SP 500 and NDX Futures Daily Charts - Don't Know When It's Coming, But It's On Its Way

Stocks chopped sideways today, as the news was of little consequence.  And since none of the ongoing wars intruded into the headlines further than a celebrity death, all was ok if not good.

As you may have heard, junk bond funds just experienced a six sigma event. That means that it was not just your usual walk in the park. The pros were quick to dismiss it as retail, read uninformed, selling.

"High-yield bond mutual funds saw outflows total an eye-popping $7.1 billion last week. "HY flowmageddon," said Goldman Sachs' Charles Himmelberg in a research note we saw via @lebullmarche. "This is the largest HY outflow on record – a 6-sigma event when flows are scaled by mutual fund assets under management..."

Gundlach stopped short of saying high-yield looked attractive. Himmelberg didn't. "Our confidence in the buying opportunity in the face of retail selling stems from our belief that credit fundamentals remain supportive, while valuations are now more attractive," Himmelberg said.

I tend to think of it this way. The Fed's protracted ZIRP has caused an unusual number of people over to the port side of the boat. So many people in fact that the captain and her crew have noticed that it is listing dangerously. Before something calamitous can happen, and all those people fall overboard, endangering the ship itself, she would like to do something to prompt some of them to move to the starboard side. Slowly. If they start rushing starboard in a panic, the boat may lose its balance and begin to wobble dangerously.

And that is not even discussing other paper assets, like stocks, and the big shifting cargo down below, the derivatives.  The ship will most likely be fine, as long as the seas remain calm.  Let's hope the gales of November are not early.

It is easy to go for clicks, and to preach impending doom. But I do think that we are in a precarious situation, and a correction to it is coming. I suspect we will see something in fourth quarter, but there is still some time for the learned captain and her crew to do something sensible, even if the owners of the ship are still happily ensconced in their VIP cabins, while their servants rifle the passengers' luggage.

There is no doubt that the Fed is worried about 'secular stagnation.'   In keeping with our passenger ship analogy, that means that everyone who  has been downgraded temporarily to steerage for the emergency will have to stay there because their cabins have been appropriated and used to make room for even bigger suites and entertainment quarters for the VIPs and their stewards.  Ouch.

Have a pleasant evening.

Matt Taibbi: Griftopia (audiobook)

Free audiobook.  Where have these been all my life.

I am not much for listening to audiobooks. Alas, the droning of a human voice tends to make me fall asleep, a feature of my being that I have often put to good use with headphones on international flights.

But after the first ten minutes I was hooked on this one. Taibbi's verbal fireworks and colorful images kept me interested, and gave me a wonderful alternative to watching the latest professional wrestling antics and extended infomercials on financial television today.  Without headphones.  Old habits die hard.

Taibbi takes an icepick to the façade of American politics, and the vagaries of its financiers. And like another polemicist Hitchens, is able to wield his words with great effect and to delight of his readers. Alas, sometimes he forgets to save the sword for injustice, and on occasion becomes the kind of condescending, major league ***** he generally derides, about spiritual matters and the preferences and sincere beliefs of others of which he has little or no understanding, like a little boy who is restless in his seat and doesn't matter who knows about it.

Or the raw American tourist who travels abroad for the first time, and makes fun of the way in which the people dress, talk, and their unfamiliar local customs. The difference is between that of a wit and a boor, and that is a line that is easily crossed, as in telling some genuinely funny stories about human foibles, and then going for the big finish by throwing your shit-encrusted boots up on the dining room table for a laugh. But at least he is still resisting the elitist and all-judging allure of the neo-cons, which Hitchens was unable to do towards the latter part of his career. The show must go on.

Enjoy.

"The important thing to remember about the Alan Greenspan era is that despite all the numbers and the inside-baseball jargon about rates and loans and forecasts, his is not a story about economics. The Greenspan era instead is a crime story. Like drug dealing and gambling and Ponzi schemes, bubbles of the sort he oversaw are rigged games with preordained losers and inherently corrupting psychological consequences. You play, you get beat, in more ways than one.

Greenspan staked the scam, printing trillions upon trillions of dollars to goad Americans into playing a series of games they were doomed from the start to lose to the dealer. In the end the printed wealth all disappeared and only the debts remained. He probably did this just because he wanted to see his face on magazine covers and be popular at certain Upper East Side cocktail parties. His private hang-ups in this way shaped the entire scam of modern American politics: a pure free market for the suckers, golden parachutes for the Atlases...

There are really two Americas, one for the grifter class, and one for everybody else. In everybody-else land, the world of small businesses and wage-earning employees, the government is something to be avoided, an overwhelming, all-powerful entity whose attentions usually presage some kind of financial setback, if not complete ruin. In the grifter world, however, government is a slavish lapdog that the financial companies that will be the major players in this book use as a tool for making money. The grifter class depends on these two positions getting confused in the minds of everybody else. They want the average American to believe that what government is to him, it is also to JPMorgan Chase and Goldman Sachs.

