SP 500 and NDX Futures Daily Charts - No Fear, Little Shame, Lousy Pay 'With Benefits'

"The problem of the last three decades is not the 'vicissitudes of the marketplace,' but rather deliberate actions by the government to redistribute income from the rest of us to the one percent. This pattern of government action shows up in all areas of government policy."

Dean Baker

A quick peek at the VIX chart below really tells the whole story of this market: no fear.   These sorts of extremes in manipulation and perception management to the point of delusion rarely last long.

We are in a financial asset bubble that is diverging from reality. The economic number from this morning's Philly Fed was abysmal. But the Fed just keeps on keeping on, with compounding policy errors and elite friendly bubbles.

This is going to end, and badly.

By mid-next week I think we will have a better idea of where we are in the wash-rinse-repeat cycle of the mispricing of risks.

 

There should be no doubt that this creation and management of another financial asset bubble is intentional at least in its effects, if not in its consequences.  

 

It is doing a very good job of channeling the vast majority of new money created by the Fed almost directly into the hands of the 'audacious oligarchy'.

Apparently Chairwoman Yellen likes the Employment Cost Index number which is increasing. Right below here is a comparison of the Employment Cost Index and the growth of wages.

 

As you can see, the employee cost index rose sharply while actual wages are flat to declining. What's up with that, besides seasonal adjustments and any other bureaucratic tinkering and the usual statistical suspects?

The index measures changes in the cost of compensation not only for wages and salaries, but also for an extensive list of benefits.

The benefits covered by the ECI include the following:

• Paid leave—vacations, holidays, sick leave, and other leave;

• Other supplemental cash payments—premium pay for work in addition to the regular work schedule (for example, overtime pay and pay for working weekends and holidays),

• Insurance benefits—life, health, short-term disability, and long-term disability insurance;

• Retirement and savings benefits—employers’ payments into defined-benefit and defined-contribution plans, including Employee Stock Ownership Plans (ESOP’s);

• Legally required benefits—Social Security, Federal and State unemployment insurance, workers’ compensation insurance, and Medicare;

• Other benefits—severance pay and payment into supplemental unemployment plans.

The grift is certainly working, and there is a recovery for some. 

But not for the 'working classes'.  That much is painfully obvious.  Let us not forget that most of the poor are the 'working poor.'  And there is a long line of unproductive drains on them from the FIRE sector, like a plump tick on their necks.

Have a pleasant evening.

 

 

 

 

'Owners Per Ounce' For All Precious Metals At the Comex

"He who sells what isn't his'n, must buy it back or go to prison."

Daniel Drew

Daniel Drew's famous maxim about naked short selling appears quaint now in these days of no fault market rigging, at least for the well-connected insiders and the too big to fail institutions.

For platinum and palladium Nick at Sharelynx.com spreads the open interest over all the stocks, and not with a split between 'eligible' and 'deliverable' as in the case of gold and silver, in case you were wondering.

Although paper claims vs. deliverable gold is by far the highest at 94:1, the trend recently on the Comex has been for more paper trading and less bullion available to cover at current prices.  Silver is at about 16:1,  palladium at 26:1, and platinum at 31:1.

This creates a condition of potential volatility at the Comex, although I do not think that a 'default' is on the table, but perhaps a short squeeze, that could be dramatic given a certain set of global events.

And of course, no one could have ever seen anything like this coming.

Gold Daily and Silver Weekly Charts - Pervasive Nonsense

Gold and silver we hit again today, but silver managed to hang on to its 15 handle, and gold bounced back to 1050. 

 

I suspect that this was the usual sort of antics we see whenever some Fed head appears before the Congress for some 'confidence building.'

 

Gold and silver are now both short term oversold, and at some key support areas.

 

I may put something out on this later, but the open interest in gold is really very high, and the next active month for the metal is August.  I suspect some of the action we are seeing with price here is designed to try and shake off more of the short term longs.

 

It would be fairly easy for a short squeeze to occur in gold, because all the longs would have to do is to take delivery and park it as eligible storage, and force higher prices in order to shake more of that eligible gold into the delivery category.  This would not be a default since there is plenty of gold overall, given the Comex anyway.  But it would be a price squeeze.  So let's see what happens.

 

Greece is far from settled.  With some twists it is still progressing pretty much as I had expected it would.  The crux of the matter is that the German government and Eurocrats are trying to force an unworkable, painful situation on Greece out of some reflexive emotional commitment to the cargo cult economics of neoliberals.  To that extent they are like the Fed and the Bank of England among others.

