Stocks and Precious Metals Charts - Market Liquidation

 

“Not everyone who calls ‘Lord, Lord,’ will enter the kingdom of heaven, but only those who do the will of my Father.  Many will say to me on that day, ‘Lord, Lord, did we not prophesy in your name?  Did we not drive out demons in your name?  Did we not do mighty deeds in your name?’  Then I will declare solemnly, ‘I never knew you.  Depart from me, you lawless ones."

Matthew 7:21-23 

 

"Shepherd me, O God,
Beyond my wants,
Beyond my fears,
From death into life."

Marty Haugen, Shepherd Me O God

 

"And he said, ‘These are they who have come out of the great tribulation; they have washed their robes and made them white in the blood of the Lamb.

Never again will they hunger;
   never again will they thirst.
The sun will not beat down on them,
   nor any scorching heat.
For the Lamb at the center of the throne
   will be their shepherd;
  he will lead them to springs of living water.
And God will wipe away every tear from their eyes.”’

Revelation 7:13-17

 

Pretty much everything was sold today, as market participants were hitting the exits in a surprisingly orderly manner.

Even the Dollar, which has been a bulwark, was largely unchanged on the day.

Stocks were just battered, setting new 'second lows' in the process.

The SP 500 closed a fairly old but significant gap on the chart as indicated.

Gold and silver were beaten with ugly sticks.

Let's see if we need to have a selling climax to calm these markets down, or some unexpected news.

The instability of the markets, the weak foundation of their valuations, are now apparent to all, as we had suggested.

If you are on higher ground you might breathe a sigh of relief and give thanks.

Have a pleasant evening.

 

Stocks and Precious Metals Charts - American Gothic - Oh the Bovinity!

 

"Why do the economists continually excuse outrageously unsustainable economic behaviour and financial systems that are as productive as games of chance?  Why do some media outlets obviously take sides and pander to the worst biases in their viewers, supplying them with easy reflexive answers to any suggestion that something might actually be wrong?  Why do adult people fall for this and regress to childish name calling so readily? 

It is because they are afraid.  They know the system is broken, that the country is in for hard times, and that the work of reform is going to be difficult and painful.  It is so easy to adopt whatever red or blue meme, whomever you think is going to deliver undeserved wealth to you, or at least safety and position. As always look for a fallguy, some identifiable and out of favor group.  The search for scapegoats may be be violent.   

At turning points such as these, when the time is right, a 'great man' will stand up and many will follow.  Who will it be, and what principals and principles will they represent?

Obama was such a one, but he is obviously like the character of Robert the Bruce in the movie Braveheart, who chooses practically and cynically to support the nobles.  He is finished; no one will follow him as his betrayal becomes too painfully obvious.

Will it be the banal fascist with the simplistic, easy answers [bingo], a leftist with retribution to offer, or a real 'braveheart' who has nothing more to offer than the hardship of freedom?" 

Jesse, Class Warfare American Style, 5 January 2010 

 

"Monetary and regulatory policy encourage asset bubbles to proliferate.  Hot money seeks out the conscious mispricing of risk.  Capital, in the form of both money and personal talent, increasingly flows into malinvestment and the gaming of markets.   The productive economy languishes, left wanting for the lack of creative resources and attention.   The bubble rises to unsustainable valuations— and fails, and a nation's capital is consumed." 

Jesse 5 August 2019, The Men Who Sold the World

Stocks continued their declines at a measure, steady selling pace showing little panic.

Surprisingly enough, VIX declined today in spite of the drop in stocks.

The Dollar also fell back a bit.

Gold bounced, while silver fell in sympathy with equities.

That second low in stocks has been set, and nailed on the charts with an iron spike.

Let's see if it takes a panic selloff to make for a viable support level, or if stocks can just start drifting higher and pull the dip buyers, who were spanked sideways this week, back in to buy again. 

On May 9^th Russia will hold its WW II victory celebration in Moscow.  If Putin is going to say something inflammatory about the Ukraine this might be the time that he says or does something that disturbs the global risk factors.  Or he might take the opportunity to declare victory and let the 'special military operation' unwind.  Much of this depends on Putin's own base of power within his government.

In any case, the danger from exogenous risks remains high, given the unstable underpinnings of the markets.

Have a pleasant weekend.

 

Stocks and Precious Metals Charts - Naked Force and Fraud - Epic Wash and Rinse

 

"With a monetary expansion intended to help cure an credit bubble crisis that is not accompanied by significant financial market reform, systemic rebalancing, and government programs to cure and correct past abuses of the productive economy through financial engineering, the hot money given by the Fed and Treasury to the banking system will not flow into the real economy, but instead will seek high beta returns in financial assets.

The monetary stimulus of the Fed and the Treasury to help the economy is similar to relief aid sent to a suffering Third World country.  It is intercepted and seized by a despotic regime and allocated to its local warlords [the financial and their Banks], with very little going to help the people.

These injections of monetary stimulus to maintain a false equilibrium is in reality creating an increasingly unsustainable and unstable monetary disequilibrium within the productive economy.

Those who have taken a huge share of the last three bubbles would like to stop the bubble now, keep their gains, and return to a system of fiscal restraint with light taxation on their windfall of assets.

So why does this not just simply happen?  Because the political risks become enormous.  It is difficult to reduce a population of free men into debt slaves, without risking a significant reaction.  Therefore, it seems most likely that the government and the Fed will try to 'muddle through' for the time being, and look for an exogenous event to break the stalemate.

The traditional solution has been a military conflict, which stifles dissent against the government while generating artificial demand sufficient to energize the productive economy. It is a means of exporting your social misery, official corruption, and fiscal irresponsibility to another, weaker people. [war, what is it good for?  misdirection and distraction]

As a reminder, in a purely fiat currency regime with an absence of external standards, the question of inflation and deflation is a policy decision.  The limiting factor is the latitude with which that policy decision can be made. [a balance between force and fraud]

Jesse,  The Speculative Bubble in Equities,  10 October 2009

 

"Such unsustainable social arrangements are backed by force and fraud.  And as the fraud loses its power over time, force must increase, until there is an end in genuine reform, or eventual self-destruction."

Jesse, Credibility Trap, 24 August 2012

 

"A value-dictated, purely fiat, currency exists through force and fraud.  As the fraud grows thin and obvious, the greater and more pervasive the force must become.  If imports are needed, wars of aggression will follow to extend and maintain the 'sphere of influence', a euphemism for control.  When force finally falters, the currency collapses.  A value-dictated, purely fiat currency is not an innovation— it is among the oldest forms of tyranny."

Jesse, Slip Sliding Away,  5 March 2019

 

"It would be no sin if statesmen learned enough of history to realize that no system which implies control of society by privilege seekers has ever ended in any other way than collapse." 

William Dodd, US Ambassador to Germany, 1933

That was some serious wash and rinse dithering we have seen over the last couple of days.

The second lows have been set, with a vengeance.

The spokesmodels were reduced to yammering inanities.

It was pretty much a reversal of everything from yesterday.

Dollar up sharply with VIX, gold and silver lower, and stocks took the gas pipe.

Let's see what the Non-Farm Payrolls report brings.

Have a pleasant evening.