Stocks and Precious Metals Charts - Shenaniganza - Stock Index Option Expiration on Friday

 

"It is not possible to found a lasting power upon injustice, perjury, and treachery.  These may, perhaps, succeed at first, and limp along on hope for awhile with a flourishing appearance.   But time betrays their weakness, and they eventually fall into ruin of their own designs."

Demosthenes


"Nothing is so difficult as not deceiving ourselves."

Ludwig Wittgenstein


"The totalitarian mass leaders based their propaganda on the correct psychological assumption that one could make people believe the most fantastic statements one day, and trust that if the next day they were given irrefutable proof of their falsehood, they would take refuge in cynicism; instead of deserting the leaders who had lied to them, they would protest that they had known all along that the statement was a lie and would admire the leaders for their superior tactical cleverness.

The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated communist, but people for whom the distinction between fact and fiction, true and false, no longer exists.”

Hannah Arendt, The Origins of Totalitarianism

Stocks attempted to stick a rally for the start of the week, but failed.

Gold, silver, and the Dollar all rose a bit.

VIX closed higher.

Stock index option expiration on Friday.

Have a pleasant evening.

Stocks and Precious Metals Charts - History Lesson - Faustian Bargains

 

"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage."

John Kenneth Galbraith


"This is the way in which he conceals from you the kind of work to which he is putting you; he promises you illumination, he offers you knowledge, science, philosophy, enlargement of mind.  He scoffs at times gone by; he scoffs at every institution which reveres them.

He shows you how to become as gods.  Then he laughs and jokes with you, and gets intimate with you; he takes your hand, and gets his fingers between yours, and grasps them, and then you are his."

J. H. Newman, The Time of Antichrist


"The Nazi’s crisis is principally a financial one.  The layer in the party interested in theories has always been extraordinarily thin.  The intellectuals already parted company with the party.  The majority of party members consist of the dumbest of the dumb, with the brown-shirts’ cadres held together by cash payments, and not by convictions.  The party’s head office has been spending like there’s no tomorrow, living off the attitude that it would spread itself over the state with its plagues of locusts in the foreseeable future.

The Hitler Party likes to emphasize its uniqueness, and it really should not be measured against conventional yardsticks.  Even if it were to explode into smithereens today, the fact would remain that it recently won fifteen million voters.  It must satisfy not only a particular political need, but also a specifically German emotional condition.  Its brutality, loud-mouthedness and brainlessness have acted not as a deterrent but rather as an attraction, and have generated unconditional and subservient followers. This fact cannot be easily brushed aside.

The great, nativist Führer, who has all the allures and outer appearance of a Gypsy Virtuoso, might have his box-office hit and fade with it.  But the evil and ugly instincts he has called up will not blow away so easily, and will plague the whole of public life in Germany for long years to come.  New political and social systems will replace the old ones, but the after-effects of Hitler will also rise again, and later generations will have to step up for the wrestling match that the German Republic was too cowardly to fight."

Carl von Ossietzky, Winter Fairy Tale, 3 January 1933

Alas, Carl von Ossietzky's estimate of the demise of the National Socialists was overly optimistic, and badly mistaken about the depths of the moral cowardice and opportunism endemic in people of privilege, and the behind the scenes deals being made by politically influential Germans.  

On November 19, 1932 a letter signed by 22 important representatives of industry, finance and agriculture, had asked Hindenburg to appoint Hitler as chancellor.  Hindenburg reluctantly agreed to appoint Hitler as chancellor after the parliamentary elections of July and November 1932 had not resulted in the formation of a majority government.

At the end of the same month that he wrote his Winter Fairy Tale, a new German cabinet was sworn in during a brief ceremony in Hindenburg's office. The NSDAP gained three posts: Hitler was named chancellor.  

Following the February 27, 1933 Reichstag fire, which the NSDAP used to seize power and crush all opposition, Ossietzky was arrested and held in 'protective custody' in Spandau prison.  Ossietzky underestimated the speed with which the Nazis would go about ridding the country of unwanted political opponents.

