Stock and Precious Metal Charts This Afternoon

Here are the stock and precious metal charts this afternoon.

I have indicated a possibly important overhead resistance level on the SP 500.  They have been using the futures to power that index higher, pulling up the rest of the equity market today, or so it seems to my eye.

Things are looking up a bit with herself, as she is speaking and remembering much better.  Her mind is clearing and her speech is improving dramatically although the right side of her body is not usable yet.   I have to go to hospital now to discuss some things with the doctors.

I am making some attempts to hold the house together with things like doing laundry and making meals and cleaning.  Yes, she would shudder if she saw me at it, but I am making the attempt nonetheless.

Have a pleasant evening.

Franklin Roosevelt On the Eve of the Presidential Election 1936 - 'Government By Organized Money'

"On the eve of a national election, it is well for us to stop for a moment and analyze calmly and without prejudice the effect on our Nation of a victory by either of the major political parties.

The problem of the electorate is far deeper, far more vital than the continuance in the Presidency of any individual. For the greater issue goes beyond units of humanity--it goes to humanity itself.

In 1932 the issue was the restoration of American democracy; and the American people were in a mood to win. They did win. In 1936 the issue is the preservation of their victory. Again they are in a mood to win. Again they will win.

More than four years ago in accepting the Democratic nomination in Chicago, I said: "Give me your help not to win votes alone, but to win in this crusade to restore America to its own people."

The banners of that crusade still fly in the van of a Nation that is on the march.

It is needless to repeat the details of the program which this Administration has been hammering out on the anvils of experience. No amount of misrepresentation or statistical contortion can conceal or blur or smear that record. Neither the attacks of unscrupulous enemies nor the exaggerations of over-zealous friends will serve to mislead the American people.

What was our hope in 1932? Above all other things the American people wanted peace. They wanted peace of mind instead of gnawing fear.

First, they sought escape from the personal terror which had stalked them for three years. They wanted the peace that comes from security in their homes: safety for their savings, permanence in their jobs, a fair profit from their enterprise.

Next, they wanted peace in the community, the peace that springs from the ability to meet the needs of community life: schools, playgrounds, parks, sanitation, highways--those things which are expected of solvent local government. They sought escape from disintegration and bankruptcy in local and state affairs.

They also sought peace within the Nation: protection of their currency, fairer wages, the ending of long hours of toil, the abolition of child labor, the elimination of wild-cat speculation, the safety of their children from kidnappers.

And, finally, they sought peace with other Nations--peace in a world of unrest. The Nation knows that I hate war, and I know that the Nation hates war.

I submit to you a record of peace; and on that record a well-founded expectation for future peace--peace for the individual, peace for the community, peace for the Nation, and peace with the world...

For twelve years this Nation was afflicted with hear-nothing, see-nothing, do-nothing Government. The Nation looked to Government but the Government looked away. Nine mocking years with the golden calf and three long years of the scourge! Nine crazy years at the ticker [tape] and three long years in the breadlines! Nine mad years of mirage and three long years of despair! Powerful influences strive today to restore that kind of government with its doctrine that that Government is best which is most indifferent.

For nearly four years you have had an Administration which instead of twirling its thumbs has rolled up its sleeves. We will keep our sleeves rolled up.

We had to struggle with the old enemies of peace--business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me--and I welcome their hatred...

Our vision for the future contains more than promises.

This is our answer to those who, silent about their own plans, ask us to state our objectives.

Of course we will continue to seek to improve working conditions for the workers of America--to reduce hours over-long, to increase wages that spell starvation, to end the labor of children, to wipe out sweatshops. Of course we will continue every effort to end monopoly in business, to support collective bargaining, to stop unfair competition, to abolish dishonorable trade practices. For all these we have only just begun to fight.

Of course we will continue to work for cheaper electricity in the homes and on the farms of America, for better and cheaper transportation, for low interest rates, for sounder home financing, for better banking, for the regulation of security issues, for reciprocal trade among nations, for the wiping out of slums. For all these we have only just begun to fight.

Of course we will continue our efforts in behalf of the farmers of America. With their continued cooperation we will do all in our power to end the piling up of huge surpluses which spelled ruinous prices for their crops. We will persist in successful action for better land use, for reforestation, for the conservation of water all the way from its source to the sea, for drought and flood control, for better marketing facilities for farm commodities, for a definite reduction of farm tenancy, for encouragement of farmer cooperatives, for crop insurance and a stable food supply. For all these we have only just begun to fight.

Of course we will provide useful work for the needy unemployed; we prefer useful work to the pauperism of a dole.

Here and now I want to make myself clear about those who disparage their fellow citizens on the relief rolls. They say that those on relief are not merely jobless--that they are worthless. Their solution for the relief problem is to end relief--to purge the rolls by starvation. To use the language of the stock broker, our needy unemployed would be cared for when, as, and if some fairy godmother should happen on the scene.

