SP 500 and NDX Futures Daily Charts - A Post Twitter Market Commences

Twitter came out this morning, to cheers and jubilation at around 45, ticked as high as 50 intraday, and then closed slightly below the open at about 44 and change.

The rest of the market dumped off, in a somewhat cynically amusing manner, despite a 'better than expected' GDP number.

It was like the Twitter IPO sucked all that fast 'liquidity' out of the market, and tech stocks in particular dropped in the vacuum it created. Momentum is fleeting.

Tomorrow we get the Non-Farm Payrolls number. Consensus if for an add of 100K. I would not even care to hazard a guess.
It comes down to how they handle the 'government shutdown.'

Have a pleasant evening.

Adjusted Monetary Base Is On a Tear Again - Efficient Markets Policy Error

I thought we would drop in at policy central and see what the Fed has been doing with the US money supply using its policy and regulatory powers.

The first chart shows that the Adjusted Monetary Base is growing by leaps and bounds. This is Billions of Dollars in Fed Balance Sheet expansion.

This chart shows the leaps and bounds of monetary base growth a little more clearly, since it is the growth of the base, in Billions of Dollars, but in year over year terms. Those are essentially trillion dollar growth swings.

 

This next chart indexes a number of measures to the economic trough in 2009, for sake of comparison.

It shows the growth in the Fed's monetary base, as well as the excess reserves being held by the Banks.

Below those it shows Wages, Consumer Credit, M2 Money Supply and the Velocity of M2, that is, the rate at which money is being used by the real economy.

We should bear in mind that despite all the hoopla, sturm und drang, and whining by the Wall Street banking elite, the US financial system is still largely unreformed.

This situation brings to mind a quote about economic policy from John Kenneth Galbraith:

“Trickle-down theory represents the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.”

― John Kenneth Galbraith

There wasn't a Fed database entry for the income of the one percent, but if there had been it would be doing very well indeed.

I did not include this in the already busy chart above, but here is Total Assets of All Commercial Banks, using the same indexing method that was used above.  Looking past the rhetoric, the priorities seem fairly clear if you look at the growth trend in assets starting in 2011, and then look at the same time period in the chart above.

This is when the Fed implemented QE2, from Nov 2010 through June 2011, and then began 'Operation Twist' in September 2011.

QE3 started in September 2012 and continues today.

I think that history may view the co-opting of the urge to reform the banking system, and the outrage at the Wall Street bailouts, into the Tea Party's strong popular backing for financial repression of the victims, and the centering of the political debate on throttling government spending for the public good while propagating a financial system that heavily favors and subsidizes the wealthy financiers, to be one of the great propaganda coups of the 21st century.

Almost as good is running a populist presidential candidate, packaged as a progressive reformer and widely denounced by the opposition as a socialist, who in policy practice is the virtual reincarnation of Herbert Hoover, but without his many prior logistical accomplishments.

Comex Registered Gold Falls To a New Low at 640,552 Ounces - Claims Per Ounce At High of 59

There was a withdrawal of 17,988 registered ounces of gold from the Scotia Mocatta warehouse on Tuesday.

The three kilogram bars representing 96.46 ounces came back to the registered category at Brinks. 

This brings the total ounces of deliverable (registered) gold down to a new low of 640,552 ounces for this leg of the gold bull market.

The 'owners per ounce' of registered gold is still bumping around the all time high of 59 potential claims per ounce.  For the interest of those who have asked, I include the comparable charts for silver this evening as well.

As claims are presented at these prices, gold will have to be delivered.  If the gold becomes scarce at these prices, higher prices may be called for to make additional supply available. The bullion banks can continue to resort to leasing gold from the central banks and using it to settle claims, but that particular game seems to be coming to a sad and sorry end.  When Germany asked for the return of its gold and was flatly refused, we heard the faint sounds of a fat lady preparing to sing.

Weighed and found wanting.

Stand and deliver.

Gold Daily and Silver Weekly Charts - A Banquet of Consequences

"Everybody, sooner or later, sits down to a banquet of consequences."

Gold was held below the $1320 level and silver the $22 level once again.

I tend to think they are coiling for a move, but we will probably have to wait while Twitter comes out to play, and the Bureau of Labor Statistics squeezes out another Non-Farm Payroll Report on Friday.

We finally had a little action in the Comex warehouses. I will be posting on that separately later tonight.

You may have heard that a group of traders have come forward claiming that they have proof of price manipulation in the Brent Crude market.

