.'

By seriously understating inflation, the chained CPI would also result in steady, hidden tax increases on non-privileged income by allowing inflation to push income levels higher without adjusting tax brackets.

Remember how the AMT was originally pitched as a way of forcing the wealthy to pay taxes despite loopholes, and instead became a snare for the middle class?

It's a win-win for the crony capitalists and liberal statists.  Because in corporatism the state is the corporation and the corporation is the state.  And it takes care of its own.

Less money for the elderly, and more income taxes from their working children.  And the government can mask their inflation while continuing to deliver wheelbarrows of money to the Wall Street banks and their friends, while providing a blind eye to their tax loopholes and havens.

The oligarchs maintain a tight control on any investment opportunities and returns, driving savings where they like using the power of their exchanges and the Federal Reserve. And it is easy to game when you are included in a stream of privileged information and dark pools of trading. 

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

The hedge funds seem to be having their way with the metals market.

This makes us wonder how relevant the paper market is to the physical market.

It must be very difficult to be a retail provider of gold and silver in market where your base pricing is set by such fluffy nonsense. 

Jim Cramer offers what could be at least a partial explanation although I am sure the mainstream pundits will be quick to defend the system as it is.

Gold Daily and Silver Weekly Charts - Metals Hold Up While Miners Trounced Again

"Every president needs to deal with the permanent government of the country, and the permanent government of the country is Wall Street oligarchs and corporate plutocrats and the questions becomes what is the relationship between that president and Wall Street."

Cornel West


"Fraus est celare fraudem. It is a fraud to conceal a fraud...And the regulators may wish to consider that when they continually turn a blind eye to glaring instances of market manipulation they foster a climate of lawlessness that opens the door for widespread fraud amongst normally law abiding market participants. It becomes a competition in larceny and a moveable feast of fraud. “Poverty wants, but greed wants everything, and more.” Customers run for safety, from one place to another, not sure what or whom they can trust."

Jesse, MF Global: The Issue Is Fraud and the Cover Up


“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.”

Louis D. Brandeis

As it turns out the Cyprus 'gold sales' touted yesterday were merely an idea floated by a politician, that had never been discussed at all with the central bank of Cyprus that controls ownership of the gold.

There are spot shortages of physical bullion on the retail level with silver of various types in particular commanding decent premiums over spot.

EMU Seizes Cyprus' Gold Reserves

Let's see how this develops.

SP 500 and NDX Futures Daily Charts - Complacency in Pig Heaven

I think that stocks are in a bubble now.

Earnings season should prove to be quite interesting.

It is not central bank policy failing so much as the complete lack of serious reform in the financial system that is thwarting a sustainable recovery.

What is a sustainable recovery? One that is not reliant on $85 billion per month in Fed purchases at non market prices in the debt markets. It is a recovery marked by growing demand support by a rising median wage, and not fueled by credit bubbles.

Background Music for Today's Market Culture and the Risk On Trade - Derivatives Agonistes

"Why tell you these things, since you are fully aware of them - or if not of these, then of other equally grave crimes committed by this frightful sub- humanity? Because here we touch on a problem which involves us deeply and forces us all to take thought.

Why do German people behave so apathetically in the face of all these abominable crimes, crimes so unworthy of the human race? Hardly anyone thinks about that.

It is accepted as fact and put out of mind. The German people slumber on in their dull, stupid sleep and encourage these fascist criminals; they give them the opportunity to carry on their depredations; 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?

It seems to be so, and will certainly be so, if the German does not at last start up out of his stupor, if he does not protest wherever and whenever he can against this clique of criminals, if he shows no sympathy for these hundreds of thousands of victims. He must evidence not only sympathy; no, much more: a sense of complicity in guilt.

For through his apathetic behavior he gives these evil men the opportunity to act as they do; he tolerates this "government" which has taken upon itself such an infinitely great burden of guilt; indeed, he himself is to blame for the fact that it came about at all."

The White Rose, Second Leaflet


"Which shall I first bewail, thy bondage or lost sight?"

John Milton, Samson Agonistes

Gold And Silver Registered Comex Ounces - On Notes From the Bailout Boys

These are the registered ounces of bullion in the Comex warehouse.  Tightness is appearing in the retail physical market, but nothing is showing up here, yet.

If you need a reminder, a brief explanation of what registered and eligible ounces on the Comex means is here.

Janet Tavakoli is a very witty person, as well as being derivatives expert, a financial writer and a noted novelist.

She just sent me this via email:

Notes from the bailout boys:

Goldman 2013: With our economists expecting few ramifications from Cyprus.

Goldman 2007:  AIG presents no counterparty risk.

Insider Sales on the Sprott Physical Silver Trust

Someone emailed me about this, and I wanted to get the actual data so you can see it.

It appears that Eric Sprott has sold about 3 million shares of his Silver Trust so far this month.  That is quite a bit of selling, but certainly not unheard of for someone who is a billionaire.

I have it second hand that the sales are related to a commitment that Eric Sprott has to a charitable obligation, and has nothing to do with his views on silver or the Trust.  I obviously do not know with any certainty if this is the reason.

A similar search shows no such insider sales on the Sprott Physical Gold Trust.

I do have current positions in both of  these funds, and some of their rivals. 

I did not find anything about this on the Silver Trust homepage.  I would think that some comment should be made given the size of the sales. 

Insider Sales Data for PHS (PSLV in the US)

Note:  Ed Steer reports that he called Eric Sprott and that the sales are being conducted for a charitable obligation, and that the sales are also related to his belief that miners will outperform bullion so he is shifting his assets accordingly.

One might obverse that a simple press release stating one's intentions for a very large sale or purchase is customary for the actions of a significant insider in a substantial public organization.

Gold Daily and Silver Weekly Charts - Goldman Says 'Sell' and It's a Risk On Day

Intraday commentary here.

It is worth reading.

Goldman made a big bear call on gold today.  Let's mark it, and see how it turns out in six months.

SP 500 and NDX Futures Daily Charts - The Fed Let's the Dogs Out - Bubble On Ben

The Fed leaked the minutes of their last meeting early today, and some discussion by some members about ending QE this year had the market leaning to the bull side, and then encountering little resistance, it was a sky hook day as resistance fell by the wayside.

Let's see how the real economy acts, as we are now in earnings season, albeit with lowered expectations.

 The Fed has proven, over and over, that it cannot see those bubbles it creates, and blithely ignores looming dangers on a regular basis. It is hard to think of a forecasting outfit with a worse record, except perhaps Townsend, Greenspan & Co.

This is a bonfire of the mediocrities.  Try not to get burned.  But since they control the currency one has to respect their power, if nothing else.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds - Selling On Fear

Goldman Says to Short Gold

If Goldman said it would be sunny and clear I would wear boots and bring an umbrella.

Cyprus Forced To Sell Gold As Part of Bail In

The rape of Cyprus continues.

CBC: The Secret World of Gold

I have bought selectively here with an eye to cash flows and dividends, with a long timeframe. 

There is increasing anecdotal evidence of shortages of bullion on the periphery.

Michael Hudson on the Thatcher Legacy

I have avoided the subject, but I thought Mike Hudson's review of Thatcher's economic impact to be interesting.