SP 500 and NDX Futures Charts - Fed Flops, Payrolls Cometh

Another fun filled day on Wall Street, aka Pig Alley.

Matt Taibbi notes that TBTF Takes Another Body Blow.

Is the Fed Setting Up the Mother of All Shorts?

The timing may be tricky, but such severe distortions in valuation as shown in the chart below can often set up special opportunities for investment profits when the eventual reversion to the mean, or norm, occurs.

I think it may be more difficult to trade on these sorts of sweeping macro changes now because of the pervasive corruption and insider operations in the markets which prey on the mispricing of risk and the calculated asymmetry of information.  I am comparing this to my own investment decisions on behalf of my family in the early 1980s, that pre-HFT period when the customers' man still thanked you for your order, when it became obvious to most informed observers that Volcker's interest rate policy had peaked at twenty percent, and the long decline in rates had begun. I remember a colleague coming in to my laboratory and writing the date and rate on my chalkboard, and he was right. For the astute longer term investor, those were the days of zero coupons, high grade and high paying annuities, longer term Treasuries, and high quality dividend DRIPs.

Look at the difficulty one has had investing in the precious metals markets from 2000 until now. I have viewed it as a similar broad macro trend, and consequent bull market, that is so apparent that it has bordered on an IQ test rather than an investment decision.  It does however cross the path of the central banks and their policy enhancement apparatus, so it is not quite so benignly tolerated as dealing in fraudulent paper, the times being what they are. The Fed did not say so much back then, but they did not prevaricate and intervene so broadly and frequently either. If the Fed ultimately does cease to be as an institution, its decline and failure will be marked by the Chairmanship of Alan Greenspan.

But for long term investors I think riding this macro trend will still be possible when the tide turns and change comes. And I think I will wait for it, because to be early is to be wrong. And these days trading early is measured in microseconds. And so it is best to wait for positions to be right, and then sit tight.

Chart courtesy of Ralph Dillon at Global Financial Data. The views expressed above about it are my own.

Fed Open Market Committee Statement for May 2013 - Audacious Oligarchy

"The planter, the farmer, the mechanic, and the laborer all know that their success depends upon their own industry and economy, and that they must not expect to become suddenly rich by the fruits of their toil. Yet these classes of society form the great body of the people of the United States; they are the bone and sinew of the country--men who love liberty and desire nothing but equal rights and equal laws, and who, moreover, hold the great mass of our national wealth, although it is distributed in moderate amounts among the millions of freemen who possess it.

But with overwhelming numbers and wealth on their side they are in constant danger of losing their fair influence in the Government, and with difficulty maintain their just rights against the incessant efforts daily made to encroach upon them. The mischief springs from the power which the moneyed interest derives from a paper currency which they are able to control, from the multitude of corporations with exclusive privileges which they have succeeded in obtaining in the different States, and which are employed altogether for their benefit..."

Andrew Jackson, Farewell Address

The Fed, as suggested, had nothing new to say, except perhaps to scale back to near zero any speculation that the Fed will be returning to a normal monetary environment anytime within the next year or so.

I am anticipating an increase in special Fed programs and even more extraordinary action before a cessation. 

And there will continue to be the use of secrecy, deception, and 'perception management' which will make any and all reform but a thin veneer.

The idea that the Fed would terminate QE sometime later this year is laughable, almost as funny as the notion that the Fed is making objective scientific judgements about specific policy actions based on solid economic data.  The Fed, by its own self-rationalizing admissions, cannot find the bubbles emanating from its collective bottom, even with both hands.

In this statement the Fed seems to point a finger at the political class, and rightfully so.  But keep in mind that the Fed are among the most powerful of the regulators, and are heavily involved in promoting policy and advocacy in favor of the banking system as it is.  The Fed is at the heart of the problem, and every bubble and financial crisis we have seen for the past thirty years.  

Their willful hypocrisy makes one cringe.

The fiscal actions of the Congress and the Whitehouse are a paleo-economic error in policy prompted by their almost slavish devotion to the monied interests, and held captive in the credibility trap.

It is little comfort that Europe is in a worse condition because of their inherently unsustainable and unwieldy structures. 

Federal Reserve Policy Statement for 1 May 2013

Information received since the Federal Open Market Committee met in March suggests that economic activity has been expanding at a moderate pace. Labor market conditions have shown some improvement in recent months, on balance, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth.

Inflation has been running somewhat below the Committee’s longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee continues to see downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months. The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability.

The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes. In determining the size, pace, and composition of its asset purchases, the Committee will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives.