Let's see, at last count that makes about EVERY major market that has been rocked by a profound scandal of price rigging and market manipulation, enabled or perpetrated by a major player in the Anglo American banking cartel. There is all kinds of weird shit going on, but nothing to see here in precious metals markets, so move along. 

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Bernanke in Twitterland

We start hitting the substance of the economic reports with GDP tomorrow and Non-Farm Payrolls on Friday.

The Twitter IPO looms over the market action as well as the real economy, and I have a sneaking hunch that the Street will support stocks until Twitter gets shoved out the door tomorrow, and perhaps for a few days after.  As you have probably heard it is coming out on the higher side of $26 per share.   Let's see how it does in the market.

I am not in stocks here, but am fighting an urge to get something going on the short side until we get a better idea if they can keep this pig in makeup for the year end ramp at least.  Twitter may give us some insight.

This market is built on a foundation of meringue, supplied by those little elves at the Fed, who are pumping huge sums to Wall Street while Main Street languishes with little excess buying power and a floundering median wage.

While the Fed does not control fiscal policy, they have a huge amount of leverage as a primary bank regulator that they are not using well.

Have a pleasant evening.

The Wall Street Code

“The complaints of the privileged are too often confused with the voice of the masses...The man who is admired for the ingenuity of his larceny is almost always rediscovering some earlier form of fraud. The basic forms are all known, have all been practiced.”

John Kenneth Galbraith


"It is difficult to get a man to understand something, when his salary depends upon his not understanding it."

Upton Sinclair

This is not quite as complex as it seems, at least in my thinking with regard to the principles of the fraudulent aspects of it. The complexity comes in the implementation of the trading code, not in the design of the system. I have been in groups that have taken on much hairier network and computing problems, and I know what self-induced complexity looks like, and understand its true purpose. 

I thought the example of line jumping for concert tickets in the video was a fairly good metaphor from which to start thinking. 

It is all about a lack of transparency, asymmetry of information, and special rules for certain people who are 'connected' in the traditional sense. 

So you establish top down market principles of transparency and equal protection. You place an order and it has a fixed life of one second.  Everyone has the same privileges of trading in the same priorities and monetary units, that is, everyone can trade to the whole cent, or the tenth of a cent with equivalent fill priority.  And everyone knows what the other players can know when they know it.

Yes the exchange can make money by selling certain key information to the highest bidder, but in doing so it has just undermined the integrity of the exchange, so too bad.  Exchanges are utilities operating under license like other utilities, and not spying agencies or extortionists who happen to run an exchange.  And if you don't want to be a utility operating within certain constraints, find some other business.

Transparency and equality. Wow, what arcane concepts.

And a very nominal fixed transaction tax of five cents per every order placed, like a toll, to fund the costs of regulation of the exchange, would be quite effective, in addition to some fundamental hysteresis on every order as described above.

Most of the complexity is unnecessary and designed for asymmetric advantage for insiders, and not for liquidity which is the great bogeyman of the Street. HFT is predatory in nature and provides no liquidity. Liquidity is not volume, it is the money that stands in the market in the locus of genuine price discovery, and stands its ground on that, and not on the next price tick.

You have to ask, what is the purpose of this system? And if the answer is fairness and soundness of price discovery, and not making the most money for powerful insiders, the answers start to clarify from first principles. These used to be called moral values.

Some fairly simple changes would fix all this, based on fundamental concepts like transparency and equal protection. The problem is that politicians and private firms make enormous sums by taking some 'vig' or vigorish from each and every trade by the 'dumb' or outsider money.

Most frauds have a lot of flash and dazzle for misdirection, but deep down they are always shockingly simple, and most often based on time honored cheats.

Eliot Spitzer and Bill Black certainly 'get this.' Lots of good people do. But the Banks use their friendly politicians and the power of money to isolate them. Just denying access to key careers or events is often enough to obtain most people's silence. This is how the status quo perpetuates itself, with money and the credibility trap. It is not dissimilar to organized crime.

The regulators should be ashamed, but they can point to the politicians, and the politicians can take the 'CEO defense' of not understanding what is going on. And the band plays on. There is some hope that the institutions might start using their leverage more effectively in their fiduciary roles, because without them the game ends. They are the 'marks' and their naivete is the criminal's incentive.

Taibbi: JPM Chase Is Not the Only Bank In Trouble - Credibility Trap - Pigmen Agonistes

If you want to take the unadjusted temperature of the ongoing financial crisis, you don't go to the financial talking heads and spokesmodels at CNBC or Bloomberg TV, but rather to the sportswriter at Rolling Stone magazine.

