Stocks and Precious Metals Charts - Metals Rebound Strongly From Recent Option Related Price Suppression

 

"Of course, even before Flaubert one did not doubt the existence of stupidity, but it was understood a little differently, it was considered as a simple absence of knowledge, a defect correctable by instruction.  In the novels of Flaubert, stupidity is an inseparable dimension of human existence, but the most shocking, the most scandalous in Flaubert's perspective of stupidity is this: stupidity does not fade away in front of science, technology, progress, modernity, on the contrary, with progress, it progresses too." 

Milan Kundera, La Pléiade Tome II

 

“Against such foolishness we are defenseless.   Reasons fall on deaf ears; facts that contradict one’s prejudgment simply need not be believed – in such moments the foolish person even becomes critical – and when facts are irrefutable they are just pushed aside as inconsequential, as incidental.  In all this the foolish person, in contrast to the malicious one, is utterly self satisfied and, being easily irritated, becomes dangerous by going on the attack.” 

Dietrich Bonhoeffer, Letters and Papers from Prison 

 

"The time is almost here — and ignorance, falsehood, cruelty, greed and lust of power were never stronger in the hearts of any ruling class in history than they are in those who constitute the Invisible Government of America today.   Day by day the money-masters of America become more aware of their danger, they draw together, they grow more class-conscious, more aggressive." 

Upton Sinclair, The Brass Check, 1919

 

“I am patient with stupidity, but not with those who are proud of it.” 

Edith Sitwell

 

"We have severely underestimated the Russians, the extent of the country and the treachery of the climate.  This is the revenge of reality."

Heinz Guderian, as quoted in Images of Kursk: History's Greatest Tank Battle, July 1943

 

The economic data this morning was very soft on the GDP and labor force area.

This provided more fuel for the dovishness of the Fed. 

The Dollar declined, giving up the 92 handle.

Gold and silver rallied strongly, recovering significant ground from the recent price suppression in observantce of their option expiration.

A fair chunk of physical gold departed from the Comex Hong Kong warehouses.

Stocks rode the wave of easy money expectations higher, but gave  up quite a bit of their gains in the afternoon, with the NDX finishing unchanged, and the SP 500 only a minor gain.

When a pricing pool collapses, especially in the case of a commodity, the resulting price increases required to clear the market can be quite impressive. 

As the old rock song goes, 'you ain't seen nothing yet.'

Have a pleasant evening.

 

Stocks and Precious Metals Charts- Mammon's Dolorous Visage - Metals Rise, Dollar Slumps on Fed Dovishness

 

“The mob believes everything it is told, provided only that it be repeated over and over.  Provided too that its passions, hatreds, fears are catered to.   The grosser, the bigger, the cruder the lie, the more readily is it believed and followed.  The mob has no memory; needless to pretend to any truth: the mob is radically incapable of perceiving it: the mob can never comprehend that its own interests are what is at stake.”

Alexandre Koyré, Réflexions sur le Mensonge 

 

"A thriving upper class accepts with a good conscience the sacrifice of untold human beings, who, for its sake, must be reduced and lowered to incomplete human beings, to functionaries, to instruments." 

Friedrich Nietzsche, Beyond Good and Evil

 

"You should thank God for bank bailouts— absolutely required to save your civilization.  So I think when you have troubles like that you shouldn't be bitching about a little bailout.  You should have been thinking it should have been bigger.  You should thank God the government saved the big banks and their investors. 

Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies.  Suck it in and cope." 

Charlie Munger, Christian Science Monitor,  September 30, 2010

The Fed left its benchmark rate unchanged.

A dovish note was struck and reinforced in Chairman Powell's press conference.

The Dollar tanked.

The metals rallied.

Stocks rose a bit.

And a fortunate time is guaranteed—  for a few.

Have a pleasant evening.

 

Stocks and Precious Metals Charts - It's Always Something - Expiration Today, FOMC Tomorrow

 

"While everyone enjoys an economic party the long-term costs of a bubble to the economy and society are potentially great.  They include a reduction in the long-term saving rate, a seemingly random distribution of wealth, and the diversion of financial human capital into the acquisition of wealth.  As in the United States in the late 1920s and Japan in the late 1980s, the case for a central bank ultimately to burst that bubble becomes overwhelming.  I think it is far better that we do so while the bubble still resembles surface froth and before the bubble carries the economy to stratospheric heights.  Whenever we do it, it is going to be painful, however.” 

Larry Lindsey, Federal Reserve Governor, September 24, 1996 FOMC Minutes 

 

“I recognize that there is a stock market bubble problem at this point, and I agree with Governor Lindsey that this is a problem that we should keep an eye on... We do have the possibility of raising major concerns by increasing margin requirements. I guarantee that if you want to get rid of the bubble, whatever it is, that will do it.” 

Alan Greenspan, September 24, 1996 FOMC Minutes 

 

"Where a bubble becomes so large as to pose a threat the entire economic system, the central bank may appropriately decide to use monetary policy to counteract a bubble, notwithstanding the effects that monetary tightening might have elsewhere in the economy.  But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?  And how do we factor that assessment into monetary policy?  We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability." 

Alan Greenspan, December 5, 1996, Speech to the American Enterprise Institute

 

As you may recall, Greenspan was taken aside by Treasury Secretary Robert Rubin after that 'irrational exuberance' speech.

And that was that.  The bubble denial by the bankers became vehement, until everything collapsed in 2001. 

And then it was observed, 'who could have seen it coming?'

Stocks were lower today, weighed down by concerns about the spread of the Covid D variant, and China's get tough regulatory policy towards its own big cap techs.

The NDX led stocks lower, but managed to gain some off the bottom.

You might recall what happened last week when stocks dropped sharply on Covid concerns.

Hint: the concerns were fleeting to say the least, and stocks went back to new bubblicious euphoria.

Silver was hammered along with stocks.

Gold was a bit higher.   The Dollar was lower.

FOMC tomorrow.

Curb your expectations.

Have a pleasant evening.