SP 500 and NDX Futures Daily Charts - Correctamundo

Market is correcting as the hot money takes the public through the rinse cycle.

Pictures From a Monetization

The Fed is printing money. Or perhaps more properly, monetizing debt, both public and private, but not efficiently or effectively from the perspective of the broader economy. That money, sometimes euphemistically called liquidity, is flowing directly into the financial system through the Banks as a matter of public policy.

It is not unlike sending aid to a third world country, where it is seized by small groups of powerful warlords for their own use and purposes, with them deciding how much will reach the people.

It is not even sophisticated math.  Look at the first chart. It is simple arithmetic.

Granted, the printing is not yet showing up as a pure monetary inflation, but primarily as asset bubbles in financial paper and selective items subject to secular monopoly market and speculative pressure: certain categories of consumer good, medicine, health care, financial fees, perks and bonuses, high end housing and collectibles, and political contributions by large organizations and the one percent for example.

That is because of the 'trickle down' approach of money distribution which the Fed, and the their partners in the government, are pursuing. It manifests in the declining velocity of money, slack aggregate demand, and the stagnant median wage. It has some of the appearance of financial feudalism in which capital substitutes for land.

The games being played in the markets are apparent, heavy-handed, and beneath contempt, operating under the rationale of a 'necessary perception management.' Necessary for whom? It is officially sanctioned theft, pure and simple, however one wishes to rationalize it. The 'new normal' is really the new awful, with a decidedly oligarchic taint.

Please be aware that all the two line charts below are using two scales, one on the left for monetary base and one on the right for the other.  The purpose here was to show how the monetary base compares in change, even if the change is not linear, or one for one.

The Fed will not stop expanding its monetary base anytime soon.  The economy is on life support.

They can monetize all the private and public debt that they can, but it will not have a positive effect until that money reaches the real economy.  For now it is flowing heavily to support a corrupt financial system that has not been reformed, to sustain speculation, and to further enrich those who made outsized gains during the credit bubble.

The government is as culpable and more than the Fed in this.  This applies to the Congress, the Administration, and the regulators. 

Related: Money Supply: A Primer

There are a number of ways to repair the damage to the real economy and get it growing again.  One way NOT to do it is to look at the landscape through the eyes of the trader or the speculator, and those who serve the financial interests.  For the most part they are self-absorbed and blinded by their predatory instincts.They are not creators of real wealth.  And they tend to distort the vital avenues of economic activity and discourse.

Charles Ferguson, Larry Summers and the Subversion of Economics

The ascent to power of the financiers, facilitated by the Clintons in the 1990's, is at the root of the problems of the day.  But to be fair, the last three Presidents and the Congress are all a disgrace.  And I see little hope on the horizon except for a few points of isolated light amidst a general erosion of stewardship.

My concern is that as the situation becomes worse, the elite will tend to punish the innocent and the weak.  This has been their response so far and in a broader swath of western countries than one might have otherwise imagined.  It may get so bad, so out of hand, that I can even imagine calls for a 'financial war crimes' trial some day, or worse. Probably worse, since these fellows are shameless, abusers of oaths, and masters of deceit.

So this will probably not end well.  But it will end.

Taibbi: The Last Mystery of the Financial Crisis

Again, how ironic that the truth is coming out, slowly, but certainly not in the mainstream media, which is covering itself in shame.

The financial crisis was not something that just happened. It was nothing like an act of God.

It was a despicable fraud perpetrated by the biggest Banks, and their enablers, over a long period of time.

And many are complicit in the coverup. It is the credibility trap.

The Last Mystery of the Financial Crisis
It's long been suspected that ratings agencies like Moody's and Standard & Poor's helped trigger the meltdown. A new trove of embarrassing documents shows how they did it
by Matt Taibbi
JUNE 19, 2013

What about the ratings agencies?

That's what "they" always say about the financial crisis and the teeming rat's nest of corruption it left behind. Everybody else got plenty of blame: the greed-fattened banks, the sleeping regulators, the unscrupulous mortgage hucksters like spray-tanned Countrywide ex-CEO Angelo Mozilo.

But what about the ratings agencies? Isn't it true that almost none of the fraud that's swallowed Wall Street in the past decade could have taken place without companies like Moody's and Standard & Poor's rubber-stamping it? Aren't they guilty, too?

Man, are they ever. And a lot more than even the least generous of us suspected.

Thanks to a mountain of evidence gathered for a pair of major lawsuits, documents that for the most part have never been seen by the general public, we now know that the nation's two top ratings companies, Moody's and S&P, have for many years been shameless tools for the banks, willing to give just about anything a high rating in exchange for cash.

In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked.

"Lord help our fucking scam . . . this has to be the stupidest place I have worked at," writes one Standard & Poor's executive. "As you know, I had difficulties explaining 'HOW' we got to those numbers since there is no science behind it," confesses a high-ranking S&P analyst. "If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value," complains another senior S&P man. "Let's hope we are all wealthy and retired by the time this house of card[s] falters," ruminates one more.

Ratings agencies are the glue that ostensibly holds the entire financial industry together. These gigantic companies – also known as Nationally Recognized Statistical Rating Organizations, or NRSROs – have teams of examiners who analyze companies, cities, towns, countries, mortgage borrowers, anybody or anything that takes on debt or creates an investment vehicle.

Their primary function is to help define what's safe to buy, and what isn't. A triple-A rating is to the financial world what the USDA seal of approval is to a meat-eater, or virginity is to a Catholic. It's supposed to be sacrosanct, inviolable: According to Moody's own reports, AAA investments "should survive the equivalent of the U.S. Great Depression."

It's not a stretch to say the whole financial industry revolves around the compass point of the absolutely safe AAA rating. But the financial crisis happened because AAA ratings stopped being something that had to be earned and turned into something that could be paid for.

That this happened is even more amazing because these companies naturally have powerful leverage over their clients, as they are part of a quasi-protected industry that enjoys massive de facto state subsidies. Largely that's because government agencies like the Securities and Exchange Commission often force private companies to fulfill regulatory requirements by retaining or keeping in reserve certain fixed quantities of assets – bonds, securities, whatever – that have been rated highly by a "Nationally Recognized" ratings agency, like the "Big Three" of Moody's, S&P and Fitch. So while they're not quite part of the official regulatory infrastructure, they might as well be...

Read the rest of this article here.

US Equity Futures Intra-Day Look

Here is the picture in equities.

As for gold and silver, the selling of thousands of contracts in quiet hours with the intent of driving the price lower is obvious, and there for all to see.

Someone is trying to free up bullion from the ETFs. But someone, perhaps another related party, is also making a statement.