SP 500 and NDX Futures Daily Charts - Wile E. Coyote

Stocks were in sell off mode this morning as the economic news, ADP employment and the ISM Index, came in worse than expected.

Equities tended to have an upward bias for the rest of the day, rising on light volumes, treading air while not daring to look down.

Most eyes are focused on the geopoliticals, with a gimlet eye on the Non-Farm Payrolls report which may move the markets, without regard to significance or validity.

 

The equity markets are in another Fed - fueled bubble.  They may be able to float on, and even higher, for quite some time.  But I think a market break is in the cards this year.

 

Have a pleasant evening.

NAV Premiums of Certain Precious Metal Trusts and Funds - April Fool's?

Gold took off this morning, while silver is still lagging a bit and struggling with the 17 handle.

I would prefer that it was reacting to some specific news.  A pause in the Iran talks?   Grexit fears?  Something simply a little more 'technical' like the end of quarter past into a new active month?  

 

It has the appearance of a 'flight to safety' with the rally emphasis on the gold price.  The gold/silver ratio is 71 which is exceptionally high.

Trust and fund premiums are pessimistic, no doubt reflecting concerns about the staying power of this rally and the upcoming Non-Farm Payrolls report. And the bucket shop is still a den of vipers and thieves.

We had snow here last night, but today, Spring is in the air.

 

Resurrexit vere

Gold Daily and Silver Weekly Charts - The Very Definition of Moral Hazard

"Rich Cordray was still serving as director of the consumer agency under a recess appointment; he hadn’t yet been confirmed by the Senate, which meant that the agency was vulnerable to legal challenges over its work.   Dimon told me what he thought it would take to get Congress to confirm a director, terms that included gutting the agency’s power to regulate banks like his.

By this point I was furious. Dodd-Frank had created default provisions that would automatically go into effect if there was no confirmed director, and his bank was almost certainly not in compliance with the those rules. I told him that if that happened, 'I think you guys are breaking the law.'

Suddenly Dimon got quiet. He leaned back and slowly smiled. 'So hit me with a fine. We can afford it.'"

Elizabeth Warren, A Fighting Chance

 

Moral hazard arises when a contract or financial arrangement creates incentives for at least one of the parties involved to behave against the interest of others, while engaging in unethical and possibly criminal behaviour.

 

If you ever had any doubts about what is at the heart of the economic problems facing our society the above quote should dispel any confusion. It is the very definition of moral hazard, of fraud and privilege that operate with impunity, above any fear of the law and consequences.

 

And it is enabled by the credibility trap of the intellectual and leadership class, and the corrupting power of big money. Jamie Dimon certainly seems confident in his ability to get what he wants from the Senate. And if not, in the ability to obtain a wristslap fine from the regulators as the cost of doing business.

"...they are creating a society in which they can commit hugely damaging economic crimes with impunity, and in which only children of the wealthy have the opportunity to become successful. That’s what I have a problem with. And I think most people agree with me."

Charles Ferguson, Predator Nation

This is your country, and the legacy of moral hazard and corruption you are leaving for your children and grandchildren. 

 

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

 

Have a pleasant evening.