I particularly liked this piece because it is a nice vignette of the credibility trap in action.

I am not optimistic.  The powers that be have far too much of their own skin in the game to engage in meaningful reform.    Both parties are in the tank for the monied interests.  It will not be easy, but change will come.

And Taibbi does not even touch on the developing gold bullion scandal, which will shake the Western central banks to their foundations when their perfidious collusion with the bullion banks to steal the wealth of nations is finally revealed.

Enjoy.

Chase Isn't the Only Bank in Trouble
By Matt Taibbi
November 5, 12:55 PM ET

"There are multiple scandals blowing up right now, including a whole set of ominous legal cases that could result in punishments so extreme that they might significantly alter the long-term future of the financial services sector.

As one friend of mine put it, 'Whatever those morons put aside for settlements, they'd better double it...'

Firstly, there's a huge mess involving possible manipulation of the world currency markets. This scandal is already drawing comparisons to the last biggest-financial-scandal-in-history (the Financial Times wondered about a "repeat Libor scandal"), the manipulation of interest rates via the gaming of the London Interbank Offered Rate, or Libor. The foreign exchange or FX market is the largest financial market in the world, with a daily trading volume of nearly $5 trillion...

The Forex story broke at a time when the industry was already coping with price-fixing messes involving oil (the European commission is investigating manipulation of yet another Libor-like price-setting process here) and manipulation cases involving benchmark rates for precious metals and interest rate swaps. As Quartz put it after the FX story broke:

For those keeping score: That means the world's key price benchmarks for interest rates, energy and currencies may now all be compromised.

Perhaps most importantly, however, there's a major drama brewing over legal case in London tied to the Libor scandal.

Guardian Care Homes, a British "residential home care operator," is suing the British bank Barclays for over $100 million for allegedly selling the company interest rate swaps based on Libor, which numerous companies have now admitted to manipulating, in a series of high-profile settlements. The theory of the case is that if Libor was not a real number, and was being manipulated for years as numerous companies have admitted, then the Libor-based swaps banks sold to companies like Guardian Care are inherently unenforceable.

A ruling against the banks in this case, which goes to trial in April of next year in England, could have serious international ramifications...

And virtually simultaneous to that, JP Morgan Chase disclosed that it is currently the target of no fewer than eight federal investigations, for activities ranging from possible bribery of foreign officials in Asia to allegations of improper mortgage-bond sales to . . . the Libor mess. "The scope and breadth of risky practices at JPMorgan are mind-boggling," Mark Williams, a former Federal Reserve bank examiner, told Bloomberg.

The point of all of this is that any thought that the potential Chase settlement might begin a period of regulatory healing for it and other Wall Street banks appears to be wildly mistaken. If anything, the scope of potential liability for all the major banks, particularly in these market-rigging furors, appears to be growing in all directions...

One gets the feeling that governments in all the major Western democracies would like to sweep these manipulation scandals under the rug. The only problem is that the scale of the misdeeds in these various markets is so enormous that even the most half-assed attempt at regulation will cause a million-car pileup. (This is the credibility trap in action, and how it impedes the reforms necessary to achieve sustainability. A lot of those cars are limos filled with politicians taking a free ride. - Jesse)

There's simply no way to do a damage calculation that won't wipe out the entire finance sector when you're talking about pervasive, ongoing manipulation of $5-trillion-a-day markets. That's the problem – there's no way to do a slap on the wrist in these cases. If they're guilty, they're done."

Read the entire article here.

Gold Daily and Silver Weekly Charts - Claims Per Deliverable Ounce to 59

"People criticize owning bullion because there’s no yield. But there’s a reason everything else needs a yield, to compensate you for things like obsolescence risk, business-cycle risk, and management risk, all of the things that gold doesn’t have.

We’re not gold bugs, but there’s a reason humanity has tended to use gold as an alternative to man-made currency: it’s the only virtually infinite-duration asset in the world."

Matthew McLennan


"Indeed there can be no criterion, no other standard than gold. Yes, gold which never changes, which can be shaped into ingots, bars, coins, which has no nationality and which is eternally and universally accepted as the unalterable fiduciary value par excellence."

Charles de Gaulle


"The Lydian Lion coins are in significant demand because of their history, the evocativeness of their design, their metallurgic characteristics, and their mystery. Other coins may vie for the title of the world's first coin, also from Lydia, nearby in Ionia, in the Middle East, and across the world in India and China, though none do so as persuasively. The Lydian Lion is the one coin that has been referred to as "The Coin."

