24 October 2013

SP 500 and NDX Futures Daily Charts - Here Comes Twitter


Stocks caught a big today with tech having a bit of an edge.

The big news came out after the bell as Goldman announced that Twitter would be priced somewhere between 17 and 20 dollars per share.

Also after the bell Amazon announced some slightly better than expected earnings and sales numbers.

Microsoft beat revenue as well. So after the bell tech is rising.  The SP 500 caught a bit of a bid, but the Banks were hit with fresh news of a DOJ probe into the Mortgage Backed Securities activity, so that held back the SP a bit.

I will be watching the Twitter IPO very carefully and looking for an opportunity to get on the shorter side of equities sometime after that if I see things forming in that direction.  Goldman is going to make a major effort to get Twitter out well, and avoid the travesty that was the Facebook IPO.

And in a thin market, barring some unforeseen event, it is not hard to move the markets where you wish, especially if quite a few wiseguys are incented to go with the flow.

Have a pleasant evening.






Ochberg: Citizens Living with a Disordered Overclass in Business and Government


As you may know I enjoy listening to Frank Ochberg.  I find his speaking style and his explanations to be very enjoyable, and relaxing.

And I am taking quite a bit of liberty in applying his thoughts to the idea expressed in the title. 

He is primarily known as an expert in Post Traumatic Stress Disorder, and I have been watching his videos in order to be a more effective caregiver, and a better friend to others.   We are all wounded and imperfect in our own ways, and progressing hopefully towards something better.

How do you define better?  Well, that is where morality and ethics come in.  And unfortunately they are quickly chucked overboard as an impediment by a narcissistic culture, much to its own eventual detriment.

He speaks on a wide range of behavioural topics. He has had some interesting things to say about psychopathy which I have shown here in the past.  But Robert Hare is the most prominent name in that area.

He is a cognitive behavioural therapist, and I have a passing knowledge of this only from courses I took as an undergrad, and some work I did for a professor in a related field of 'social styles.'  I don't pretend to be any subject matter expert in this, except for what I have read and seen first hand.

I came across a few new videos from Ochberg's series last night that I thought it would be useful to share.

One new thing did occur to me this time in watching, most likely in light of my having read the book This Town, by Mark Leibovich.  It was an update on the Beltway I had been seeking, since my own involvement there ended about fifteen to twenty years ago.  It was a little worse than I expected.  In many ways London, New York, and Washington have come to resemble The Capitol in The Hunger Games.

Large organizations can take on various characters and personalities that can change with time. They are often referred to as corporate 'cultures.'   If you change companies, you can often see the change in environment, how employees are viewed, how incentives and disincentives are given, and how problems are approached.

Narcissism, and its corrosive effects, first became evident to me in my corporate career, and it was an eye opener.

I believe that today in the US and UK at least, we have seen the rise of a political class dominated by a spirit of narcissism and Darwinistic privilege. It started with the Reagan and Thatcher administrations, but has carried through every one since then to greater or lesser degrees.  Clinton certainly made his own unique contribution in marrying the Democratic party to Big Money.

This is not to say that everyone becomes that way who happens to be in government, but rather, the 'tone' of the organization and its incentives tend to promote and reward that sort of behaviour, making it more acceptable and predominant than it might have been in the past.

And this is certainly no perfect analogy, because adult citizens are not children, just as adult employees are not children. But there is the kind of 'power imbalance' between boss and employee, and Congressman and citizen, that brings some validity into a comparison of responsibility and caring and attendance to oaths and duties that quite frankly I think have been discarded in this age of narcissism.

So, here are a few thoughts on some of these personality types, for your viewing enjoyment.

I have also included an unrelated piece on how men might best support their companions in the recovery from stressful situation. I found it to be very insightful.

So what are we to do about our crazy aunts and uncles, faux moms and dads in government who have taken oaths to 'serve, protect, and defend?'   And the serially abusive Big Daddy Warbucks who seek to bend the law and the country to the service of their personal whimsies and wills. 

Luckily in the intermediate term we can do what children have been doing throughout history.  We can bid them adieu, shun them as best we can, and in the meantime encourage the adults to speak up and bring some goodness and positive qualities to our society.   This is not easy because it is not as personally enriching for them as a corruption fueled by selfish greed.  

Sometimes the 99 percent seem to take on the character of a battered spouse these days: lied to, manipulated, and abused.  And there are enough who fall victim to the Stockholm syndrome and the corporatist propaganda, and allow their anger to be channeled towards their 'own children,' among them the weak.