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Charles L. Evans; Jerome H. Powell; Sarah Bloom Raskin; Eric S. Rosengren; Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Esther L. George, who was concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.

Jeff Sachs: The Movie

"But what it's led to is this sense of impunity that is really stunning and you feel it on the individual level right now. And it's very very unhealthy, I have waited for four years, five years now to see one figure on Wall Street speak in a moral language.

And I've have not seen it once. And that is shocking to me. And if they won't, I've waited for a judge, for our president, for somebody, and it hasn't happened. And by the way it's not going to happen any time soon, it seems."

Jeffrey Sachs

NAV Premiums of Certain Precious Metal Trusts and Funds

Thin and a surprisingly negative cast to the Central funds. O Canada!

Barrons notes that Slumping ETFs and Futures a Stark Contrast to Coin Sales.

Wall Street can create and manipulate paper shares, but they do not have the power to mint coins.

And when they looked there, the cupboard was bare.

Recall that this is an FOMC day, and so a hit on the metals has some tradition. Especially when the Fed is boxed into a corner.

And some of the key overseas trading areas are closed today, so the mice will play.

Let's see what happens with the Fed. We'll know this afternoon, a little while after the insiders are informed.

Gold Daily and Silver Weekly Charts - FOMC Rate Decision Tomorrow at 2:15

"God has numbered your reign.  You have been weighed, and found wanting."

The FOMC will issue its rate decision at 2:15 tomorrow.

I would expect some wording change to reflect the deteriorating macroeconomic outlook in the US, even if they do not admit it.

The Chicago PMI came in weak, showing a contraction. Tomorrow we get the national ISM number and I think that will show a slight contraction as well, a little light of 50. But its hard to say.

We will also get the latest ADP employment change number, although it seems to have little impact except during a Non-Farm Payrolls week and at the extremes of estimates.

ECB will make a rate decision of their own on Thursday.

AAPL cheered the equity markets today by announcing its intentions to issue a record amount of new debt, on the order of $17 billion, in order to 'pay dividends and buy back stock.'   They are doing this to avoid bringing back profits they have sequestered overseas to avoid paying taxes.

This is innovation, American style.

There are repeated rumours of a private run on the bullion banks from the ranks of the wealthy. Apparently they are pulling their bullion holdings out of even the 'allocated stores' of the banks and moving them to private storage facilities.

As you know, Ben Bernanke will be leaving the Fed soon, most likely to retreat back to Princeton and start writing his version of history, while taking a few spins through the revolving door.  The discussion of his possible successors makes one's skin crawl.  The economists are lining up to be considered for a chance at this largess of power and position, strutting their stuff like tarts on 11th Avenue.    A sign of the times perhaps that the job will go to some smarmy insider.  That is Obama's style.

Let's see what happens.

SP 500 and NDX Futures Daily Charts - NYSE Margin Debt Levels Back to Post-Crisis Highs

The SP made a new record high today as April draws to a close.  Sixth month in a row that the stock markets have turned in a gain.

Sell in May and go away.

The FOMC will make a decision about rates tomorrow at 2:15.

Chicago PMI came out with a contraction today. Most economic indicators are now showing a contraction except for stocks and 'confidence' which is led by the equity market.

Complacency rules. And it is dangerous.

And this in a thinly traded market. Seems like an almost certain recipe for disaster if the easy momentum trade turns lower on even some seemingly trivial event.

NYSE Member Firm Debit Balances In Margin Accounts (MARGDEBT).
John Mendelson

MARGDEBT, at the end of March 2013 (latest figures released) rose to $380 billion up 4% over February and just a hair below the all-time high of $381 billion as of July 31, 2007….a period some may recall.

I am often told in meetings that there is no speculation or notable leverage in the current market. I believe the March figure speaks for itself.

A chart of Margin Debt back to the end of 2006 is included.

But When She Got There, the Cupboard Was Bare...

Where is all the gold?

Old Mother Hubbard
Went to the cupboard,
To get the poor dog a bone;
But when she got there,
The cupboard was bare,
And so the poor dog had none.

Gold Daily and Silver Weekly Charts - Educators And the School of Probability

According to LeMetropole Café this word from UBS:

"Demand out of Asia was exceptional last week: Indian demand was the strongest we’ve seen in five years, while volumes and premiums on the Shanghai Gold Exchange reached record highs. This seemingly insatiable appetite is not necessarily limited to the region, though.

Reports of long queues, refinery capacities being maxed out, lead times being extended, stocks running out, and surging premiums are also evident. Retail buyers in Europe and the US have shown strong appetite, too.

Our flows indicate both strong demand for physical gold and growing difficulty in sourcing metal."

