SP 500 and NDX Futures Daily Charts - Stocks Ignore Bad ADP Employment, Sell off on ECB

Stocks tried to shake off some pretty bad macroeconomic numbers from this morning. I have included a chart of them below.

However, the stock market's rally was dumped hard as the ECB announced into the close that they would no longer allow banks to accept Greek debt as collateral.

 

More on this in the gold and silver commentary above.

Stocks pretty much went off on the lows. This market has the resilience of meringue, and all the character of a cotton candy soufflé.

 

Without QE I am struggling to see how stocks can keep scaling their lofty heights, especially with the wheels starting to fall off the real economy.  And they are, despite the puffery from the Fed and the sell side of the Street, the paid strategists whose primary strategy is to keep you 'fully invested.'

 

Some incident will occur, and then the truth will be revealed, and non-related parties properly scapegoated for spoiling our great and glorious Recovery.  We are the world, we are exceptional, we cannot fail.

 

The elite will lie, and the people will pretend to believe them.  Heck about 20 percent of the American public will believe almost anything if it is wrapped with the right prejudice and appeal to passion.

 

Have a pleasant evening.

 

 

 

Gold Daily and Silver Weekly Charts - Same Old Schemes, Ending Badly

Federal Reserve Bank of St. Louis President James Bullard warned Tuesday regulatory changes haven’t solved the too-big-to-fail problem in banking, adding that he’d support a break-up of the biggest banks in the U.S.

“It’s naive to think that macro prudential tools as they exist today are sufficient” to tackle new bubbles without notable help from Federal Reserve interest rate policy, Mr. Bullard said. He was referring to the suite of tools the Fed and other agencies have to intervene in a targeted fashion when authorities believe financial markets have become unstable.

WSJ, Bullard Calls For Breaking Up Nation's Biggest Banks

 

Robert Johnson recognizes that rampant inequality could be the death of us all. “People need to know there are possibilities for their children, that they will have the same opportunity as anyone else,” he said at Davos. Johnson continued, “There is a wicked feedback loop. Politicians who get more money tend to use it to get even more money.”

That’s the money they get from the plutocrats who pull their strings; in the past three elections alone, the financial sector has given $256 million to Republicans and $153 million to Democrats.

USA Today recently editorialized, “Wall Street got its swagger back not long after the bailout, which is no surprise.  Its culture is built on greed and ego.  What is more surprising is how quickly Congress again became Wall Street’s errand boy.”

Michael Winship, The Super-Rich Can't Hide From the Rest of Us

If called on their bets, the Comex cannot come up with the bullion to answer it, except at much higher prices.  And I am talking about many hundreds of dollars higher, probably into the 2,000 range, unless they can get the government/judiciary to allow them to declare some favorable sort of force majeure as they did in the case of MF Global.

 

The only real doubt in my mind is how badly leveraged the New York and London crowd are, and how many cross claims exist for each ounce of physical metal.  I suspect it is worse than I think.

 

Kyle Bass said the same thing, so let the apologists, the little Lord Haw Haw's, dismissively chew on that one. 

 

It is a scam.  It is tolerated by the kleptocracy.  Remember this when the time comes.  They know.

The regulators and the Fed and the Congress are turning a blind eye to the corruption because they can, no one calls them on it, and it suits their very personal preferences.

 

The BRICS are calling the Anglo-American banking cartel's bluff, one bar of bullion at a time.

 

That is the situation in a nutshell.

 

Tick tock.

 

Have a pleasant evening.

 

 

 

 

 

SP 500 and NDX Futures Daily Charts - The Financial Sector Is a Subsidized Money Machine

Just 10% of Americans own 91 percent of the nation's stocks and mutual funds, according to economist Edward Wolff. Most of the remainder is held by a "middle class" that is steadily losing ground. The bottom 60% is almost entirely shut out.

Stock owners, some of whom made billions of dollars last year, can defer their income taxes indefinitely, pay a reduced capital gains tax when they decide to cash in, or pass on the capital gains tax-free to their heirs.

Making money is all a game to the super-rich -- redistribution toward the top, trickle-down delusions, tax avoidance, and even, for some of them, dabbling in criminal activities.