You and I will continue to refuse to accept that estimate of our unemployed fellow Americans. Your Government is still on the same side of the street with the Good Samaritan and not with those who pass by on the other side..."

Franklin D. Roosevelt, October 31, 1936

Caught in the Aftermath of a Minsky Moment by a Credibility Trap

"I think this is where the academics are kind of clashing with the practitioners. I think on paper negative rates make a lot of sense if you're running academic models, but in reality they make no sense.  Having seven or eight trillion dollars of debt trading at negative rates, having thirty year JGB's trading at fifty basis points is absolutely ludicrous. This experiment that's going on we all know will end poorly at some point in time, I just don't know when that time is...

I think that one of the fears that they have is a run on cash. If they told you and I that they're going to tax your deposits by a hundred basis points, well it's better to put it in a safe or under your mattress. And that's why you see a resurgence in gold. The more they move to negative rates, the more gold is gonna take off because there's no carrying cost."

Kyle Bass, Hayman Capital

This comment [quoted below] about a recent column by Paul Krugman is written by someone I consider to be an ethical and intelligent mainstream economist. It was so simply and eloquently put that I am using it here on my site.  It expresses almost perfectly why there is a broad movement growing in the US that rejects all the  establishment candidates from both parties

And it goes without saying that the words I put in front of it are completely my own, and most likely go far beyond what this person said so well.  We have disagreed on some things at times, but I hope in an amicable way.  This is how knowledge is created from the raw material of data.

What I find to be highly significant right now is how badly the status quo is assessing and reacting to this current political situation.  There is an unmistakable desire for honesty, transparency, and reform in this country, especially among the young.  But those who view themselves as the powerful, the thought leaders, seem to be retreating into a comfortable story that they tell each other.   It is a story about how good things really are, if only the stupid and naive public could be made to understand it. Few may actually believe it in their hearts, but it is a story that serves their cause: it is expedient.

I don't wish to single Mr. Krugman out, not at all, because he is hardly the worst among mainstream commentators and economists.  He is merely symptomatic of these times, more a follower and participant than an original thinker or leader. Like his peers, he has seen others doing it, and it has worked for them.  As Louis Brandeis once said, the government teaches by example.   

What the privileged fail to realize is that by continuing to push forward with their winning strategy, because nothing powerful enough has risen up yet to stop them, will at some point shake the American republic to its foundations.

Since our current system of finance and money is so heavily reliant on confidence in its integrity, I fear that this break in trust, that is already showing signs of advanced development, will lead to a serious tear in the social and economic fabric.  This is certainly something that we have seen before in this country, but thankfully not for many, many years.

Some people will view this gathering storm as an opportunity to gain more power for themselves and their friends, and will attempt to use it as such.  And some ruthlessly so I am sure.  And that is dangerous. It is unfortunate that real change that can provide a more constructive alternative is not happening, because the very serious people, what Larry Siummers categorized as insiders, keep rationalizing the status quo to themselves, and deny anything that suggests that the prevailing system has failed, that they may have failed in anything.  I have called this the credibility trap.

If the fortunate few decide to continue to push down this rising trend towards reform and justice, eventually resorting to force as confidence and willing compliance continues to decline, then history suggests that the Pandora's box that they will open will carry many of them, and far too many innocents, to a place where they would not wish to go.

We do not have 'capitalism;'  what we have is plunder.   We have a corrupt system of kleptocracy ruled over by the big money power of a relative few individuals and organizations, what FDR called 'organized money'.  And a system based on the primacy of selfishness, power,, unbridled greed and a free hand to cheat and deceive and manipulate will serve to create a kind of hell on earth.

I think it is time for all of us to take a deep breath and seriously consider where our passions are taking us, and what this spirit of contentiousness and willfulness is causing us to say and do. The ultimate irony is when we become that which we hate.  I would wish all of us to step back and see what we may become before this goes too far.

Saturday, April 16, 2016 at 05:32 AM (in reaction to the two recent PK columns on Sanders):

"Paul Krugman has decided that if there is any way to destroy a decent, humble, caring, thoughtful candidate for president, a candidate who offers the possibility of actual change in domestic and foreign policies that have created so many problems for so many people for so long, if there is any way, any word that can be used, to destroy that candidate then destruction there will be.

What Krugman has done however is show me what wild intolerance, what authoritarian political thinking in an American context amounts to, and the attempts by Krugman at destruction of a decent person and candidate will with me turn me completely away from the desired effect.

Were I a student of Paul Krugman, I would smile and nod as if in agreement and very quietly go in the opposite direction. After all, I fortunately learned early on which teachers always had to be agreed with.