In 1936, he was awarded the 1935 Nobel Peace Prize but was forbidden from traveling to Norway and accept the prize.  After enduring years of being systematically starved, tortured, and generally maltreated in various Nazi concentration camps, Ossietzky died of tuberculosis in May 1938 in a Berlin prison.

Stocks managed to shake off any concerns that might have remained and rallied into the weekly close.

The VIX fell further as a feeling of 'confidence' returns to the speculation.

The Dollar took another leg lower onto the 106 handle.

Gold and silver moved higher into overhead resistance.

PPI next Tuesday.

"If there are damned souls in Hell, it is because men blind themselves.”

E.A. Bucchianeri, Faust: My Soul Be Damned for the World

Vanity, wealth, and power are the idols and masters of this world. But they have been overthrown through the death and resurrection of the Lord, who took on our nature, so that we might partake in His. He has ransomed us from ourselves, freed us from the tyranny of the world, and raised us up, giving us the choice to serve Him not as slaves, but in freedom.

Serve then whom you will, but know well who you serve. For it is that which you love, and with whom you and yours will abide.

Have a pleasant weekend.

Stocks and Precious Metals Charts - Big Wheel Keeps On Turning - Moonshot Bear Market Rally

 

"What I did not understand was how highly concentrated bitcoin ownership is by its nature, and why the 'bitcoin' market is becoming increasingly fragmented with different groups with their own architecture creating their own non-interchangeable types of bitcoins and crypto-currencies.

The key to this is obviously going to be the middlemen, the exchanges.  And I do not believe that they are particularly well founded or regulated.   The technocrats are essentially making it up as they go along, and they do not necessarily agree, or have to agree, with each other.

I cannot believe that the regulators have allowed the CME to bring out futures for these things, which apparently they are going to do over the weekend.  The Bitcoin market seems much more like the very early over-the-counter stock market under the buttonwood tree. Or perhaps even tulipmania.

I am not saying that everyone involved with this is acting in bad faith. Not at all. And something like a cryptocurrency *could* become real money some day.   It needs someone with a lot of financial clout to stand behind it with sufficient full faith and credit at a stable value of exchange for some particular flavor of crypto-coin.  This is just my own, certainly fallible, judgement.   But based on everything I know this is nuts.   And it is going to end very badly."

Jesse, One Thousand People Own 40% of Bitcoin Market, 8 December 2017


"Turns out that the fundamental principal in Decentralized Finance (DeFi) is that every firm must be deeply interconnected with other firms, each holding the other’s token, and lending to the other, and bidding up each other’s tokens, so that if one firm goes to heaven, they all go to heaven together – which they did – and when one firm goes to heck, they all go to heck together – which they’re now doing.  Makes for very smooth and efficient contagion.

They all hold each other’s tokens, and they all bid up each other’s tokens to mind-boggling levels amid gobbledygook theories of the new financial world, called DeFi, but now they want to sell each other these tokens, and prices collapse and exchanges, trading firms, and lenders go to heck?"

Wolf Richter, Cryptos Plunge, Contagion Sweeps Across DeFi, 9 November 2022


"Most people who say they are using bitcoins for transactions are really just trading obligations held in trust by some third party.  If you have made money on it great. But in my own estimation, and I could be wrong, the hyping involved in bitcoin is all too reminiscent of the dot com bubble.  And there is no talking to people who are seized by the desire to be rich, and those who seek power.  Like the dot com bubble, I suspect that the rewards from this digital gold rush will be taken primarily by those who sell the picks and shovels and storage and assaying services to the miners, and a few insiders and lucky early adopters.  And the average person is going to get skinned."

Jesse, Bitcoin, the Mania, 26 December 2017


A softer than expected CPI number this morning ignited the unexploited red wave rally.

Bear market rallies are impressive, because the bias in the market participants tends to be defensive and shaded to the short side.

The Dollar dropped, precipitously.

Gold and silver rocketed higher.

The major stock indices did moonshots.

Let's see how it goes.  PPI next Tuesday.

Pivot city.

Have a pleasant evening.

