Stocks and Precious Metals Charts - A Banquet of Consequences - CPI Thursday Morning

 

“Totalitarianism in power invariably replaces all first-rate talents, regardless of their sympathies, with those crackpots and fools whose lack of intelligence and creativity is still the best guarantee of their loyalty.”

Hannah Arendt, The Origins of Totalitarianism

“Is a people that elects as its president an icon that has never read a book all that far away from burning books itself?”

Joseph Roth, What I Saw: Reports from Berlin 1920-1933

“A fascist is one whose lust for money or power is combined with such an intensity of intolerance toward those of other races, parties, classes, religions, cultures, regions or nations as to make him ruthless in his use of deceit or violence to attain his ends. They claim to be super-patriots, but they would destroy every liberty guaranteed by the Constitution.”

Henry Wallace

“Yet the victory of fascism was made practically unavoidable by the [neo]liberals’ obstruction of any reform involving planning, regulation, or control.”

Karl Polanyi, The Great Transformation

"Words can be like tiny bits of arsenic: they are swallowed unnoticed and seem to have no effect, but after a while the toxic effect is there."

Victor Klemperer

"When humanity, subjugated by the terror of crime, has been driven mad by fear and horror, and when chaos has become the supreme law, then the time for the empire of lawlessness will have come."

Friedrich Rudolf Klein-Rogge, Das Testament des Dr. Mabuse


This remains a dangerous, highly-manipulated market.  

If you must, proceed with caution.

There will be a CPI read on Thursday morning. 

It may be leaked ahead as it was last time, and it may move markets.

Watch out for the 'tail risk.'

It was a 'pop and flop' kind of a day.   Pretty typical really for this beark market we have.

Stocks rallied hard in the morning, and then fell back to the red or essentially unchanged.

Gold managed to hang on to a slight gain while silver moved lower.

Neither has confirmed a breakout yet in my judgement from the charts.

The Dollar dumped.

Need little, want less, love more.  For those who abide in love abide in God, and God in them.

Have a pleasant evening.

Rest on the Flight to Egypt - or Martha's Vineyard

 

"They have become twisted in their reasoning, and their foolish hearts are darkened."

Romans 1:21

"Then he will say to those on his left, ‘Depart from me, you accursed, into the eternal fire prepared for the devil and his angels.  For I was hungry and you gave me no food, I was thirsty and you gave me no drink, a stranger and you gave me no welcome, naked and you gave me no clothing, ill and in prison, and you did not care for me.’"

Matthew 25:41-43

“But now, we are witnessing a transformation: a true opium of the people is the belief in nothingness after death, the huge solace, the huge comfort of thinking that for our betrayals, our greed, our cowardice, our murders, we are not going to be judged.”

Czeslaw Milosz

"But Abraham said, ‘If they won’t listen to Moses and the prophets, they will not be persuaded, even if someone rises from the dead.’”

Luke 16:31

These are the words of our Lord.  

Our hardened hearts turn away from Him, into the darkness. 

 

Stocks and Precious Metals Charts - Shameless - And the Band Played On

 

"No one today likes truth: utility and self interest have long ago been substituted for truth. We live in a nightmare of falsehoods, and there are few who are sufficiently awake and aware to see things as they are.  Our first duty is to clear away illusions and recover a sense of reality.  To recover a sense of reality is to recover the truth about ourselves and the world in which we live, and thereby to gain the power of keeping this world from falling apart."

Nikolai Alexandrovich Berdyaev

“Crime, once exposed, has no refuge but in audacity.”

Tacitus

“These days, banks have become so big that much of what they do is merely shuffle wealth around, or even destroy it.   Instead of growing the pie, the explosive expansion of the banking sector has increased the share it serves itself.   Bizarrely, it’s precisely the jobs that shift money around – creating next to nothing of tangible value – that net the best salaries.   How is it possible that all those agents of prosperity – the teachers, the police officers, the nurses – are paid so poorly, while the unimportant, superfluous, and even destructive shifters do so well?

The Machiavellis are one step ahead.   They have the ultimate secret weapon to defeat their competition. They’re shameless.”

