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There are high expectations ahead of the Fed's September announcement tomorrow afternoon.
Traders are betting the Fed will cap rates in Operation Twist. There are also even odds that the Fed will cut the rate it pays on bank reserves which it holds. The thinking is that it will give banks more incentive to lend. The downside is the view that if it becomes too close to zero, people will stop making markets in the shortest term Treasuries.
If they do lower this rate, I will view it as justification for the view I put forward over the past two years that the Fed interest payment on reserves acts as a bit of a drag on commercial activity by drawing funds out of the marketplace, in addition to being a tool for managing short rates around the zero bound.
Nice bounce in gold today, but notice it still has not broken the short term down trend. I expect that situation to be resolved one way or the other around 2:30 tomorrow afternoon. But that is the short term paper market. The broad sweep of the global physical market is another story altogether.
"...For what it is worth, this [leased central bank] gold goes right into an Asian vault and it is gone from the West permanently. This is having the effect of transferring Western solid assets over to the East, in size. This has the appearance of desperation because in the end this is really an attempt to save the too big to fail banks that are on the wrong side of a derivative play yet again. That is the reason this is being done.
Western central banks don’t really want that gold to disappear like that, they don’t want to sell that gold. They had to raise dollars in a hurry to pump liquidity into the system, but in the end, as I said, the gold is gone. In the old days the gold would be floating around the LBMA system, there would be a little bit of erosion, but today that gold is being sucked into the East.
This price action has had the effect of creating bearish sentiment, but meanwhile the physical buyers are just sitting there and constantly accumulating physical gold. There are massive orders for tonnage of gold, incredible amounts between $1,715 and $1,760. This has the effect of putting a physical floor under the price of gold. If they make a push to the $1,715 level that would be suicide in my opinion. There are simply too many massive orders for physical gold down to that level for that to be breached.
During this quarter this leased gold is supposed to be paid back, but how? As the central banks come to grips with the reality that the leased gold is gone, there may be a religious experience to the upside in gold and you will see the gold price break the $2,000 level."
London Trader: Massive Physical Floor Under Gold as Asia Buys What West Offers - KWN
This scenario tracks with my charts to an almost uncanny level. But let's see what happens. We still have to get past the FOMC monentary decision tomorrow and the Comex option expiration next week.
Stocks were rallying today, when fresh jitters about a Greek default caused the afternoon trade to turn south, finishing almost even to slightly in the red.
I suspect quite a bit of that selling was due to traders squaring up their positions ahead of the big Fed announcement tomorrow.
Expectations of some action from the Fed are high. Reassuring words alone will not sustain the equity markets. If the Fed does nothing we might see stocks sell off badly.
Charts courtesy of John Williams at Shadowstats.
The first chart shows US Housing Starts since the year 2000.
The second chart shows US Housing Starts since 1945.
The premiums are now even narrower, with the usual exception of PSLV of course.
"At this point in my life, I did not think it was possible to significantly lower my estimate of Ayn Rand, or to regard her as even more of a psychological and moral mess than I had already taken her to be.
I stand corrected."
Excerpted by my friend JerryB:
Romancing the Stone-Cold Killer: Ayn Rand and William Hickman
by Michael Prescott
In her journal circa 1928 Rand quoted the statement, "What is good for me is right," a credo attributed to a prominent figure of the day, William Edward Hickman. Her response was enthusiastic. "The best and strongest expression of a real man's psychology I have heard," she exulted. (Quoted in Ryan, citing Journals of Ayn Rand, pp. 21-22.)
At the time, she was planning a novel that was to be titled The Little Street, the projected hero of which was named Danny Renahan. According to Rand scholar Chris Matthew Sciabarra, she deliberately modeled Renahan - intended to be her first sketch of her ideal man - after this same William Edward Hickman. Renahan, she enthuses in another journal entry, "is born with a wonderful, free, light consciousness -- [resulting from] the absolute lack of social instinct or herd feeling. He does not understand, because he has no organ for understanding, the necessity, meaning, or importance of other people ... Other people do not exist for him and he does not understand why they should." (Journals, pp. 27, 21-22; emphasis hers.)
