SP 500 and NDX Futures Daily Charts - Begin the Beguiled

Stocks largely moved sideways on the weak economic data this morning.

After the bell it was revealed that Intel would like to purchase chipmaker Altera. The consolidation of industry continues.

After a largely directionless day, there was a little bit of a lift into the close as Chairman Yellen talked about the bias to raise interest rates for the purpose of 'normalization,' but slowly and with an eye on the data.

Nothing new here. The Fed wishes to get off ZIRP at least nominally to give themselves some policy latitude for the future and to widen the spreads and bets available to the Banks.

And so they are likely to 'get her done' and not blanch from the task until they start to blow up the real economy in a manner more overtly than they have already been doing through their distortions over the past thirty years or so.

The Fed is bank-centric. They are a creature of the Banks. Unfortunately so are the politicians, so the broader public may find themselves in difficult circumstances.

I doubt that this will change or improve until there is substantial discomfort felt by the ruling elite. Nothing new there. And the more vocal portion of the public, the twenty percent I like to think of as the 'beguiled,' will be busy trying to push each other under the bus as it were, and kick the other guy off the life raft, because that is much easier than facing the real issues of reform.

At some point the beguiled will wake up, and then we will see a social phenomenon that 'no one will understand.' It is hard to get the herd moving, but once they start to move the force and momentum of their movement can be impressive and fairly durable. As a child of the 50's and 60's who was not unfamiliar with seeing armed soldiers and tanks in the streets of major urban areas, I can assure you that this phenomenon is more common in history than you probably imagine.

That is not to say it is a good thing, or a desirable thing. But it is becoming almost an inevitable thing given the inability of the upper crust to disengage themselves from the credibility trap, and their ill gotten gains from their abuses of power.

Have a pleasant weekend.

 

 

 

Gold Daily and Silver Weekly Charts - Ship of Fools

Gold and silver caught an overnight flight to safety on the war breaking out between Saudi Arabia, Egypt, and Yemen on the overnight.

 

Gold hit a high around 1218 or so on the spot price, but was pushed back down towards 1203 during the New York trading hours.

 

The miners were hit rather hard, which sometimes portends a hit on the metals the next day.  Let's see how that works out.  These mechanisms and influences are not linear.

 

It would be in the manner of the bucket shop to give a gut check on a price drop to those new holders of futures contracts from today's precious metals option expiration.  But since I cannot see into all the players hands, to know who is holding what with any confidence, it is too hard to say.

 

I do think that the US Fed will raise rates this year by some token amount, unless the wheels completely fall off the economy for two quarters in a row.  The first quarter is looking increasingly dismal, but it is easy to dismiss that as a one-off due to the weather.

 

The pampered princes and princesses of the Feds would like to raise rates for the benefit of their Bankers.  And they will perform as required.  Like the politicians, this is why they are there, to give plunder the appearance of legitimacy. 

 

But at the end of the day, they are, for the most part, a collection of willful, self-deceiving fools who are plunging madly forward without a clear vision or care for what is just across the horizon, whether it be a shoal or an iceberg.   They are now operating on necessity, defined by their own selfish needs.  Just following orders.  Whose orders, what priorities, well, that is another question altogether.  But not yours. 

 

If you want someone to tell you exactly what will happen or what to do next you can find plenty of people who are willing to do it, for a price, generally denominated in money and power. Just look for the wild claims, self-promotion, and screaming headlines. 

 

If they knew, they would not tell you. 

 

There are so many big changes happening behind the scenes.  No one can really predict exactly which way they will go.  But I am increasingly confident that we have the lay of the land mapped out correctly.  And I think that the signs are knowable.

 

The currency war is the pivotal event of our time.  If you do not yet understand what is going on there, you will be tossed around like a small boat, directionless in a tempest, because you cannot see beyond the nearest waves.

 

Keep an eye on China and Russia.  This does look like a pivotal year, but we have been close before, and the can keeps getting kicked further down the road.  The longer we wait, the greater the break.

 

If someone knows which way the Chinese leadership will finally go, I should like to know it.  But I don't think even they know that yet.

 

What you can do, above all, remember what is truly important, what lasts.  And now is a very good time to sort that out, because when the time comes, there will be no time.

 

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts

"O Jerusalem, Jerusalem, you who murder your prophets, and persecute those whom God has sent as messengers to you. How often I have longed to gather your children together, as a hen gathers her young under her wings. But you would not let me.

As you have willed, your house is now yours— but will be made desolate.”

 

The 'Yellen put' kicked in about where it might have been expected.

 

Winning....

 

Have a pleasant evening.

 

 

 

 

 

 

Gold Daily and Silver Weekly Charts - The Tyranny of Round Numbers, Functionaries, and Factotums

 

“Look back over the past, with its changing empires that rose and fell, and you can foresee the future too.”

Marcus Aurelius, Meditations

Gold is being stalled here at 1200 and silver at 17.  These have no real significance except that they are 'headline numbers.'  

 

But since the Comex price discovery mechanism is now a bucket shop, the punters may enjoy playing around these headline levels, especially since we are coming into an option expiration.  Who the heck that isn't an insider is still bellying up to buck the tiger at that twisted faro table on the Hudson?

 

I think we may be nearing an extreme in bearish metal sentiment because the shills and trolls for the funds are throwing out some ridiculously scatological 'analysis' on gold again.  Well, water finds its level, and not only hope floats.  This is why we can't have nice things.

 

Speaking of the scatological, someone shared a study with me showing that an increase in interest rates is almost necessary to insure the continued good financial health of JP Morgan in the near term. This zero interest rate policy is putting a serious squeeze on their officially subsidized  vigorish.

And the Fed, having fostered yet another bubble in financial assets, and yes it is a bubble, need to give themselves some room to cut rates to 'fix it' once it fails as it most likely will again.  There is a purpose to their 'wash and rinse' of the real economy, as more useful assets are transferred to the top.

So I do think we will have a lot of happy talk about recovery from very serious people, the Fed drones who have gotten into some fairly nice sinecures by going along with the financial flow for most of their careers.  Insiders don't talk badly about the mistakes and follies of other insiders.

 

They won't be talking about the inferior and unlivable part time jobs that people are actually getting, the stagnant real median wage that is strangling organic demand, or the enormous concentrations of capital that they fostered which is increasingly enabling enormously abusive monopolies that will most likely take a generation of struggle to root out and overturn.

 

Keep an eye on China, and Russia.  They have some big cards to play this year, and it will be interesting to see what they throw down.  Not that they are any better, not under the rule of oligarchs as well.   But history always seems to have a turn when least expected.

 

The glory that was Greece, the grandeur that was Rome.   Ubi sunt?

Where were you when I laid the earth’s foundation?

Tell me, if you know.

Who marked off its dimensions?

Who stretched a measuring line across it?

On what were its footings set,

or who laid its cornerstone –

while the morning stars sang together

and the angels shouted with joy?

 Have a pleasant evening.