Rutger Bregman

"Financial predators are usually narcissistic and audacious.  They regularly have an extreme sense of entitlement coupled with high self-efficacy.  Many of them have a charismatic quality and are preternaturally persuasive.  Financial predators are commonly shameless and quite adept serial liars. They perceive themselves having near unlimited guile and resourcefulness to extricate themselves out of any compromising situations."

Russ Alan Prince, Forbes

The economic news provided a two stage boost to the risk trade this morning. 

The first was the Jobs Report, which came out remarkably strong and bearish, but with a somewhat strained reading was viewed as bullish for risk assets, because of a less robust gain in wages. 

Some styled it as indicative of an 'immaculate disinflation.'

That boost was quickly fading, as most refused to believe it.

But at 10 AM the next stage of data, the ISM Manufacturing, and to a lesser extent employment, came in a bit light, and then we were off to the races.

The usual melt up and short squeeze de luxe ensued.

My skeptical self tends to view this as the beginning of yet another wash and rinse cycle.  

Now all that is required, as it usually happens, is for some voice from the Fed, or additional data, to throw shade on the story that the Fed will begin to moderate its interest rate tightening.  It seems to be the way things are done these days.

But on a happy note gold and silver caught a rally bid as well, with the Dollar falling fairly hard.  

Gold has not yet broken out.

Let's see how long this lasts.

The circus in the House of Representative continues, the Velvet Insurrection Part Deux.

And the band played on.

Have a pleasant weekend.

 

Stocks and Precious Metals Charts - Minsky Moment - Our Year of Living Dangerously

 

"In particular, over a protracted period of good times, capitalist economies tend to move from a financial structure dominated by hedge finance units to a structure in which there is large weight to units engaged in speculative and Ponzi finance."

Hyman Minsky, The Financial Instability Hypothesis

"The period of financial distress is a gradual decline after the peak of a speculative bubble that precedes the final and massive panic and crash, driven by the insiders having exited but the sucker outsiders hanging on hoping for a revival, but finally giving up in the final collapse."

Charles Kindelberger, Manias, Panics, and Crashes: A History of Financial Crises

"Twenty-five years ago, when most economists were extolling the virtues of financial deregulation and innovation, a maverick named Hyman P. Minsky maintained a more negative view of Wall Street; in fact, he noted that bankers, traders, and other financiers periodically played the role of arsonists, setting the entire economy ablaze. Wall Street encouraged businesses and individuals to take on too much risk, he believed, generating ruinous boom-and-bust cycles. The only way to break this pattern was for the government to step in and regulate the moneymen.

Today, with the subprime crisis seemingly on the verge of metamorphosing into a recession, references to it have become commonplace on financial web sites and in the reports of Wall Street analysts. Minsky’s hypothesis is well worth revisiting."

John Cassidy, The Minsky Moment, The New Yorker, 4 February 2008

"FDR came right at Wall Street and the Banks with serious reform that saved capitalism from itself, and worked for a generation to hold back its darker impulses.  This is a lesson that we have apparently forgotten.

If the Fed attempts their old fix [cheap money, financial asset inflation] once again, they may do what I thought was almost inconceivable, and go a step beyond mere stagflation which is bad enough, and cause an actual break in confidence, and the bond of their word, the currency. The people of the world will not be fooled forever.

As Hyman Minsky once said, and the moderns seem to have forgotten, 'Anyone can create money; the problem is in getting it accepted.'   He should have added, except by force [force is bad monetary policy by other means].  Reform goes hand in hand with recovery."

Jesse, Moral Hazard of the Fed's Current Policy: Fraudulent Paper, 24 January 2013


When a similar boom and bust, fomented in each case by Fed monetary policy, happens three times in 21 years, you may wish to consider that it is not an accident, or a coincidence, or addle-brained fat finger error, but something a little more purposeful, and at its heart more than mere careless incompetency.

The recent insider trading scandals in the Fed's highest ranks, and the ensuing cover-up and deflection, make our confidence a bit more strained.

Non-Farm Payrolls tomorrow.

Have a pleasant evening.