Upton Sinclair: The Moneychangers - An Historical Novel of the Financial Crisis of 1907

"It had all worked out beautifully, according to the schedule. The stock market was falling to pieces—some of the leading stocks were falling several points between transactions, and Wyman and Hegan and the Oil and Steel people were hammering the market and getting ready for the killing. And at the same time, representatives of Waterman in Washington were interviewing the President, and setting before him the desperate plight of the Mississippi Steel Company.

Already the structure of the country's finances was tottering; and here was one more big failure threatening. Realising the desperate situation, the Steel Trust was willing to do its part to save the country—it would take over the Mississippi Steel Company, provided only that the Government would not interfere. The desired promise was given; and so that last of Waterman's purposes was accomplished.

But there was one factor in the problem upon which few had reckoned, and that was the vast public which furnished all the money for the game—the people to whom dollars were not simply gamblers' chips, but to whom they stood for the necessities of life; business men who must have them to pay their clerks on Saturday afternoon; working-men who needed them for rent and food; helpless widows and orphans to whom they meant safety from starvation.

These unhappy people had no means of knowing that financial institutions, which were perfectly sound and able to pay their depositors, might be wrecked deliberately in a gamblers' game. When they heard that banks were tottering, and were being besieged for money, they concluded that there must be real danger—that the long-predicted crash must be at hand. They descended upon Wall Street in hordes—the whole financial district was packed with terrified crowds, and squads of policemen rode through upon horseback in order to keep open the streets.

"Somebody asked for a dollar," was the way one banker phrased it. Wall Street had been doing business with pieces of paper; and now someone asked for a dollar, and it was discovered that the dollar had been mislaid.

It was an experience for which the captains of finance were not entirely prepared; they had forgotten the public. It was like some great convulsion of nature, which made mockery of all the powers of men, and left the beholder dazed and terrified. In Wall Street men stood as if in a valley, and saw far up above them the starting of an avalanche; they stood fascinated with horror, and watched it gathering headway; saw the clouds of dust rising up, and heard the roar of it swelling, and realised that it was a matter of only a second or two before it would be upon them and sweep them to destruction.

The lines of people before the Gotham Trust and the Trust Company of the Republic were now blocks in length; and every hour one heard of runs upon new institutions. There were women wringing their hands and crying in nervous excitement; there were old people, scarcely able to totter; there were people who had risen from sick-beds, and who stood all through the day and night, shivering in the keen October winds.

Runs had begun on the savings banks also; over on the East Side the alarm had reached the ignorant foreign population. It had spread with the speed of lightning all over the country; already there were reports of runs in other cities, and from thousands and tens of thousands of banks in East and South and West came demands upon the Metropolis for money. And there was no money anywhere.

And so the masters of the Banking Trust realised to their annoyance that the monster which they had turned loose might get beyond their control. Runs were beginning upon institutions in which they themselves were concerned. In the face of madness such as this, even the twenty-five per cent reserves of the national banks would not be sufficient.

The moving of the cotton and grain crops had taken hundreds of millions from New York; and there was no money to be got by any chance from abroad. Everywhere they turned, they faced this appalling scarcity of money; nothing could be sold, no money could be borrowed. The few who had succeeded in getting their cash were renting safe-deposit boxes and hiding the actual coin."

Upton Sinclair, The Moneychangers, 1908

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

Gold and silver had the lid slammed all day, although the miners recovered nicely from an early morning smackdown.

The next Comex option expiration will be next Monday.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Miles Gloriosus

There is little economic news this week. The new weekly economic calendar is below.

The drivers this week are therefore likely to be on earnings reports, and the geopolitical issues especially with regard to the Ukraine.

Our glorious financial warriors are riding high in the markets, which are otherwise very dull and quiet.

Remember, thou art a man. Memento mori.

Have a pleasant evening.

 

Is the New BRICS Bank a Challenge To US Global Monetary Power?

"Brazil, Russia, India, China and South Africa have many allies in the G-20, the minister noted, naming Argentina, Mexico and Indonesia in particular. 'They speak in the common voice with BRICS in the G-20 on the reform of international financial system,' the diplomat said.

BRICS countries are going to jointly demand implementation of the International Monetary Fund (IMF) reform during the G-20 summit being hosted by Australia in November.  The agreements to reform IMF quotas were reached in 2010 but have been put on hold by leading Western countries ever since."

Xinhuanet, BRICS matures, can turn into political alliance

It is pretty much as I said it was with the evolving currency war and the struggle by the Anglo-American banking cartel to maintain the status quo in a changing world.

How it will turn out, no one can know for certain. But since money and power are involved it will probably become more dirty and desperate than one might otherwise expect.

 

Thom Hartmann: The Crash of 2016

This is a view of how we got here and where we are going that you are unlikely to hear from the mainstream media.

Gold Daily and Silver Weekly Charts - Sleepwalking To a Wipeout

Word has it that Goldcorp is eyeing Newmont (at these price levels and reserves) with covetous eyes. Can't say I would blame them.

Markets shook off the scare of a new cold to medium warm war yesterday as conflicts took their toll on innocents in the Ukraine and in Gaza.

The beleaguered Espírito Santo International has declared bankruptcy.

The Anglo-American financial system's moral bankruptcy is already a generally recognized fait accompli, except by those caught up in the credibility trap.

Today was a stock market option expiry. The next expiration on the Comex will be for the August contracts on July 28.

This next song goes out to Bubbles, from the Moondog.  If you do right, everything will come out right. aaaaaahwoooooo...

Things might look bad, but there is still room to dance if the music is good.  We'll save a table for you.

Have a pleasant weekend.

 

SP 500 and NDX Futures Daily Charts - Nothing Can Stop the Market, Until it Does

"Government is, or ought to be instituted for the common benefit, protection, and security of the people, nation, or community; of all the various modes and forms of government, that is best which is capable of producing the greatest degree of happiness and safety, and is most effectually secured against the danger of maladministration."

George Mason

The markets bounced back today as the algos shook off yesterday's Ukraine and Gaza jitters, and the momentum players came back in.

Volatility fell on this options expiry.

Have a pleasant weekend.