SP 500 and NDX Futures Daily Charts - Ancien Régime - Here Comes the Sun King

Stocks managed to build on their rally, despite some particularly ugly macroeconomic news this morning.

I seem to recall saying that it is hard to be too cynical about this market. It is running on low volume and algorithms that are largely focused on the short term technicals.

It is going to take something of significance to shake Wall Street out of its narcissistic love affair with itself.

Today President Obama announced that he is relaxing the restrictions against lobbyists directly occupying positions of power on Federal advisory boards for government policies. 

Perhaps he just wants to cut out the middlemen.  Or line up a few more post-electoral $100K speaking engagements.

How fitting that the Sun King announced this from Martha's Vineyard. 

Is there any promise or progressive policy that he has not carelessly thrown under the carriage of his imperial convenience for the pleasure of the moneyed interests?

As a reminder, tomorrow is an option expiration for stocks.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Cap, Cap, Cappity Cap

It was silver's turn in the barrel, as gold held its ground a little better.

 Silver was under modest pressure throughout the NY trading day. 

As you know this is an 'active month' for gold and an off month for silver in New York.

Nothing meaningful happened on the Comex delivery front or in the warehouses yesterday.  Active month-wise.

Why waste words?   Just another day with the Flim Flam man.   

We have the illusion of calm and efficient markets.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Alibaba and the 40 Underwriters

Stocks managed to rally despite economic numbers this morning for retail sales that sucked out loud, no ifs, ands, or buts.  This does not bode well for Q3 GDP.

I think my skepticism of the week before last about the stock market action being the rinse cycle in a wash and rinse has a little more street credibility, given the U-turn that equities made right on key support levels.

I grow old, I grow old, I will ladder Treasuries and have them rolled.

I hear Alibaba's IPO, which will be the largest IPO ever and a real bell ringer, will be coming out on September 16th, with the road show starting in Asia on September 3rd. Unless something really happens, it will surprise me very much if stocks are going to take a dive during that time period.

As a reminder this Friday is a stock option expiry. The next stock option expiry will be on September 20th.

Stocks are jammed up into short term overhead resistance right now from a down sloping trend channel also known as a bull flag. IF they can move higher from here they have a good chance to run higher to the top of the intermediate trend before Friday expiry and take out the bear option players.

Then we might get another test downwards, but the cynical me says that the Street will try to smooth the way for the mother of all IPOs in September, at least until the 20th or so.  Unless Alibaba snubs one of the big Wall Street machers in the underwrite and ability to dole out the spoils and take their vig. Then all bets are off.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - No Silver Money For Mexico, But Perhaps Gold For Eurasia

The amount of gold ounces stopped so far in August reached 478,800 the other day.  That is a sizable chunk of gold at the Comex warehouse.  But fortunately as you can see from the warehouse report, gold only enters, and rarely leaves.  Don't look at all that other precious metal flowing to Asia, probably never to return in our lifetimes. 

I don't want to beat it to death, but I think you know that I hold the Comex  in rather low esteem as a market for price discovery.  On the surface it looks like a confidence game, and there is plenty of collateral and circumstantial evidence to suggest that might be the case.

But what surprises me are those who believe the same thing, and then go and put their money down in that casino, and get taken for a ride. 'Oh yeah, silver is a rigged market.  And I just bought some November options on the Comex futures.'  Huh?  Its like the old story about a cowboy complaining about the crooked faro game in the local saloon, and then going there to lose 'because its the only game in town.'  Well, the Comex is not the only way to play.

I heard an interesting statistic today. It seems that more people in the U.S. die from suicide than from homicide. A sad toll of collateral damage in an empire of deception, death, and despair.

There was a report about Mexico being 'on the verge of tying their currency to silver.'  I quite frankly will not give it any credibility unless my friend Hugo Salinas-Price, who is the dean of the monetary metals for Mexico movement, tells me so in reply to the question I asked. I just do not see it happening, since Mexico still has such close ties to the Anglo-American banking cartels. 

So for now, let's say it is a scenario, and not particularly likely. (later: Hugo says "wishful thinking by someone")

More likely is gold assuming some sort of monetary reemergence which is as yet undefined, originated in the Eurasian economic complex.  That could go several ways, and not all of them favorable.  So let's see what happens with that.

And as for the Anglo-American central banks, you never give us your money, you only give us your funny paper.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Don't Know When It's Coming, But It's On Its Way

Stocks chopped sideways today, as the news was of little consequence.  And since none of the ongoing wars intruded into the headlines further than a celebrity death, all was ok if not good.

As you may have heard, junk bond funds just experienced a six sigma event. That means that it was not just your usual walk in the park. The pros were quick to dismiss it as retail, read uninformed, selling.

"High-yield bond mutual funds saw outflows total an eye-popping $7.1 billion last week. "HY flowmageddon," said Goldman Sachs' Charles Himmelberg in a research note we saw via @lebullmarche. "This is the largest HY outflow on record – a 6-sigma event when flows are scaled by mutual fund assets under management..."