And apparently the Perth Mint Works Through Weekend Because of Surging Gold Demand.

As you may recall I showed a video interview with the head of the Hong Kong Precious Metals Exchange who said that their stores were exhausted by demand, and they were having to import gold from London and Switzerland.

This is hardly a sign of long liquidation caused by disenchantment with the precious metals.  Rather, it is the natural outcome of a bifurcation between the paper derivatives markets and the real world.  And such a divergence can be dangerous to the speculative trade if they fail to converge again as expected, no matter the size and power of the paper trade.

Just ask the laureates of Long Term Capital Management.  At the end of the day they were less Nobel in their risk management than misgiven in their assumptions, like the advisors of King Canute.  Fat tails are like tides in their relentless ability to make the experts all wet. And their backers get soaked.

This is what Walter Bagehot meant when he said, 'Life is a school of probability.'

I have been re-reading one of John Kenneth Galbraith's lesser known works, Economics in Perspective: A Critical History.

It struck me today, having audited a history of economics not all that long ago on the web, what a profound difference there is between a teacher and an educator.   It reminded me of some of the great minds which I have had occasion to stumble across in the long cycle of learning.

Even today when I am well past the pursuit of formal education (I went back for an advanced degree in a subject unrelated to any past studies at 40, and even that now seems ages ago), I still am jolted now and then by the education one can obtain from not only personal reading, but from friends and acquaintances, who impart knowledge without perhaps even realizing it and sometimes by example.

An educator (ex-ducare: to draw out from) brings the student along, gives them a model or a framework on which to hang the facts through which they are led by selective readings, draws out what is best in them, beyond even their own nascent ability to see their capabilities.  They are groomers of talent.  And they are able to impart knowledge, and the tools with which to increase it, and often in a wide ranging field of subjects.

Even an older work like Galbraith's,  intended for public consumption,  and which I am quite sure is out of favor and out of date among professionals, and has much to be taken issue with based on more current thoughts, provides a platform or a foil on which to assess new data, and to challenge according to one's own particular thought and inclinations.

An educator provides a lasting substance. An educator illuminates the subject, and the result is a kind of inner satisfaction in the developing mind that serves to provide a new view of things through renovated eyes.

Too many teachers on the other hand, merely provide endless lists of thoughts and a complexity of facts in a hodgepodge manner to be memorized, without providing much in the way of insight or lasting frameworks.  They exult over their own knowledge as compared to their students. They tend to exasperate, rather than inspire. Not because they are demanding, but because they are not quite able to impart knowledge, a deeper understanding of things.  They cannot give what they do not have.

I have known educators that were incredibly demanding, sometimes almost amazingly so.  I had one professor who I thought would break me in the rigor of his expectations.   He changed me for life by showing me what I could do when I put my mind to it using the right tools.  He would not settle for second best.

An educator brings the mind of the student flush up against the mind of genius, explaining without condescension or false complexity, exposing without imposing or overwhelming, and cultivating without judging and demanding except to bring the mind to full flower.  They impart a sense of the joy of learning, the ecstasy of understanding, and can bring people to a greatness and fulfillment that they might not otherwise have achieved.

This is the highest calling that I can imagine, if one has the gift for it, a gift which is honed over long years of practice, often through the hands of other educators.  After all, we stand on the shoulders of giants.

Effusive praise, and not intended for Galbraith per se, but for all those educators in my past of whom he reminds by his gentle, elegant style of coaxing one to learning.  I owe much to them,  most likely the better part of me, and certainly those things I might reflect on that have made me more human.

SP 500 and NDX Futures Daily Charts

Stocks rose today on a better than expected pending home sales number.

The volumes were remarkably thin.   You know what they say about shorting a thinly traded market -- don't.  But you may not wish to establish investment positions in them either.  Thin markets are often a prelude to volatility.

You know what I think about this market. Do not get in front of because the Fed is feeding the trade, and providing what is likely to be seen as a false sense of recovery and complacency that can turn on a dime, or stray bit of bad news.   But in the meanwhile it serves the more agile financial interests to keep it floating higher on a crest of easy liquidity.

The Irresponsibles: The Bubble In Financial Assets Paper and Bernanke's Policy Errors

Here is the failure of the Fed as monetary policy and regulator with greatly expanded portfolio in one picture assuming that one remembers that stocks have risen back to all time highs.

The Fed has been stuffing its expanding Balance Sheet into the reserves of the Too Big To Fail Banks, where they and their Wall Street cronies use the funds to game the markets for financial paper and real goods.

