Stocks and Precious Metals Charts - Nocturne

"A horse walks into a bar, the bartender says, 'Why the long face?'"

And so we had both an FOMC and a precious metals option expiration on the Comex today.

Let's see if we get any post-FOMC, post-expiration shenanigans for the rest of the week.    Once gold breaks out it could be tough to stop, although I am not liking the small advances it has been making on such steady dollar weakness.

Stocks are continuing to edge higher, although with a big less verve than previously.

Pundits are now saying that a crash is probably at least two months away, so now is a good time to buy more stocks.

You cannot make this stuff up.

I think the theory is that when the Fed starts unwinding their balance sheet in September, that the air of liquidity, which is one of key components of these bubbles, is going to start coming out of the markets much faster than it went in.

And the result may be terrific—  not with a bang, but a whimper.


"She walks in beauty, like the night
Of cloudless climes and starry skies;
And all that’s best of dark and bright
Meet in her aspect and her eyes;
Thus mellowed to that tender light
Which heaven to gaudy day denies."

George Gordon Lord Byron

Have a pleasant evening.

Thinking Like An Economist

Most economists have to significantly reduce the complexity and finer details of the economy through a set of reality crushing assumptions in order to make their models work coherently. See the artist's depiction of how an economist thinks below.

Then again, the really harmful economists are relatively unconstrained by reality in the first place, and can freely draw their conclusions and make policy recommendations basic on gnostic wisdom received from the ascended masters of malarkey.

This has given rise to a priori based models, spawned by well-funded think tanks and other hired servants of Big Money, about the way markets work.   The economies they describe are evidenced only in an incorporeal universe of the economist's fevered imagination, and have been rarely seen in the real world.  

Nevertheless, there are whole schools of thought that engage in herculean attempts to erect an homage to their particular madness out of well-tortured statistical bones.  Some recent examples are the efficient markets hypothesis, free trade, supply side economics, and the infamous trillion dollar platinum coin that solves budget problems at a single 'clink.'

As a rule of thumb, the more arrogant certainty with which the economist states their revelations, and the more reliant they are on jargon and assumptions that suck the reality out of the room like intellectual black holes, the less space there is likely to be between their hat and their ass.

Housing Bubble 2.0: Making America More Unstable, Again

With low inflation and continuing stagnation in median wages another housing bubble is just what the doctor ordered as a cure for the last financial crisis, caused in part by the rampant financial fraud associated with Housing Bubble 1.0.

And it looks like we have yet another tech stock bubble well underway.

Meanwhile the public is distracted by the corporate media's endless coverage of clown car antics and foreign plots to pollute our precious bodily fluids.

Well done, elites, well done.

And no one could have seen it coming, again.