Farewell Homage to Fed Chairman Jerome Powell - Jay, We Hardly Knew Ye

 

It looks likely that Jerome 'Well you can call me Jay' Powell is going to be moving on from his post as Fed Chairman.

No tears need be shed, as he will likely find warm welcomes, open arms, and lucrative speaking opportunities at the Wall Street Banks and hedge funds from whence he came.

But what else could we expect, for creatures of the moneyed interests and their Banks.

“Your strength is just an accident arising from the weakness of others.” 

Joseph Conrad, Heart of Darkness

 These fellows are comedic gold, and for that he will be missed at Le Café.

 

Stocks and Precious Metals Charts - Cloudy With a Chance of Vertigo

 

"Power is always dangerous.  Power attracts the worst and corrupts the best."

Edward Abbey

 

"This elite-generated social control maintains the status quo because the status quo benefits and validates those who created and sit atop it.  People rise to prominence when they parrot the orthodoxy rather than critically analyze it.  Intellectual regurgitation is prized over independent thought. Voices of the dispossessed, different, and un(formally)educated are neglected regardless of their morality, import, and validity.  

Real change in politics or society cannot occur under the orthodoxy because if it did, it would threaten the legitimacy of the professional class and all of the systems that helped them achieve their status." 

Kristine Mattis, The Cult of the Professional Class

 

"Most of them became wealthy by being well connected and crooked.   And they are creating a society in which they can commit hugely damaging economic crimes with impunity, and in which only children of the wealthy have the opportunity to become successful."

Charles Ferguson

 

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” 

Upton Sinclair

Stocks were a bit wobbly today, getting a slight nosebleed from their recent lofty valuations. 

Gold and silver took off on the stronger than expected measure of inflation.

The Dollar also rallied, in what is likely a combination of a flight to safety and anticipation of higher interest rates.

Have a pleasant evening.

 

 

Stocks and Precious Metals Charts - Remarkable Fragility - The Madness Serves None But Itself

 

"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.

And especially who or what it is that you serve.

Have a pleasant evening.

Stocks and Precious Metals Charts - The Never-Ending Story

 

“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.

The VIX was slightly higher.

And the band played on.

Have a pleasant evening.