SP 500 and NDX Futures Daily Charts - Wibbly Wobbly

Stocks have been chopping sideways in a trading range for about 8 days now.

This coming Friday is a stock option expiration.

Have a pleasant evening.

Above the Law: The Age of Impunity and the Credibility Trap

"A credibility trap is a condition in which the financial, political and informational functions of a society have been compromised by corruption and fraud, so that the leadership cannot effectively reform, or even honestly address, the problems of that system without impairing and implicating, at least incidentally, a broad swath of the power structure, including themselves."

The bureaucrats, politicians, professional enablers, and financial elite are so intricately complicit in, and so benefited by, the broken system which we have now that they cannot talk about the systemic problems that are driving the real economy into a perpetual stagnation. They may talk a good game, and pledge themselves to reform in passing, but quickly turn the conversation to some emotional distraction, some other group of people to blame, some other social cause, anything but the serious subject of substantial financial reform.

They are very much a part of the problem, if not at the heart of it.

They cannot engage in effective reforms because in doing so they would:
a) indict themselves and their predecessors and colleagues, and impugn their reputation for competency and/or integrity, and
b) would hamper their very lucrative careers in a system that they cannot afford to change or meaningfully reform.

There are very serious consequences for speaking the truth these days.  Insiders do not speak ill of other insiders, or they lose access to information and power.  This explains much of our current problems.

Perhaps the slogan for these pampered princes and princesses should be 'it may be a rotten, broken system, but I am personally doing just fine by it.'

How can one expect real reform when the privileged control the mechanisms of power and regulation, including the very selection process that chooses which candidates can even run for public office?

This is the credibility trap.

The Age of Impunity
Jeffrey Sachs
May 13, 2016

THE PANAMA PAPERS opened yet another window on the global system of financial corruption, showing how political leaders and businesses use shell companies in secrecy havens like the British Virgin Islands and many US states to evade taxes and hide corruption and other crimes.

Yet the system of corruption depends on another factor beyond secrecy, one that is perhaps even more important: impunity. Impunity means that the rich and powerful escape from punishment even when their malfeasance is in full view.

Impunity is epidemic in America. The rich and powerful get away with their heists in broad daylight. When a politician like Bernie Sanders calls out the corruption, the New York Times and Wall Street Journal double down with their mockery over such a foolish “dreamer.”

The Journal recently opposed the corruption sentence of former Virginia governor Bob McDonnell for taking large gifts and bestowing official favors — because everybody does it. And one of its columnists praised Panama for facilitating the ability of wealthy individuals to hide their income from “predatory governments” trying to collect taxes. No kidding.

Our major institutions, the ones that should know better, are often gross enablers of impunity...

Read the entire article here.

Gold Daily and Silver Weekly Charts - Plus C'est la Même Chose - Restless

"That we are overdone with banking institutions which have banished the precious metals and substituted a more fluctuating and unsafe medium, that these have withdrawn capital from useful improvements and employments to nourish idleness, that the wars of the world have swollen our commerce beyond the wholesome limits of exchanging our own productions for our own wants, and that, for the emolument of a small proportion of our society who prefer these demoralizing pursuits to labors useful to the whole, the peace of the whole is endangered and all our present difficulties produced, are evils more easily to be deplored than remedied."

Thomas Jefferson, 14 March 1810

And the remedy was not found for this corruption of the banking system cited by Jefferson until the coming of 'Old Hickory,' who although with Jefferson is sometimes reviled by the oligarchs and statists of today, nevertheless brought reform and relief to the general public, for whom they never broke their faith or betrayed their confidence, despite all the failings and shortcomings of their times.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.

There was intraday commentary here.

"In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society — the farmers, mechanics, and laborers — who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their government.

There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing."

Andrew Jackson, Veto of the Second Bank of the United States

Have a pleasant evening.

Related: Franklin Roosevelt on Andrew Jackson

"You have made us for Yourself, O Lord, and our hearts are restless until they rest in You." - St. Augustine of Hippo

SP 500 and NDX Futures Daily Charts - Purposeful Mispricing of Risk

The charts seem fairly clear.

The mispricing of risk continues.

The rationales for this are increasingly thin and self-serving.