If your goal is to support the one percent at all costs, then creating new bubbles in financial paper that they own makes perfect sense.    And as regulator the Fed promotes a lack of transparency, of financial secretiveness, of cronyism, and laissez-faire corruption that is deadly to healthy markets.

Reform is the only viable response.   And that is best measured by the levels of transparency and accountability.

But the public is no longer heard in the halls of a Congress and a White House dominated by special interest money. And so things become increasingly unsustainable.

"Based on the above data, how is the stock market fundamentally sound when earnings are collapsing? I guess the Federal Reserve is going to print profits for the S&P 500 companies.

Actually earnings are irrelevant when central banks all over the world including the Federal Reserve are juicing the markets with a sea of liquidity and where multiple expansion trumps real earnings or value."

Read the entire story at Minyanville here.

And from the RealNews:

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Thin premiums.  Certainly no exuberance here.

Weekend Reading

"God beholds you individually, whoever you are. He calls you by your name. He sees you and understands you, as He made you. He knows what is in you, all your own peculiar feelings and thoughts, your dispositions and likings, your strength, your weakness.

He views you in your day of rejoicing, and your day of sorrow. He sympathises in your hopes and your temptations. He interests Himself in all your anxieties and remembrances, all the rising and failings of your spirit. He has numbered the very hairs of your head and the height of your stature.

He compasses you round and bears you in His arms; He takes you up and sets you down. He notes your very countenance, whether smiling or in tears, whether healthful or sickly. He looks tenderly upon your hands and your feet; He hears your voice, the beating of your heart, and your very breathing.

You do not love yourself better than He loves you. You cannot shrink from pain more than He dislikes your bearing it; and if He puts it on you, it is as you would put it on yourself, if you would be wise, for a greater good afterwards....

God has created you to do Him some definite service; He has committed some work to you which He has not committed to another. You have your mission -- you may never know it in this life but you shall be told it in the next.

You are a link in a chain, a bond of connection between persons. He has not created you for naught. You shall do good, you shall do His work. You shall be an angel of peace, a preacher of truth in your own place while not intending it if you do but keep His commandments.

Therefore I will trust Him. Whatever I am, I can never be thrown away. If I am in sickness, my sickness may serve Him; in perplexity, my perplexity may serve Him. If I am in sorrow, my sorrow may serve Him. He does nothing in vain. He knows what He is about.

He may take away my friends. He may throw me among strangers. He may make me feel desolate, make my spirits sink, hide my future from me -- still He knows what He is about."

John Henry Newman

Matt Taibbi Discusses the Market Rigging in the Swaps and LIBOR Markets By the Banks

Derivatives and many real world calculations of risk and price are based on a relatively few published data, such as LIBOR.

Similarly, the 'spot' price of gold and silver is based in large part on the front month contract for gold and silver on the Comex. And those prices in turn have enormous leverage over the price of mining stocks.

Some have pointed to the 'physical market' in London for metals at the LBMA as the true price market for physical bullion, with their AM and PM 'price fix.'  And while it is true that the LBMA is a market dominated by insiders, with less disclosure than many exchanges,  it has come out that even on the LBMA the price is largely based on paper trading with leverage approaching 100 to 1. 

And LBMA is heavily interconnected with the Comex.

Since those making markets on the Comex in metal futures deliver a very small percentage of the actual gold and silver that is traded on paper, and much of that is settled for cash, the opportunity for price rigging is significant, hugely so.

And as in the case of other long running market schemes, like Bernie Madoff's, the stony silence and arrogant denials of any irregularities, despite very unusual trading activity in quiet hours and around key dates, is disconcerting considering the opaque nature of some unusually large market positions and significant circumstantial evidence with regard to motive and opportunity.

"All of these stories collectively pointed to the same thing: These banks, which already possess enormous power just by virtue of their financial holdings ­ in the United States, the top six banks, many of them the same names you see on the Libor and ISDAfix panels, own assets equivalent to 60 percent of the nation's GDP ­ are beginning to realize the awesome possibilities for increased profit and political might that would come with colluding instead of competing. Moreover, it's increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system.

If true, that would leave us living in an era of undisguised, real-world conspiracy, in which the prices of currencies, commodities like gold and silver, even interest rates and the value of money itself, can be and may already have been dictated from above.

And those who are doing it can get away with it. Forget the Illuminati ­ this is the real thing, and it's no secret. You can stare right at it, anytime you want."

Matt Taibbi: Everything Is Rigged

Gold Daily and Silver Weekly Charts - Post-Expiration Gut Check - Taibbi: Everything Is Rigged

From last night's gold and silver commentary:

Today was option expiration on the Comex and it was quiet. After the recent bloodbath I cannot imagine it would be otherwise. If I were of a manipulative mind I would hit the metals again hard tomorrow."

