SP 500 and NDX Futures Daily Charts - And Here Comes the Rinse

On Wednesday in the stock market commentary I said that "the wash cycle is almost done."

And indeed is was, as on little weak economic news today the stock market took a serious nosedive, led by the momentum stocks. Stocks peeled off much of the paint that was applied to the tape just recently for the end of quarter.

Live by the scam, die by the scam.

So what next? Overall the market is going to continue feeding on hot money and thin volumes. Also on Wednesday I said that the exchanges would be embarrassed if they stopped all the HFT hot potato trading, because the lack of participation in stocks would be all too apparent.

The market is a bit lofty and will remain vulnerable to exogenous shocks and news, which are difficult to predict. There are certainly plenty of tensions in and around eastern Europe and the Mideast. Today we saw a newsflash about US objections to a Iran-Russia deal that some saw as motivated by an attack on the petrodollar. I was watching this develop since February, and it looks more like the US is objecting to Russia ignoring the sanctions designed to bring Iran to the negotiating table over their nuclear program.

I include a valuation chart put out by JPM that likens this market valuation to some others including those that preceded that last two big market selloffs.   I picked this chart up at Zerohedge.  

While I may not always agree with their interpretation of some things, and certain some policy preferences,  I cannot help but thank them for all the hard work that they do in supplying the latest news, and acknowledge their often very valuable insights and context to the financial news and economic developments.  I use their site every day and I am glad for it.  I am glad and grateful for the work that all the bloggers provide, in addressing the yawning void in the financial news that is left by the mainstream media.   I try to give them any exposure and encouragement that I can.

Have a pleasant evening.

 

NAV Premiums of Certain Precious Metal Trusts and Funds

Gold is still outperforming silver by quite a bit with the ratio at 65 to 1.

I think that is either the sign of a developing bottom, with the high beta of silver not yet having kicked in with the return of positive sentiment, or possibly that this is more of a 'flight to safety' phenomenon.

A third possibility is that gold is starting to show the effects of a squeeze on physical supply. 

Sales of silver eagles are certainly robust. 

John Ralson Saul: Re-evaluating the Current Approach To Trade and Globalisation

Does globalization actually deliver what we thought it would?

There are a range of choices between free trade and protectionism.  Ideological commitments and purity may prevent a meaningful discussion of the situation.

Is there really a surplus of goods, or is trade organized around a plutocratic economic model that is providing a scarcity of wages for labour?

When local laws are leveled by the economic realities of globalization, can nations retain their own character and choice of government and guiding principles?

Can there be genuine 'free trade' in a world in which only the US is a major military and monetary superpower, owner the world's reserve currency, with Russia and China alone presenting some effective counterbalance, while many other nations, among them much of Europe and Japan, have become essentially incapable of exercising enough military power to defend themselves and preserve order in their own regions except for minor police actions?    Are the assumptions about the benefits of free trade founded on assumptions as unrealistic as those that drove domestic free market policies?

Is global free trade 'lifting all boats,' or merely spawning a proliferation of oligarchs because of its inherently lawless and borderless character?

Although the title of the video is in German, the presentation by JRS is in English.

Senator Bernie Sanders: The Supreme Court Campaign Funding Decision Undermines Democracy

Gold Daily and Silver Weekly Charts - Non-Farm Payrolls Tomorrow

There was intraday commentary about a 'collapse in the international monetary system' here.  There are also some words about worrying too much to the point of near hysteria.  Granted there are some things to watch closely and are cause for concern.  The theory that a major sovereign currency cannot fail because it defines itself and its own value is not consistent with some of the things that we have seen happen with our own eyes..  

It reminds me of the old story about a boxer who comes slowly to his corner between rounds.  His manager encouragingly says, 'Don't worry, kid, he hasn't laid a glove on you.'  And the boxer says, 'then you better have a talk with the referee, because someone is beating the hell out of me.'

Someone asked me if all of the ounces of gold that are claimed in the futures clearing process are actually 'delivered,' and the answer as I have given it before is 'no.'

A party may stop or stand for a futures contract warrant, that is gold in the deliverable category, but that does not mean that they actually have to take that physical gold. They have other methods of settling in kind. And they may also 'take' that gold, but leave it where it is, depending on their intentions for it.

So I would take the clearing report as indicative, rather than the final word which is told by the warehouse stocks, with a lag. And I do not know if that sort of thing is still going on, but I recall a scandal where certain brokers were selling silver and charging storage for bullion that never really existed at allexcept on paper.

But I am sure that sort of thing does not happen anymore, and certainly not on the Comex. Who can imagine that major Banks and prestigious firm rigging prices and selling things that are not on the up and up. That is the talk of malcontents and those who do not give the system the proper amount of blind trust.