The consequences are going to be historic.

Have a pleasant evening.

Charts Updated as of Monday at 11 AM - Tender Mercies

"The trouble with lying and deceiving is that their efficiency depends entirely upon a clear notion of the truth that the liar and deceiver wishes to hide.

In this sense, truth, even if it does not prevail in public, possesses an ineradicable primacy over all falsehoods."

Hannah Arendt


"Let everyone see your gentleness. The Lord is near! Do not be anxious about anything. Instead, in every situation, through prayer and petition with thanksgiving, tell your requests to God. And the peace of God that surpasses all understanding will guard your hearts and minds." Phil 4:4-9

By their manipulations and deceit they prove that which they seem to fear, that their economic and monetary theory is nonsense, and is failing, for it cannot stand on its own. And that the people will not be fooled forever.

As noted over at Zerohedge a little while ago, "over 18,000 contracts - or over $2.3 billion notional of gold has been dumped in the last 10 minutes..."

I will be in training this week to help Mary when she comes home, learning how to more effectively assist her to get in and out of a car,  and manage her needs,  as she will be in a wheel chair for a little while at least.  But given her remarkable progress the therapists do not expect this to be too long. It is hard to believe that only four weeks ago the doctors were deeply concerned that she would never have the use of her right leg and arm again.

Was I afraid? Did I doubt? Of course I did. I was in a kind of a walking shock, numb with grief. But in the end I accepted it, and gave over to His providence. 'Thy will be done.' And it was not easy. It was only two weeks ago that we saw her leg move for the first time, and feebly move her fingers. And yesterday I saw her make her way down the hallway for dinner in a wheelchair but without our help. It was like the breaking of dawn.

But there are many there who are not so blessed, and we must remember them in our thoughts and prayers. In this same facility one can see the amputees, and the elderly, the stricken and the lonely. We must remember them, and do not forsake them. We live in an age that despises the weak, the unfortunate, the gentle, the poor, and preys upon them while the others remain silent. We are called to not be silent.  In the gentle acceptance of His will we are like the rocks of a shore, the steel of a blade.  For this is the nature of our warfare.  We rise by falling.

The darkness only serves to make His tender mercies all the brighter. So do not lose heart. Change is coming.

Have a pleasant evening.

"Wonderful providence indeed which is so silent, yet so efficacious, so constant, so unerring. This is what baffles the power of Satan. He cannot discern the Hand of God in what goes on; and though he would fain meet it and encounter it, in his mad and blasphemous rebellion against heaven, he cannot find it.

Crafty and penetrating as he is, yet his thousand eyes and his many instruments avail him nothing against the majestic serene silence, the holy imperturbable calm which reigns through the providences of God. Crafty and experienced as he is, he appears like a child or a fool, like one made sport of, whose daily bread is but failure and mockery, before the deep and secret wisdom of the Divine Counsels.

He makes a guess here, or does a bold act there, but all in the dark. He knew not of Gabriel's coming, and the miraculous conception of the Virgin, or what was meant by that Holy Thing which was to be born, being called the Son of God. He tried to kill him, and he made martyrs of the innocent children; he tempted the Lord of all with hunger and with ambitious prospects; he sifted the Apostles, and got none but one who already bore his own name, and had been already given over as a devil.

He brought into the world the very salvation which he feared and hated. He accomplished the Atonement of that world, whose misery he was plotting. Wonderfully silent, yet resistless course of God's providence! 'Verily, Thou art a God that hidest Thyself, O God of Israel, the Saviour;' and if even devils, sagacious as they are, spirits by nature and experienced in evil, cannot detect His hand, while He works, how can we hope to see it except by that way which the devils cannot take, by loving faith?"

John Henry Newman, PS 17

No Updates Tonight

"For in that universal call,
Few bankers will to heaven be mounters;
They'll cry, 'Ye shops, upon us fall!
Conceal and cover us, ye counters!'

When other hands the scales shall hold,
And they, in men's and angels' sight
Produced with all their bills and gold,
'Weighed in the balance and found light!'"

Jonathan Swift, The Run on the Bankers

Change is coming.

Updates on Monday.

Have a pleasant weekend.