Stocks and Precious Metals Charts - Them Tumblin' Dice - Non-Farm Payrolls Tomorrow

 

"Ordinarily, the financial risk in a market, and hence the risk to the economy at large, is limited because the assets traded are finite. There are only so many houses, mortgages, shares of stock, bushels of corn, [bars of silver], or barrels of oil in which to invest.

But a synthetic instrument has no real assets. It is simply a bet on the performance of the assets it references. That means the number of synthetic instruments is limitless, and so is the risk they present to the economy...

Increasingly, synthetics became bets made by people who had no interest in the referenced assets. Synthetics became the chips in a giant casino, one that created no economic growth even when it thrived, and then helped throttle the economy when the casino collapsed."

US Congressman Carl Levin, Financial crisis: The role of investment banks, April 27, 2010


"To anticipate the market is to gamble. To be patient and react only when the market gives the signal is to speculate."

Jesse Livermore

We will be getting the Non-Farm Payrolls report tomorrow.

The markets are obviously edgy ahead of that information.

The whole thing hinges on the Fed, what impact on their thinking that the number may have.

It is just another sign of how artificial and distorted the financial system has become.  Their actions are enormously amplified by the speculation and leverage in the system, which is their own doing. 

So rather than guess let's see how things come out tomorrow, and go from there.

Have a pleasant evening.

Stocks and Precious Metals Charts - Whipping Fear and Greed - A School of Probabilities

 

"Life is a school of probabilities."

Walter Bagehot

"It is a far, far better thing to have a firm anchor in nonsense than to put out on the troubled seas of thought."

 John Kenneth Galbraith, The Affluent Society 

"Democracy is held captive, not just by money, but by ideas — the ideas that money buys." 

William Greider 

"As in all periods of speculation, men sought not to be persuaded by the reality of things but to find excuses for escaping into the new world of fantasy."

John Kenneth Galbraith, The Great Crash of 1929

"When the modern corporation acquires power over markets, power in the community, power over the state and power over belief, it is a political instrument, different in degree but not in kind from the state itself.   To hold otherwise — to deny the political character of the modern corporation — is not merely to avoid the reality.   It is to disguise the reality." 

John Kenneth Galbraith, Power and the Useful Economist, 1973

"Dimon told Bloomberg TV it's possible the central bank will continue hiking rates by another 1.5 percentage points, to 7%...When members of his board ask him whether interest rates could really go that high, his answer is always 'yes,' he told Bloomberg."

Nicole Goodkind, CNN Reporter, Be prepared for 7% interest rates, warns Jamie Dimon, October 2, 2023

I watched the Bloomberg interview, several times in the course of that day.  And also the subsequent interview with CNN.   Dimon cautions about the potential for a recession, but is merely suggesting that rates *could* go to 7% given some improbable set of circumstances.

And he is quite correct in his estimation of the things that might cause a recession, and that is hardly an outlier opinion at all. Many have been expecting some sort of recession, including this guy here, and for many of the same reasons.  It is not at all unusual for a recession to follow a period of Fed tightening the money supply.  That, after all, is their purpose.  They merely like to quibble about the degree.  After all, rate policy is a blunt instrument, too often used to unjustly correct a financial asset bubble grown to outrageous proportion due to (self-serving from a class perspective) policy error.

But one might ask, if they have a financial mind, how likely is the Fed to increase its benchmark rate to 7% if the real economy falls into an actual recession?  Even given their enduring propensity for awful forecasting and myopic nincompoopism?  Have we so far retreated into our own realities, or the doublespeak of Wall Street speculation?

Many, many things are 'possible.' But much less are probable. Preparedness is good, especially flexible preparedness based on some reasonable calculation of the probability of various outcomes with flexible models for adjustment.

In fairness to CNN, the spokesmodels on financial TV has also been outright saying that 'Jamie Dimon (thinks/says/sees) rates are going to 7%.'

Rather than asking Mr. Dimon if rates *could* go to 7% would it not be more appropriate to ask him how likely such an event might be.  Jamie hedged his statements very carefully, allowing that his bank is capable of hedging against such an outcome. And I should like to think that they could, since that is the business that they are in.

But how easily we lose all concept of the nature of tail risks, in a very bipolar manner. We seem to either obsess about the merely possible, or disregard a careening approach to the abyss completely.   

Has the good work of Nassim Taleb and other thinkers, as well as our own personal experience, gone completely for naught?  Have we been so completely mesmerized by that duplicitous rationale that 'no one could have seen it coming', even though many people made themselves willfully blind to it, for professional purposes and convenience?  That all outcomes are equally probable if we can but imagine them, or hear them on television from some clueless politician or spokesmodel?

It's easy to become too cynical these days, in the empire of lies and lawlessness.