It directly preceded ancient Greek coinage, which through Rome begot all Western coinage, and which through the Seleukids, Parthians, and Sassanians begot all Islamic coinage. Indian coinage has largely been a product of Greek, Roman, and Islamic influences. Chinese coinage, though it probably developed independently, was succeeded by Western-style coinage in the late nineteenth century."

Gold caught an obvious hit on the Comex open that took it back down from the 1320 level.

Silver also traded sideways.

There was no serious movement at the Comex warehouses with just 3 kilo bars Brink's customer storage, and nothing coming in.

The claims per deliverable ounce have risen to 59, back to the all time high once again.  

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - The Pause That Refreshes

Stocks were flat to mixed today, as the market pauses ahead of the more significant economic data later this week.

Have a pleasant evening.

NAV Premiums of Certain Precious Metal Trusts and Funds - Plus C'est la Même Chose

"We find our population suffering from old inequalities, little changed by vast sporadic remedies. In spite of our efforts and in spite of our talk, we have not weeded out the over privileged and we have not effectively lifted up the underprivileged. Both of these manifestations of injustice have retarded happiness.

No wise man has any intention of destroying what is known as the profit motive; because by the profit motive we mean the right by work to earn a decent livelihood for ourselves and for our families.

We have, however, a clear mandate from the people, that Americans must forswear that conception of the acquisition of wealth which, through excessive profits, creates undue private power over private affairs and, to our misfortune, over public affairs as well. In building toward this end we do not destroy ambition, nor do we seek to divide our wealth into equal shares on stated occasions.

We continue to recognize the greater ability of some to earn more than others. But we do assert that the ambition of the individual to obtain for him and his a proper security, a reasonable leisure, and a decent living throughout life, is an ambition to be preferred to the appetite for great wealth and great power."

Franklin D. Roosevelt, 1935


"They were ruined, when they were required to send laboring children to school; they were ruined, when inspectors were appointed to look into their works; they were ruined, when such inspectors considered it doubtful whether they were quite justified in chopping people up with their machinery; they were utterly undone, when it was suggested they need not always make quite so much smoke.

Besides Mr. Bounderby’s gold spoon which was generally received in Coketown, another prevalent fiction was very popular there. It took the form of a threat. Whenever a Coketowner felt he was ill-used, that is to say, whenever he was not left entirely alone, and it was proposed to hold him accountable for the consequences of any of his acts—he was sure to come out with the awful menace, that he would ‘sooner pitch his property into the Atlantic.'"

Charles Dickens, Hard Times

The Massive Drawdown of Gold From the West Continues - Silver Comparison - the Abyss

"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake.  

Therefore at any price, at any cost, the central banks had to quell the gold price, manage it."

Sir Eddie George, Bank of England, September 1999


“In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.”

Eric Hoffer

Here is the change, in tonnes, in the inventory of major exchanges and ETFs for gold and silver since the beginning of the year.  Nick Laird of Sharelynx.com was kind enough to share the data which he has collected with me.  He does a remarkable job in maintaining an enormous amount of data at his site.

As you may recall, both silver and gold have seen price declines since the beginning of the year. As a reminder, silver is down 28.7% and gold is down 21.5%.  I show this in the last chart. So they have both seen comparably stiff price declines this year.

Since the beginning of the year, the major exchanges and ETFs for silver have added about 1,494 tonnes of bullion. 

But what is absolutely remarkable is that since the beginning of the year the Comex and some of the major ETFs have LOST about 856 tonnes of gold bullion.  And I suspect much of that bullion has gone to the non-reporting vaults in Asia and the Mideast. And there is import/export data that corroborates that hypothesis.

Now, some might say that they don't see what this means, that they don't see the significance. Or that the significance is that people like silver but don't like gold, even though both have seen price declines, and even though demand for physical gold in Asia and the Mideast has been explosive this year according to trade records.

I will tell you what the significance is.  The significance is that you are, figuratively speaking, watching water running uphill and out of sight.  And some look at this and say, nothing to see here.

That gold which is disappearing from the reporting grid will not be coming back to these largely western vaults anytime soon.   And it certainly will not be coming back at these prices.  It is going into some fairly strong hands with an eye to the long term.

Silver is still acting like a precious metal, similar to platinum, which added 21 tonnes, and palladium which added about 1.5 tonnes.

Here is what is happening, as shown in the three charts below.  Draw your own conclusions.   But keep in the mind the negative gold forward rates and record leverage in potential paper claims for physical gold that we are seeing and hearing reported.