Paul Buchheit, Super Bowl For the Rich

Chipotle beat on earnings but missed on revenues and a few growth measures. That's a refrain you will hear quite often in these days of dodgy GAAP rules and accounting antics. The priced-for-perfection stock was down 5 percent after hours.  Who knows if it will stick.  It's all a game.

Factor orders missed by a mile this morning.

Oil has rallied back over 50. It is not clear what this means exactly since the price discovery process is badly broken by leveraged speculation.  Hey, weren't we just here about six years ago?

I suspect there was a steep overshoot to the downside that can be attributed to 'gamesmanship.'

 

S&P 'settled' for 1.4 Billion for its active participation in the massive mortgage fraud perpetrated by Wall Street.  It was just a cost of doing business. 

There will be another financial crisis, and another attempt to bail out the perpetrators by their shrine maidens in the Congress. 

Have a pleasant evening.

 

NAV Premiums of Precious Metal Trusts and Funds - Why There Is No Recovery

 

Another 7,285 ounces of gold bullion were redeemed from the Sprott Physical Gold Trust.

My friend Arby had an interesting observation.  I have not checked it out specifically.  I thought Australia was in second place, but I have not looked at the latest figures for 2014.

 

But if the numbers are generally right, which they seem to be, it gives us some idea of the magnitude of what is going on.

US 52 WEEKS gold mine production 2014 (estimate from Mineweb) ... ...    210 tonnes

China first 3 WEEKS gold imports 2015 (calculated by Koos Jansen)      .... 202 tonnes

The largest producer of gold is China, second Russia, third USA.

The two largest producers are net importers of their world leading mining output.  The third largest producer is a net exporter.

 

And then there's Australia, but I'm not sure that they even know what they're doing as one of the attendant nations.

 

No matter what the exact numbers and who makes the most, gold is flowing from West to East. 

Anyone who does not understand this is missing one of the most dramatic monetary phenomena of this century.

I wonder who will blink first in this 'suicide squeeze.'  Because that is what this latest gold pool is becoming.

Speaking of monetary phenomenon, the professor of numbers and all things housing Tony Sanders notes that Mortgage Bonds Have Underperformed the Worst Since 2008 on Refi Risks.

 

As part of a different discussion, I noticed the other week that the Fed stepped up purchases of agency mortgage debts considerably since they 'ended QE' and own a boatload of them.

 

Janet and Bill Dudley must be running handcarts up and down Wall and Broad Streets telling the Banks to, 'bring out your dead.'

 

Fan and Fred buy them, and the Fed buries them.   With nothing going to the people whose homes are being foreclosed.   

And finally,  Zerohedge reminds us this morning that the numbers indicate that the biggest flows of capital into the US equity markets are from.. wait for it... companies using their profits to buy back their own stocks, by far.

 

So the Fed is using its ability to print money to buy bad debts from the Banks which they created to cheat their customers, and companies are using the outsized profits they are obtaining through government subsidies and underpaying their workers to buy back their own stock and enrich their upper management. 

 

And as Wall Street On Parade reminds us this morning, the corporatized media, owned by a handful of corporations, is cheerleading all this, and is very much captured by the crony capitalist culture.

 

And people wonder why there is no recovery.  Who says they want one, when this new normal is paying off for a privileged few so well.  And they get to buy even more of the remaining productive assets on the cheap.

 

That's trickle down stimulus, par excellence.

 

Related:  The Big Lie:  5.6% Unemployment

 

 

Gold Daily and Silver Weekly Charts - NonFarm Payrolls Friday

Gold was hit early on during quiet trade, and then regained most of its losses intraday.

A late hit in quiet after hours trade took it back down a bit.

Silver held up quite well.

 

There was not all that much of interest going on with the Comex other than blatant price shoving.  They must be trying to work down the February open interest. 

 

The Comex is becoming increasingly irrelevant to precious metals.

 

There will be a Non-Farm Payrolls Report on Friday.

When the going gets tough, the privileged lie, then cheat, then deny everything, and then finally panic and accuse everyone else of undermining them out of jealousy for their well deserved success and impeccable qualities.

