SP 500 and NDX Futures Daily Charts - On the Edge

With the lack of fresh macroeconomic news today, it was the earnings that was driving equities, even though volumes remain somewhat low.

The tech sector in particular is not reporting the types of results that would reflect a growing economy.   Instead the numbers show that the consumers are still struggling, both at home and abroad.

The financial sector heavy SP 500 seems to be hanging on a bit better, but the NDX with its tech weightings is starting to roll over.  Indeed it was buying in the SP 500 futures that seemed to sustain the equities during the worst of today's declines, but again on low volumes.

There will be more earnings reports and macroeconomic news next week.

Volatility is rather low as measured by the VIX.  But with these light volumes that could change in a Manhattan minute.

Have a pleasant weekend.

The US Government Is Holding Counterparty Risk for Wall Street Derivatives (And So Are You)

"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.

When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin!

You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out."

Andrew Jackson, in a meeting with the Bankers in Philadelphia, February 1834

Just as in the case of AIG, which was 'bailed out' at 100 cents on the dollar not to help them, but to provide a big cash infusion to places like Goldman Sachs, so Wall Street continues to socialize their reckless gambling with the help of their 'friends' in the government and the media.

U.S. Government Is Now a Major Counterparty to Wall Street Derivatives
By Pam Martens and Russ Martens: April 21, 2016

According to a study released by the Federal Reserve Bank of New York in March of last year, U.S. taxpayers have already injected $187.5 billion into Fannie Mae and Freddie Mac, two companies that prior to the 2008 financial crash traded on the New York Stock Exchange, had shareholders and their own Board of Directors while also receiving an implicit taxpayer guarantee on their debt. The U.S. government put the pair into conservatorship on September 6, 2008. The public has been led to believe that the $187.5 billion bailout of the pair was the full extent of the taxpayers’ tab. But in an astonishing acknowledgement on February 25 of this year, the Government Accountability Office, the nonpartisan investigative arm of Congress, issued an audit report of the U.S. government’s finances, revealing that the government’s “remaining contractual commitment to the GSEs, if needed, is $258.1 billion.”

This suggests that somehow, without the American public’s awareness, the U.S. government is on the hook to two failed companies for $445.6 billion dollars. And that may be just the tip of the iceberg of this story.

The official narrative around the bailout of Fannie and Freddie is that they were loaded up with toxic subprime debt piled high by the Wall Street banks that sold them dodgy mortgages. While that is factually true, the other potentially more important part of this story is the counterparty exposure the Wall Street banks had to Fannie and Freddie’s derivatives if the firms had been allowed to fail...

Read the entire story here.

Stock and Precious Metals Updates As Of 11 AM on Thursday - The Predators

"Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population.

Federal policy is increasingly dictated by the wealthy, by the financial sector, and by powerful (though sometimes badly mismanaged) industries such as telecommunications, health care, automobiles, and energy. These policies are implemented and praised by these groups’ willing servants, namely the increasingly bought-and-paid-for leadership of America’s political parties, academia, and lobbying industry.

If allowed to continue, this process will turn the United States into a declining, unfair society with an impoverished, angry, uneducated population under the control of a small, ultrawealthy elite. Such a society would be not only immoral but also eventually unstable, dangerously ripe for religious and political extremism."

Charles Ferguson, Predator Nation, 2012

As you can see, gold was pushing much higher this morning, up to $1270, and silver to 17.60, and then they were slammed down rather hard by selling.  Some will say that this was because the ECB had done nothing in their meeting today.  Nothing that is, except to continue to provide unprecedented stimulus designed to prop up their financial sector while doing little for the broader public economy.

Financial assets in the US like stocks are being pushed steadily higher for some time now, I believe as either an instrument or an artifact of the bubble-nomics being promoted by the Federal Reserve and the Administration.  One tries to provide some semblance of prosperity for the sake of perception management, while others cash in based on their information about what is happening.

Again, this is not capitalism, by any stretch of the imagination;  it is mere plunder.  And it will remain as such until it stops being highly profitable with little risk of serious punishment to the predator class and their enablers.  And if you are expecting serious reform from the leading presidential candidates, then you may still be breathing the fumes from the pipe of 'hope and change.'

There will not be further updates today unless something extraordinary happens.

Mary continues on in intensive care.  Thank you for your kind thoughts and prayers.  One step at a time.

Stock and Precious Metal Charts At the End of Day - Silver Cup and Handle

Stocks were mixed today on weaker than expected home sales and some poor reports from finance and the tech sector.

The US dollar turned lower, and gold and silver 'popped' in a two step rally. Gold stands a little over 1250 and silver is hanging on to the 17 handle.

Today is the NY primary for President.

The Bucket Shop was relatively quiet yesterday with a few gold deliveries, and a bit of a build in the deliverable gold in the warehouses over the past week, back up over 550,000 ounces.

Silver is shining a bit, and on the weekly chart below has 'set' a cup and handle formation.  Now it must hold these gains and move higher.  If it can do this I would think silver will test that old support level around 19$ and try to fight its way back into the old trend channel.

In the chart on the right you can see the year to date performance of gold, silver, the SP 500 and NDX.  Silver is the leading asset.

