Stocks and Precious Metals Charts - Blue Skies - Forget 'Plastics' Wall Street Says 'Pivot'

 

"J. P. Morgan and Andrew Mellon made their billions through inter locking directorates and outright ownership of hundreds of nationally prominent enterprises.  Glass-Steagall is one crucial piece of a litany of legislation designed to place checks and balances on the concentration of financial resources. To repeal it would be tantamount to bringing back the days of the robber barons.   The unbridled activities of those gifted financiers crumbled under the dynamic forces of the capital marketplace.  If you take away the checks, the market forces will eventually knock the system off balance."

Mark D. Samber, End Bank Law and Robber Barons Ride Again, NY Times, March 5, 1995


"In 1999, on signing Gramm-Leach-Bliley into law, Clinton said, 'This is a day we can celebrate as an American day' and that 'the Glass-Steagall law is no longer appropriate for the economy in which we live' and 'today what we are doing is modernizing the financial services industry, tearing down these antiquated laws and granting banks significant new authority' and 'This is a very good day for the United States.'"

Columbia Journalism Review, Bill Clinton on Deregulation


"There is no reason to believe either equity swaps or credit derivatives can influence the price of the underlying assets any more than conventional securities trading does."

Alan Greenspan, July 24, 1998, Testimony on the Regulation of OTC Derivatives


"But bad economics was only a symptom of the real problem: secrecy. Smart people are more likely to do stupid things when they close themselves off from outside criticism and advice."

Joseph Stiglitz, What I Learned at the World Economic Crisis, April 17, 2000


"It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud.   The behaviour that caused the mortgage bubble and financial crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident."

Charles H. Ferguson


“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

Upton Sinclair


"We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices."

Goodbody and Company, The New York Times, October 25, 1929

The market read between the lines of the FOMC decision and in particular Chairman Powell's remarks and assumed that the Fed is in a pivot to a less hawkish stance on interest rates.

And so gold and particularly silver rallied.

Stocks went stratospheric.

The Dollar dumped back to the 106 handle.

Whether this interpretation of the Fed's intentions is valid or not remains to be seen.  

Certainly eyes will be on the data,  

After hours the corporate earnings reports were a very mixed bag.

Tomorrow we will be getting an advance look at 2Q GDP.

Regardless of this backward look, history suggests that we are heading into a recession. 

Unless this time is different.

Have a pleasant evening.

Chances of a Recession Later This Year or Early Next Year

 

Does it look like we get a recession later this year or early next year?

Only if you look at the Treasury inversion and economic results data and assume the Fed can perform a miracle that they have never done before, or that they will stimulate a fourth bubble through a massive inflationary policy error.

So its a miracle of policy precision, or most likely the Fed will be providing an economic recession in response to their bubblenomic excesses, as usual.

But given the track record of these jokers a fourth bubble is not out of the question. And I fear it would come with grave consequences.

Stocks and Precious Metals Charts - Wehret den Anfängen - FOMC Rate Decision Tomorrow

 

"Fascism begins the moment a ruling class, fearing the people may use their political democracy to gain economic democracy, begins to destroy political democracy in order to retain its power of exploitation and special privilege."

Thomas Clement Douglas


"When you won, you divided the profits amongst you, and when you lost, you charged it to the bank.   You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families.  That may be true, gentlemen, but that is your sin!   Should I let you go on, you will ruin fifty thousand families, and that would be my sin!  You are a den of vipers and thieves.  I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out."

Andrew Jackson


“Human nature being what it is, small loopholes are likely to be exploited until they become big ones, and big ones until they turn into financial disasters.”

Seth Klarman


“The point of modern propaganda isn't only to misinform or push an agenda. It is to exhaust your critical thinking, to annihilate truth.”

Garry Kasparov


"And we headed out of the hotel, went to the airport, got on the plane and, about halfway through the flight, I found myself alone in the President’s cabin with him. I said, 'Mr. President, there’s something going on.' He said, 'You bet. There is something else going on.' And he said, 'When you find out, grab your balls and run.'

Pierre Salinger, On the Cuban Missile Crisis

 

There is a serious imbalance in the American financial and political system, which is going to be affecting the rest of the global economic structure.

When that cancer exhibits, it will be past time to hit the exits as best as one may manage.

There was an August gold contract option expiration on the Comex today.  Silver was not directly affected.

Gold moved lower with the Dollar rallying higher.

Silver gained back some of its recent losses, which was a little surprising considering the strength of the Dollar and the weakness of equities. 

And yet, there it is.

Perhaps this highlights the artificial, 'technical' nature of the some of the recent declines driven by the over-sized, predatory positioned  bullion operators on Wall Street.

FOMC rate decision tomorrow.   The market is expecting a 75 bps increase in the benchmark.

Stocks seem to be approaching a short term oversold condition.

At this point events will weigh heavily on the markets, which themselves are possessed by a greater than usual volatility, both up and down.

Have a pleasant evening.