Gundlach stopped short of saying high-yield looked attractive. Himmelberg didn't. "Our confidence in the buying opportunity in the face of retail selling stems from our belief that credit fundamentals remain supportive, while valuations are now more attractive," Himmelberg said.

I tend to think of it this way. The Fed's protracted ZIRP has caused an unusual number of people over to the port side of the boat. So many people in fact that the captain and her crew have noticed that it is listing dangerously. Before something calamitous can happen, and all those people fall overboard, endangering the ship itself, she would like to do something to prompt some of them to move to the starboard side. Slowly. If they start rushing starboard in a panic, the boat may lose its balance and begin to wobble dangerously.

And that is not even discussing other paper assets, like stocks, and the big shifting cargo down below, the derivatives.  The ship will most likely be fine, as long as the seas remain calm.  Let's hope the gales of November are not early.

It is easy to go for clicks, and to preach impending doom. But I do think that we are in a precarious situation, and a correction to it is coming. I suspect we will see something in fourth quarter, but there is still some time for the learned captain and her crew to do something sensible, even if the owners of the ship are still happily ensconced in their VIP cabins, while their servants rifle the passengers' luggage.

There is no doubt that the Fed is worried about 'secular stagnation.'   In keeping with our passenger ship analogy, that means that everyone who  has been downgraded temporarily to steerage for the emergency will have to stay there because their cabins have been appropriated and used to make room for even bigger suites and entertainment quarters for the VIPs and their stewards.  Ouch.

Have a pleasant evening.

Matt Taibbi: Griftopia (audiobook)

Free audiobook.  Where have these been all my life.

I am not much for listening to audiobooks. Alas, the droning of a human voice tends to make me fall asleep, a feature of my being that I have often put to good use with headphones on international flights.

But after the first ten minutes I was hooked on this one. Taibbi's verbal fireworks and colorful images kept me interested, and gave me a wonderful alternative to watching the latest professional wrestling antics and extended infomercials on financial television today.  Without headphones.  Old habits die hard.

Taibbi takes an icepick to the façade of American politics, and the vagaries of its financiers. And like another polemicist Hitchens, is able to wield his words with great effect and to delight of his readers. Alas, sometimes he forgets to save the sword for injustice, and on occasion becomes the kind of condescending, major league ***** he generally derides, about spiritual matters and the preferences and sincere beliefs of others of which he has little or no understanding, like a little boy who is restless in his seat and doesn't matter who knows about it.

Or the raw American tourist who travels abroad for the first time, and makes fun of the way in which the people dress, talk, and their unfamiliar local customs. The difference is between that of a wit and a boor, and that is a line that is easily crossed, as in telling some genuinely funny stories about human foibles, and then going for the big finish by throwing your shit-encrusted boots up on the dining room table for a laugh. But at least he is still resisting the elitist and all-judging allure of the neo-cons, which Hitchens was unable to do towards the latter part of his career. The show must go on.

Enjoy.

"The important thing to remember about the Alan Greenspan era is that despite all the numbers and the inside-baseball jargon about rates and loans and forecasts, his is not a story about economics. The Greenspan era instead is a crime story. Like drug dealing and gambling and Ponzi schemes, bubbles of the sort he oversaw are rigged games with preordained losers and inherently corrupting psychological consequences. You play, you get beat, in more ways than one.

Greenspan staked the scam, printing trillions upon trillions of dollars to goad Americans into playing a series of games they were doomed from the start to lose to the dealer. In the end the printed wealth all disappeared and only the debts remained. He probably did this just because he wanted to see his face on magazine covers and be popular at certain Upper East Side cocktail parties. His private hang-ups in this way shaped the entire scam of modern American politics: a pure free market for the suckers, golden parachutes for the Atlases...

There are really two Americas, one for the grifter class, and one for everybody else. In everybody-else land, the world of small businesses and wage-earning employees, the government is something to be avoided, an overwhelming, all-powerful entity whose attentions usually presage some kind of financial setback, if not complete ruin. In the grifter world, however, government is a slavish lapdog that the financial companies that will be the major players in this book use as a tool for making money. The grifter class depends on these two positions getting confused in the minds of everybody else. They want the average American to believe that what government is to him, it is also to JPMorgan Chase and Goldman Sachs.

The fact that an unapologetic fat cat like Kudlow—one who talks and acts and dresses like a fat cat—can, when convenient, throw on the mantle of a populist revolt and get away with it reassures us that for all the talk about pitchforks and revolutions and fighting back, the Tea Party movement remains in thrall to the authority of the rich and powerful. Which renders the so-called movement completely meaningless...

The new America, instead, is fast becoming a vast ghetto in which all of us, conservatives and progressives, are being bled dry by a relatively tiny oligarchy of extremely clever financial criminals and their castrato henchmen in government, whose job is to be good actors on TV and put on a good show...Our leaders know we’re turning into a giant ghetto and they are taking every last hubcap they can get their hands on before the rest of us wake up and realize what’s happened.”