Have a pleasant evening.

Stock and Precious Metal Charts This Afternoon

Here are the stock and precious metal charts this afternoon.

I have indicated a possibly important overhead resistance level on the SP 500.  They have been using the futures to power that index higher, pulling up the rest of the equity market today, or so it seems to my eye.

Things are looking up a bit with herself, as she is speaking and remembering much better.  Her mind is clearing and her speech is improving dramatically although the right side of her body is not usable yet.   I have to go to hospital now to discuss some things with the doctors.

I am making some attempts to hold the house together with things like doing laundry and making meals and cleaning.  Yes, she would shudder if she saw me at it, but I am making the attempt nonetheless.

Have a pleasant evening.

Franklin Roosevelt On the Eve of the Presidential Election 1936 - 'Government By Organized Money'

"On the eve of a national election, it is well for us to stop for a moment and analyze calmly and without prejudice the effect on our Nation of a victory by either of the major political parties.

The problem of the electorate is far deeper, far more vital than the continuance in the Presidency of any individual. For the greater issue goes beyond units of humanity--it goes to humanity itself.

In 1932 the issue was the restoration of American democracy; and the American people were in a mood to win. They did win. In 1936 the issue is the preservation of their victory. Again they are in a mood to win. Again they will win.

More than four years ago in accepting the Democratic nomination in Chicago, I said: "Give me your help not to win votes alone, but to win in this crusade to restore America to its own people."

The banners of that crusade still fly in the van of a Nation that is on the march.

It is needless to repeat the details of the program which this Administration has been hammering out on the anvils of experience. No amount of misrepresentation or statistical contortion can conceal or blur or smear that record. Neither the attacks of unscrupulous enemies nor the exaggerations of over-zealous friends will serve to mislead the American people.

What was our hope in 1932? Above all other things the American people wanted peace. They wanted peace of mind instead of gnawing fear.

First, they sought escape from the personal terror which had stalked them for three years. They wanted the peace that comes from security in their homes: safety for their savings, permanence in their jobs, a fair profit from their enterprise.

Next, they wanted peace in the community, the peace that springs from the ability to meet the needs of community life: schools, playgrounds, parks, sanitation, highways--those things which are expected of solvent local government. They sought escape from disintegration and bankruptcy in local and state affairs.

They also sought peace within the Nation: protection of their currency, fairer wages, the ending of long hours of toil, the abolition of child labor, the elimination of wild-cat speculation, the safety of their children from kidnappers.

And, finally, they sought peace with other Nations--peace in a world of unrest. The Nation knows that I hate war, and I know that the Nation hates war.

I submit to you a record of peace; and on that record a well-founded expectation for future peace--peace for the individual, peace for the community, peace for the Nation, and peace with the world...

For twelve years this Nation was afflicted with hear-nothing, see-nothing, do-nothing Government. The Nation looked to Government but the Government looked away. Nine mocking years with the golden calf and three long years of the scourge! Nine crazy years at the ticker [tape] and three long years in the breadlines! Nine mad years of mirage and three long years of despair! Powerful influences strive today to restore that kind of government with its doctrine that that Government is best which is most indifferent.

For nearly four years you have had an Administration which instead of twirling its thumbs has rolled up its sleeves. We will keep our sleeves rolled up.

We had to struggle with the old enemies of peace--business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me--and I welcome their hatred...

Our vision for the future contains more than promises.

This is our answer to those who, silent about their own plans, ask us to state our objectives.

Of course we will continue to seek to improve working conditions for the workers of America--to reduce hours over-long, to increase wages that spell starvation, to end the labor of children, to wipe out sweatshops. Of course we will continue every effort to end monopoly in business, to support collective bargaining, to stop unfair competition, to abolish dishonorable trade practices. For all these we have only just begun to fight.

Of course we will continue to work for cheaper electricity in the homes and on the farms of America, for better and cheaper transportation, for low interest rates, for sounder home financing, for better banking, for the regulation of security issues, for reciprocal trade among nations, for the wiping out of slums. For all these we have only just begun to fight.

Of course we will continue our efforts in behalf of the farmers of America. With their continued cooperation we will do all in our power to end the piling up of huge surpluses which spelled ruinous prices for their crops. We will persist in successful action for better land use, for reforestation, for the conservation of water all the way from its source to the sea, for drought and flood control, for better marketing facilities for farm commodities, for a definite reduction of farm tenancy, for encouragement of farmer cooperatives, for crop insurance and a stable food supply. For all these we have only just begun to fight.

Of course we will provide useful work for the needy unemployed; we prefer useful work to the pauperism of a dole.

Here and now I want to make myself clear about those who disparage their fellow citizens on the relief rolls. They say that those on relief are not merely jobless--that they are worthless. Their solution for the relief problem is to end relief--to purge the rolls by starvation. To use the language of the stock broker, our needy unemployed would be cared for when, as, and if some fairy godmother should happen on the scene.

You and I will continue to refuse to accept that estimate of our unemployed fellow Americans. Your Government is still on the same side of the street with the Good Samaritan and not with those who pass by on the other side..."

Franklin D. Roosevelt, October 31, 1936