I have no idea where this disdain for a truly decent person and candidate comes from, obviously not from the person, nor do I care about the psychology on where the disdain comes from. Krugman is being as fierce as can be, harsh as can be. I record the fierceness and harshness, know such an anti-intellectual posture can never be for me and move away.

"As you know, I’m only saying these things because I’m a corporate whore and want a job with Hillary.

Related: Paul Krugman, Why I Haven't Felt the Bern


Jesse in reply:

Paul, you will obtain no objection to that self-confession from me, although it is purposely and dramatically overstated so as to discredit it.   No, you are caught by an idea, to a particular economic arrangement that seems to be failing most people, and to what history is likely to see as a systematic and continuing abuse of power.

This is not capitalism; this is mere plunder by a powerful few. We are caught in the aftermath of a 'Minsky Moment' by a credibility trap, and it has been going on for far too long.

In your defense, there is a lot of this sort of creative rationalization of a rotten system going around these days. It is fashionable.   And that is a big part of the problem.

Weekend Reading

“We are slow to master the great truth that even now Christ is, as it were, walking among us, and by His hand, or eye, or voice, bidding us to follow Him. We do not understand that His call is a thing that takes place now. We think it took place in the Apostles' days, but we do not believe in it; we do not look for it in our own case.

God's presence is not discerned at the time when it is upon us, but afterwards, when we look back upon what is gone and over. The world seems to go on as usual. There is nothing of heaven in the face of society, in the news of the day.

And yet the ever-blessed Spirit of God is there, ten times more glorious, more powerful than when He trod the earth in our flesh.

God beholds you. He calls you by your name. He sees you and understands you as He made you. He knows what is in you, all your peculiar feelings and thoughts, your dispositions and likings, your strengths and your weaknesses. He views you in your day of rejoicing and in your day of sorrow. He sympathizes in your hopes and your temptations. He interests Himself in all your anxieties and remembrances, all the risings and fallings of your spirit.

He encompasses you round and bears you in His arms. He notes your very countenance, whether smiling or in tears. He looks tenderly upon you. He hears your voice, the beating of your heart, and your very breathing. You do not love yourself better than He loves you. You cannot shrink from pain more than He dislikes your bearing it; and if He puts it on you, it is as you would put it on yourself, if you would be wise, for a greater good afterwards.

There is an inward world, which none see but those who belong to it. There is an inward world into which they enter who come to Christ, though to men in general they seem as before. If they drank of Christ's cup it is not with them as in time past. They came for a blessing, and they have found a work.

To their surprise, as time goes on, they find that their lot is changed. They find that in one shape or another adversity happens to them. If they refuse to afflict themselves, God afflicts them.

Why did you taste of His heavenly feast, but that it might work in you—why did you kneel beneath His hand, but that He might leave on you the print of His wounds?

God has created me to do Him some definite service; He has committed some work to me which He has not committed to another. I have my mission -- I may never know it in this life but I shall be told it in the next.

I am a link in a chain, a bond of connection between persons. He has not created me for naught.

I shall do good, I shall do His work. I shall be an angel of peace, a preacher of truth in my own place while not intending it if I do but keep His commandments.

Therefore I will trust Him. Whatever I am, I can never be thrown away. If I am in sickness, my sickness may serve Him; in perplexity, my perplexity may serve Him. If I am in sorrow, my sorrow may serve Him.

He does nothing in vain. He knows what He is about.

He may take away my friends. He may throw me among strangers. He may make me feel desolate, make my spirits sink, hide my future from me -- still He knows what He is about.

Let us feel what we really are--sinners attempting great things. Let us simply obey God's will, whatever may come. He can turn all things to our eternal good. Easter day is preceded by the forty days of Lent, to show us that they only who sow in tears shall reap in joy.

Contemplate then yourself, not as yourself, but as you are in the Eternal God. Fall down in astonishment at the glories which are around you and in you, poured to and fro in such a wonderful way that you are dissolved into the Kingdom of God.

The more we do, the more shall we trust in Christ; and that surely is no morose doctrine, that leads us to soothe our selfish restlessness, and forget our fears, in the vision of the Incarnate Son of God.

May the Lord support us all the day long, till the shades lengthen, and the evening comes, and the busy world is hushed, and the fever of life is over, and our work is done.

Then in His mercy may He give us a safe lodging, and a holy rest, and peace at the last.”

John Henry Newman

Some Charts - When In Doubt Inflate Financial Paper

"For we wrestle not against flesh and blood, but against principalities and powers, against the rulers of the darkness of this world, against spiritual wickedness in high places." Eph 6:12

Here are the basic stock and precious metal and economic charts as of about 2:00 EDT.

The economic news this morning was rather poor, and the luster with which Wall Street attempted to paint the financial sector in light of the 'great results' from JPM were fading as the 'better than expected' results over lowered expectations from CITI were not so lustrous year over year.   I think we might be in the midst of another handoff of long positions from the pros to the 'others.'  But only time will tell as we bang against an obvious overhead resistance point.

