SP 500 and NDX Futures Daily Charts - Don't Fight the Fraud

There are many reasons offered to buy equities.

One of the reasons being touted lately is that with bonds in a bubble, and nowhere to go but down, and money leaving commodities, equities are the only place for money to go to obtain a fair return.

But there was another reason offered today on US financial television that had me gobsmacked, as my British cousins say.

The guest said that the market was 'rigged to go higher.'

So obviously one should not short it, and staying out of it is not such a good play either. Rather, if you know the dice is going to come up the same way each time, you need to get in on the betting, whether it makes sense otherwise or not.

Now I've heard everything. Don't fight the fraud.

After the bell, Dell beat earnings by a penny.

What hath Ben wrought.

Don't ask why; just buy.

Comex Metals Option Expiration For Remainder of the Year - Hedge Fund Buying Metal Shares

As a reminder, next Monday is the March option expiration for gold and silver at the Comex.

Here is an interesting blurb on the steps the government of India is taking to dampen gold imports: fractional reserve bullion. I wonder where they got this idea?

"The government recently stopped requiring gold-backed exchange-traded funds to hold physical gold in the amount of their sales. Instead, the funds will be allowed to deposit some gold with banks who in turn can lend it to jewelers, which in theory should reduce imports for a time."

India Cultural Demand Defies Gold Curbs

And there is this tidbit:

"SAC Capital Partners LP, a $20 billion dollar group of hedge funds founded by Stephen A. Cohen, quietly positioned itself in over $240 million dollars worth of gold, silver, and mining share investments during Q4 2012.

Of great interest is the structure of those positions. They are indicating, that the firm is expecting a massive spike in both gold and silver, as well as a staggering move higher in the mining shares."

SAC Puts $240 Million into Gold/Silver/Mining Shares Investments

As you may recall, it is Stevie Cohen's cohorts who are being frisked up for having traded on non-public information. Naw, couldn't be.

About that FDIC Controversy, and Some Other Internet Rumours

I answered a few emails on this a week or so ago, but the issue seems to have come back again.

There was a change in the aggregation of accounts at the FDIC as of 31 Dec 2012. That change rolled back a consideration that had been granted for 'non-interest bearing transactional accounts' held at a bank. Such an account is what is normally considered a checking account. Those were to be aggregated with the other accounts of the account holder.

But in terms of aggregation, nothing else changed. Some people said the rule would aggregate ALL accounts at ALL banks to a single Social Security number in the amount of $250,000.

This is not what the FDIC said, not at all.  And there updated information from 1 January 2013 confirms this.

The aggregation rules are still based on a 'per bank' basis. And within that bank, those rules are roughly as follows per the FDIC's webpage.

I do not know the future. Some will ask, 'well do you trust the ....?'    Probably not, and I tend to trust in God, and look at the data for everything else. But there is a wide gap between blind trust and just making things up.   And it is there that we must make our stand, on as firm a ground as we can find.

It is not unreasonable to believe that dollar debts will be paid in devalued dollars, and there will be de facto defaults as well.   This has been going on for quite some time, and there is plenty of historical precedent.  Much of the hoohah going on in politics revolves around the allocation of financial pain.

There are legitimate concerns, and fears, and phantoms.   The difference between the first two is the difference between probability and possibility.  And with regard to the last, it is a terror of the imagination that is inimical to reason and to a rewarding life and the refuge of despair.

We entering a time of rumour and hysteria. I have been hearing some rather crazy things, about the Mormons buying up all the real estate of California, and the Queen of England buying up Nevada.  And some other things I do not care to even mention in this Café, from the usual repugnant sources of fear and hatred and violence about the usual victims of prejudice. 

Because to do that is not to stand with the truth as we can know it, even if we think we are wallowing with those in the mud for 'the right ends' and things we may sincerely believe.   That merely serves the madness, which serves none but itself.  

If hatred and fear crowd out the reason, and love, in our words and our minds, we have probably gone off the path.

Prime Minister Abe's Radical Plan for Japan's Constitution

Here is a notice of an upcoming talk at the Foreign Correspondents Club of Japan that I found to be of interest.

I am sure there is some political hyperbole here, and there are also some big 'ifs.'  But this sort of thing does seem to be the general trend amongst the developed nations. 

Democracy was an innovation imposed on Japan in the aftermath of the second World War.  Most westerners do not realize that for the majority of its political life, the postwar government of Japan has been a government dominated by a single party, the LDP in partnership with their corporate combinations, or keiretsus.  

And this 'Japan Model' of concentrated political power in a partnership between government and their corporations is responsible for the lack of reform that led to Japan's 'lost decade.'

The Constitution and its integrity takes on an added importance to those devoted to the democractic freedoms and individual protections for this reason.

The Foreign Correspondents Club of Japan
Shinzo Abe's Radical Plan to Change Japan's Constitution

Lawrence Repeta, Professor, Meiji University School of Law
Masako Kamiya, Professor, Gakushuin University Faculty of Law
Yoichi Kitamura, Representative Director, the Japan Civil Liberties Union

12:00-14:00 Thursday, February 21, 2013

Japan's Liberal Democratic Party has made no secret of its plan to comprehensively reform the Constitution, which it says was 'imposed' on the country after World War 2. On April 28, 2012, it revealed what these plans are. The date was chosen to commemorate the sixtieth anniversary of the San Francisco Peace Treaty.

In Diet interpellations on January 30, Prime Minister Shinzo Abe declared that the party would move forward with these plans under his leadership. For many years, debate over constitutional amendment has focused on the war-renouncing Article 9 but the LDP reform plan is far more radical.

If successful, the party would delete Article 97, the Constitution's most powerful declaration of human rights, and make several other far-reaching changes, including elevating maintenance of "public order" over all individual rights; adding a new requirement that citizens "respect" the kimi ga yo hymn and the hinomaru flag; eliminating free speech protection for activities "with the purpose of damaging the public interest or public order, or associating with others for such purposes"; and reducing parliamentary majorities required for constitutional amendments.

If the party achieves these goals, it will create a Constitution that mandates citizen obligations to the state rather than the other way around. This would effectively mean a rejection of popular sovereignty and a return to Japan's prewar order. The LDP and its allies secured more than two-thirds of the House of Representatives in December elections. If they can achieve the same level in the House of Councilors, the door will be open to a new Constitution to match Mr. Abe's vision.

A panel of experts has agreed to come to the FCCJ and explain the significance of these enormously important proposals. Lawrence Repeta is a professor at Meiji University Faculty of Law. Masako Kamiya is a Professor of Law at Gakushuin University and representative director of the Japan Civil Liberties Union. Yoichi Kitamura is a representative director of the same union and a co-counsel in many noteworthy cases, including litigation that led to the historic 2005 Supreme Court decision that found the Diet in violation of the Constitution for failing to adopt adequate voting procedures for Japanese who reside abroad.

Please reserve in advance, 3211-3161 or on the website (still & TV cameras inclusive). The charge for members/non-members is 1,700/2,600 yen, non-members eligible to attend may pay in cash (menu: braised chicken with rosemary and cream sauce). Reservations canceled less than one hour in advance for working press members, and 24 hours for all others, will be charged in full. Reservations and cancellations are not complete without confirmation. For meal service, please enter the room by 12:25.