"A wonderful, free, light consciousness" born of the utter absence of any understanding of "the necessity, meaning, or importance of other people." Obviously, Ayn Rand was most favorably impressed with Mr. Hickman. He was, at least at that stage of Rand's life, her kind of man.
So the question is, who exactly was he?
William Edward Hickman was one of the most famous men in America in 1928. But he came by his fame in a way that perhaps should have given pause to Ayn Rand before she decided that he was a "real man" worthy of enshrinement in her pantheon of fictional heroes.
You see, Hickman was a forger, an armed robber, a child kidnapper, and a multiple murderer.[...]
In December of 1927, Hickman, nineteen years old, showed up at a Los Angeles public school and managed to get custody of a twelve-year-old girl, Marian (sometimes Marion) Parker. He was able to convince Marian's teacher that the girl's father, a well-known banker, had been seriously injured in a car accident and that the girl had to go to the hospital immediately. The story was a lie. Hickman disappeared with Marian, and over the next few days Mr. and Mrs. Parker received a series of ransom notes. The notes were cruel and taunting and were sometimes signed "Death" or "Fate." The sum of $1,500 was demanded for the child's safe release. (Hickman needed this sum, he later claimed, because he wanted to go to Bible college!) The father raised the payment in gold certificates and delivered it to Hickman. As told by the article "Fate, Death and the Fox" in crimelibrary.com,
"At the rendezvous, Mr. Parker handed over the money to a young man who was waiting for him in a parked car. When Mr. Parker paid the ransom, he could see his daughter, Marion, sitting in the passenger seat next to the suspect. As soon as the money was exchanged, the suspect drove off with the victim still in the car. At the end of the street, Marion's corpse was dumped onto the pavement. She was dead. Her legs had been chopped off and her eyes had been wired open to appear as if she was still alive. Her internal organs had been cut out and pieces of her body were later found strewn all over the Los Angeles area."
Quite a hero, eh? One might question whether Hickman had "a wonderful, free, light consciousness," but surely he did have "no organ for understanding ... the necessity, meaning, or importance of other people."
The mutilations Hickman inflicted on little Marian were worse than reported in the excerpt above. He cut the girl's body in half, and severed her hands (or arms, depending on the source). He drained her torso of blood and stuffed it with bath towels. There were persistent rumors that he molested the girl before killing her, though this claim was officially denied. Overall, the crime is somewhat reminiscent of the 1947 Black Dahlia case, one of the most gruesome homicides in L.A. history.
......
Eventually, Hickman confessed to a dozen armed robberies. 'This is going to get interesting before it's over,' he told investigators. 'Marion and I were good friends,' he said, 'and we really had a good time when we were together and I really liked her. I'm sorry that she was killed.' Hickman never said why he had killed the girl and cut off her legs.
It seems to me that Ayn Rand's uncritical admiration of a personality this twisted does not speak particularly well for her ability to judge and evaluate the heroic qualities in people. One might go so far as to say that anyone who sees William Edward Hickman as the epitome of a "real man" has some serious issues to work on, and perhaps should be less concerned with trying to convert the world to her point of view than in trying to repair her own damaged psyche. One might also point out that a person who "has no organ for understanding ... the necessity, meaning, or importance of other people" is what we today would call a sociopath.
Was Rand's ideal man a sociopath? The suggestion seems shockingly unfair - until you read her very own words.
....
In her notes, Rand complains that poor Hickman has become the target of irrational and ugly mob psychology:
"The first thing that impresses me about the case is the ferocious rage of a whole society against one man. No matter what the man did, there is always something loathsome in the 'virtuous' indignation and mass-hatred of the 'majority.'... It is repulsive to see all these beings with worse sins and crimes in their own lives, virtuously condemning a criminal...
"This is not just the case of a terrible crime. It is not the crime alone that has raised the fury of public hatred. It is the case of a daring challenge to society. It is the fact that a crime has been committed by one man, alone; that this man knew it was against all laws of humanity and intended that way; that he does not want to recognize it as a crime and that he feels superior to all. It is the amazing picture of a man with no regard whatever for all that society holds sacred, and with a consciousness all his own. A man who really stands alone, in action and in soul."