But it is a bit moot as I have more recently said. Precious metals and their trading are on the move from West to East. And the Comex is sometimes of the character of theater, where players move objects and money around to provide the appearance of reality, rather than the reality itself. One bigger change is that now one can also say that about the LBMA in London perhaps, with its hot potato trading and paper leverage to physical supply.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Non Farm Payrolls Tomorrow

The economic news this morning was off the mark and not particularly encouraging.

Tomorrow we will get the non-farm payrolls report.

The news reporting on the financial channels is just terrible. No wonder people are so uninformed.   With a few notable exceptions these fellows are like actors in extended infomercials.

Have a pleasant evening.

Rickards: Collapse of International Money System - Not Apocalypse, But a Change

I am glad that Rickards came out and said this more clearly. I get worried emails from people from time to time, and I remind them that there is nothing we are facing or are likely to face, outside of an all out nuclear war, that was not faced by our fathers and grandfathers who faced two World Wars and a Great Depression in between.  

It seems more frightening now because we are more aware, and we are 'carrying the ball' and are noticing more things.  When they are young, most people don't pay attention to much that happens above the waist, unless it is on the radio or TV and is said by entertainers, or on reality shows.  I'm talking about their wallets, shame on you.  When you are young you are always broke.

I myself have lived through at least one major monetary crisis, quite a few minor ones, an oil embargo, three financial crises, and five major wars. I saw the collapse of a major developed country's currency close up when I was doing business in Moscow and the ruble had to be withdrawn and reissued with a couple of zeroes knocked off. It was wild times there. But life went on, and goes on still.

So take a deep breath, and listen to this as information, and some facts with which to prepare, and not as a portent of doom. Every generation faces the same sort of coming of age from what I can tell, where the history experienced by their forbearers suddenly becomes more than a story, and all too real for them.

I am more concerned about the love of otherwise good people growing cold, and their hearts hardening, and sins against the Spirit, the madness of the sociopaths spreading to a wider swath of misguided but otherwise gentle people, the fashionableness of injustice and growing tolerance for corruption, the plight of the unfortunate and the careless arrogance of the fortunate,  the future of the vulnerable among us, and some of the hard truths of diseases that still elude a cure, than I am worried about Mad Max coming to town.

Forget the fear-mongering. Bad things do happen, but we will manage on as we have always done, because life and the Spirit are resilient.

"And though the last lights off the black West went
Oh, morning, at the brown brink eastward, springs—
Because the Holy Ghost over the bent
World broods with warm breast and with ah!— bright wings."

Here is some knowledge.

Gold Daily and Silver Weekly Charts - 340,200 Ounces of Gold Claimed So Far In April

There was intraday commentary on the moral blindness of the US and UK financial establishment and ruling elites here.  

So far in April 3,402 gold contracts have been 'stopped,' that is, holders of those contacts have stood for delivery of the 100 oz bars each contract represents.

There are more than enough ounces at the Comex in the deliverable category now at 876,637 ounces. 

This is just part of the paper shell game, but it is interesting to watch its progress.  After all, 340,200 ounces of gold is only about 10.6 metric tonnes.  Cumulative physical gold delivery in Shanghai alone last year was well over 2,000 tonnes.

Have you ever wondered how a relatively small force, the British East India company and later the British Raj, was able to control the Indian sub-continent?   Perhaps that is how New York and London are able to govern the world market for gold, and thereby the foundations of money.

Non-Farm Payrolls on Friday.  The stock market seems a bit 'puffy' here, and complacent.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Who Can Stop the Rain

Lofty and complacent.

The wash cycle is almost done.

I think one of the reasons that the Street is defending High Frequency Trading so vehemently is because without it they would be embarrassed at the genuine volumes on the exchanges.

People, from the outside in, are beginning to lose their confidence in US equities and most likely the financial system. Wow, how could that have happened.

Non-Farm Payrolls on Friday.  The frauds will continue until confidence returns.

Have a pleasant evening.

Moral Blindness Syndrome (MBS) - When Money and Confidence Dies It Will Be Televised

"It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud.

The behaviour that caused the mortgage bubble and financial crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident."

Charles H. Ferguson

It is interesting to see the reaction that Michael Lewis has made with his new book, Flash Boys.

The furor is in large part over a quotable quote that is attributed to the book's major protagonist, 'the stock market is rigged.'

I am not going to get into the deficiencies of the book's moral argument, and the spin that is being put on this problem. It has finally become 'a problem' because the cheating that was going on started to visibly hurt the wrong people: the rich and well connected.

To that extent, it is quite similar to the market manipulation that was known as 'the London Whale' in which trading companies complained that JPM was dislocating the market, and screwing with their profit stream, with the company's antics.  Then the regulators got involved and shut it down.

