Gold Daily and Silver Weekly Charts - Gold Finishes Eleventh Straight Year Higher

The metals bounced today, but were pushed down into the close on extremely light trading.

I am going to be busy preparing for New Year's Eve but I may post some thoughts on Sunday evening about the year ahead.

Have a Happy New Year everyone.

SP 500 and NDX Futures Daily Charts - SP Cash Finished Year Dead Even

Boring day overall, but the big excitement was that Wall Street was able to bring the cash SP 500 in at dead even for the year.

Have a Happy Holiday everyone. Keep in mind that the US markets are closed on Monday.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Lawrence Lessig: Republic, Lost - The Quiet Coup D'etat

"Money Buys Results In Congress"

Summary: The reason for the failure of the American economy and the inability of the government to address it is because of the corruption and distortions inherent in a system where campaign contributions control the politicians and the policy, and less than one percent of the people control the vast majority of those campaign contributions and therefore the distribution of power.

Video presentation

Lawrence Lessig: Republic, Lost

"The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than the democratic state itself. That in its essence is fascism: ownership of government by an individual, by a group, or any controlling private power.”

Franklin D. Roosevelt

This is the critical issue that will be addressed, one way or the other, across the developed world.   The timing is difficult to judge because of the many exogenous factors.  It could come quickly, or be over a longer period of time of many years.   But in any case the result will be a mixed revival of democracy and the rapidly increasing repression of totalitarianism, in various countries at various times, similar to what the world had seen in the 1930's.

"If there must be trouble, let it be in my day, that my child may have peace.”

Thomas Paine

The roles that the various countries and their alliances will play are not yet clear.  But what seems likely is that the next great leader or antichrist will once again appear draped in a flag, but this time will be wearing business attire instead of jackboots.

Gold Daily and Silver Weekly Charts - Painting the Tape Red

There was intraday commentary here.

The thought is that the big metals shorts are hammering the paper prices in thin trading to 'paint the tape' for their year end mark-to-market. 

It smelled like a capitulation today, but as the volumes were so thin I would not care to call it.   But 1524 had the look of a bottom.  Aggressive traders must be chomping at the bit. 

Let's see how the year ends.

SP 500 and NDX Futues Daily Charts - Quiet Days Are Good for Painting

Very light volume day, and the tape was duly painted into the year end.

The commmentary on the financial news networks is so disassociated from reality it is almost like something out of Sunset Boulevard.

I'm ready for my closeup Mr. DeMille.

Five Charts Useful for Framing the Economic Debate in 2012

These charts are from a collection of favorite charts put together by Jared Bernstein from material put out by the Center on Budget and Policy Priorities.

The End of Year Precious Metal Bullion Bear Raid - Another Form of Window Dressing?

Like many others who watch the markets I have wondered what might be prompting this obvious bear raid on the paper precious metals market over past four weeks.

It could be explained by any number of economic developments including the decline of the Euro, but that does not really explain the downward market action which has been sporadic and not associated with news, moreso than fundamental.

One has to be a bit naive or disingenuous to ignore the blatant bombing of the market with large numbers of contracts for sale during thinly traded markets. This is the not the sort of trading that a profit seeking trader would do except under the duress of a margin call.

I admit this would be less likely if one has a high level of confidence in the CFTC.  They have not done much to inspire such confidence in the public this year, particularly in light of their mishandling of the silver market investigation and of course MF Global.

Anyone who watches the tape, rather than waving their hands from the 50,000 feet level,  can see this clearly.

From speaking with other traders, and based on my own thinking, I believe that what we are seeing is primarily a type of end of year window dressing supplemented by a broad desire to maintain 'orderly' prices by the central banks.

At the end of year an institution will mark positions to market. Granted, any number of institutions will have an off calendar fiscal year ending for example in October.

But many others observe the conventional calendar year ending in December as their fiscal year, among them JP Morgan and HSBC for example.

It is a widely remarked phenomenon that trading firms run up prices into key events to make their results look better if the market conditions permit it. And the trading desks run prices lower on some assets into key events such as option expirations.

But what about firms that have very large short positions including naked short positions with leverage? Would they have an incentive to push prices lower into key events of mark to market?

The answer is yes, particularly if markets are thin and sentiment has been battered by repeated bear raids and commentary from their friends in the financial press. They also often spread the word, one way or another, amongst big traders and friends at funds that tend to follow price momentum to add more 'punch' to their efforts.

And of course it does not hurt if a major source of bullish trading amongst small speculators has been taken down into bankruptcy.

Is this why we are seeing this now? Few can know for sure, but if we see a sharp rally in January and resumption of the bull trend the answer is more probably 'yes.'

And if so, this is just another hidden price that is being paid by a nation that cannot bring itself to be free of a financial oligarchy and their corrupting influences.

Be careful of trying to get in front of this while the downtrend is intact. Short term greed is swimming in the water with the sharks. And they own the lifeguards. This downtrend is a good test of your ability to tolerate risk and execute a properly hedged trading strategy.

Better for most not to trade at all but to take a long term horizon and follow some investment plan, and do not change it unless something fundamental changes first.