Still Backstopping the Banks With Public Money

"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

Serious financial reform is almost never discussed in any meaningful way in the political campaign debates, for all the petty sniping and smart remarks that pass for a serious discussion of our policy issues.  Life imitates high school.

Goldman Sachs’ Rich Man’s Bank Backstopped by You and Me
By Pam Martens and Russ Martens
October 21, 2015

Just when you thought Wall Street’s heist of the U.S. financial system couldn’t get any crazier, along comes a regulator’s report on FDIC-insured banks exposure to derivatives. According to the Office of the Comptroller of the Currency (OCC), one of the regulators of national banks, as of June 30 of this year, Goldman Sachs Bank USA had $78 billion in deposits, and – wait for it – $45.7 trillion in notional amount of derivatives. (Notional means face amount of derivatives.) According to the OCC report, Goldman Sachs Bank USA’s notional derivatives are an eye-popping 563 percent of its risk-based capital. You and every other little guy in America is backstopping this bank because it’s, amazingly, FDIC insured...

Based on the data, it looks like the average taxpayer is backstopping a ton of risk at this FDIC insured bank and getting very little in return. According to financial data from the FFIEC for the second quarter, the bank had $25.1 billion in trading assets and according to the company’s web site, it’s those high net worth clients of its Private Bank that it’s working with “to manage their cash flow needs, finance private asset purchases, and facilitate strategic investments.”

According to the New York Times, Goldman Sachs private wealth management services require a minimum of $10 million to get in the front door. The same Times article says Goldman was even kicking out its own employees’ accounts if they fell short of $1 million..."

Read the entire article at Wall Street On Parade.

Gold Daily and Silver Weekly Charts - J'attendrai

Gold and silver held steady at key resistance today, unable to move higher, but refusing to go lower.

There was very little delivery activity at The Bucket Shop yesterday, with the three bullion banks shoving some gold bullion around the plate in their house accounts again.  JPM picked up a little.

Other than that, the Comex is 'quiet' to put it charitably, with a little more silver leaking out through the seams.

And so I am waiting. I seem to be getting very good at it, waiting patiently. I have been waiting since yesterday for a phone call giving the latest test results from a PET scan last Wednesday. I probably have done this sort of thing about a dozen times now over the past four years. Waiting for someone else's tests, someone whose fear and pain strikes to your heart, seems worse than waiting for your own.

So as for gold and silver, waiting for them to do something is relatively easy. Bring it, you cartel clowns. Gold is flowing from West to East. And we are waiting for you, with a deepening resolve.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Going Nowhere Man

Stocks were struggling to go green (again) all day.

After the bell Yahoo missed earnings and revenues and Chipotle was not looking robust either, especially with a miss on the bottom line.

I am mostly in cash here with a light short position, waiting to see if stocks can move higher or will start rolling over. They seem overvalued here, especially in light of a slowing US and global economy.

Have a pleasant evening.

NAV Premiums of Certain Precious Metal Trusts and Funds

Sprott silver appears to be temporarily out of cash for current expenses.

Typically they have been selling off a little bullion in order to raise funds, since their premiums do not allow for secondary offerings under their current arrangements.

At at the bottom, central bankers extraordinaire Stanley and Janet take a QE Victory Tour by auto through the Swiss Alps, with Mario Draghi at the wheel.

Gold Daily and Silver Weekly Charts - Retracement - J'attendrai - I Will Wait

Gold and silver were under light pressure most of the day, and slid a little in the afternoon to finish slightly lower.

The Bucket Shop was very quiet as usual, with only a little movement in the silver warehouses.

Gold bullion continues to act as though it was under lockdown.

As you know I was looking for a retracement here. The depth and shape of it will inform us on what sort of chart formation, if any, we have in play.

I have included the chart of the three scenarios and a 'worst case' below.  We are now in the 'shallow retracement' area, probably from here down to 1170ish.  The other levels are down to about 1150, and deeper down to 1130.  If gold breaks down below 1120 and sticks a solid close for a couple days at least then this formation is off the table.

Much of the commentary I am reading these days about gold and silver is junk food for the mind.  If you take in too much of it, you may become a fathead.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Hope Isn't the Only Thing That Floats

Stocks came in weakly, but clearly had a push under them throughout the day.

Techs led the way higher, while the SP 500 lagged, weighed down in part by the awful earnings from Morgan Stanley and the financial sector.

After the bell IBM missed and lowered forecasts.

The Street would like to keep stocks growing higher for now.  Let's see if they can keep it going against such light selling.

Have a pleasant evening.

Martin Luther King: The Drum Major Instinct

The 'drum major instinct' according to Martin Luther King is the impulse to lead, to be praised, to be the center of attention, and to have more than others.

 It can become the basis of pride and selfishness, and corrosive to society, our relationships, and our personal well being.