 

I doubt they will learn from their folly on their own.  Most sociopaths and narcissists have a huge blind spot when it comes to realistic self-assessment.  And they flock to finance, politics, and positions of power, especially in a kleptocracy.  Which is what we have here in the States today.

 

Have a pleasant evening.

 

 

 

 

Even Children Who Are Homeless Have Dreams

SP 500 and NDX Futures Daily Charts

Stocks were slumping most of the day from worse than expected macroeconomic news as shown in the third chart below.  Personal spending came in light as did ISM Manufacturing.

 

A late day boost led by the SP futures managed to take stocks into the green.

 

Manage those perceptions and keep the trickle down stimulus for the one percent going.  Its better than addressing the real problems with practical solutions. 

 

Have a pleasant evening.

 

 

 

France Prepared To Support Greece in Debt Negotiations

Support, whatever that means.

The negotiations and discussion surrounding the Greek debt issue are not straightforward nor transparent.

People will tend to project their own opinions on to this since it is rather complicated, especially for those not familiar with international politics.

There are a number of issues involved, and a number of players, some with their own interests and agendas that intersect enough with this to bring them into the discussions.

And like most political situations of complexity the ultimate resolution will likely involve some compromise.  So those who prefer to enhance their reputation by second guessing will almost certainly have some opportunity to say 'I told you so.'   Like so many stock forecasters, they write their hits in marble, and their misses in sand. 

In addition, I cannot stress enough that relying on only one category of mainstream media sources on this entire topic can be highly misleading.

The amount of spin and perception management being generated even by 'name' media sources these days is pronounced. Remember the stories being put out earlier this month that Russia was on the ropes, and was selling its gold to meet its reserve obligations?

And there are global macro and political issues enough so that the neo-liberal establishment will be keenly interested in becoming involved in this, fear contagion and the 'domino effect' not only in Europe, but in their own countries. 

And quietly, almost unnoticed, China and Russia keep accumulating gold bullion.

Such are the times of currency wars. And I think we might know to whom most of the Western commercial press owes their allegiance. And they are not the only ones.

But they are unusually shameless considering the image that their PR has created. I have not seen this much blatant propaganda in the major news in a very long time, probably not since the early part of the Vietnam war.  

France 24

France ‘prepared to support Greece’ in debt renegotiations

01/02/2015

France’s Socialist government offered support Sunday for Greece’s efforts to renegotiate debt for its huge bailout plan, amid renewed fears about Europe’s economic stability.

The backing was a victory for Greek Finance Minister Yanis Varoufakis, holding talks with European officials to push for new conditions on debt from creditors who rescued Greece’s economy to save the shared euro currency. Worries have mounted that Greece’s new far left government might not pay back its debts.

Varoufakis is also visiting London and Rome – and said Sunday that he would visit Berlin. The German government has been particularly angry at the new Greek government’s position and bluntly rejected suggestions that Greece should be forgiven part of its rescue loans.

Varoufakis insisted that Greece wants to pay the money back, but said he wants new terms and new negotiating partners, arguing that “it’s not worth” discussing with the so-called “troika” of creditors who set the strict terms for Greece’s rescue.

France’s Socialist leadership, whose president has campaigned against austerity, presented itself Sunday as a possible mediator between Greece and creditors.

French Finance Minister Michel Sapin insisted his country wouldn’t support canceling the debt, but offered support for a new timeframe or terms.

“France is more than prepared to support Greece,” Sapin said after meeting Varoufakis, saying Greece’s efforts to renegotiate were “legitimate.” Sapin urged a “new contract between Greece and its partners.”

Greek Prime Minister Alexis Tsipras and his new government have worried financial markets and German and other European officials by pushing to scrap painful budget cuts and rethinking the debt. Tsipras sought to calm worries over the weekend after days of increasingly heated discussions.

Varoufakis announced that he has retained financial consultants Lazard as advisers to the Finance Ministry on issues of public debt and fiscal management. The socialist PASOK party, which ran Greece during part of its debt crisis, praised the decision, noting that then-Finance Minister Evangelos Venizelos also hired Lazard advisers when he negotiated with private bondholders in 2011-2012.