I spoke to the shortcomings of the story's moral argument yesterday, 60 Minutes Sanitizes Its Report - What Banks, What Exchanges?

What is fascinating now is watching the reaction that people are exhibiting to the book and its assertion of market manipulation, with quite easily understood evidence in support of it I might add.

Yesterday there was an argument on one financial television show that literally stopped the Madame Tussauds wax museum-like trading on the floor of the NYSE. The reaction of the apologist for the status quo of systemic skimming, or front running as you prefer, was apoplectic with his reaction to this scheme being unmasked. It called to mind Victor Hugo's observation that 'frightened hypocrisy hastens to defend itself.'

(postscript:  with a few days the CEO apologist was persuaded by the New York Attorney General to retract his description of how his platform works, since it was false and in fact DID advantage HFT traders as the other fellow had described.  Nice.  Too bad the network doesn't fact check.)

This morning on another financial network, more directly beholden by Wall Street interests, Michael Lewis was interviewed, and it was the turn of the anchorpersons themselves to roll out the indignation on behalf of the industry that cuts their paychecks, and variously attack and parse the offending statement, 'the market is rigged.'   They had a go at it, and then changed the subject.

But the same anchorperson who compared Wall Street traders to children, who cannot help themselves except to try and break mom's rules, took a different tack this morning.  Today we heard that Wall Street traders have no moral imperative, no operative sense of right and wrong.   That is, their only task is to make money in whatever way that is possible, even if it means cheating, lying, and even creating false opportunities to defraud other people.  

A good trader suppresses any sense of morality and law, except as an obstacle to be overcome.  When they cheat and steal it is the fault of the regulators, because they are not smart enough and fast enough to stop them.   And these are the same people that we claim should therefore be self-regulating.

But the most shocking thing was that Michael Lewis agreed.

"I don’t regard high-frequency traders as villains.   It is like blaming the lion for eating the antelope. They are wired that way. I think the system is screwed up to exploit opportunities, exploit glitches in the system. They’re not wired to say that this is moral or immoral; they aren’t wired to say is this good for the world. They don’t think that way.”

Ah the noble lions. Or perhaps more appropriately jackals, based on how they feed in the dark on the weak.  Remember this the next time someone asks a financier for their recommendations on public policy and first principle social issues.

The irony of course is that this description is that of functional sociopaths at best, psychopaths at worst.  They are 'wired' to seek self-gratification without regard to moral considerations, conscience, or consequences.

Rather than just saying the market is rigged, the anchors and  Michael Lewis agree that the market is now founded on sociopathic behaviour, whose primary directive is to game the system and defraud the other market participants in the most clever ways that they can.  Not by producing anything, not by contributing anything real to society, but by being very successful conmen. And all the parties nodded their heads in agreement.

Psychopathy is a medical condition, whereas sociopathy is a learned behavior that is often environmentally born.  And it is therefore contagious.  Psychopaths just have a natural advantage
if they have no conscience or empathy to suppress.   Willful moral blindness for selfish ends is an acquired skill, and the domain of the sociopath.

What a hell of a way to set up a critical social system, to seek out and incent sociopathic behavior.

Whenever you hear this sort of rationalizing about the profit imperative alone, it is often said about Wall Street traders and their special status in finance. But take the same scenarios, the same moral principles, and apply them to some other professions. What if this principle was the basis of the medical profession, or the food industry, or retail stores?

Yes, doctors will always find some way around the regulations in order to falsely charge and do harm to their patients, mostly without killing them outright to their credit, as long as they can make money at it which is their primary objective. And that is the system we have set up, and there are few consequences against it.

Gas stations will always find some way to cheat their customers by short changing them and faking repairs, because their purpose is to make money any way that they can, and it is our fault for not stopping them.  If we catch them, they receive a token fine as a cost of doing business.

They will say that we need to teach the public to be better judges of mechanical repair issues.  It is not the mechanics fault. It is just how they are and what they do.   And you can apply that rationalizatin to any number of professions, from plumbers to electricians to zoo keepers to Congressmen.

The moral blindness of those caught up in this culture of deceit is appalling.  The notions they hold would never be tolerated in any other undertaking. But financial crime pays, and the tricks and abuses they perpetrate are less obvious in their effects than a dead child or a woman made blind through quackery.  But they do have effects, and they are killing us.

The purpose of the stock market is to encourage investment and the efficient allocation of capital in productive activities.   But tiers of complexity are added to hide and deceive investors, by cadres of admittedly very smart people who not only perform no useful function, but who in any other industry would be shunned.

This moral blindness is tolerated because there is very big money involved, and the potential for very negative career consequences.  As they say, it is the bribe or the bullet.   It is easy to excuse because it involves 'white collar' crimes that engage wide swaths of the most influential voices in our society.