And this chart does not include the leased gold that is being occasionally disclosed by Western central banks, which seems to be going to satisfy the appetite of Asia.

It seems pretty darn obvious to me that there are some big buyers outside this reporting system that are taking down supply, and at a fairly aggressive rate, especially in the last twelve months. 

You know that I think this exercise was triggered by the revelation that Germany's gold was missing, and a reflexive price manipulation that was intended to dampen demand, but instead set off an avalanche of physical buying.  

Given that genuinely new gold supply is only added slowly from mining, once the West realizes what is happening the turnaround could take on the character of a short squeeze, and perhaps even a panic and market dislocation to the upside.

And if you are one of those who are holding receipts for gold held in this system, you may find that you have been rehypothecated with extreme prejudice, and given a forced cash settlement at another's discretion. When the time comes your assets may be found to have been used as cannon fodder in the currency war.  Thank you for your support.

The German people asked for their national gold back, and were told by the Fed to go sit down in the lobby for seven years and wait for it. Are you kidding me? What is it going to take to wake people up that something has gone seriously wrong in these markets?  

What kind of new fraud or disclosure of fiduciary misbehavior will it take to bring the dawn?  And what will happen when the dawn finally comes?  Do you wish to be standing in a very long line holding a warehouse receipt or brokerage statement?  Good luck with that.

You may be a financier, fearing the abyss and hanging on, obsessively doing what worked in the past.  But here is some news.  You don't have to fall into the abyss,  the abyss is coming for you.   And the longer this nonsense continues, the worse the drawdowns will become, and the more painful the final reckoning will be. 

Weighed, and found wanting.

Stand and deliver.

Gold Daily and Silver Weekly Charts - Ship of Fools

"No offense to those mad geniuses of Greece,
But wisdom is never perfect here below;
Folly is found in every age we know,
Even careful fools differ, but only in their ebb and flow."

Nicolas Boileau-Despreaux, Satires
tr. by Jesse

There was very little activity in the Comex warehouses on Friday as about 16 bullion bars left the Scotia Mocatta customer category.

HSBC has been added to the firms that are being investigated for the rigging in the foreign exchange markets.

Isn't it wonderful how just about every market has been found to be subject to clumsy rigging by the banks, EXCEPT the gold and silver markets?

Gold and silver were capped most of the day, for the usual reasons no doubt.

The gold in particular continues to flow from West to East. How long can it last?   One thing is almost certain, that this will not end well.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - A Tipping Canoe and Twitter Too

This is going to be a fairly interesting week for US economic news.

Tomorrow is the ISM Services, but on Wednesday we will see the unemployment claims, Challenger job cuts, and Advance GDP for Q3.

The jobs related data takes on some importance because we will be getting the October Non-Farm Payrolls report on Friday, along with Personal Income and Spending, and the Michigan Sentiment reading for November.

Twitter IPO looms and today we hear that the price of the IPO is getting kicked higher because it is 'sold out.'

There is an interesting dynamic going on here with the Twitter IPO.  There is of course a desire for the principals not to leave too much on the table with a lowball offering price.  But at the same time they do not wish to price too aggressively and end up with an embarrassment like Facebook had been.

The gaming going on for those being granted shares is quite heated I hear, and there is some desire to ramp the price after the offering comes to market, in order for the flippers to cash in over the following two or three weeks with a healthy profit.  The stock market will have its year end wind at their backs.

So you see how that dynamic is setting up.  The company does need the cash, since they have little cash flow of their own, so pricing higher is a definite plus.

And over this web of intrigue and varied interest hovers the mighty vampire quid, Goldman Sachs.

I have a feeling that this one is going to signal a high water mark of some sort, exactly what I am not yet sure.

Have a pleasant evening.

Nanex: One or More News Organizations Leaked Fed Information to Markets

This is from Nanex:

"On October 25, 2013, the Federal Reserve announced it would add an Internet Kill Switch (among other measures) to prevent future leaks of FOMC news announcements.

We proved with market data that the September 18, 2013 Fed (FOMC no-taper) news release must have been secreted out of the Treasury Department and placed on computers in New York and Chicago trading centers sometime before the official 2 PM release from Washington, D.C...

We have since learned, from people familiar with the matter, that one or more news organizations secreted the Fed news out of the Treasury Department before 2 PM and loaded it onto servers in trading centers in New York and Chicago. This has not yet been disclosed publicly..."

Read the entire story including questions to be answered here.