 

Have a pleasant evening.

 

 

 

SP 500 and NDX Futures Daily Charts - Fed Follies and Assorted Shenanigans

Stocks managed to hold their own today in honor of Janet Yellen's testimony before the House.   And it was painful to watch.

 

The Greek situation continues to remain highly unstable, but the rinse cycle is not quite due yet.  but the markets are ignoring these things because of 'technical conditions.' 

 

Maybe later this week or next week we will see it dump again, perhaps after a push higher.  Where this little rally ends will be technically significant.

Netflix looks like it might be the big tickle tomorrow that could take us up to the next tipping point.  What a puffball.

 

There is no recovery.  The Western governments have been hijacked by the oligarchs for the most part, and their financial and economic minions are acting for their own short term interests, which are contrary for the most part to the greater good.  It is really too bad to see this.

 

Have a pleasant evening.

 

 

Gold Daily and Silver Weekly Charts - Reaping the Whirlwind - The Good Shepherd

 

"The shepherd drives the wolf from the sheep's throat, for which the sheep thanks the shepherd as his liberator, while the wolf denounces him for the same act as the destroyer of liberty."

Abraham Lincoln

The US Federal Reserve and Congress remind me very much of the Troika. 

All of them are caught in a credibility trap of self-serving constraints and things-which-we-cannot-discuss-openly. And all of them are sowing the wind, to reap the whirlwind sometime later this year, maybe earlier next year.  The timing of such sea change is difficult.

But no matter when it does come, they will not see it coming.

It is important to remember that there is a difference, especially in these days of upper classes and ruling elites, between the people of a nation and their governments.

So when I am hitting the criticism button hard on Germany or the US or the UK for example, I am referring to those who are 'running the show' so to speak. Oh I know very well that they will deny that they are running things, are just humble servants to the people, and so forth when any consequences or blame shows up. But moreso now than ever the ruling classes are running the show with much less reference to their own people than one might expect in normal times, which might be small enough at that.

And a people are diverse, and broadly so, except in crude stereotypes that crush out individuality. There are some cultural markers, some customs that tend to adhere perhaps, but even these can vary widely within a people. Southern Germans are not the same as northern Germans, anymore more than someone from New Mexico is like someone from Brooklyn, or someone from Manchester is like someone from the West End of London.

 

If anything, I think we are vastly underestimating the rise of the class system once again, with the historic gulf in economic equality.  People still tend to remark 'tribal' lines more than they do socio-economic differences, but the class lines are clearly there now.  The upper class knows and notes them, and will go to great lengths to get their children in the 'right schools' and with the 'right crowd.'

 

The US economic numbers this morning sucked out loud. The Fed will still raise rates, because they have stopped caring about the real economy sometime ago. It enters into their calculation primarily as a potential food source for the Banks.  There is no recovery, and most economists know it but will pretend otherwise until 'something happens.'

 

Gold and silver are being capped, by the folks I have noted and for the reasons that are obvious.   It is a competing currency that some jokers have decided is 'bad' for them.  Oh yes they will make up rationales and stories, but at the end of the day they are being self-serving and corrupt.

Gold is now viewed as 'undervalued' by fund managers.

There are some people who think that the system belongs to them and should serve their interests.  And you are not one of them.  You may like to think that you are, and a lot of people who are not do.  They can point to someone 'lower' on the ladder and exult in their position.  Let me assure you, to the real ruling class you are just working a different section of the fields.

 

It is almost funny sometimes, what people will do and say when they think they can get in with the in-crowd.  Oh to be invited up into the big house!   But if you show up on the doorstep of real power, it had better be with a serving towel over your arm, and a proper sense of your place.  When it comes to sitting down to dinner  you and yours are there, on the menu.

 

And they will continue to distort economic and public policy to serve their own narrow interests until someone finally stops them.   They will not stop it by themselves.   After all, they are winning...

 

Have a pleasant evening. 

 

 

 

 

 

 

SP 500 and NDX Futures Daily Charts - Wash Cycle Is Almost Finished

I figure we have about 15 or so more points of upside potential in the SP 500, barring exogenous events, and then it turns into a slower slog higher with the usual wash and rinse cycles to keep the HFT and predator trading desks happy.

 

Have a pleasant evening.