24 April 2016

Weekend Reading: Pride, Rationalization, and 'Cheap Grace'


"Cheap grace is the grace we bestow on ourselves. Cheap grace is the preaching of forgiveness without requiring repentance, baptism without church discipline, Communion without confession....

Cheap grace is grace without discipleship, grace without the cross.”

Dietrich Bonhoeffer

"Yet such in one shape or other is the way with the multitude of men everywhere and at all times; they do not see the image of Almighty God before them, and ask themselves what He wishes: if once they did this they would begin to see how much He requires, and they would earnestly come to Him, both to be pardoned for what they do wrong, and for the power to do better.

And, for the same reason that they do not please Him, they succeed in pleasing themselves. For that contracted, defective range of duties, which falls so short of God’s law, is just what they can fulfill; or rather they choose it, and keep to it, because they can fulfill it.

Hence, they become both self-satisfied and self-sufficient; – they think they know just what they ought to do, and that they do it all; and in consequence they are very well content with themselves, and rate their merit very high, and have no fear at all of any future scrutiny into their conduct, which may befall them...

And such, I say, is the religion of the natural man in every age and place; – often very beautiful on the surface, but worthless in God’s sight; good, as far as it goes, but worthless and hopeless, because it does not go further, because it is based on self-sufficiency, and results in self-satisfaction.

I grant, it may be beautiful to look at, as in the instance of the young ruler whom our Lord looked at and loved, yet sent away sad; it may have all the delicacy, the amiableness, the tenderness, the religious sentiment, the kindness, which is actually seen in many a father of a family, many a mother, many a daughter, in the length and breadth of these kingdoms, in a refined and polished age like this; but still it is rejected by the heart-searching God, because all such persons walk by their own light, not by he True Light of men, because self is their supreme teacher, and because they pace round and round in the small circle of their own thoughts and of their own judgments, careless to know what God says to them, and fearless of being condemned by Him, if only they stand approved in their own sight...

Yes, it is the ignorance of our understanding, it is our spiritual blindness, it is our banishment from the presence of Him, who is the source and the standard of all Truth, which is the cause of this meagre, heartless religion of which men are commonly so proud..."

John Henry Newman

The prayers of children, both in age and in the spirit, are full of needs, and sometimes ostentatious thanks and requests aloud to impress others. As we grow older, our needs are supplemented by requests for strength, and for the knowledge of God's portion for us, His will.

If we wish to grow, we pray that God will show us our shortcomings, the ways in which we have neglected to do His will, in bending our understanding of His commands to please ourselves instead. The times and places in which we turned aside from His call, not because we were defiant, but because we were blinded with distractions, and negligent in our own self-satisfaction and illusions of self-sufficiency.

If done well, we can find this examination to be an experience in growth, bearing in mind that growth is almost always a long process that is, at times, uncomfortable, and rarely cheap. But to take up that burden with His support is the path to life.

23 April 2016

Gold Deliveries on the Comex For Friday, April 22


HSBC delivered 94,500 ounces of gold bullion at 1228.70 from their house account to the market on Friday.   I wonder if their house account includes their custodial activities.

In this case the biggest takers were the house accounts at Nova and JPM, and that big 'customer' at JPM who keeps standing for gold this month.

I just like to take the occasional note of these things.

Let's see if gold bottoms here for the short term and goes back up next week.


22 April 2016

Silver 'Owners Per Ounce'


Silver 'owners per ounce,' which is the registered (deliverable) supply on the Comex compared to the total contracts for that silver that are open is elevated.   And this is in a relatively inactive, quiet month for silver on that exchange.




Gold Daily and Silver Weekly Charts - Management of Perceptions


Gold took a $20 hit after the European close today, moving down from 1250 to 1230.

And the theme of the day seemed to be 'buy paper, don't worry' with the pushing of the SP 500 futures, even though techs kept threatening to roll over here on weak to bad earnings reports.

Silver managed to hang on to the $17 handle which was very good news.   I am watching the NDX for stocks and silver for the precious metals to get a better idea of where these asset prices might be moving in the short term.

The charts are fairly obvious if you look at them.  Nothing new has really developed.  Silver seems to have activated its cup and handle with the breaking out above the rim, and so far so good there.

Mary moved her fingers and toes on her right side this morning, her fingers while we were there last night for the first time.  It was the prettiest thing I have ever seen.  Next week we have a minor surgery to provide a permanent drain for her cerebral fluid called a 'shunt' and then hopefully she will be released to an inpatient rehab facility.

Have a pleasant weekend.










SP 500 and NDX Futures Daily Charts - On the Edge


With the lack of fresh macroeconomic news today, it was the earnings that was driving equities, even though volumes remain somewhat low.

The tech sector in particular is not reporting the types of results that would reflect a growing economy.   Instead the numbers show that the consumers are still struggling, both at home and abroad.

The financial sector heavy SP 500 seems to be hanging on a bit better, but the NDX with its tech weightings is starting to roll over.  Indeed it was buying in the SP 500 futures that seemed to sustain the equities during the worst of today's declines, but again on low volumes.

There will be more earnings reports and macroeconomic news next week.

Volatility is rather low as measured by the VIX.  But with these light volumes that could change in a Manhattan minute.

Have a pleasant weekend.






21 April 2016

The US Government Is Holding Counterparty Risk for Wall Street Derivatives (And So Are You)


"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.

When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin!

You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out."

Andrew Jackson, in a meeting with the Bankers in Philadelphia, February 1834

Just as in the case of AIG, which was 'bailed out' at 100 cents on the dollar not to help them, but to provide a big cash infusion to places like Goldman Sachs, so Wall Street continues to socialize their reckless gambling with the help of their 'friends' in the government and the media.

U.S. Government Is Now a Major Counterparty to Wall Street Derivatives
By Pam Martens and Russ Martens: April 21, 2016

According to a study released by the Federal Reserve Bank of New York in March of last year, U.S. taxpayers have already injected $187.5 billion into Fannie Mae and Freddie Mac, two companies that prior to the 2008 financial crash traded on the New York Stock Exchange, had shareholders and their own Board of Directors while also receiving an implicit taxpayer guarantee on their debt. The U.S. government put the pair into conservatorship on September 6, 2008. The public has been led to believe that the $187.5 billion bailout of the pair was the full extent of the taxpayers’ tab. But in an astonishing acknowledgement on February 25 of this year, the Government Accountability Office, the nonpartisan investigative arm of Congress, issued an audit report of the U.S. government’s finances, revealing that the government’s “remaining contractual commitment to the GSEs, if needed, is $258.1 billion.”

This suggests that somehow, without the American public’s awareness, the U.S. government is on the hook to two failed companies for $445.6 billion dollars. And that may be just the tip of the iceberg of this story.

The official narrative around the bailout of Fannie and Freddie is that they were loaded up with toxic subprime debt piled high by the Wall Street banks that sold them dodgy mortgages. While that is factually true, the other potentially more important part of this story is the counterparty exposure the Wall Street banks had to Fannie and Freddie’s derivatives if the firms had been allowed to fail...

Read the entire story here.