Before we get to the meat of this statement, let us pause to consider Rand's claim that average members of the public are "beings with worse sins and crimes in their own lives." Worse sins and crimes and kidnapping, murdering, and mutilating a helpless little girl? If Rand honestly believed that the average American had worse skeletons than that in his closet, then her opinion of "the average man" is even lower than I had suspected.
We get an idea of the "sins and crimes" of ordinary people when Rand discusses the jury in the case: "Average, everyday, rather stupid looking citizens. Shabbily dressed, dried, worn looking little men. Fat, overdressed, very average, 'dignified' housewives. How can they decide the fate of that boy? Or anyone's fate?"
Their sin, evidently, is that they are "average," a word that appears twice in three sentences. ...Rand dismisses the possibility that the public's anger might have been motivated by the crime per se. Apparently the horrendous slaying of a little girl is not enough, in Rand's mind, to justify public outrage against the murderer.
....
[As if in liberal-softie mode she depicts him as victim-of-society. H]e had a lousy home life and an unfulfilling job. And it would be asking too much of such a superior soul to put forth the long, sustained effort necessary to rise to a position of power and influence by means of his own hard work.
Rand's statement here reminds me very much of an attitude often found in career criminals -- that honest work is for suckers....
[W]e find her fulminating against the depravity of:
"... the pastors who try to convert convicted murderers to their religion... The fact that right after his sentence Hickman was given a Bible by the jailer. I don't know of anything more loathsome, hypocritical, low, and diabolical than giving Bibles to men sentenced to death.[...]"
I can think of at least one thing that is "more loathsome ... low, and diabolical than giving Bibles to men sentenced to death." And that is: ripping up little girls for fun and profit.
Incidentally, given Hickman's claim that he ransomed his victim in order to pay for Bible college, the jailer's decision to hand the condemned man a copy of the Good Book seems like poetic justice to me."
No one is a pure mixture of good and bad. We are all a mix of talent in some things and mediocrity in others. It is how we use our talents, to what purposes we put them, that makes the difference.
Ayn Rand wrote some remarkably good essays on money. She had insight into the mechanics of some things that is expressed quite well for the layperson. But her moral philosophy and the core of her social outlook seems strikingly underdeveloped, almost adolescent in its careless disregard, and crudely nihilistic.
One could speculate about a basis in trauma during a key period of development, some breakage or familial dysfunction, the neighborhood tough guy with the broken heart and home. But this is all too easy to do, a cheap trick of pop psychologists, without hard data. However, whatever, the cause or motives, the outcomes and effects can be discerned.
Young men and women sometimes read stories about pirates, gangsters, and cowboys, who are 'rugged individualists' with an uncompromising, amoral response to anyone or anything that gets in the way of their fulfilling their needs.
And typically they start to graduate to less one dimensional heroes and role models, people who temper their strengths with restraint and compassion, who build as well as take. The archetype of this is Robin Hood. And finally one hopes, they mature into whole people who have a moral dimension that informs their baser instincts, and they obtain the ability to create, whether it be a home, or a business, or a family.
But some people never really grow up. Something in their psyche is broken, has gone astray, beyond the range of reason. They have a fatal attraction to lawlessness and callousness in the most classic imitation of the immature desire to shock, in their restless search for relief from their hollowness, to finally feel something. And on occasion even these can become powerful figures, despite their otherwise banal and stunted personalities, and beyond a small circle of cultish adherents, become fashionable.
And then the madness is unleashed, and in extreme instances an entire generation can go astray, exulting in their willful disregard for restraint, despising the ordinary and the conventional, dressing in costumes, and imagining themselves to be gods on earth, even as they plunge into the abyss.
Postscript
From Wikipedia:
"In the early 1950s, Greenspan began an association with famed novelist and philosopher Ayn Rand. Greenspan was introduced to Rand by his first wife, Joan Mitchell. Rand nicknamed Greenspan "the undertaker" because of his penchant for dark clothing and reserved demeanor. Although Greenspan was initially a logical positivist, he was converted to Rand's philosophy of Objectivism by her associate Nathaniel Branden.