The Age of Narcissism

"Narcissism falls along the axis of what psychologists call personality disorders, one of a group that includes antisocial, dependent, histrionic, avoidant and borderline personalities.

But by most measures, narcissism is one of the worst, if only because the narcissists themselves are so clueless."

Jeffrey Kluger

If you wish to see the narcissist in their natural habitat, the chat boards and comment sections of some blogs are where the marginally successful dwell, often dominating the conversation with their self-obsessed arrogance.  Sometimes in periods of unusual circumstances they can even rise to positions of power.  They are attracted to corporate structures, and financial and political positions.

They have no humility, no doubts, and no empathy. Whatever life or luck or others may have helped them to achieve, they feel that they deserve it all, and more. They have worked for everything they have, whereas others who have suffered setbacks and misfortune simply have made bad choices or been lazy. And if others have been cheated and abused, then they deserve it for being stupid.

They are often judgmental and racist, and brimming over with hateful scorn for others, unless they can be co-opted into their sphere of influence and behave according to the narcissist's world and rules.

As Thomas Aquinas said, 'well-ordered self-love is right and natural.' It is when this natural behaviour becomes excessive and twisted that it becomes a pathology, a disorder of the personality.

Often narcissists have exaggerated ideas about their own talents and worth and work. Sometimes they are compensating for the neglect and disregard, or even abuse, of one or both parents who failed to see and appreciate how special they are. At other times they are the product of an environment in which they have been raised to believe that they are special, and deserve special treatment and consideration.   Since obviously not all children of privilege or abuse become narcissists, it might have its genesis in an untreated form of depression or genetic predisposition.

"The classic narcissist is overly self-confident and sees themselves as superior than other people. Think of a child who has always been told by mom and dad that they would be great, and then that child takes and internally distorts that message into superiority.

The compensatory narcissist covers up with their grandiose behavior, a deep-seated deficit in self-esteem. Think of a child who felt devalued but instead of giving up on life, resorts to fantasies of grandeur and greatness. This person will either live in that fantasy world or decide to create that fantasy world in real life."

If this affliction is accompanied by other problems such as sadism or malignant mania, they may become a destructive element for all who encounter them.  Their illness affects others more than themselves, so they may often not seek treatment, and excuse the damage they inflict with the 'weakness' of others.

They seek to fill the great empty holes of self-loathing with the lives and possessions of others, all the while proudly wreathing their actions with self serving rationalization. 

They are more to be pitied than scorned, as they are living in a small part the hell which they are making for themselves.  But we must guard ourselves against their powerful certainty in an age of uncertainty.  Their certainty is a madness which serves none but itself.

"Narcissism is a psychological condition defined as an obsession with the self. While not all forms of self-love or self-interest are destructive, extreme cases can be very damaging and may be diagnosed as narcissistic personality disorder (NPD).

In these instances, the disorder is characterized by a lack of empathy for others, sadistic or destructive tendencies, and a compulsion to satisfy personal needs above all other goals.

People suffering from NPD tend to have difficulty establishing or maintaining friendships, close family relationships, and even careers. About 1% of people have this condition, and up to 3/4 of those diagnosed with it are men.

The signs of narcissism often revolve around a person's perception of himself in comparison to other people.

Those with severe cases often believe they are naturally superior to others or that they possess extraordinary capabilities. They may have extreme difficulty acknowledging personal weaknesses, yet also have fragile self-esteem.

Narcissistic people also frequently believe that they are not truly appreciated, and can be prone to outbursts of anger, jealousy, and self-loathing when they do not get what they feel they deserve."

Hallmarks of Narcissism

A pervasive pattern of grandiosity (in fantasy or behavior), need for admiration, and lack of empathy, beginning by early adulthood and present in a variety of contexts, as indicated by five (or more) of the following:

•Lacks empathy: is unwilling to recognize or identify with the feelings and needs of others

•Has a grandiose sense of self-importance (e.g., exaggerates achievements and talents, expects to be recognized as superior without commensurate achievements)

•Has a sense of entitlement, i.e., unreasonable expectations of especially favorable treatment or automatic compliance with his or her expectations

•Is interpersonally exploitative, i.e., takes advantage of others to achieve his or her own ends

•Is often envious of others or believes others are envious of him or her

•Requires excessive admiration

•Shows arrogant, haughty behaviors or attitudes

•Believes that he or she is "special" and unique and can only be understood by, or should associate with, other special or high-status people (or institutions)

•Is preoccupied with fantasies of unlimited success, power, brilliance, beauty, or ideal love