“Depart from me, you accursed. For I was hungry and you gave me no food, thirsty and you gave me no drink, a stranger and you did not welcome me, naked and you did not clothe me, sick and in prison and you did not comfort me.' They answer, 'Lord, when was it that we saw you hungry or thirsty or a stranger or naked or sick or in prison, and did not care for you?' He answered, 'Truly I tell you, as you did not do it to one of the least of these, you did not do it for me.’” Matthew 25:40-46
"Asset prices remain vulnerable to significant declines should investor risk sentiment deteriorate, progress on containing the
virus disappoint, or the economic recovery stall.
Leverage of life insurance companies remained at post-2008 highs. Corporate bonds, CLOs [Collateralized Loan Obligations], and CRE [Commercial Real Estate] debt continued to account for a large proportion of life insurers’ assets. If these assets lose value, life insurers’ capital positions—and, hence, their ability to honor debt obligations—could be impaired.
Excessive leverage within the financial sector increases the risk that financial institutions will not have the ability to absorb even modest losses when hit by adverse shocks. In those situations, institutions will be forced to cut back lending, sell their assets, or, in extreme cases, shut down. Such responses can substantially impair credit access for households and businesses.”
Federal Reserve, Financial Stability Report, November 2021
"Foolishness has a knack of getting its way; as we should see if we were not always so much wrapped up in ourselves. In this respect our townsfolk were like everybody else, wrapped up in themselves; they did not believe in plagues."
Albert Camus
Stocks were a bit wobbly today.
Considering how far and how fast they have come in this melt up phase of the financial asset bubble, it is pretty much just a breather, so far.
I am trying to take most things people say with a grain of salt now in this period of extreme hyperbole and detachment from reality, in so many areas.
It's tough for people living in a bubble to maintain their bearings.
Madness is contagious, and a relief for many from reality.
Gold was higher again. It is approaching a key resistance area.
Silver was a bit higher, but is lagging a bit.
The Dollar continued to chop sideways around the 94 handle.
Keep a good eye on yourself, moreso than the other guy.
“In a speculative market, what counts is imagination and not analysts.”
Benjamin Graham
“Human nature being what it is, small loopholes are likely to be exploited until they become big ones, and big ones until they turn into financial disasters. At the root of all financial bubbles is a good idea carried to excess.”
Seth Klarman
“Booms start with some tie-in to reality, some reason which justifies the increase in asset values, and then -- and this is the critical feature of speculative mood -- the market loses touch with reality. What we do know is that speculative episodes never come gently to an end. The wise, though for most the improbable, course is to assume the worst.”
John Kenneth Galbraith
"Wall Street in boom days is an aggregation of madmen. The Stock Exchange becomes Bedlam well dressed. In the end, of course, all violations of the fundamental laws of economic and financial common sense are paid for; but every bull thinks he will unload before the break. They really do not know when to stop winning, and so in the end they lose profit and principal.”
Edwin Lefevre
Stocks were striving to keep up their efforts to keep posting new highs, with mixed results.
Gold and silver were slightly higher.
The Dollar was lower, but managed to hang on to the 94 handle with its fingernails.
“They support freedom for themselves and slavery for everyone else, and they use the freedom of the market to disguise this. Economic coercion is just a different form of force.”
Robert Peate
“As long as there are crazed or crafty leaders to play on old fears, a mob will turn cruel.”
Leigh Brackett
“Hatred is the most accessible and comprehensive of all the unifying agents. Mass movements can rise and spread without belief in a god, but never without a belief in a devil. And there is perhaps no surer way of infecting ourselves with virulent hatred toward a person than by doing him a grave injustice.”
Eric Hoffer
"Earth provides enough to satisfy every man's needs, but not for every man's greed."
Mohandas K. Gandhi
The Non-Farm Payrolls Report came in hot this morning.
One might have thought that this would put a dent in the market, as the number might encourage the hawks among the Fed governors.
But no, stocks went off on a melt up rally to new highs.
The market took the numbers as a sign of recovery, and were trusting in Chairman Powell's tender dovishness with the money spigot.
In the short term perception and the power of leverage is all that matters, especially in an asset bubble.
And gold and silver were also off on a fairly remarkable rally, as the coiling suppression they have been taking on the chin suddenly broke free.