It may be good to remember that many of those urging us to cut down government and the law are speaking from the very heart of the corruption and narcissism in our society. And once the laws are all cut down, who will be able to stand alone against the cold winds of corporate power that will blow across the land?

Enjoy.









US Dollar Valued In Gold Since 1718



How many ounces of gold can $1000 buy?

The answer over time is instructive. Here is some knowledge about money.

It is remarkable how few economists really understand this, and what it means, what it implies. 

Here is Paul Krugman's opinion on the currency war and the US dollar in a recent piece called Godwin and the Greenback.    I think it speaks for itself, approaching the language of economic jingoism.

And he is certainly not the worst economic voice out there, which is what makes this so disconcerting.   At least he is not an austerian, those who would crucify the public for the sins of the one percent.

Thanks to my friend Nick at Sharelynx.com for this.

Nick impishly added in a note that the US defaulted on its gold obligation in 1933 and 1971, a 38 year gap.  And it has been 42 years, so we might be due again.  

I am not a great believer in cycles.  But I am a confirmed believer in what Thomas Mann called the stupidity of cleverness as being among the worst forms of foolishness. It is the capability of knowledge, but without wisdom and sound judgement.

We seem to have a surfeit of clever ones eager to play fast and loose with the nation's currency these days as a means of pushing off genuine reform, and delaying the reckoning between the people and the banks, and the powerful few that control them.
Postscript (Oct25):    In discussing this chart further with Nick, I think the data is accurate back to about 1790 or so.  As you may recall, the US used various forms of currency prior to declaring its independence.  As someone might wish to extrapolate what a currency might have been, relating it to other currencies, so this is what I think has been used prior to 1792.  

I would have preferred not to have used it since it adds *nothing* to the analysis, but it is not my call.  However I do not agree that this valuation is good prior to 1792 because I do not understand the method that was used to derive it.  That does not mean it is wrong.  It means that I have less confidence in it that the rest of the chart because it is based on a derivation that I have not examined.




23 October 2013

Gold Daily and Silver Weekly Charts - Don't Fear the Reaper


"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood.

For these few gold has been the asset of last resort."

Antony C. Sutton


"Like liberty, gold never stays where it is undervalued."

J. S. Morrill

Gold and silver were being capped most of the day on rather light volumes.

The CME inventory report for yesterday shows JPM was again the reaper for the bullion banks, bringing in 32,150 ounces of gold bullion to customer storage.   It appears that 1 bar each left the customer vaults of HSBC and Scotia Mocatta.  There was no change to the deliverable category.

As a reminder, next Monday the 28th is an expiration for November options on the Comex.  November is not a particularly big month for the gold and silver futures.

The mining stocks were hit today along with a general pullback in equities.  That often concerns those who watch them because it can signal a bear raid in the metals, with wiseguys positioning in related markets ahead of the hit.  But let's see what happens.

There seems to be a seasonal manipulation in gold and silver during December, most likely tied into year end shenanigans perhaps.   You can read prior articles about this here.

If they do that sort of thing again this year, I think they might be setting themselves up for a difficult first quarter with regard to available physical supply for delivery. It seems that the wiseguys will hit the wall again, taking it just a bit too far in short term greed, but one can always hope that wiser heads might prevail. If they do something and it doesn't break, the immature tend to double down and do it again. And again. And then it ends, badly.

Despite the antics, the structure of the physical gold bullion holdings in the US markets looks a bit stretched on the downside.  I am growing ever more persuaded that higher prices will be required to bring more metal to meet market delivery demands.   But since there has been a massive drawdown in the ETFs in the face of unrelenting demand for physical gold out of Asia, it could be a good trick. 

Better that they start earlier rather than later.  An exchange failure is not a desirable event.  And if a major scandal hits the Fed, it could not come at a worse time for them since they will be facing a massive confidence game next year with regard to tapering. 

Gold is flowing from West to East. This is something that obtain very little recognition in the mainstream media, and certainly not on from the financial media spokesmodels who appear as though they would be quite comfortable serving as the jaded but carefree hosts and hostesses for The Hunger Games.

As for me, I am ready for a perfect Manhattan, up with a twist. It's been a rather long week already. As Chekhov once said, "Any fool can face a crisis; it's the day to day living that wears you out."

Have a pleasant evening.