He became one of the members of Rand's inner circle, the Ayn Rand Collective, who read Atlas Shrugged while it was being written. During the 1950s and 1960s Greenspan was a proponent of Objectivism, writing articles for Objectivist newsletters and contributing several essays for Rand's 1966 book Capitalism: the Unknown Ideal including an essay supporting the gold standard. Rand stood beside him at his 1974 swearing-in as Chair of the Council of Economic Advisers. Greenspan and Rand remained friends until her death in 1982."
Ayn Rand Took Social Security and Medicare Benefits
Bear raid today in the metals, as money was chasing stocks after the open, and the metals tanked when New York woke up into the 3 PM London afternoon fix.
FOMC meets this week and announces their decision on Wednesday. This meeting was expanded from one to two days by Mr. Bernanke last month, and is widely expected to facilitate in depth discussions of non-traditional Fed market activities.
The banks love to whack gold and silver prior to a market operation. This way if the metals rally, they have less opportunity to break out and run even higher.
"That day the U.S. announced that the dollar would be devalued by 10 percent. By switching the yen to a floating exchange rate, the Japanese currency appreciated, and a sufficient realignment in exchange rates was realized. Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake."
Paul Volcker, Nikkei Weekly 2004
Let's see what Benny and his Merry Pranksters roll out for the markets on Wednesday.
Another day in which stocks came in weak, and ended the day strong after the European markets closed.
VIX remains elevated but the volumes are thin.
Later: Italy credit rating cut to A from A+ by S&P; outlook negative
Futures drop ten points on the news.
It has been a while since we've seen the net to premiums of CEF, GTU, and PHYS this closely bunched.
As always PSLV is off by itself in the stratosphere. But if the premium is generally high then it really does not matter overmuch, does it?
The Gold Daily and Silver Weekly charts are growing rather large since the key breakouts that mark this leg of their bull markets. It does give the big picture, but it could make things a little more difficult to see for the short term movements. Here is a closer look at daily gold.
Although there are a number of possibilities, some of which have been promoted by other 'name' chartists which people have sent to me, it seems most likely that gold is in a short term consolidation pattern, as a pronounced symmetrical triangle. A breakout to the upside seems most likely. That breakout will target 2100.
Notice that gold seems to find resistance and support roughly every $100 higher, at the 80's. So we might expect some hesitation and resistance at the 2080 level should the break out occur.
Barring a major intervention by the central banks, or a liquidation selloff, I fully expect gold to continue to move higher. Rumour has it that China has responded with its terms to remain neutral during such an intervention, and they were draconian indeed. And there is no controlling the mass buying by the peoples of Asia which is still just awakening. Actual buying repression, as opposed to simple price manipulation, is most likely in continental Europe if bank runs occur.
Other forms of general political repression which are already underway in the Mideast, are most likely to make their appearances in at least a few Western countries seeking their Orwellian fulfillment. This depends on some variables which are understandably difficult to forecast. Who will be the first Nato member to declare martial law? .
This is not over, not by a long shot. There is no resolution to the global currency and financing situation which is in a multi-decade change from one system to another. So I would say that we are roughly half way there. My long term target for gold has been in the $4000 to $5000 area, although a spike panic could take us as high as $6700. If it reaches that point I will be a seller of at least a portion of my long term holdings.
My longer term target for silver is in the $250 area, although its volatility could take it above $400 in a buying panic or exchange signal failure. I would consider selling long term silver holdings at the $400 level.
All these levels are obviously reviewed as more data becomes available. What else would an intelligent person do?
Watching the intermediate trend on the second chart, the dip towards 1700 was most likely a significant buying opportunity. I hope so as I took it, and in some size, although I have added and subtracted to that position as the trading fluctuations have suggested in this short term pattern.
I own no stocks, and have a slight short position on the SP.
As a reminder, there is a two day FOMC meeting this week, with their announcement on the 21st. There is also a Comex option expiration next week on the 27th.
Keeping safe is never easy when power is in the hands of the self-interested.
"Double, double, toil and trouble;
Fire burn and cauldron bubble.
Cool it with a baboon's blood,
Then the charm is firm and good.
