SP 500 and NDX Futures Daily Charts

The market rallied on a 'Romney win' in the presidential debate and a decent Spanish bond auction.

The ECB left rates unchanged.

The Non-Farm Payrolls report is tomorrow.

Simon Johnson: Money, Power, and the Rule of Law

The dominant political parties in the US or the UK really 'get this,' because they do not want to. They are fine with collaborating with the status quo as long as it serves them.

They have become a brothel for the monied interests and nationless corporations.

They seem to have lost their sense of honor and civic duty. It has been choked by greed and selfishness, a lack of empathy and proportion. Their hypocrisy knows no bounds

NY Times
Money, Power and the Rule of Law
By Simon Johnson
October 4, 2012

Economic policy is always torn between helping the broader social interest – lots of ordinary people – and favoring particular special interests. Unfortunately, special interests typically win out in the kind of situation we have in America in 2012, when it’s all about spending money to win friends and influence people.

The most effective way to push back against powerful special interests is to have the same rules for everyone – and to enforce those rules fairly, even when they are broken by the richest and most politically connected people in the land. Attorney General Eric Schneiderman of New York took a major step toward restoring the rule of law this week, by bringing a case against JPMorgan Chase. But it will be an uphill battle; the forces against him are incredibly strong, including some within the Obama administration.

Special interests always want to take over and organize society for their own benefit. In the terminology of economics, there are always some “rents” to be had – meaning some form of extra compensation that you get from tilting the playing field in your favor. Powerful people are always “rent-seeking,” another way of saying that they would like to feather their own nests. And such activities impose costs on society, lowering incomes and limiting opportunities for everyone else.

When money is the primary source of power, the special interests win hands down. They can create advantages for themselves. One way is through the market mechanism – as monopolists did with railroads and industrial sectors at the end of the 19th century.

Or they can capture the government and use state policies to help themselves – for example, by deregulating the financial sector and allowing excessive risk-taking in big banks. The ability to take such risks hurts all consumers and taxpayers while helping the special interests who get this advantage...

Read the rest here.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

There was a small reduction in the units outstanding in the Sprott Physical Gold Trust, and a commensurate decline in cash. it looks like some shares were bought back.

The cash level in Sprott Silver Trust continues to decline to historically low levels. I expect they will be doing an expansion sometime in the next few months.

W. E. Pollock: Faux 2012 Debates In a Very Real World

A bit of a rant, but not misplaced.

I did not watch the US Presidential debate, but from what I hear of it, it does sound like the bread and circuses which I had anticipated that they would be. A real discussion of the real issues might accidently trip over the credibility trap that ensnares both parties.

I am also seeing some sentiment on the extremes, of both right and left, that would favor a continuing harder push in the current direction, that would bring about a social dislocation, and more radical change.

Those on the extremes think that they can ride that change into greater power by undermining democracy, or at least further limiting it. And so from their perspective, there can be no compromise. They do not want any, they would like to see a confrontation, an armageddon of sorts, because it would serve their interests. Or so they think.

Welcome to The Hunger Games.