They retreat into blaming the victims, silencing the critics, repressing even peaceful protests, praising their own exceptionalism, and coercing the outliers, others, and dissidents.   The system is the lie, and so the lie must be protected for the sake of the system.

I wonder if there is a need to have news people, and economists, and politicians to take some basic courses in ethical behavior. They are certainly doing a wonderful job of suppressing their moral sensibilities when it comes to financial fraud, even if the laws do not overtly define and indict these abuses as 'crimes.'  

And when someone points out the hypocrisy and fraud, they first ignore them, and then panic and attack. How dare they undermine the confidence of the system!   For they have become creatures of the system, and that is a big part of the problem in the credibility trap.

They do not get it. They are suffering from a severe case of moral blindness as described by Upton Sinclair when he said, 'It is hard to get a man to see something when his paycheck depends on his not seeing it.'

And the example they give as public figures, from Wall Street to the Beltway, is rotting the future of our country, down to the bone.

The cure for this is relatively straightforward if you understand the problem as one of pervasive corruption. We are in a state of serious moral hazard, in which crime pays.  It really is no different from other situations where whole towns and areas can be undermined by gangsters and graft.

You start with the law, and put some heft behind it.  You stop giving the powerful and the well-connected a pass on fraud, or just wristslap fines.   You put the right people in regulatory positions, and enough of them, and back them especially when they go up against the major syndicates. You put the message out, and then make it stick. How did Roosevelt clean up the financial industry after the 1920's?

It won't be easy, because so many have been caught in the credibility trap.  We need to find our best, who have a strong moral sense and public spirit, and then give them whatever support and encouragement that they need. If we are not doing that, and we are not, then we need to find out why and fix it. That will take leadership. And since greed and fear have so many in their grip, our short term problem is that we do not have any.

"Capitalism is at risk of failing today not because we are running out of innovations, or because markets are failing to inspire private actions, but because we’ve lost sight of the operational failings of unfettered gluttony.

We are neglecting a torrent of market failures in infrastructure, finance, and the environment. We are turning our backs on a grotesque worsening of income inequality and willfully continuing to slash social benefits.

We are destroying the Earth as if we are indeed the last generation."

Jeffrey Sachs, Self-interest, without morals, leads to capitalism’s self-destruction

The world sees this, even if the people of the US and UK do not yet realize it. The world is watching, and there will be consequences. Money and confidence will die first on the periphery, and then the deluge may come.

Gold Daily and Silver Weekly Charts - April Showers Bring May Flowers

There was intraday commentary about the 'market rigging' story that was on 60 Minutes this Sunday past.  You may find it to be interesting.   60 Minutes Sanitized Its Report on High Frequency Trading.

The argument that captured the interest of the floor traders on the NYSE and distracted them from what little trading that actually still takes place there is interesting to watch as well.  I have linked to it within that commentary.

There were the usual ins and outs in the Comex gold warehouse yesterday. The deliveries might well start showing up in the report on today's activity, which will come out tomorrow. I am still curious about Nova Scotia stopping out a big chunk of the gold being supplied out of JPM, both listed as house accounts. But since they are both custodians for this and that, we will have to wait and see where the hot potato actually stops.

Silver showed more resilience than gold today, which is sometimes quite a good sign.

As a reminder Friday is a Non-Farm Payrolls report.   The VIX is back down to its lower levels. Stock markets have hit a new record high, or at least the headline market has done so.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Reform? April Fools - Another New Stock Market Record

"The markets for equities of all kinds had evolved to a platform for hackers...[High-frequency traders] are the ultimate hackers. They’re running software programs that have one goal, and that’s to exploit the trading systems as early and often as possible...

When software programs are trying to outsmart other software programs and hack the world's trading platforms, that is a recipe for disaster."

Mark Cuban, June 27, 2012


"We would rather be ruined than changed;
We would rather die in our dread
Than climb the cross of the moment
And let our illusions die."

W. H. Auden, Age of Anxiety

Today was the first of the month, when the inflows from mom and pop's 401k and IRA savings are offered up on the altar of Wall Street. I think we are just about ready for the rinse. The VIX is back to near complacent levels, given our geopolitical context.

But there is a Non-Farm Payrolls report on Friday, so don't get too worked up about it just yet. The Fed likes to watch the stock market, and there is always talk of Robert Rubin's and the ESF's favorite confidence toy, the SP futures.

Have a pleasant evening.

HFT: 60 Minutes Sanitizes Its Report - What Banks, What Exchanges?

