Stocks and Precious Metals Charts - Rhyming - Busts and Bubbles

 

"It was around July 2020, when we were all locked down and not knowing what was going on with our lives, our personal economies, our health, and our families, when I realized that the Federal Reserve had doubled the size – or even more so — of its book of assets.  It had created about $5 trillion worth of money in a very short period of time.

During that time, the markets went from being very afraid and down to being very, very high.  A lot of people said, well, we’re all at home using Zoom, so therefore the market just rebounded by so much.   But that was just a small part of it.  The bigger part was that money became available at such an immense level and therefore the distortion between where money goes in the financial markets and where it doesn’t go in the real economy became permanent.  At that moment I saw that this can happen in any amount, at any time.  There’s no restriction, no transparency, no responsibility."

Nomi Prins, You’re Living in a World Wrought by the Fed, 17 November 2022

"Unless one has placed oneself on the side of the oppressed, to feel with them, one cannot understand. As soon as men know that they can kill without fear of punishment or blame, they kill; or at least they encourage killers, with approving smiles.  Evil when we are in its power is not felt as evil, but as a necessity, or even a duty."

Simone Weil

"Once central banks unleashed monetary policy to accommodate mega-banks, subsidize Wall Street financiers, and bolster global markets, the very idea of free and open markets and laissez-faire investing died.  No one wanted to call the Fed’s QE a Ponzi scheme.   But it was.

Whether it was done to soothe a stock market crash, a ruptured subprime housing market bubble, or a pandemic, the Fed’s response to the financial crisis of 2008 and later crises has confirmed that it will always seek a way to grease the wheels of capitalism for its wealthiest participants and private banks.   The results speak for themselves."

Nomi Prins, Permanent Distortion: How the Financial Markets Abandoned the Real Economy, October 11, 2022


As you may have likely heard the economic data this morning from the Non-Farm Payrolls report was a big miss, but apparently not great enough to swing the fear vector all the way around.

Hence, we have the 'goldilocks' effect.

Stocks roared higher, on expectations of no more Fed rate increases anytime soon.  

And wistful yearnings for a rate cut.

The Dollar tanked.

Gold and silver rallied.  Gold was held below the optic resistance at $2000.

VIX fell again, showing some abandonment of risk concerns, and a generally happy-go-lucky attitude, at least compared to the short term.

I rewatched the movie Margin Call last night.   I think the last time was closer to its release around 2011.  Has it really been that long?   

My son said it was a good movie to watch.   I said I had seen it, and had lived it.  And the crash before that.  And that.  And that.

A stunning cast illuminates a realistic but somewhat spare depiction of unbridled greed going badly, for some.  It was spare, perhaps, reflecting the characters who were really that banal.

The same sorts of people make the same egregious errors and fiduciary lapses, again and again, and are richly rewarded and rarely punished, pleading ignorance and benign intentions.

Bubbles and busts are acts of nature, right?   Maybe the unnatural nature.

Who could have seen it coming— with their eyes closed and their greedy maws open?

Have a pleasant weekend.

Stocks and Precious Metals Charts - Where Are You Going, Lord?

 

“Seneca had made the bargain that many good men have made when agreeing to aid bad regimes. The Rome he has been trained to serve, the Rome of Augustus and Germanicus, was gone.  In its place stood Neropolis, ruled by a megalomaniac brat.”

James Romm, Dying Every Day: Seneca at the Court of Nero

"Modern capitalism is masterful at producing services people don't need and in large part probably don't want.  It is brilliant at convincing people that they do need and want them.  But it has difficulty turning itself to the production of those services which people really do need.   Not only that, it often spends an enormous amount of time and effort convincing people that those services are either unrealistic, marginal or counterproductive."

John Ralston Saul, Voltaire's Bastards, 1992

"Most politicians couldn't care less about the plight of the poor. There's so much profit to be made from poor people - think payday loans, high-interest rent-to-own stores, for-profit colleges, and overpriced mobile homes - that politicians and their crony-capitalist donors have a vested interest in keeping them poor."

Joshua Wilkey, My Mother Wasn't Trash

"We live in a world where love itself is condemned.  People call it weakness, something to grow out of.  Some are saying: 'Let each one become as strong as he can, and let the weak perish.'  They say that the Christian religion with its preaching about love is a thing of the past. The neo-paganism [of the Nazis] may well cast off love but, in spite of everything, history teaches us that we shall be the victors over this.  We shall not forsake love. Take the days as they come, the good with a grateful heart, and the bad for the sake of those which follow.  I see God in the work of His hands and the marks of His love in every visible thing.   Do not yield to hatred. We are here in a dark tunnel, but at the end, an eternal light is shining for us."

Titus Brandsma, executed at Dachau, 26 July 1942

"And Peter understood that neither Nero, nor all his legions, could overcome the living truth— that they could not overwhelm it with tears or blood, and that now its victory was beginning.   He understood with equal force why the Lord had turned him back on the road.  That city of pride, of crime, of wickedness, and of a lust for power, was beginning to be His."