O well done! I commend your pains;
And every one shall share in the gains;
And now about the cauldron sing,
Live elves and fairies in a ring,
Enchanting all that you put in.
By the pricking of my thumbs,
Something wicked this way comes."
Wm. Shakespeare, Macbeth, Act 4, Sc. 1
"...The entire global system is at a critical juncture with sovereign bonds, currencies, stock markets and the fate of politicians all in play. The hidden purpose of QE and QE2 was always to cheapen the dollar by causing inflation in China and forcing its hand. Critics have said that QE did nothing to help with unemployment and consumption. But that was never the main purpose – the purpose was to weaken the dollar to help exports and get jobs that way, but it takes time.
I removed QE3 from my set of expectations late in 2010 when it became clear that Fed rollovers were enough to keep the yield curve tame and, more importantly, China was finally starting to move on the currency.
For now, QE3 is still off the table. But if the eurozone weakens and China weakens, that is the signal for more QE. It’s hard to know how this will play out, but at least we know what to look for. If you want to see QE3 ahead of the market, watch the euro.
Finally, it is not quite true there are no winners in a currency war. There is always one winner – gold."
Secrets of QE, Gold, and Currency Wars - Jim Rickards
“We are slow to master the great truth that even now Christ is, as it were, walking among us, and by His hand, or eye, or voice, bidding us to follow Him. We do not understand that His call is a thing that takes place now. We think it took place in the Apostles' days, but we do not believe in it; we do not look for it in our own case.
God's presence is not discerned at the time when it is upon us, but afterwards, when we look back upon what is gone and over. The world seems to go on as usual. There is nothing of heaven in the face of society, in the news of the day.
And yet the ever-blessed Spirit of God is there, ten times more glorious, more powerful than when He trod the earth in our flesh.
God beholds you. He calls you by your name. He sees you and understands you as He made you. He knows what is in you, all your peculiar feelings and thoughts, your dispositions and likings, your strengths and your weaknesses. He views you in your day of rejoicing and in your day of sorrow. He sympathizes in your hopes and your temptations. He interests Himself in all your anxieties and remembrances, all the risings and fallings of your spirit.
He encompasses you round and bears you in His arms. He notes your very countenance, whether smiling or in tears. He looks tenderly upon you. He hears your voice, the beating of your heart, and your very breathing. You do not love yourself better than He loves you. You cannot shrink from pain more than He dislikes your bearing it; and if He puts it on you, it is as you would put it on yourself, if you would be wise, for a greater good afterwards.
There is an inward world, which none see but those who belong to it. There is an inward world into which they enter who come to Christ, though to men in general they seem as before. If they drank of Christ's cup it is not with them as in time past. They came for a blessing, and they have found a work.
To their surprise, as time goes on, they find that their lot is changed. They find that in one shape or another adversity happens to them. If they refuse to afflict themselves, God afflicts them.
Why did you taste of His heavenly feast, but that it might work in you—why did you kneel beneath His hand, but that He might leave on you the print of His wounds?
God has created me to do Him some definite service; He has committed some work to me which He has not committed to another. I have my mission -- I may never know it in this life but I shall be told it in the next.
I am a link in a chain, a bond of connection between persons. He has not created me for naught.
I shall do good, I shall do His work. I shall be an angel of peace, a preacher of truth in my own place while not intending it if I do but keep His commandments.
Therefore I will trust Him. Whatever I am, I can never be thrown away. If I am in sickness, my sickness may serve Him; in perplexity, my perplexity may serve Him. If I am in sorrow, my sorrow may serve Him.
He does nothing in vain. He knows what He is about.
He may take away my friends. He may throw me among strangers. He may make me feel desolate, make my spirits sink, hide my future from me -- still He knows what He is about.
Let us feel what we really are--sinners attempting great things. Let us simply obey God's will, whatever may come. He can turn all things to our eternal good. Easter day is preceded by the forty days of Lent, to show us that they only who sow in tears shall reap in joy.
Contemplate then yourself, not as yourself, but as you are in the Eternal God. Fall down in astonishment at the glories which are around you and in you, poured to and fro in such a wonderful way that you are dissolved into the Kingdom of God.
