SP 500 and NDX Futures Daily Charts - Risk Off on Euro Summit Concerns

It was a 'risk off' day as stocks were sold and investors moved into safer plays.

This is the end of quarter week, so the tape may begin to take a coat of paint in a day or so, barring more storms from the continent.

Funds tend to sell their losers first, then pump up their holdings to mark them as winners. So watch out for the old 'one-two.'

Interesting that gold and silver went countertrend today. I am surprised at how few have figured it out.

NAV Premiums of Certain Precious Metal Trusts and Funds - Silver Undervalued

The premiums of some of the more popular Funds are back to 'normal' levels, but certainly not overly enthusiastic.

And we see a significant divergence between the metals and stocks today, suggesting perhaps that the selling in the metals had been overdone. Stocks are sharply lower, but the metals are stubbornly positive. And yet the US dollar is higher as well. A flight to safety? It looks like it.

The Gold/Silver ratio at 58 reflects the underperformance that silver has shown of late, in response to its higher beta and partial industrial component, and most recently I think because of its option expiration at the Comex tomorrow. The call holders may have been shaken, and so it is now time to skin the put buyers.

Michael J. Burry's Commencement Address at UCLA - Credibility Trap and the Predator State

Burry is describing the credibility trap that followed in the aftermath of the financial fraud that gripped the developed world through the Anglo-American banking cartel, perhaps without realizing it in those terms. This is why there is no honest discussion of what has been happening.

The financial crisis is not over. The bank bailouts and subsidies are as much a part of the vast financial fraud that is destroying the real economy as the original packaging and promotion of risky mortgages had been.

"Michael J. Burry is one of the few who saw the crisis coming in all its glory and bet heavily on that unmistakable eventuality. Bernanke and Geithner and Greenspan and Summers and Rubin did not see it coming. Yet, who has been in charge of guiding us out of this predictable and self-inflicted crisis? Greenspan's prodigies: Bernanke, Geithner, Summers, Rubin and many other profoundly compromised parties.

Michael J. Burry, in the video below, delivers the keynote address at the 2012 UCLA Department of Economics Commencement. In it, he describes the process he undertook in determining that the credit bubble would pop, the housing sector would crash, and that the financial world's blindness to the obvious would, if property harnessed, vault him into the 1%. All of it t was 100% foreseeable. There was no "black swan". Yet, our most esteemed economic leaders were completely blind to it.

In 2010, Burry wrote an op/ed in the New York Times entitled, I Saw the Crisis Coming. Why Didn’t the Fed? No member of government ever reached out to Burry to discuss the issue - to see if there was any way to bring his focused wisdom and uncompromised analysis to a government that was tragically deficient. Instead, within 2 weeks of the publication of the op/ed, all 6 of his defunct funds were audited. Soon thereafter, the FBI initiated an investigation into his activities.

Greenspan's prodigies are beyond compromised. That the IRS and the FBI were sent to create havoc for Burry is a form of abuse of process. Our democracy is failing us. Checks and balances have been subverted by money, people in leadership positions protecting their failed legacies, and absolute impunity for the power elite who are successfully marginalizing the truth-tellers. As Burry notes, they are rewriting history."

Capitalism Without Failure

High Anxieties: The Mathematics of Chaos

"The hyper-rich are facing something worse than death: becoming poor. Do you think they will go quietly? I think they will do whatever it takes and sell it to us in the name of 'saving the system.'"

David Malone, Debt Generation

This documentary was started in 2007 by David Malone and Mark Tanner on commission from the BBC. David had finally persuaded the network that a financial collapse was coming, a situation which he had been watching and documenting for some years.

It was finally finished on 12 September 2008, the Friday before the collapse of Lehman Brother. Two days later it was aired on BBC4.

David Malone writes a financial blog Golem XIV.

A number of people had been warning of a collapse including myself. The bubble in housing and dodgy credit was apparent to anyone who had eyes to see, the time and training to look, and a mind unclouded by conflicts of interest.

I remember after one particular rant of mine on an establishment economics site about the coming collapse, someone asked, 'What do you think he wants?'

And that is perhaps the heart of what went wrong. Few were acting from conscience and principle, and most, as is so human, were guided by self-interest, ideology, rosy thinking, careerism, and the flawed models that supported inaction in the face of monstrous injustice and transfers of wealth from the relatively innocent and unsuspecting to the financial predators.

I will tell you now that what is coming next will be as awful as anything that has gone before, and quite possibly much worse. Poison is being offered as a cure, and if taken, will contribute to the suicide of the middle class.

There is still some time to act, but it is quickly slipping by. We seem to have learned nothing.

Author’s Note from Debt Generation By David Malone

"From the very start of this crisis what concerned me, above all else, was the almost total lack of any real and meaningful debate. Decisions have been made that will affect us for generations to come, but did we ever truly hear competing ideas, explanations and alternative solutions? I certainly didn’t. All I heard was a worrying unanimity.

Bankers, financial experts, journalists and politicians all repeating each other with the same absolute, shrill, conviction. Only a seemingly endless series of vast bank bailouts, they told us, could avert otherwise certain and catastrophic disaster. It was all far too complicated for the likes of you and me to question what we were not qualified to understand.

Such absolute certainty always gives me cause for thought, so I did what I do in such situations: I began to read – but not economics books. I already knew, from a film I was making at the time, that the assumptions economists used about the real world were fatuous at best. I chose to read what actual traders inside the crisis were saying to each other, day to day, on the message boards where they exchange ideas and information.

Most of what is said on such boards is in trader gibberese, but some of it is a brutally clear analysis of what is happening. I didn’t have to agree with their politics to learn from what they had to say. There was another view of the crisis. There were other ideas of what should be done. Radically different ideas.

The more I read, the stronger my conviction grew that the mainstream media’s reporting of the crisis was alarmingly wrong. After three months of reading, I began to write. That was in early 2008. I had no intention of writing a book. I simply felt compelled to voice opposition to the deafening certainties being thrust at me from all sides. What I wrote, under the name GolemXIV, were comments on the Guardian newspaper’s website responding to financial news stories.

We had been denied, I argued, a meaningful discussion of the nature of this crisis and the futility of what was being done in the name of fixing it. As the crisis unfolded, I became more and more convinced that what was being done in the name of helping us would instead, whether by design or stupidity, turn us and our children into the Debt Generation: the generation whose principle use and fate would be to pay off other people’s debts. It made me angry. Angry at those engineering it, angry at those who justified it, and angry at those who told me there was no alternative.

After nearly two years of commenting on the Guardian, I started my own blog where I still write.

What you have in your hands is a condensation of all that anger, frustration, reading and thinking. My friend and collaborator on many films, Mark Tanner, took everything I had written and formed it into what we hope and believe is a jargon free and readable critique of what, to this day, we are still being told by all the experts, bankers, politicians and journalists.

If, like us, you feel the need to have a different account of our current situation and what we should be doing about it, then I sincerely hope this book offers you something valuable and important."