Henryk Sienkiewicz, Quo Vadis

It was a 'risk on' day all the way, with strong rallies in equities.  Stocks went out near their highs.

VIX reflects this new wave of confidence, and continued to fall.  

The ebb and flow of fear and greed is taking back what was lost with the war fears of not too long ago.

Gold finished unchanged, with silver losing a little more ground despite the weakness in the Dollar, which continued to decline, in addition to the strength in equities.

What is this telling us?

It may become much clearer by next week.  Risk may recede from our perception, but it has not gone way.

As you may know I grew up in northeastern Ohio, and most of my friends from earlier days were 'salt of the earth' people, the children of the working class, such as myself. 

I was stunned a few months ago in a phone call to discover that almost all of my buddies from young adulthood after college are gone now.  When you move some distance away and start your own family you naturally tend to lose contact. Many of them worked in the trades, and have passed away. 

So its nice to hear from someone who brings fond memories of pleasant times, my good friend Phil who called unexpectedly.  He was always quick-witted and full of good humor.  We worked together after high school, which at that time was in an aging, if not deteriorating as it is all gone now, section of southeast Cleveland, in an old furniture warehouse next door, a cavernous place, full of opportunities for the kind of carefree fun and camaraderie that make a student's life more passable.

It's nice to be reminded of who we are and how deep our roots go, in sharing memories and laughs, shared experience from times gone by.  It is easy to lose perspective and a sense of your core being, of who you really are and what you believe, swept along in this tumult of events, and endless waves of mind-numbing controversies.  The modern world overwhelms and isolates us with the shallowness of its values, full of illusions and falsehoods, binding us to a wheel of fire shifting quickly between greed and fear.

Family and friends are always important, as well as the institutions that helped to shape us, and sustain us, which often remain there for us, as we travel the world, and through time.  They help us to resist the hate and the madness of the moment, and even if our knees are just a bit more wobbly now, to remain standing firm against the tide.

Such is His loving kindness, and tender mercies. 

Non-Farm Payrolls report tomorrow, and then into the weekend.

Have a pleasant evening.

 

Stocks and Precious Metals Charts - La Grandeur Mystérieuse - Payrolls Report on Friday

 

"I get tired of the darkness all around me.  The darkness itself seems to borrow, from the sinners who live in it, the gift of their speech.  I hear its mocking accents.

Oh, what mysteries will be revealed to us later.  How often have I thought that I perhaps owe all the graces showered upon me to the earnest prayers of a little soul whom I shall know only in Heaven.  It is God's will that in this world by means of prayer heavenly treasures should be imparted by souls one to another, so that when they reach their home with the Father they may love one another with a love born of gratitude, with an affection far, far exceeding the most ideal family affection upon earth.  

There we shall meet with no indifferent looks, because all the saints will be indebted to each other.  No envious glances will be seen; the happiness of every one of the saved will be the happiness of all.  Just as the members of a family are proud of one another, so shall we be of our family, without the least jealousy.  Who knows even if the joy we shall experience in beholding the glory of the great Saints, and knowing that by a secret disposition of Providence we have contributed to it, who knows if this joy will not be as intense and sweeter perhaps, than the happiness they will themselves possess.  How I long to dwell in that Kingdom of Love."

Thérèse de Lisieux

"'Who are these people, all dressed in white robes, and where have they come from?' I replied, 'My lord, you are the one who knows.' Then he said to me, 'These are the ones who have survived the great tribulation. They have washed their robes and made them white in the blood of the Lamb.'"

Revelation 7:13-14

"We all end up serving something or someone, even if it is only ourselves.   And we become defined by what we serve.   Anyone can become a hero or a saint— not flawless, but faltering, not perfect, but persevering, not proud but pushing forward often in fear and trembling, not losing their own way but following the light of righteousness and goodness, even while stumbling and going forward again.   Because everyone can serve, and serve well, if they choose something lasting and worthy."

Jesse, Heroes and Saints, 18 January 2015

"Do you not know that to whom you give yourselves as servants, his servants you become, whether of a corruption unto death, or of a righteousness unto life?"

Rom 6:16

"In the end the only real tragedy is not to be a saint."

Léon Bloy, La femme pauvre, 1897

The Fed had their interest rate FOMC meeting announcement today. 

They didn't do anything.

Jay Powell had his usual press conference.

He didn't say anything significant.

Markets rallied, taking the VIX back down to the 50 day moving average, which has been a lower bound for the wash and rinse cycle lately.

The Dollar chopped widely but finished unchanged.

Gold was hit and stayed a bit on the low end.

Silver had a wide ranging day with a deep dip lower, but finished unchanged.

Non-Farm Payrolls on Friday.

Wall Street has forgotten for now about the chaos the West is engendering abroad.

A banquet of consequences awaits.

Have a pleasant evening.