There were some gaping holes in the 60 Minutes expose about the stock market being rigged. The story was spun in such a way to make one think that uncontrolled innovation had created some unfortunate and inadvertent technical arbitrage opportunities in exchange centers outside of Manhattan, but a clever insider, funded in part by ultimate insider David Einhorn and backed by the big dogs of Wall Street, had come up with a clever technical fix in a new and better exchange called IEX.  Protected by a spool of fiber to induce network latency.  

 Free market triumphs, mission accomplished.   And wait breathlessly for the IPO.

Don't even think about a minimum transaction tax, a speed bump rule such as a minimum order duration, or anything more comprehensive than that. A spoolful of fiber makes the medicine go down.

I was so enchanted that they allowed someone to say 'the stock market is rigged' on national television that I thought that giving it a day or two to sink in might be appropriate.  And it is rigged.  It is just not fixed, in the manner of genuine reforms.  It is a laughingstock amongst insiders. Well not everyone is laughing.

What was this 60 minutes piece, a limited hangout expose that will still be boldly and hotly denied? 

The Fight Today That Stopped Floor Trading on the NYSE

"How frightened hypocrisy hastens to defend itself."

Victor Hugo

What is coming down the road, another flash crash or a major market failure?  Or are the natives just getting restless?  Look, reform!  And it was self-regulating!  The major owner and executive chairman of CBS, Sumner Redstone, of the aptly named holding company National Amusements, could not have asked for a better script.

If you did not notice, they parsed HFT into two types.  Conventional HFT that rides on the bid ask, normally in small incremental orders, aimed at skimming and carving up the smaller orders of the retail investors.  What INEX is addressing is 'front running' HFT that games lags between exchanges to jump in front of BIG orders from powerful insiders. 

Never mind the front running, which was taking a bite from the pros,  how about the steady nibble at the bid and ask on virtually every order that is being placed?   Doesn't anyone remember the computerized transactional skimming in the movie Office Space? 

NY AG Eric Schneiderman himself praised mom and pop affecting HFT as 'providing liquidity.' I think that canard has been capably debunked in many places and much better than I can do. It is like sex in college. The kind of liquidity you get you don't want, and when you desperately need even that liquidity, its not there. Why not just praise portfolio insurance to abolish risk, and party like its 1987?

And what about the bombing of quiet markets with an avalanche of orders to brazenly manipulate the price?  We have indictments of American companies doing that from Europe to Japan, with the sexy title 'Dr. Evil strategy.'   And it is happening like clockwork, almost every day.

And as the king of Samoan metals traders, Salelologa Dave said, 'I’ll know that real change is coming to our system when the Government allows Sixty Minutes to discuss the manipulation of the gold market."

And brother, that is the truth. We can't even get the CFTC to disclose its five year study of manipulation in the silver market that we paid for.

60 Minutes Sanitizes Its Report on High Frequency Trading
By Pam Martens
April 1, 2014

Two of the chief culprits of aiding and abetting high frequency traders, the New York Stock Exchange and the Nasdaq stock exchange, failed to come under scrutiny in the much heralded 60 Minutes broadcast on how the stock market is rigged.

This past Sunday night, 60 Minutes’ Steve Kroft sat down with noted author Michael Lewis to discuss his upcoming book, “Flash Boys,” and its titillating revelations about how high frequency traders are fleecing the little guy.

Kroft says to Lewis: “What’s the headline here?” Lewis responds: “Stock market’s rigged. The United States stock market, the most iconic market in global capitalism is rigged.”

Kroft then asks Lewis to state just who it is that’s rigging the market. (This is where you need to pay close attention.) Lewis responds that it’s a “combination of these stock exchanges, the big Wall Street banks and high-frequency traders.” We never hear a word more about “the big Wall Street banks” and no hint anywhere in the program that the New York Stock Exchange and Nasdaq are involved.

60 Minutes pulls a very subtle bait and switch that most likely went unnoticed by the majority of viewers. In something akin to its own “Flash Boys” maneuver, it flashes a photo of the floor of the New York Stock Exchange as Kroft says to the public that: “Michael Lewis is not talking about the stock market that you see on television every day. That ceased to be the center of U.S. financial activity years ago, and exists today mostly as a photo op.”

That statement stands in stark contrast to the harsh reality that the New York Stock Exchange is one of the key facilitators of high frequency trading and making big bucks at it....

Read the entire piece with the details here.

After Many a Summer Dies the Swan

"Vanity and narcissism — the compulsive need to be admired and praised — undermine one's courage, for one then fights on someone else's conviction rather than one's own."

Rollo May


"Narcissus so himself, himself forsook,
And died to kiss his shadow in the brook."

William Shakespeare


"Alas! for this gray shadow, once a man —
So glorious in his beauty and thy choice,
Who madest him thy chosen, that he seemed
To his great heart none other than a God!"

