Stocks and Precious Metals Charts - Ship of Fools - Lingering at Another Minsky Moment

 

“The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least to neglect, persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments.”

Adam Smith

"I write to you from a disgraced profession. Economic theory, as widely taught since the 1980s, failed miserably to understand the forces behind the financial crisis.  Concepts including 'rational expectations,' 'market discipline,' and the 'efficient markets hypothesis' led economists to argue that speculation would stabilize prices, that sellers would act to protect their reputations, that caveat emptor could be relied on, and that widespread fraud therefore could not occur.  Not all economists believed this – but most did.

Thus the study of financial fraud received little attention.   Practically no research institutes exist; collaboration between economists and criminologists is rare; in the leading departments there are few specialists and very few students.  Economists have soft-pedaled the role of fraud in every crisis they examined, including the Savings & Loan debacle, the Russian transition, the Asian meltdown and the dot.com bubble.

They continue to do so now.  At a conference sponsored by the Levy Economics Institute in New York on April 17, the closest a former Under Secretary of the Treasury, Peter Fisher, got to this question was to use the word 'naughtiness.'  This was on the day that the SEC charged Goldman Sachs with fraud."

James K. Galbraith, Why the 'Experts' Failed to See How Financial Fraud Collapsed the Economy, May 16, 2010

"There is a kind of chronic complacency that has been rotting American liberalism for years, a hubris that tells Democrats they need do nothing different, they need deliver nothing really to anyone – except their friends on the Google jet and those nice people at Goldman.

The rest of us are treated as though we have nowhere else to go and no role to play except to vote enthusiastically on the grounds that these Democrats are the 'last thing standing' between us and the end of the world.   It is a liberalism of the rich, it has failed the middle class, and now it has failed on its own terms of electability.   Enough with these comfortable Democrats and their cozy Washington system.  Enough with Clintonism and its prideful air of professional-class virtue.

I think what we need in order to restore some kind of sense of fairness is not the final triumph of markets over the body and soul of humanity, but something that confronts markets, and that refuses to think of itself as a brand."

Thomas Frank, 2016

 

Stocks managed to shake off some early gloom and rallied in the afternoon.

The Dollar chopped sideways, finishing largely unchanged.

Gold and silver rallied sharply.

The VIX fell slightly.

Earnings continue rolling in, for what they are worth.

Did I mention that there will be a stock option expiration on Friday.

Have a pleasant evening. 

Stocks and Precious Metals Charts - A Banquet of Consequences

 

“It was not curiosity that killed the goose who laid the golden egg, but an insatiable greed that devoured common sense.  If there are damned souls in hell, it is because men blind themselves.”

E. A. Bucchianeri

“They were careless people, Tom and Daisy — they smashed up things and creatures and then retreated back into their money or their vast carelessness, or whatever it was that kept them together, and let other people clean up the mess they had made.”

F. Scott Fitzgerald, The Great Gatsby

"You have to understand that only the very worst end up here: the ones whose anger made them kill, and who felt no sorrow or guilt after the act; those so obsessed with themselves that they turned their backs on the sufferings of others, and left them in pain; those whose greed meant that others starved and died. Such souls belong here. Wickedness never rests easily so, in a way, one might almost feel pity for the wicked, for they are destined to live their lives in fear, in a prison of the heart.”

John Connolly, The Infernals

"Not Nero, but God, rules the world."

Henryk Sienkiewicz, Quo Vadis

"Everyone knows that plagues have a way of recurring throughout history, yet somehow we find it hard to believe in the ones that crash down on us out of the sky. There have always been plagues and wars, yet they always take us by surprise. When war breaks out people say it's stupid and won't last long. Stupidity has a knack of getting in the way, which we would see if not wrapped up in ourselves. In this our townsfolk were like everybody else— they did not believe in plagues."

Albert Camus, The Plague

 

There will be a stock index option expiration on Friday.

Stocks were in rally mode today.

The Dollar was flat.

Gold and silver were largely unchanged.

We are entering earnings season in earnest.

I think the theme for the rest of this decade and the next will be 'consequences.'

Have a pleasant evening.

US Dollar Very Long Term Chart

 

"I postulated some years ago (2002) that, when push came to shove, the Fed would gather around itself a few 'friendly banks' which would act on its behalf in private to enforce certain policy decisions in markets in which the Fed and Treasury do not wish to openly operate.   It is hard to think of any other somewhat moral reason for the government to babysit and subsidize these very expensive and dangerous TBTF monstrosities, except as instruments of policy to provide some degree of freedom to shape events and responses.

If you want to wage a currency war, you need to have some dreadnoughts packing serious financial throw-weight, and economic muscle.  It may be Machiavellian, counter-democratic, and expensive, but that is the diktat of strategy if you want to control things and wield power to do what you will, both at home and abroad."

Jesse, Financial Dreadnoughts in Times of Currency War, 22 February 2013

Stocks and Precious Metals Charts - The Destructive Egoism of Divisive Ideology

 

"This kind of person finds fault, complains constantly and sows discontent to promote their own desires and preferences.  If you listen they are arrogant, and they use flatteries to gain advantage.  Remember the predictions of His apostles, that in the last age there will be scoffers driven by their own desires, creating divisions and controversies, worldly, and devoid of the Spirit."

Jude 1:16-19

"I appeal to you, brothers and sisters, to be wary of those who sow divisions among you, and undermine the faithfulness of the people with controversies concerning the teachings that you have received.  Avoid them, for these people do not serve the Lord, but their own passions and objectives.  By their lying tongues and smooth flattering they deceive the naive and the unsuspecting."

Romans 16:17-18

"Avoid foolish controversies, and detailed analysis and pedigrees, and arguments and quarrels about our teachings, because they are unprofitable and useless.  Warn a divisive person once, and then a second time.   After that, have nothing to do with them.  You may be sure that these people are disturbed and sinful; by their actions they condemn themselves."

Titus 3:9-11

"There seems to be a crescendo of corruption and a storm of deceitfulness rising all around us.   How we react to these trials of the day will determine many things, not the least of which is the choice of whom we will serve, whether we realize it or not.

Be wary of the stories being woven that are designed to lead to your fearful acceptance of the unspeakable towards its intended victims.   And be especially wary of interpretations of the faith that are centered on worldly riches for the believer, as an end of faithfulness in itself.  Our Lord did not say, 'Pick up your big fat wallets and follow me to the mall.'"

Jesse, And the Love of Most Will Grow Cold, 16 March 2018

Today we saw retrenchment and consolidation in the markets that were rallying enthusiastically yesterday.

The Dollar bounced higher.

Gold and silver fell a bit.

The major stock indices ended up largely lower or unchanged after a volatile day.

The VIX fell.

Earnings reports will be coming now in earnest.

There will be a stock index option expiration next week, but not as significant as this most recent quad witch option expiration.

Have a pleasant weekend.