The more we do, the more shall we trust in Christ; and that surely is no morose doctrine, that leads us to soothe our selfish restlessness, and forget our fears, in the vision of the Incarnate Son of God.
May the Lord support us all the day long, till the shades lengthen, and the evening comes, and the busy world is hushed, and the fever of life is over, and our work is done.
Then in His mercy may He give us safe lodging, and a holy rest, and peace at last.”
John Henry Newman
This is a collection of quotations from J. H. Newman woven into a whole cloth by Le Proprietaire as a young man for a small circle of friends.
Gold = 1 / T,
where T stands for the Trust that people have in the fiat Monetary System and the financial complex running it. Jim Grant points the finger at the central bankers, but they are merely creatures, albeit powerful actors, in a system of privilege and legalized looting.
In other words, the price of gold will run higher in response to the opacity, crony capitalism, insider dealing, abuses of power, and arbitrary valuations in the financial system and the overall system of governance.
Gold, and to a growing extent silver, are the safe havens for the world. This flight to safety is the fundamental driver of the precious metals bull market.
And I think that the ownership of gold and silver is still highly selective, based often on culture, financial sophistication, or a general predisposition against trust in monolithic organizations.
As a recognition of what is happening penetrates more deeply into the public consciousness, the spike in the price of precious metals may be much more impressive.
Is this weakening of confidence justified? One must ask themselves, how deeply has the corruption in the system been reformed?
Has transparency been restored, and the confidence of the members of the system been regained by things other than public relation campaigns, forced choices, subtle coercion, market manipulation, and even blatant propaganda?
These crony capitalists are so inward looking and corrupt that their policy response is to continue the looting and intensify the deception until confidence in the system is restored.
There is plenty of free choice to be had in this brave new world, from 401k's to the election ballot, as long as one chooses from what they give you.
That is the answer, the fundamental driver of the valuation.
"A bubble is a bull market in which the user of the word "bubble" has not fully participated. You can think of gold as a stock that went from 2⅝ to 18 in a dozen years. I'm not sure that's a bubble. It is the nature of gold that its valuation must forever be a mystery. It earns nothing. It pays no dividend. No conference call, no management to call up and complain to.
What I do think is gold is simply the reciprocal of the world's faith in the institution of managed currencies. It is one divided by T, where T stands for trust. And trust is a shrinking number and will continue to shrink. Therefore, I am still bullish on gold.
If a bubble connotes absurdity, what is absurd are the monetary conditions that supported this gold bull market. Gold is an expression of the world's justifiable distrust of the way our central bankers conduct their affairs. The poetry of it is that it can't be quantified. The central banks are unworthy opponents. The Fed has pledged 0% money-market rates for the next two years, so that's not much competition. And the governments of the world are taking under advisement this notion called financial repression—short-circuiting market mechanisms, capital controls, punitive taxes or intrusive taxes and the like."
Jim Grant: Gold Still Looks Good, Japan Still Doesn't - Barron's
"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks." Lord Acton
But before the people finally come to reform the Banks, the monied interests will throw quite a few patsies, traditional scapegoats, and red herrings on the fire in their stead. And if they have their way, they will burn down society rather than give up their seats at the top of the hill.
Comex option expiration next week, and the European and US central banks are widely expected to engage in more printing to save the most reckless banks at the expense of the public.
Another quad option expiration come and gone.
The markets are looking to the ECB and FOMC next week.
"The thing is right now we are nowhere near bubble territory. If gold were $10,000 we’d be having a conversation about whether that was a bubble, but at the $1,800, $1,900 level that’s absolutely not the case. If you are going to ride this long-term trend at the very high levels that we are talking about, you are just going to have to bear this volatility...."
Jim Rickards
This certainly appears to be a 'risk off' scenario for the metals and the dollar, as statements from Europe rallied stocks and caused some money to flow back into riskier assets and out of safe havens.
But the action in the metals for the past few days has smacked of a determined effort by some large entities, quite possibly central banks, to drive the price down and keep it from breaking out and running higher over $2,000. The timing of a determined gold price action in light trade with the Swiss Bank intervention in the franc.
