Gold Daily and Silver Weekly Charts - Up Again, Up Again, Jiggity Jig

Running Free, Pigman Knew He Was a Master of the Universe

To market, to market, to buy a fat pig,
Home again, home again, jiggety-jig.

To market, to market, to buy a fat hog,
Home again, home again, jiggety-jog.

To market, to market, to buy a plum bun,
Home again, home again, market is done.

Gold and silver remain resilient despite the concerted campaign to push them down and dampen interest in the alternative stores of wealth.

I would not mind fast forwarding a few hundred years to see what the future makes of this episode in human history.

Will it be a great turning point, a high moment, as we might like to think, full of sound and fury? Or are we just a comedic footnote, an frivolous episode in life, with very little that is lasting or even new?

It is hard to say. But I am almost certain that our great grandchildren will ask themselves, "What were they thinking?"

See you Sunday evening.

SP 500 and NDX Futures Daily Charts - Excelsior

There is intraday commentary that may be worth reading, which you can scroll down to see.

The financials led the US equity markets higher today led by JP Morgan.

Apparently the markets were relieved that JPM seems to be able to put their CIO losses behind them, and shift money from their loss reserves to achieve the appearance of vitality.

As one of the spokemodels on financial television said, JPM can get back to printing money.   All is well, right?  Well perhaps, but perhaps not so, while the severe mispricing of risk is upheld by the credibility trap.

There is a bull market in bloodsuckers and bootlickers. I hear that there are thirty-seven different financial sector ETF's alone. Talk about saturation.

A sour note are the numerous warnings coming from companies that are involved in the real economy. Consumer demand is flagging badly, as the median wage staggers under the burden of supporting the unsustainable greed and corruption of the one percent.

Have a pleasant weekend.

Spain Has Its 'Let Them Eat Cake' Moment - Another Milestone Reached

Technically the pampered princess of Spain's elite said, 'screw them all' rather than 'let them eat cake.' She is only saying what most of the Western elite are thinking about 'the problem of the hoi polloi.'

After the brazen theft of customer money by a well-connected financier, I said I was waiting for another shoe to drop, another milestone to be reached on this cycle of history.

I should add that a single instance of something obviously does not make a trend.  It is the trend that is of significance.  Do the perpetrators become emboldened, or does a horror of recognition bring things back into balance?  No one wakes up one morning and decides, "I think I shall become a monster." Evil is a process of abnormality with which one becomes increasingly familiar, accepting,-- comfortable.

The next step in the rise of statism is capital controls, media suppression, and the increased repression of dissent by physical means and censorship. After that is the singling out of certain ethnic and religious groups for 'special treatment,' and campaigns to establish the 'otherness' of select targets. This could also be related to some age or class group, or even the disabled.

And then murder, first occasional and then systematic. It may take the form of starvation, denial of medical treatment, non-elective abortion, or euthanasia at first. Hopefully we will not progress as far on the cycle as any of these latter stage developments.

Here is a note from a friend about a news item that has not penetrated the Anglo-American news media yet.

Spain is implementing its latest austerity package. Spanish PM Mariano Rajoy Raises VAT 3pc in Shock U-Turn

When the Prime Minister Rajoy said to their National Assembly that they must cut benefits to Spain's unemployed, Miss Fabra was apparently caught on video shouting, "Screw them all."

The damage control groups are now trying to explain that Miss Fabra was not saying 'screw them' to the unemployed, who the Prime Minister was talking about, but rather 'the Socialists,' who favor things like benefits for the unemployed.

This is sparking quite a bit of anger in Spain, as one might imagine, which is suffering under very high levels of unemployment and facing further austerity cuts.

Spain's oligarchy appears to be a bit backward and thuggish. Rather than clumsily rigging lotteries and construction projects, they would be better off forming a banking cartel, rigging market prices, and stealing a little from everyone, every day, on every transaction. Then you can be a Very Important Person, dress well, have Congressmen publicly kiss your ring, and still gorge yourself at the trough of public corruption without marring your cufflinks.

In every one of these troubled countries that I examine, although the blame tends to fall on the 'lazy and foolish' many, if one scratches beneath the surface they find a corrupt core of greedy insiders, oligarchs, who have been inflicting economic distortions and pain on the public in the service of their own sense of entitlement.