So what next? There will not be any halt to QE for the forseeable future.

Gold and silver are lightly owned. When they break out and the common person becomes more aware of what is going on, there will be a huge shift in buying to the upside.

And those who manage the markets fear this.  They not only fear their loss of control, but also the exposure of their market antics and the widespread corruption in the system.  We are in a credibility trap, after all.

If you have not yet seen it, the most recent piece by Matt Taibbi, Everything Is Rigged, is worth reading.

Have a pleasant weekend. See you Sunday evening.

SP 500 and NDX Futures Daily Charts - GDP Disappoints

GDP came in light today and the markets move lower, although they were able to shrug off the news.

Volumes remain light, and the markets remain gamed.

Volatility is complacent.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Premiums remain thin.

I think today is the obligatory post-expiration gut check for the metals.

Let's see how we close and how it goes next week.

Read Taibbi's piece posted early about the latest market rigging scandal.

When the rigging in the metals is revealed it may be a 'career ender' and an 'exchange breaker.'

Matt Taibbi: Everything Is Rigged - The Biggest Price-Fixing Scandal Ever

“The worst crimes were dared by a few, willed by more, and tolerated by all.”

Tacitus

There are more scandals to come.   Wall Street is now a pathological environment, and the City of London is as bad or worse.

When someone raises their voice over these abuses they are often met with stony denial and ridicule.  That is the credibility trap at work.  Those who owe their positions to the system, as corrupt as it may be, feel the need to defend it rather than reform it.

There will be no sustainable recovery until the system is reformed.  

Rolling Stone
Everything Is Rigged: The Biggest Price-Fixing Scandal Ever
By Matt Taibbi
April 25, 2013

Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world's largest banks may be fixing the prices of, well, just about everything.

You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that's trillion, with a "t") worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it "dwarfs by orders of magnitude any financial scam in the history of markets."

That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world's largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world's largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps...

All of these stories collectively pointed to the same thing: These banks, which already possess enormous power just by virtue of their financial holdings ­ in the United States, the top six banks, many of them the same names you see on the Libor and ISDAfix panels, own assets equivalent to 60 percent of the nation's GDP ­ are beginning to realize the awesome possibilities for increased profit and political might that would come with colluding instead of competing. Moreover, it's increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system.

If true, that would leave us living in an era of undisguised, real-world conspiracy, in which the prices of currencies, commodities like gold and silver, even interest rates and the value of money itself, can be and may already have been dictated from above. And those who are doing it can get away with it. Forget the Illuminati ­ this is the real thing, and it's no secret. You can stare right at it, anytime you want.


Read the entire story here.

Gold Daily and Silver Weekly Charts - Voilà, Les Jeux Sont Faits

"If you shut up truth and bury it under the ground, it will but grow, and gather to itself such explosive power that the day it bursts through it will knock down everything that stands in its way."

Émile Zola

Gold and silver rallied sharply today from their deeply oversold condition, which remained so even after several days of steady increases.

Today was option expiration on the Comex and it was quiet. After the recent bloodbath I cannot imagine it would be otherwise.  If I were of a manipulative mind I would hit the metals again hard tomorrow.

But I hear that this recent market operation has put a dent in the physical bullion under the control of one of the Fed's favorite banks, so that might be a dangerous play, and a risk of a run on the bullion banks.

GDP for Q1 tomorrow.

This seems to be a season for scandals. 

First it has been shown that the bulwark of austerity, the work of Rogoff and Reinhart, was not only mistaken in its Excel spreadsheet, but it was also highly selective in its use of data. 

So much so that an unbiased examination of the data shows that not only is their hypothesis not proven, it is proven false! And Reinhart is working for the Peterson Institute.

After all the crowing with the paper smash of gold and silver, and the widespread glee that investors were rejecting it, in fact there have been widespread shortages of actual gold and silver bullion available for sale. 

And there is still no heavy buying from the general public.  Ownership is still narrowly concentrated in those who follow money and financial matters.  That type of broader buying may be to come, but it has not happened yet. 

The open interest and other data show it was largely a bear raid driven by the manipulation of the markets in off hours using tried and true manipulative techniques of gaming the system.

What wonders and revelations will the future bring?

Intraday commentary regarding what may be behind the hysterical antagonism towards gold and silver here.

SP 500 and NDX Futures Daily Charts

After the bell Amazon beat on earnings, but guided lower next quarter. Their profit margin is thin, and getting even thinner.

Stocks remain thinly traded, without substantial underpinnings.