SP 500 and NDX Futures Daily Charts - Labor's Share of National Income

A wash and rinse day, with the markets going sharply lower on remarks from Senator Harry Reid that he sees no chance of a financial deal before year end.

And in the last hour the market rallied sharply off the bottom, closing almost unchanged for the day, on the news that the House of Representatives will reconvene on Sunday December 30 at 6:30 PM.

I just do not see what they can do, other than to offer to 'kick the can down the road' and take the nation into another crisis, more to their liking, at the next budget ceiling operation early next year.

I suspect the markets will continue to gyrate, as the monied interests and their servants in Washington hold the country hostage, as they did with TARP.

Hang on for a rough ride.

At the bottom is a chart from the Fed's database that shows the latest information on Labor's Share of National Income, which has declined to new postwar lows. 

A greater share of income has gone to those wielding capital.  This has not been positive for aggregate demand or the median wage.  The extractive efforts of the financial and healthcare cartels are taking their toll, slowly but surely.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Premiums are certainly not exuberant, but rather to the low end of historic norms.

Gold: This Time Last Year

As you can see, gold had a 'tap tap' bottom at the end of last year, with a final intraday low on the 29th, the second last trading day of the year.

It rallied in January back to where it had been at the beginning of December.

We may be seeing a repeat of what I think is an 'end-of-year' phenomenon this year.

If so, we *might* see one more low this week, probably tied in with some sort of selloff related to the 'fiscal cliff.'

This sort of thing could be government related but it seems more probable that it is related to the gaming of large short positions as they are marked to market at year end. That, and of course, the obvious price manipulation that allows big players to pick up assets like miners and bullion on the cheap.

The 'bombing' of gold with large contract sell orders in quiet periods is leaving tracks all over the tape, that most can see, except if they are willfully blind.

It would not be surprising if we don't see exactly that double tap bottom again this year. We had an odd overnight plunge to 1649 on futures open after Christmas, and that may mark the bottom.  

We *could* go back down to visit there again, and maybe even the prior double low of 1636 from just before the holiday. If it were me I would consider throwing a curve ball. And maybe hit the metals the first week in January very hard if the specs start jumping ahead of the rally early. Its hard to beat the house in the short term, especially when the cards are stacked, and they can see your hand.

But as Eliot Spitzer observed, when he was the NY Attorney General, what surprised them when they broke the investigation of manipulation by the banks was not the cleverness of their schemes, but the obviousness, the heavy handed, almost clumsy thuggery.

'No time for that. Give me a diablo sandwich, a Dr. Pepper, and make it quick. 
What we're dealing with here is a complete lack of respect for the law. '