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I think there is a good chance of a 15 to 20% correction in US equities sometime between now and the end of July. I am not at all sure of the timing, in part because the Fed is adding enormous amounts of liquidity which seeks out beta, AND the volumes remain light, so this liquidity can do its work in a relatively straightfoward manner.
But as with all sugar high bubbles, this one is going to pop. We are in bubble territory, so a trigger event is able to quickly deflate the stock indices. The higher stocks go, the less of a trigger event will be required. It could also come as a series of event that together bear enough weight to shake the Fed's policy errors back to some more realistic base level.
Most of the economic discussion I read is either complete book-talking puffery, or naively pedantic. I wonder how many bubbles it will take before this Ancien Régime of crony capitalism is overthrown, and how difficult this transition might be.
Gold and silver moved higher today, and are both up against overhead resistance.
Intraday commentary here.
I seem to recall saying that the Yen intervention by the G7 was not so much for the Japanese and their rebuilding as it was for the benefit of the financial global carry trade. Et, la voila.
Yen action sets scene for return of carry trade - FT
Gold is right up against the big inverse head and shoulders neckline around 1440.
I am struggling to see a breakout here, but it is possible. The last big neckline breakout took place around a failed option expiration gambit.
Maybe Jamie is too preoccupied with the largest unsecured, non-syndicated bank loan every (to AT&T as a bridge loan to buy T-Mobile) to worry about Blythe's capital needs.
I think this AT&T acquisition, and its very rich price, is indicative of what is wrong with the US economy. Money is being generated and held by fewer hands who continue to use it to consolidate their economic and political power.
But these things ebb and flow. The mighty sow their own destruction in their excesses and their overreach. The reign godless as if triumphant, until they fall back upon their knees. It can be a curse or a blessing, to see the true face of that which you serve.
I take profits, holding bullion but trading paper, and retire to the kitchen for the evening trade.
The appetites and customers seem unchanging, but there is always something a little different on the menu if you look carefully. And over long periods of time, tastes and fashions will change back and forth, but the basic ingredients remain the same.
"Money is gold, and nothing else." J. Pierpont Morgan
Since option expiry is on Monday the 28th, I would expect Blythe to throw some cards on the table and at least take a run at this rally. If it comes it will be in thin trading and likely into the weekend.
The gold/silver ratio is cracking 40 again. It could eventually go back to 16:1 which has historical precedent.
Keeping the Shell Game Going Department
JPM Becomes a Self-Licensed Vault/WeighMaster/Assayer For the NYMEX/COMEX
Makes it easier to move the bullion between the COMEX and SLV? lol
Good one, Baba Yaga.