Let's see if gold can hold a breakout over 1800 which has been so psychologically intimidating.
The Dollar was off a bit but managing to hang on to the 94 handle and then some.
There will come a time when you will realize what truly matters in your life, at least at the very end.
Let's hope that this comes sooner for us all, rather than too late, at a time when we can see past all the distractions and false gods of our own passionate obsessions, and still do something about it.
Can you imagine what the realization that it was all simply true as you were told, but did not listen and just pushed aside with other distractions and things, must be like?
The regret must be stunning, almost unimaginable. All else pales before it.
What a loss to bear.
Need little, want less, love more. For this, in the end, is all that matters.
"We are coming apart as a society, and inequality is right at the core of that. When the 90 percent are getting worse off and they’re trying to figure out what happened, they’re not people like me who get to spend four or five hours a day studying these things and then writing about them — they’re people who have to make a living and get through life. And they’re going to be swayed by demagogues and filled with fear about the other, rather than bringing us together.
President Theodore Roosevelt said we shall all rise together or we shall all fall together, and we need to have an appreciation of that.
I think it would be easy for someone to arrive in the near future and really create forces that would lead to trouble in this country. And you see people who, they’re not the leaders to pull it off, but we have suggestions that the president should be killed, that he’s not an American, that Texas can secede, that states can ignore federal law, and these are things that don’t lack for antecedents in America history but they’re clearly on the rise.
In addition to that, we have this large, very well-funded news organization that is premised on misconstruing facts and telling lies, Faux News that is creating, in a large segment of the population — somewhere around one-fifth and one-fourth of it — belief in all sorts of things that are detrimental to our well-being.
So, no, I don’t see this happening tomorrow, but I have said for many years that if we don’t get a handle on this then one of these days our descendants are going to sit down in high-school history class and open a textbook that begins with the words: The United States of America was … and then it will dissect how our experiment in self-governance came apart."
David Cay Johnston, May 2014
"Inequality is a euphemism, a kind of shorthand, for all of the things that have gone to make the lives of the rich so much more delicious, year on year, for the last three decades. And also for the things that have made the lives of working people so wretched and so precarious in that same time. This word inequality. It's visible in the ever rising costs of healthcare and college, in the coronation of Wall Street, and the slow blighting of wherever it is that you happen to live.
And you catch a glimpse of inequality every time you hear about someone that had to declare bankruptcy because a child got sick, or you read about the lobbying industry that drives Washington DC, or the new political requirement, the new constitutional requirement that every presidential candidate has to be a billionaire's favorite, or a billionaire themselves.
Inequality is about the way in which speculators, and even criminals, get a helping hand from Uncle Sam, while the Vietnam Vet down the street from you loses his house."
Thomas Frank
"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason.
But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right. The sensitivity of the poor to injustice is a trivial thing compared with that of the rich."
John Kenneth Galbraith
"Capitalism is at risk of failing today not because we are running out of innovations, or because markets are failing to inspire private actions, but because we’ve lost sight of the operational failings of unfettered gluttony. We are neglecting a torrent of market failures in infrastructure, finance, and the environment.
We are turning our backs on a grotesque worsening of income inequality and willfully continuing to slash social benefits. We are destroying the Earth as if we are indeed the last generation."
Jeffrey Sachs
Stocks were on another risk on rally today, with the SP and NDX making new highs again.
After the bell some of the big story stocks like Peloton and Uber and Square were getting spanked on their earnings and guidance.
Ed Yardeni assures us that stocks are not rising due to any monetary support from the Fed, but from their wonderful earnings growth.
Like I said yesterday— delusional.
Well in fairness there is a lot of that going around these days.
Gold and silver bounced back, along with the Dollar which took back the 94 handle decisively.
Hmmmm. Now why would these three canaries rise on a risk on day.
Besides the shock from the Bank of England, the bond market's unreliable boyfriend.
Let us pray for those whose hearts are hardened against His grace and loving kindness by greed, fear, and pride, and the seductive illusion and crushing isolation of evil.
We pray that we all may experience the three great gifts of our Lord's suffering and triumph: repentance, forgiveness, and thankfulness. And in so doing, may we obtain abundant life, and with it the peace that surpasses all understanding.
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