Gold Daily and Silver Weekly Charts - Non Farm Payrolls - Freedom Is Best

"The stupidity of the average man will permit the oligarch, whether economic or political, to hide his real purposes from the scrutiny of his fellows and to withdraw his activities from effective control...

The American business oligarchy is not as hereditary as European landed aristocracies, but is for that reason neither more virtuous nor less tenacious in clinging to its power and privilege."

Reinhold Niebuhr, Moral Man and Immoral Society


Dico Tibi Verum, Libertas Optima Rerum Nunquam Servili Sub Nexu Vivito, Fili.

'I tell you the truth, my son, that the best of all things is freedom. Never live under the bondage of slavery'.

William Wallace Memorial

Markets continue to slough off the geopolitical drumbeat to war that Obama and his Merry Neo-cons are playing. Even a cheery beige book was unable to turn that market frown completely upside down.

Profit taking is underway in stocks. I suspect that this means that we are soon to see another wash and rinse ahead of the Alibaba IPO which is a bit more than twenty days away.

The big tickle for the metals will be the Non-Farm Payrolls report on Friday. The whisper numbers are talking about a hot headline number. And the quiet whispers are saying, 'but what if wages do not show up? Will anyone care?'

The sentiment for precious metals is as bad as the sentiment for stocks is not bearish, with levels on stocks reaching lows of bearish sentiment not seen since before the big decline in 1987.  HFT and portfolio insurance may turn out to be twins.  And the Fed played on.

And the rest will play their outlawed tunes on outlawed pipes, thinking about their freedom, squandered, lost, or won.

Have a pleasant evening.

"Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields."

John McCrae

SP 500 and NDX Futures Daily Charts - Getting Sentimental

"Also, it was in 1987 the previous time the Investors Intelligence service said in its survey that Bears fell to 13. Today, Bears fell to 13.3 for the first time since then vs 15.1 last week. Bulls rose to 56.1 from 52.5 and the spread at 42.8 pts puts the difference back in the “dangerous” camp according to II. Above 30 is a “worry.”

I want to emphasize that this is not a timing mechanism and is just a SHORT TERM indicator but at least should put to rest the belief that this is somehow a ‘hated’ rally when bears are at a 27 year low."

Peter Boockvar


"Adversity makes men, and prosperity makes monsters."

Victor Hugo

I don't think that the rally is 'hated.' But I do think that the stock market and Wall Street have become generally despised and seen as fraudulent.

AAPL was a drag on the NDX, ahead of its new product announcements.  Everything in this market today smelled of profit taking.  And well it could be, given the rocket like bounce that the indices took off the end of the last wash-rinse cycle.

And for those who called me foolish in forecasting this bounce, how that's perma-bearishness working out for you so far? 

What we are seeing is a lack of genuine participation, moreso than any real bearish inclination to selling.  The volumes that we do have are short term, speculative, and lacking in substance.  'Vaporous' comes to mind.  'Contrived' is another good descriptor.

What this lack of real buying with conviction implies is that any exogenous event can trigger a serious market index decline as the hot money sublimates.  Unless of course there is even greater central bank intervention brought to bear than we are seeing on an almost daily basis today.  And if the Bankers fail to stem the tide, we could see something quite remarkable.

In the absence of an event, I would expect us to continue on with the status quo, the regular back and forth, wash and rinse rigging of almost every market as the pretenses and facades wear ever more thin.

It is very difficult to forecast a market break.  But it is quite possible to analyze the structure of the market, and to judge it to be inherently unstable and fragile.  'Prone to accidents' if you will.

The political and financial class are way out over their skis, with moral hazard and the colossal winds of hubris at their backs.   It is a question of what exogenous event may trigger the next great crisis, and who will the moneyed interests try to blame.

Still, there is plenty of money to be made in the great Alibaba IPO, due towards the latter part of September, and the midterm elections are coming. A market decline sans crash *could* favor the Republicans.  Obama should carry plenty of blame, but he is more a cousin to that crowd than they would ever care to admit beyond the theatrics of the political wrestling ring.

This current situation appears to be unsustainable.   But never underestimate the power of paper money in the hands of frightened, unscrupulous men.  

Have a pleasant evening.

The US Is In a Societal Panic: Why Our Tax and Economic Debates Are Irrational

David Cay Johnston is an excellent lecturer, who can address economics and public policy in clear and simple statements.

This is one of most informative talks I have heard about where we are, and how we got here, what the crony kleptocracy is, and how it works.

Johnston's concept of a societal panic corresponds to the notion of national hysteria which I have expressed on a number of occasions.  But he fills out the idea more fluently and fully.   It is a dangerous period of time which can yield new ideas and concepts, depending on how well we survive it.

It is a must watch, and I rarely say that.

Chris Hedges: The Rise of the Corporate Class and the Triumph of Managerial Malfeasance

“Antidemocracy, executive predominance, and elite rule are basic elements of inverted totalitarianism. Antidemocracy does not take the form of overt attacks upon the idea of government by the people. Instead, politically it means encouraging what I have earlier dubbed civic demobilization, conditioning an electorate to being aroused for a brief spell, controlling its attention span, and then encouraging distraction or apathy. The intense pace of work and the extended working day, combined with job insecurity, is a formula for political demobilization, for privatizing the citizenry.

It works indirectly. Citizens are encouraged to distrust their government and politicians; to concentrate upon their own interests; to begrudge their taxes; and to exchange active involvement for symbolic gratifications of patriotism, collective self-righteousness, and military prowess. Above all, depoliticization is promoted through society’s being enveloped in an atmosphere of collective fear and of individual powerlessness: fear of terrorists, loss of jobs, the uncertainties of pension plans, soaring health costs, and rising educational expenses.”

Sheldon S. Wolin, Democracy Incorporated

"Our corporate oligarchs are harvesting the nation, grabbing as much as they can, as fast as they can, in the inevitable descent."

 Chris Hedges

 

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

Welcome to September. Ouch.

The spotlight is now on silver, and less so on gold.

Both metals took a hit that was fairly obvious starting late last night. I was surprised it did not go deeper.

It is tough to make a real short term bullish case until we break this pattern of lower highs and lower lows.

Big amount of silver get shoved around the plate at the Comex, so we will have to shift gears a bit and adjust to reports with much bigger numbers of ounces involved.

Today was the first day. Let's see how the rest of the month goes.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Bubble On Through M&A's and IPO's

Stocks had a bit of a roller coaster ride today, with techs trying to take the lead on the upside.

The markets are sloughing off quite a bit of exogenous risk. But that ought not to surprise us, because that is almost the very definition of a bubble in assets. The fundamentals and realities are ignored, as pieces of paper become increasingly traded on their own without regard to risks.

September is going to be marked by the biggest IPO ever. The much awaited Alibaba will be rolling out between now and about September 20. The wiseguys are also going to taking a lot of M&A activity out of the trunks and planting them in the killing fields of a toppy market. Why not? Whether you are paying with cash or stock, your currency is debased.

So barring any untoward events I would expect the markets to muddle through to the latter part of September, and then get set up for some sort of correction into October.  It will probably not be severe, again unless it is driven by some geopolitical events, because of the midyear elections coming up.  Unless of course the financiers decide to engage in some mild form of coup d'état.

I put out an excerpt from a new Harvard Business Review article earlier today that is worth reading here.

Although greed is always a factor in any human activity in our fallen world, there are times when it reaches a peak of activity and predominates, becomes a focus along with power. And then the world is turned upside down as it were. We are in such a time, I firmly believe.

Have a pleasant evening.