I have not heard much in the lame stream media about Deutsche Bank admitting that they, along with others, had been manipulating the prices in the global precious metals markets.     The oligarchs seem to be less coy and more audacious about pulling the strings of power.

A late night complication has led to a minor surgery this morning, to the extent that any surgery with full anesthesia is minor.   We seem to be hitting the trifecta of unusual things that do not often happen, and those unexpectedly.

The surgery is to insert a tube to drain of excess fluid from the ventricle, a different area from where they had the drain in from the surgery itself.    They think the cerebrospinal fluid was contaminated by blood from the area of the tumor even though it was not directly in touch.

And that blood 'clogged up' the natural draining system.  So they intend to relieve the pressure and let it flush the blood out over a few days.  And back to the ICU she goes.

And so I am putting this up, and then cracking on to the hospital.

Have a pleasant weekend.

Fed: JP Morgan Poses a 'Serious Adverse Effect To US Financial Stability' While Media Ignores

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

Upton Sinclair


"Hell is empty and all the devils are here."

William Shakespeare, The Tempest

And these days it is not always so obviously a question of salary. But it is often a question of access to the powerful, and the great favors, money, and privileges that they may grant as a reward.

There has been no meaningful and sufficient financial reform in the US, thanks in large part to the money power of the Banks and their faithful courtiers in the professional and political classes.

How can we not expect political failures in financial reform when almost fifty percent of Super Pac money comes from just 50 sources?

Do you reasonably expect any movement on changing this corrupt system from the establishment Republicans or the Wall Street Democrats?  They and their friends are doing very well financially as the data shows.

One of the reasons why the Fed is raising this alarm now is in part to the serious grilling that Senator Elizabeth Warren gave to Janet Yellen in a hearing last year, to which Janet had no good answers.

As JPM showed in their most recent financials, they are prospering once again while risking the rest of the US economy by their pursuit of greed and socialization of their losses.

And as we learned yesterday, Deutsche Bank admitted that they had been manipulating the prices of gold and silver in the world markets, and that they were certainly not alone in this fraudulent behaviour.  As I have asked so many times, if the Banks have been shown to have manipulated so many other markets of consequence, how can anyone be so skeptical when the evidence showed that they were doing the same thing in the gold and silver markets.

A rank amateur might not see it on the tape and the data, but any seasoned pro could not miss it unless they were wilfully blind.  Keep this sort of thing in mind as you take your pick of analysis and associated spinning of the facts.  I have seen a lot of nastiness on the Street over the past thirty five years, but this is one of the most rotten financial market climates that I can remember.  What used to be the exceptional misbehaviour seems to have become the accepted standard of doing business.  This is one of the most brutally cynical political and financial climates that I can remember and my memory of this goes all the way back to the early 1960's, to LBJ and Nixon.

The mainstream media continues to yawn, and when the next financial crisis comes, one well may ask 'why didn't anyone see it coming?'

The Fed Sends a Frightening Letter to JPMorgan and Corporate Media Yawns
By Pam Martens and Russ Martens
April 14, 2016

Yesterday the Federal Reserve released a 19-page letter that it and the FDIC had issued to Jamie Dimon, the Chairman and CEO of JPMorgan Chase, on April 12 as a result of its failure to present a credible plan for winding itself down if the bank failed. The letter carried frightening passages and large blocks of redacted material in critical areas, instilling in any careful reader a sense of panic about the U.S. financial system...

At the top of page 11, the Federal regulators reveal that they have “identified a deficiency” in JPMorgan’s wind-down plan which if not properly addressed could “pose serious adverse effects to the financial stability of the United States.”   Why didn’t JPMorgan’s Board of Directors or its legions of lawyers catch this?

It’s important to parse the phrasing of that sentence. The Federal regulators didn’t say JPMorgan could pose a threat to its shareholders or Wall Street or the markets. It said the potential threat was to “the financial stability of the United States.”

That statement should strike fear into even the likes of presidential candidate Hillary Clinton who has been tilting at the shadows in shadow banks while buying into the Paul Krugman nonsense that “Dodd-Frank Financial Reform Is Working” when it comes to the behemoth banks on Wall Street...

JPMorgan’s sprawling derivatives portfolio that encompasses $51 trillion notional amount as of December 31, 2015 is also causing angst at the Fed and FDIC. The regulators wanted more granular detail on what would happen if JPMorgan’s counterparties refused to continue doing business with it if rating agencies cut its credit ratings. The regulators asked for a “narrative describing at least one pathway” for winding down the derivatives portfolio, taking into account a number of factors, including “the costs and challenges of obtaining timely consents from counterparties and potential acquirers (step-in banks).”

Read the entire article here.