Alfred Lord Tennyson, Tithonus

I had intended to write about the winds of change beginning to rise in Europe, but it is hard to find a proper beginning for such a vast and historic subject. But luckily a reader sent me Grant Williams latest newsletter, which you can read in its entirety here. So I may defer on my own effort, and provide a taste of things to come with this.

As you may recall I have said on any number of occasions that when change comes, it will probably come first at the periphery, as in all great changes in empire. In the east it is generally brutish, sturm und drang.   But watch when it comes to the UK, most likely first amongst the English speaking nations.  The backlash and repression there on the whole will be— polite but comprehensive.

The credibility trap takes its toll over time, and people lose interest in the status quo.   The ruling elite never see it coming, because they are so self-absorbed, enamored of themselves.  Their first reaction is disbelief, and then rage, because how can they be unappreciated, so betrayed, such beneficient gods?

I am not saying that the change will necessarily be for the good, but it will come, just as it did in the 1930's, with very mixed results.

Like so many things that approach the universal nature of art, our reaction to it probably says more about us than it does about it. And perhaps for this effort as well.

And the times, they are a-changin'.

THINGS THAT MAKE YOU GO Hmmm...
Fight Club
By Grant Williams
01 April 2014

...Elsewhere this past week in Europe, there was another sign of things to come — and this time it played out in the UK as Deputy Prime Minister Nick Clegg of the pro-European Liberal Democrats threw down the gauntlet to the staunchly anti-European Nigel Farage of UKIP to join him in the first of two live televised debates — ostensibly on whether the UK should remain part of Europe, but in reality a desperate attempt to both blunt the challenge presented by Farage’s surging popularity and at the same time restore some credibility to Clegg’s ailing junior coalition partners.

As regular readers will know, Farage is the very embodiment of the anti-establishment movement. A pint-drinking, chain-smoking everyman who looks like he’d be more at home debating the issues of the day in a London pub than in the European parliament, Farage spent 20 years as a commodity trader and is one of the few politicians amongst the current crop to have a background in the private sector.

Clegg, on the other hand, is the archetypal politician: public school and Oxbridge-educated, related to aristocracy (albeit of the Russian variety), and a man who has been involved in politics for his entire adult life. The debate was fascinating to watch.

Farage’s bluster and soapbox oratory versus the polished politics of Clegg. Farage’s passion and intensity versus Clegg’s measured tone.

In the aftermath, the political pundits had their say on who emerged victorious, and they were unanimous:

Mary Riddell:
No minds will have been changed. The Faragistes who see their champion as the battler against faceless, bloodless, heartless power-brokers will be happy. But Nick won. As he should have. Easily.

Dan Hodges:
Nick Clegg kept calm and stuck to the facts. And it became clear facts are Nigel Farage’s enemy. He became increasingly angry and bombastic. By the end Clegg was engaging easily and effectively with his audience. Nigel Farage appeared to be cracking jokes to amuse only himself. His explanation of his reason for employing his wife was especially embarrassing. Fortunately, by that point, few people in the audience appeared to be listening to him.”

Toby Young:
“Overall, Clegg came across as more in command of the detail (possibly because he’d been briefed by the civil service beforehand) and for that reason I think he edged it.... Farage will certainly have pleased his supporters, but not much more than that.”

So... a humiliating public mauling of poor Nigel. But here’s where it gets interesting. In the Telegraph’s poll more than 81 per cent of readers said they thought Nigel Farage had won the debate.

A YouGov poll found that 57 per cent of people thought Mr Farage won the debate. This is perhaps the most important point.

Regardless of what those who spend their lives around politics believe, the public is ready for change, and they will be very hard to sway unless somehow they feel that quality of their lives can improve drastically — and that is not about to happen.

Measuring political performance by traditional metrics is a waste of time in a world where the people will simply vote for change. We saw it in Greece, we saw it in Spain, and now we’ve seen it in France. Next up, European elections in six weeks’ time.

Public disaffection with the world’s leaders is growing by the day — you can feel it — and nowhere was that made more apparent recently than in Holland last week when Barack Obama, halfway through his tour of Europe, took to the stage alongside Dutch PM Mark Rutte.

Obama, so used to adoring hordes — not only at home, but wherever in the world he is reading a teleprompter giving a soaring lesson in oratory — was presented with the answer to the age-old question about the sound of one hand clapping after he concluded, at a press conference, remarks espousing the USA’s “core values” of privacy, the rule of law, and individual rights. ([See the video below] to watch the most awkward end to a speech since Sally Field accepted the Oscar for Best Actress in 1985.)