So today we had the rally off the dire selling of yesterday, with most equity markets higher.

VIX fell quite sharply.

Gold and silver were under pressure, even as The Dollar declined.

Gold snapped back to about unchanged in the last fifteen minutes.  What a surprise.

Traders are doing their usual market reaping boogie woogie ahead of the Non-Farm Payrolls report on Friday morning.  

Whipping the public between fear and greed is all part of the endless wealth transfer of the wash and rinse.

People, even nominally good people in positions of nominal righteousness, can make Faustian bargains for the sake of a 'higher good.'   It's one of the devil's favorite snares.

How many in the 20th century made a deal with the devil to spite Bolshevism, or even a despised liberal tolerance?   How many today make similarly corrupt deals for some other higher good that they espouse in their exceptional righteousness, especially in judging others?

It's never between you and them.  It's always between you and God.   And he has made his will clear, for all but the hardest of hearts.

Have a pleasant evening.

Stocks and Precious Metals Charts - 'Greed Is Good' Creates an Unstable Nation of Con-men

 

"Our basic trouble was not an insufficiency of capital.  It was an insufficient distribution of buying power coupled with an over-sufficient speculation in production.  While wages rose in many of our industries, they did not as a whole rise proportionately to the reward to capital, and at the same time the purchasing power of other great groups of our population was permitted to shrink.

We accumulated such a superabundance of capital that our great bankers were vying with each other, some of them employing questionable methods, in their efforts to lend this capital at home and abroad.  I believe that we are at the threshold of a fundamental change in our popular economic thought, that in the future we are going to think less about the producer and more about the consumer.

Do what we may have to do to inject life into our ailing economic order, we cannot make it endure for long unless we can bring about a wiser, more equitable distribution of the national income.”

Franklin D. Roosevelt, Campaign Speech, Oglethorpe University, 1932

"The problem [First Bank of the United States] was not paper money per se, but the concentration of power and wealth which the abusive use of the paper monetary power had granted to a few powerful individuals and institutions.   No system is foolproof when a foolish people will allow the unscrupulous few to operate it in secrecy and without transparency, accountability and the rule of law.  And if anything is clear, the crony regulation by the Fed and other regulators of the Banking System, or lack thereof, is a failure and the source of much of our own mischief.  And the primary reason we cannot acknowledge the facts of our own situation is that our political and financial class are caught in a credibility trap.  They cannot speak the truth without compromising their own personal greed and will to power."

Jesse, Peak Junk, Currency Wars, 11 August 2015

"Fraud and falsehood only dread examination. Truth invites it."

Samuel Johnson

"Change is the law of life.  And those who look only to the past or present are certain to miss the future.   A great change is at hand, and our task, our obligation, is to make that revolution, that change, peaceful and constructive for all.  Those who do nothing are inviting shame as well as violence.

The problems of the world cannot possibly be solved by skeptics or cynics whose horizons are limited by the obvious realities.  We need men who can dream of things that never were and ask, why not?  History is a relentless master.  It has no present, only the past rushing into the future.  To try to hold fast is to be swept aside."

John F. Kennedy, Dublin, Ireland, June 28, 1963

Is it any surprise that a generation that was taught and embraced, primarily through its professional class, the belief that 'greed is good' would foster an economy and a nation dominated by self-centered, barely incompetent con-men?

I would suggest that the fruits of this dishonor are yet to be harvested.  What has been hidden will be revealed.

The JOLTS report, a government survey of job openings, came in higher than expected this morning, so of course rate fears flamed on and the markets melted.

Things tended to calm down into the close, stocks finished well in the red.

That gap in the SP 500 futures has certainly been closed.   Unless they are a runaway gap they often do.

The Dollar chopped sideways, with some range at times.

I have included a longer term Dollar chart this evening for perspective.

VIX jumped higher again, well off its notable lows of not too long ago.

Wash-rinse-repeat.

 Gold and silver fell with the JOLTS, but then recovered and made a decent showing into the close.

Non-Farm Payrolls report on Friday.

Gold continues flowing from West to East.

Long ignored, at some point this trend will become more generally known, and its consequences felt.

Our position in all this has been given to us clearly, from many years ago.

"Do not join your efforts with the false and treacherous, for what does justice have to do with lawlessness?  Or what fellowship does light have with darkness?   What is there in common between Christ and Belial?   What do the faithful have in common with the faithless?" 

2 Corinthians 6:14-16

Some history was made today, as for the first time a Speaker of the House has been rebuked, primarily by his own party. 

Interestingly enough this was due to infighting between two MAGA political figures, albeit with slightly different personal styles. 

Such as the ways of the proud, and the self-destructive tendencies of narcissists.   They sow conflict and misery widely, while gaining little or nothing for anyone, including themselves.   

Have a pleasant evening.