The fact that an unapologetic fat cat like Kudlow—one who talks and acts and dresses like a fat cat—can, when convenient, throw on the mantle of a populist revolt and get away with it reassures us that for all the talk about pitchforks and revolutions and fighting back, the Tea Party movement remains in thrall to the authority of the rich and powerful. Which renders the so-called movement completely meaningless...

The new America, instead, is fast becoming a vast ghetto in which all of us, conservatives and progressives, are being bled dry by a relatively tiny oligarchy of extremely clever financial criminals and their castrato henchmen in government, whose job is to be good actors on TV and put on a good show...Our leaders know we’re turning into a giant ghetto and they are taking every last hubcap they can get their hands on before the rest of us wake up and realize what’s happened.”

Gold Daily and Silver Weekly Charts - The Ukraine Did It? and RIP Robin Williams: Vesti La Giubba

“La commedia è finite."  [The comedy is ended.]

Ruggero Leoncavallo

 

Gold and silver were pretty much capped today as stocks rallied on the hopes that nothing bad will happen in Iraq, Gaza, West Africa, and the Ukraine.  The miners seemed to gain a little lift, but really there is not much that happened that is worth wasting words.

As of Friday, approximately 418,800 ounces of gold have been claimed in the month of August.  But as you can see in the latest Comex warehouse report, they are just sitting tight where they were.  Comex is a sideshow now in the global precious metals markets.

The next Comex option expiry will be on August 26th.

 

Oops.  New Straits Times claims US analysts conclude that an air-to-air missile shot down Malaysian flight over the Ukraine.

KUALA LUMPUR:   INTELLIGENCE analysts in the United States had already concluded that Malaysia Airlines flight MH17 was shot down by an air-to-air missile, and that the Ukrainian government had had something to do with it.

This corroborates an emerging theory postulated by local investigators that the Boeing 777-200 was crippled by an air-to-air missile and finished off with cannon fire from a fighter that had been shadowing it as it plummeted to earth.

In a damning report dated Aug 3, headlined “Flight 17 Shoot-Down Scenario Shifts”, Associated Press reporter Robert Parry said “some US intelligence sources had concluded that the rebels and Russia were likely not at fault and that it appears Ukrainian government forces were to blame”...

I missed that one on the US nightly news.  There is quite a bit of speculation in this piece above.  And Parry did not write this piece for the AP.  He is an investigative reporter who has written for AP in the past, helping to break the Iran-Contra story for example.

 

I wonder if the real truth of this sad incident will ever come out.  Perhaps we will have to file this one with Jimmy Hoffa, Jack the Ripper, the Lost City of Atlantis, and the freefall of WTC 7.

 

 

Speaking of sad incidents, RIP actor/comedian Robin Williams of an apparent suicide at age 63.   Williams had been battling severe depression.  

 

It has become almost a cliché that the exceptional minds of improvisational comedic geniuses, that allow them to see the odd associations and absurdities, hypersensitive to the ironies of life, can be both a gift and a curse. 

And when the comedy has gone out of life, only the tragedy remains.  For without those who can laugh at themselves and make us laugh at our vanities, what remains are grimly uncaring monsters, and their retinues of  oblivious banalities.

 

I wonder if the masters of the universe are aware, or even able to cry, while they put their makeup on, to fool rather than to be fools, and see what monstrosities they have become.

 

Artists, clowns, and lovers must attempt to divert the people as they approach the chasm of madness.

 

nanoo nanoo. 

 

Have a pleasant evening.

 

 

Recitar! Mentre preso dal delirio, non so più quel che dico, e quel che faccio! Eppur è d'uopo, sforzati! Bah! Sei tu forse un uom? Tu se' Pagliaccio. Vesti la giubba e la faccia infarina. La gente paga, e rider vuole qua. E se Arlecchin t'invola Colombina, ridi, Pagliaccio, e ognun applaudirà! Tramuta in lazzi lo spasmo ed il pianto in una smorfia il singhiozzo e 'l dolor.     Ridi, Pagliaccio, sul tuo amore infranto! Ridi del duol, che t'avvelena il cor!

Perform! While in this madness, I no longer know what I say, and what I do! And yet it is necessary... Try! Bah! Are you a man? You are a clown. Put on your costume and colour your face. People have paid, and they want to laugh. And if Harelquin shall steal your love Columbina, Laugh, Clown, and everyone will cheer! Turn your anxiety and tears into jest, your pain and sobbing into a funny face. Laugh, Clown, at your own broken love! Laugh at the very grief that poisons your heart!

 

 

SP 500 and NDX Futures Daily Charts - Pop Up

Stocks rallied up today on the good news that nothing blew up in the Mideast or in the Ukraine over the weekend.  Dare I suggest it was a technical bounce off the latest rinse to the bottom of the wash 'n rinse channel?

After that early exuberance, they tended to drift lower most of the day.

After the bell Caesar's offered some fairly awful results. No not Obama, who was speaking about Iraq after hours, but Caesar's the other gambling empire besides the Fed.

There will be more earnings, macroeconomics news, and geopolitical jitters this week.

Have a pleasant evening.