I suspect we may see additional interventions over the next few weeks, as suggested by the ECB today, and of course in conjunction with the FOMC meeting next week.
The central banks of the West appear increasingly desperate to avert a financial crisis, and the discoveries that proceed from market breaks such as this. And desperate people do desperate things, especially when it involves conflicts of interest and potential charges of malfeasance in office.
I had warned that with the FOMC and a Comex expiration next week we should brace for a rough time in the metals. That comes with the territory. We are having a correction in a bull market.
Stay away from leveraged and short term betting, and play the longer term fundamentals if you find this sort of volatility to be unpalatable.
Gold-Backed Dollar Puts Fair Value at $10,000 Per Ounce - Bloomberg
As a reminder, tomorrow is a 'quad witching' day for equities in the US.
Next week there is a two day FOMC meeting, and the Comex will have an option expiration.
Volumes were light on the NYSE today with under a billion shares traded.
I found this story on the $2 Billion trading loss at UBS to be interesting. I was going to write something in this vein, but he says it quite well. Rogue Trader My Ass - Matt Taibbi
The Banks must be restrained...
Today was a 'risk off' day, and the safe havens were scorned in favor of riskier red meat, namely stocks.
The meme on the desks was that the markets had priced in a disorderly Greek default, but now expectations are set for an orderly Greek default, hence the rally. The Street is still expecting a default, but one with a tighter blast perimiter, namely confined to continental Europe, with all the best people in their shelters and unscathed.
Its like beating EPS by a penny, after having guided lower in the prior quarter.
Personally it looked like an excuse for a 'technical trade,' that is, an opportunity to squeeze the speculative shorts.
VIX remains elevated.
As a reminder, I do not accept any money or gratuities for this Cafe which at least for now is self-sufficient. The markets have been kind through the past ten years, and we keep our needs simple.
If you feel that you wish to do something for benefits received, a noble emotion to be sure, I would ask that you 'pay it forward,' that is, be kind and loving to someone who may not have done anything to deserve it.
If you wish to send money, a worthy charitable interest for many years has been St. Francis Friends of the Poor in New York City, which does good work with the homeless, and is always in need of funds since the homeless and the afflicted are numerous.
But please don't send anything to me. I am very grateful for the thought. If you really wish to do something for me personally that I will value, remember me in your prayers. And if you ordinarily don't pray, all the better if you put a little effort to it, and get the kinks out of your knees. Looking up to something greater than yourself may do you good. lol.
Remember me, as I do you and yours, every day.
There are many in need. When someone says, 'Why doesn't God do something about it?' I think, 'He did. He sent you. Why do you think you are here?'
So there is always something to do, even if it is a small thing, little and unnoticed by the world. You have not been created in vain. You have your work in this life, you have a calling that no other person can perform in the same way as you.
Have a pleasant evening.
The buzzword for today is orderly, as in an orderly default for Greece, which is what the Street put forward as a means to squeeze the short interest and rally stocks today, although they faded a little bit into the close.
The US economy is slumping and the political leadership is dysfunctionally obsessed with campaign contributions, so optimism appears to be a bit misplaced.
Continuing intervention ahead of the FOMC and ECB actions.
Markets are in a range, waiting to see what happens in Europe, and with the FOMC next week.
"There are no markets, just interventions."
Chris Powell, GATA
The pampered princes on Bloomberg today suggested there was selling of gold to 'raise capital' today, and that selling was being done by 'central banks.' Perhaps they need to meet some margin calls. lol.
You just can't make this stuff up.
Another QE is coming. The banks are dying on the vine and need another stealth bailout to maintain the bloated standards to which they have become accustomed.
I think the Wall Street crowd have gone barking mad, and imagine themselves to be veritable Bonapartes of the world economy.
And the reintroduction of their hubris to reality is coming and might be rather messy, as it will probably involve hitting some wall, and the limitations to their will to power.
But at the time of reckoning, 'no one will have seen it coming' and those responsible will feign ignorance and non-involvement. And that is the way of a national madness, and a failure of governance.
This is a world ruled by insane people doing insane things. I think they know something is wrong, but just do not care as long as they are getting their way.