 

Stocks and Precious Metals Charts - Dreams and Delusions Flambé - A Pandemic of Goofiness Variant

 

"A synthetic instrument has no real assets. It is simply a bet on the performance of the assets it references.  That means the number of synthetic instruments is limitless, and so is the risk they present to the economy.  Synthetic structures referencing high-risk mortgages garnered hefty fees for Goldman Sachs and other investment banks.  They assumed an ever-larger share of the financial markets, and contributed greatly to the severity of the crisis by magnifying the amount of risk in the system.

Increasingly, synthetics became bets made by people who had no interest in the referenced assets.  Synthetics became the chips in a giant casino, one that created no economic growth even when it thrived, and then helped throttle the economy when the casino collapsed."

Senator Carl Levin, Wall Street and the Financial Crisis, April 27, 2010


“The greatest evil is not done now in sordid dens of crime. It is not even done in concentration camps and labor camps. In those we see its final result. But it is conceived and ordered in clear, carpeted, warmed, and well-lighted offices by quiet men, with white collars and cut fingernails and smooth-shaven cheeks, who do not need to raise their voice.”

C. S. Lewis, The Screwtape Letters


“Proposals to bring even minimalist regulation were basically rebuffed by Greenspan and various people in the Treasury,” recalled Alan S. Blinder, a former Federal Reserve board member and an economist at Princeton University. “I think of him as consistently cheerleading on derivatives.”

Arthur Levitt Jr., a former chairman of the Securities and Exchange Commission, said that Mr. Greenspan’s authority and grasp of global finance consistently persuaded less financially sophisticated lawmakers to follow his lead.”

Peter S. Goodman, Taking Hard New Look at a Greenspan Legacy, Oct. 8, 2008


"The Federal Reserve is considering arguments that Wall Street banks provide hard-to-replace services in some of these areas. The separation between banking and commerce has served markets and our economy quite well for decades.  And the erosion of that barrier is clearly doing harm today.  Any discussion of these physical commodities activities must begin and end with the need to protect our economy from risk, our markets from abuse and our consumers from the effects of both.

Wall Street banks with near-zero borrowing costs, thanks to easy access to Fed-provided capital, have used that advantage to elbow their way into commodities markets.  Bad enough that this competitive advantage hurts traditional commercial businesses; worse that it opens the door to price and market manipulation and abusive trading based on nonpublic information."

Senator Carl Levin, Wall St Banks and Physical Commodities, Nov 2014


"The crash has laid bare many unpleasant truths about the United States.  Recovery will fail unless we break the financial oligarchy that is blocking essential reform."

Simon Johnson, The Quiet Coup, May 2009


“The larger the bank, the greater the potential spillover if it defaults; the higher its leverage, the more prone it is to default under stress; and the greater its connectivity index, the greater is the share of the default that cascades onto the banking system. The product of these three factors provides an overall measure of the contagion risk that the bank poses for the financial system. Five of the U.S. banks had particularly high contagion index values — Citigroup, JPMorgan, Morgan Stanley, Bank of America, and Goldman Sachs.”

Office of Financial Research, Systemic Importance Indicators, February 2015


“The essence of a speculative bubble is a sort of feedback, from price increases, to increased investor enthusiasm, to increased demand, and hence further price increases.  Major speculative bubbles, as I argued in Irrational Exuberance, are always supported by some superficially-plausible popular theory that justifies them, and that is widely viewed as having sanction from some authority figures.  These may be called new-era theories.”

Robert Shiller

 

After hours some of the new era stocks, and in particular the alternative dimension of the crypto-sphere, were going up in flames.

The elections did not have a large effect so far because the crux of the matter is still undecided, although the big red wave has clearly not materialized.

Stocks slumped hard.   New era, child-of-the-bubble stocks were being pummeled after hours.

The spokesmodels were wringing their hands and clutching their pearls over the implosion ongoing in the crypto bubble. 

Fraud?  We are shocked, shocked.  

The Dollar rose, and gold and silver pulled back a bit from Friday's moonshot.

Let's keep an eye on that one.  

Volatility remains in the forecast.

CPI information tomorrow.

Have a pleasant evening.