SP 500 and NDX Futures Daily Charts - Slippery Slope

 

US equities continued to slide today as the recent makeover rally designed to put some lipstick on some new tech pigs has continued to retreat.

Stock had their worst week of the year. I hope you were able to take something off the table.

New housing sales slumped badly according to this morning's economic data.

We are obviously in the rinse cycle now of the usual wash n' rinse mo-mo scam that substitutes for market price discovery these days.

Let's see if it keeps going or continues to stay well-behaving and responsive to the whims of the algos and insiders.

Have a pleasant weekend.

 

NAV Premiums of Certain Precious Metal Trusts and Funds

The discount on CEF is remarkable.

The gold to silver ratio is quite high.

 

Both metals are oversold.

If the precious metals rebound silver will have quite a bit of catching up to do, and will likely outperform to the upside as they have outperformed to the downside.   Beta giveth, and beta taketh away.

Silver has done this over the last six months for example.

Gold Daily and Silver Weekly Charts - Though the Heavens May Fall

"No one today likes truth: utility and self interest have long ago been substituted for truth. We live in a nightmare of falsehoods, and there are few who are sufficiently awake and aware to see things as they are. Our first duty is to clear away illusions and recover a sense of reality.

If war should come, it will do so on account of our delusions, for which our tormented conscience attempts to find moral excuses. To recover a sense of reality is to recover the truth about ourselves and the world in which we live, and thereby to gain the power of keeping this world from falling apart."

Nikolai Alexandrovich Berdyaev

There was intraday commentary titled The Epicenter of the Next Financial Crisis and overnight commentary on the precious metals, Free Markets at Work.

I get the feeling sometimes that we have become a nation of conmen and their servants, who plague the great mass of people who are preoccupied with raising families and just getting by.

As we have seen, in the latter part of the 20th century, people had forgotten, or more properly had been persuaded to disregard, the lessons of history and the reforms put in place in the 1930's.   And to our regret the conmen and their enablers were able to get their hands in our pockets, and grab hold of our wallets.  And we have not been able to get their slimy hands out of pockets yet. 

How fitting that in the next election we can once again consider voting for a Bush or a Clinton.  Some choice.

When the time comes, and it is coming as it always does, we should forgive, but not forget. 

And we should let justice be done, though the heavens may fall. 

Have a pleasant evening.

 

SP 500 and NDX Futures Daily Charts - Reavers: Time To Go

Simon: I don't understand.

Zoe: You've never heard of Reavers?

Simon: Well, campfire stories of men gone savage on the edge of space, killing and—

Zoe: They're not stories.

Simon: What happens if they board us?

Zoe: If they take the ship, they'll rape us to death, eat our flesh and sew our skins into their clothing. And if we're very very lucky, they'll do it in that order.

Joss Whedon, Serenity

It looks like equities are getting set up for another 'big short.' 

It is not quite clear whether we are at full apogee or not yet.  If the international situation clears up, there is always plenty of paper left to take it higher.

This market is now an artificial construct.  It is a wealth extraction machine, more poorly regulated than the average casino.

It is hard to tell where safety may lie.   The usual suspects have most of the usual places covered.

But fortunately the abusers of civil society among us these days are not archcriminals, are not like the mythical hordes of the past. and most are not even extraordinarily intelligent, enough to hold and be successful in a legitimate profession.

They do not allow most of the normal prohibitions of conscience or human empathy to give them pause.  They tend to be verbally acute, emotionally shallow, and mildly delusional.  They may dress well and have admirers amongst the media and the public.

On the positive side, they are not too lazy to steal.  Madoff may have worked very hard, but at the end of the day he was just a gangster.    Most are just sociopaths who have chosen to hold a pen instead of a gun.

And it is not just Wall Street.  People are great imitators,  And when illicit behaviour and monopoly business tactics become tolerated they can soon enough become commonplace.   The corruption and lack of moral principle and judicious moderation in Big Pharma and other 'service sectors' are appallingly fashionable.

If we can ever find enough honorable people to uphold the law, and give them the support that they deserve, we may find that a fear of physical punishment will have most of these modern day crooks cutting deals and turning state's evidence, or running for other places in their jets, like vermin scattering when a light shines upon them. 

And that will be a good day.

Have a pleasant evening.

The Epicenter of the Next Global Financial Crisis - Financial Dreadnoughts

The 'trigger event' for the next crisis could be elsewhere, someplace distant, and out of the way.  The first World War was ignited by a political assassination over a fractious disagreement in Sarajevo that engaged an international web of interconnections.

 

Granted that hubris was on a high note, particularly in Germany, and the system itself was fragile and deeply interwoven.

In the current global financial scenario, if the ripple of global interconnectedness reaches the New York (and European NationalBank Holding Companies), then the real crisis can take root and begin to knock down banks and national economies around the world.

12 Systemic Importance Indicators For US Bank Holding Companies

At that point the only rational response by the government would be to nationalize these Banks, and begin their orderly restructuring with losses ringfenced to investors and principals and creditors.

 

Of course that might not happen, since that was also the only rational response in 2008, and political power and influence and soft bribery prevailed.    And there has been very little reform, with the Too Big To Fail Banks becoming Too Big To Jail, and the real lords of the land.

 

Why do democratically organized nations allow such behemoths to grow even larger, and act with virtual impunity over the laws, and imperil their national health and welfare.   Because these outlandish financial monstrosities are the new battleships in a financial landscape in which political will controls money and wealth in ways never before seen, but far too often for the private gains of commercial moneyed interests.  War never changes.

And like the dreadnoughts from the last wars of the 20th century, they are already anachronisms, costing much more than they are worth.  The generals always seek to employ the old methods of warfare, even on unfamiliar landscapes.

 

Next time it looks like not only a 'bailout' but a 'bail-in' as well.   And the destruction of a free and honest financial system in the US will be complete.

 

Special thanks to Wall Street On Parade For this chart and the report link.