People can’t even bring themselves to be polite to the incumbent political class anymore — not even to a rock star like Obama. Make no mistake, from Ukraine to Holland, from the United Kingdom and France to Greece, Italy, and beyond, politicians are under immense pressure to “do something” in order not to lose their grasp on power.

From Nobel to Ignoble

Robert Hare: What a Psychopathic Corporation Might Be Like

Dr. Robert Hare is describing what a psychopathic corporate culture might be like, not what all corporations are.

Corporations can have personalities if you will, based on the character of their leadership, and the traits and tendencies which they tend to seek out and reward.

Is there a difference in culture between Costco and Walmart? Why might that be the case? How about the difference in treating the customer between St. Jude's Children's Hospital and Goldman Sachs, both putatively doing "God's work?" Do they seek certain personality types, and tend to cultivate and reward different behaviours? Not all hospitals are altruistic and caring, and not all financial firms are the same. Does Goldman Sachs have the same character as Charles Schwab? How about Bank of America and Edward Jones? Or BP and Whole Foods? Why might they be different? Or is it all just marketing and image?

Governments may have also have character traits, whether they choose to call it culture, or tone, or philosophy. Certain behaviours are rewarded, and others are suppressed and discouraged.  Quite often a few like-minded and powerful personalities may set the character of the organization, and choose subordinates who are either servile or of a simple mind. Is there a difference between a government run by Franklin Roosevelt and Adolf Hitler? Do their differences affect the people whom they attract and the behaviours that they reward?

Corporations are not people, and do not deserve the rights of people because it grants to the corporation mangers, those that actually give life to a company, a power that makes most other individuals unequal under the law.  It is an extension of power and rights by proxy, greatly leveraged.

If an individual has a voice, the individual managers of a major corporation can obtain a much greater voice, one applied by the power and money of a large organization.  These are the modern übermenschen that we are unwittingly raising like titans over the world of real people.

And when they are singularly amoral, or focused for anti-social purposes, or criminal activities, the resultant damage of which they are capable can be devastating, not only to individuals, but even to towns, cities, and small nations.

Iron Grip of the Credibility Trap: The Ongoing War On Whistleblowers and Transparency

Sam Seder interviews documentary film maker Robert Greenwald on his 2013 film, War On Whistleblowers.

A reader informs me that this documentary is currently available on Netflix streaming.

“Often the best source of information about waste, fraud, and abuse in government is an existing government employee committed to public integrity and willing to speak out. Such acts of courage and patriotism, which can sometimes save lives and often save taxpayer dollars, should be encouraged rather than stifled. We need to empower federal employees as watchdogs of wrongdoing and partners in performance.”

Office of the President-elect Barack Obama, 2008 Transition Project

Gold Daily and Silver Weekly Charts - JPM Throws Down 229,400 Ounces of Gold To Meet Deliveries

Today was the end of quarter. The positions can be marked to market.

There was intraday commentary on a widely reported story concerning market rigging here.

On Friday JPM moved 229,400 ounces of gold from the eligible to deliverable category in their Comex warehouse, in preparation for the April delivery period which starts about now. 

It looks like that gold that was moved over to the registered category by JPM is to fill the delivery requests that the Comex received on Friday, according to this report.    I have included a screen shot of the relevant page below.

JPM filled 2,640 April futures contracts for 264,000 ounces.  So they needed to issue at least some of those additional warrants, since they only had 214,097 going in.  And most of that came out of their 'house account.'

I thought that it was interesting that a good chunk of that gold is being stopped by Nova Scotia, for their own house account.   Special thanks for the link to the famed Samoan gold analyst from Investment Research Dynamics, Salelologa Dave.

And the band played on.

Have a pleasant evening.

 

SP 500 and NDX Futures Daily Charts - Slouching Into the End of Quarter

"How many do I have to kill before I get my name in the paper, or some national attention?"

Dennis Rader, the BTK Killer in a letter to KAKE-TV

The Chicago PMI missed by a country mile this morning, but that is so real economy that it hardly mattered.

Last night on one of America's most watched evening news programs, 60 Minutes, they said 'the stock market is rigged,'  with enough examples and details that even an average American might understand it.  But that hardly mattered because everyone knows, and doesn't care.

The VIX fell back to more comfortable level, as the latest adventure in foreign nation building does not seem to have triggered a major regional conflict.   Meanwhile the infrastructure at home continues to crumble and rust.

Old Yellen came out today and said that the labor market is struggling, and that more stimulus will be required, despite all the meretricious talk about the great American recovery. But that hardly mattered because things are important, but people aren't.

The know-nothings continued their crusade against the weak, the different, the elderly, and the victims in a society gone mad, who they liken to vermin and parasites. 

And the plutocracy continued to rob the public blind, while they are admired for their stature, strength, and daring, and held up as role models by a fawning corporate media.  And the intellectuals and thought leaders are silent. 