"It should come as no surprise to anyone that major commercial banks manipulate Libor submissions for their own benefit. The OTC derivatives markets was designed by the big banks, for the big banks, to ensure that as they set up their own private securities exchanges - away from regulatory scrutiny - they could control the interest rate settings. Money center commercial banks did not want the "truth" of market prices to determine their loan rates. Rather, they wanted an oligopolistically controlled subjective survey rate to be the basis for their lending businesses."

David Zervos
Jefferies & Co

That is sophisticated financial corruption. That is progress.

From an erudite friend in Europe:

"Yesterday, after PM Rajoy announced that the government was going to cut the benefits the unemployed receive, a PP congresswoman, Andrea Fabra, daughter of Carlos Fabra, was caught on camera applauding and shouting "Que se jodan" - which translates roughly to screw them all.

Miss Fabra was appointed Parliamentary Advisor at the age of 24, straight out of university. Her father has "won" the lottery at least 7 times, and is under multiple investigations for corruption.

'Qu’ils mangent de la brioche.' France, late 18th century

'Que se jodan!' Spain, early 21st century

At least, back then, they had better manners."

Guide to the Confused: SP 500 Futures Intraday - 'Technical Trade'

When I talk about the 'technical trade,' I mean that fairly literally.

The market, in the absence of a major exogenous event, is running on autopilot, with the algorithmic computers and trend following traders driving it back and forth within pre-programmed levels of support and resistance.

There is always some reason that can be used to justify a big up or down day. In this case market action creates market commentary. Today it is the 'good numbers' from JPM. No mention of the raiding of loss reserves and other gimmicks that banks today use to paint their pretty pictures on rotten paper.

The SP 500 futures are just an example. This same market rigging thing takes place in many other markets including important world markets such as metals, energy, and foodstuffs.

In low volume environments with no important exterior factors in the short term, the technical game tends to have a bias higher, because in this type of paper market there is no upward limit, and one wishes to draw in the 'suckers.'  The word goes out in the pit that the trading desks 'want to try to take it up.' This is how the 'pools' operated in the 1920's.

The drops tend to come quickly and pass even faster, since that is the reaping, not the planting and growing of the scam.

And because of their collocation and speed, the computer trading algos can front run almost every transaction and skim a small percentage off it, and absent real volume use wash trades to drive the price where they will. And in the aggregate at least, their market positioning allows them to 'see what is in your hand, what cards you are holding.'

If there is any change, the well-capitalized professionals with very high priced, high speed collocated computers and departments of brainy quants are driving the smaller scamsters to the sidelines, and sometimes into the ranks of the pundits and hangers-on. The price of computers, politicians, media, and regulators provides an effective barrier to entry against competition.

Yes there is always corruption in markets, despite what the naturally efficient markets theorists from the monied interests' bastions of intellectual folly and deception might maintain. But at certain times in history the distortions in the markets become so great, so predominant, so extreme, that they crowd out much of the productive and creative investment activity.  In the resulting outcome, the inevitable return to normalcy,  society in general can suffer greatly for the greed of the few.

And if anyone should ever warn about manipulation in the markets, one responds, 'oh no, they would never allow that!  Who could be so low?' And then some mouth a few appropriate slogans supplied by the market manipulators using comic book views of the world from Ayn Rand, for example.

People deny what they cannot bear to admit. And one denial leads to another, and another, until the truth becomes not only unspeakable, but almost unthinkable. And so one deflects to another thought, a diversion and distraction, a person or group, and finally another reality. That is the way to madness, that is the credibility trap.

The LIBOR scandal, and the trainwreck of revelations about market corruption which I forecast would happen, are making the true believers a little hesitant, uneasy. But the hard core are resilient, faithful to the myth, to the end.

It's a lucrative business, and if unforeseen events intrude, you can always have the public cover your losses.

"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. 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 intend to rout you out, and by the grace of the Eternal God, will rout you out."

Andrew Jackson

What a wonderful world we have created with the gifts that have been given to us.

De trop pour l'éternité. Enjoy.