And so the quarter ended, with an air of pride in the exceptionalism of the Pax Americana.

Have a pleasant evening.

The 'Stock Market Is Rigged' and an Epidemic of Fraud

You have probably heard by now that the popular US news magazine style program 60 Minutes carried a segment interviewing Michael Lewis about his new book last night. In it Lewis says that the 'US Stock Market is rigged,' referring to the front running of basic price data taking place with the cooperation of 'the exchanges, the banks, and the traders' in order to regularly cheat large institutional and fund investors on their stock transactions.

You may rightly say that this is nothing new. You have heard about this new type of organized and systemically arranged 'front running' here and other places on the web many times over the past five years. And there were people who had been interviewed, occasionally but not so much of late, on some of the financial news networks complaining about it.

This morning NY AG Eric Schneiderman was interviewed about the investigation he is conducting on Bloomberg TV. Schneiderman was quite politic, praising HFT itself as 'providing liquidity' and pointing to some of the trading firms grasping for milliseconds of advantage as some sort of misguided bad apples.

The lady anchor on the show who questioned him was quite adamant that is it the fault of the regulators for allowing it to happen. She likened these Wall Street traders to her children, who are constantly looking for ways to circumvent her rules, and the shame is on her when they succeed.

I don't think the anchor really understood what she was saying in that awful comparison. These are not children, in the morally formative stage of relative innocence. They are adults, with tremendous advantages and often in positions of power, who have often taken oaths and fiduciary responsibilities. And they too often violate them, and twist the laws to escape responsibility, shamelessly.

This is the unspoken entitlement of the privileged class, the price of their naturally beneficial role in society, that is, the entitlement of being above the law, because they are so special, and so legally advantaged and well connected.   This is the twisted reincarnation of class and racial arrogance,  the one percent's burden of bringing order and direction to its social and genetic inferiors.

Well, that is the moral hazard of excusing Wall Street's criminal thefts, of giving a slap on the wrist when they are caught lying, cheating and stealing, of believing canards like the exchanges are responsible and self-regulating, and ignoring the key role that they and the Banks play in enabling widespread fraud and financial plunder.

Why do people ever listen to those apologists for financial fraud, who dismiss all accusations of market manipulation as mere conspiracy talk? Yes they are skillful in creating doubt, and since all fraud is founded on the hiding and control of information, there is always room for doubt.

Perhaps the worst of this is that 60 Minutes and other are willfully ignoring the power of money in silencing regulators, cutting their budgets, and using political influence to kill their attempts at enforcing the law by corrupting the political process.

Complicating matter, the Federal Reserve has taken the policy of shoving manufactured liquidity into the system through these very Wall Street banks and their exchanges, who are taxing the stimulus like warlords who take Red Cross aid for themselves, allowing a trickle of them to go to the intended recipients. This 'trickle down' approach by the entitled is a sick joke, because it continues robbing the public to pamper the privileged few.

And anytime a whistleblower steps forward, they are smeared and charged with crimes. What a world we are giving to our children, who we apparently teach by our words and example that breaking the rules is a fine art, and that justice is a poorly defined and highly debatable abstract concept. And the truth is merely what we say it is, if we say it well enough, and have enough powerful people and credentialed experts to back us up. Whatever 'is' might mean.

And there are other frauds still going on, like the blatant manipulation of the futures markets with large scale buying and dumping of positions in quiet markets to shove the price around, with regulators turning a blind eye to it. As long as the exchanges, the biggest traders, and the politicians are getting their piece of the action, nothing will be done about it. But such actions have real world consequences.

Old story, always with a bad ending.

Gold Daily And Silver Weekly Charts - Here Comes April

"It was possible, no doubt, to imagine a society in which wealth, in the sense of personal possessions and luxuries, should be evenly distributed, while power remained in the hands of a small privileged caste.

But in practice such a society could not remain stable. For if leisure and security were enjoyed by all alike, the great mass of human beings who are normally stupified by poverty would become literate and would learn to think for themselves; and when once they had done this, they would sooner or later realise that the privileged minority had no function, and they would sweep it away.

In the long run, a hierarchical society was only possible on a basis of poverty and ignorance."

George Orwell, 1984

Gold stabilized today, and silver showed a little resilience.

There was the usual in and out of the Comex gold warehouses yesterday, which are preparing for the April active delivery month.

And I would be remiss if I did not remind you that with the end of the month comes a new Non-Farm Payrolls report next week.

There was intraday commentary and an interview with Jim Rickards on gold manipulation today that you might wish to have a look at here.

I see where the IMF is already putting the Ukraine on the loans and austerity treadmill.  (cf. Greece)

Have a pleasant weekend.