SP 500 and NDX Futures Daily Charts - Reverse Engines

Money is still hot and cheap, and plentiful in all the wrong hands.  So do not look for fundamentals to be driving asset prices in the short time, if they ever do.

It was no surprise that we saw a sharp reversal in equities today as the selling obviously exhausted itself on Brexit jitters, and there were too many specs leaning with leverage to the short side.

So we had a nice sharp intraday reversal.

Ok, now that the Fed is off the table for now, at least until July, attention is turning to Brexit, and to a lesser extent to the real economy, primarily as it says something about what the Fed may be able to do.

Rough seas ahead, mateys.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Seriously? - $28 Silver and $1490 Gold

"The rate hike cycle has left the building."

Jeffrey Gundlach


"Character is, in the long run, the decisive factor in the life of individuals and of nations alike."

Theodore Roosevelt

The Fed has failed.   Death by serial policy errors and a credibility trap.  They are in good company with their peers.

The longer term implications of this are quite interesting, especially given the upcoming elections in the US, the bonfire of the vulgarities.  And globally, something as old as Babylon and evil as sin slouches towards the darkness and the death of reason to be born, again.

And so now we know why gold was smacked down so hard at the end of May, in addition to a convenient opportunity for the well-informed to skin the call options holders for the June Comex gold contract.

Those hawkish comments and bullish tweets about the economy from the Fed in April were just so much spin and hot air.  But it did serve to facilitate the ongoing wealth transfer from the 99% to the pampered professional class.

There is little enough that is beneath them.   And the bar keeps getting lower.

The MSCI has decided that Chinese stocks are not good enough for their index.  Better luck next year.

There was intraday commentary related to the precious metals here.

On a breakout, the intermediate target for silver is $28 and change, and for gold about $1490.

As the fellow from the Comex told Kyle Bass, 'price will fix everything.'    If you let it.  And I doubt that they will, except under duress of men and markets.

The Fed is not the heart of it; they are merely the hired help.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Spinning Wheel

"But I am bound upon a wheel of fire, that mine own tears do scald like moulten lead.”

William Shakespeare, King Lear

In her defense, Janet is having to shovel out from a blizzard of bad karma created by her predecessors, as well as the results of her own actions. Nevertheless, she was not shanghaied into the job.

The Fed has revised to the downside the revision of growth which they had boldly put forward in April, along with predictions of rate hikes to cool off a robust economy.

Initially the markets took this turn back to dovishness as bullish, but then they thought about it and realized that the change in outlook is because there is no real economic recovery.

This is not a new concept, after all, a lack of recovery.  Except in the fevered imaginings of skittish bureaucrats who can't keep but failing, without changing.

We have not had a real recovery for about five years or so, after the initial rebound from the crash in 2007-8, which was caused by—  miscalculations by the Fed.

And of course this kind of widespread stagnation and transfer of wealth was not possible without the corrosive effects of the corruption by big money of the political and regulatory processes.  All in support of an oversized financial sector that has become largely parasitic to real growth and the broad creation of wealth.

A banquet of consequences, now being served.

Ride a painted pony, let the spinning wheel spin...

Have a pleasant evening.

FOMC Statement For June 2016 - 'Job Gains Have Diminished' - Spectacle of Vulgarities

After eight long years, there is still no self-sustainable economic recovery.

And now we know the other reason that the price of gold had been hit so hard at the end of May, in addition to the big option expiration for the June futures contract.

The money masters fear a breakout in the price of gold, and a run higher sparking further interest, at a most inconvenient time when the free float of gold bullion in the world, and particularly in London, is so heavily strained by years of the systematic mispricing of risks across a range of financial assets.

The unsustainable will not be sustained. It ends in flamboyantly thin deceits, and a spectacle of vulgarities.

Release Date: June 15, 2016

Information received since the Federal Open Market Committee met in April indicates that the pace of improvement in the labor market has slowed while growth in economic activity appears to have picked up. Although the unemployment rate has declined, job gains have diminished. Growth in household spending has strengthened. Since the beginning of the year, the housing sector has continued to improve and the drag from net exports appears to have lessened, but business fixed investment has been soft.

Inflation has continued to run below the Committee's 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation declined; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market indicators will strengthen.

Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further. The Committee continues to closely monitor inflation indicators and global economic and financial developments.

Against this backdrop, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; James Bullard; Stanley Fischer; Esther L. George; Loretta J. Mester; Jerome H. Powell; Eric Rosengren; and Daniel K. Tarullo.

NAV Premiums of Certain Precious Metal Trusts and Funds - What Is Truth?

"Sin has many tools, but a lie is the handle which fits them all."

Edmund Burke


"A noble man compares and estimates himself by an idea which is higher than himself; and a mean man, by one lower than himself. The one produces aspiration; the other ambition for power or wealth, which is the way in which a vulgar man aspires."

Marcus Aurelius

We live in an age when breaking the rules for personal profit, cheating if you will, and telling lies about it has become an accepted means of acting in public, quietly fashionable, almost admirable to some, provided that the lying is done skillfully well more as a distortion than an outright whopper, and with style.

I have noticed of late that some seem to lie now quite freely almost as a convenience, in imitation of their 'betters,' those more verbally acute and skillful in the deceptive arts. And when caught out in a factual lie, seem offended that you would take notice of it. They are ashamed, not of the lie, but of having done it poorly. And they try to become better at it, more clever.

It seems as though even more have been given over passively to this sort of self-deception, perhaps not originating the falsehoods as such, more from a lack of creativity than scrupulous honesty. They will pass along the lies of others aggressively and without shame, even when they are shown to be objectively false. What matters is that the lies flatter us, our biases, our positions, and our passions. Team spirit. But what team?

I had a friend, who to all appearances and reputation was an upstanding person and quite proud of it, who passed along things that were blatantly false, unkind, and quite nasty to others. I implored him to stop sending these things to me. And when it was shown to be false, in a fairly indirect and non-confrontational manner for the sake of friendship, he was quick to respond indignantly, 'what is truth?'

This is ironically the quote that marked Pontius Pilate's great moment of moral failure for the sake of personal expediency. I am not sure what was more injured in this: our long friendship which this ended, or his character as a man.

It is not that most of our sins are so great; they are not, for in most things we do not rise to greatness in any sense of the word. Rather, it is that they obtain for us so little while costing us so much. What does it profit a man indeed.

And there is no reward in constantly marking the failures of others, but a pitfall.   It is better that we mark our own shortfalls, which are many. But at some place we must stand our ground, stand for something, some principle, even if we do so in fear and trembling for our own weaknesses and poor grasp of what is true.

What is truth? This could be the vulgar motto for the generation that is passing. And looking to our prescriptive leadership, could we see any better examples of vulgarity?    Truth is whatever we say it is, and woe to any who dare to disagree with the lie, or bring any light to our fanciful imaginings. The children of the darkness of this world will hate them for it.  For they are given over to greed and power, not truth.

The Central Fund's NAV discount has contracted quite a bit from what it had been.

Sprott Gold has raised its cash by selling additional units.

Sprott Silver is priced at a slight discount, which is a bit unusual given its historical norms.

The gold/silver ratio is still a bit high, but not as high as it had been.

The rally in gold is being driven by a flight to safety, among other things. Although Year-To-Date silver is still leading gold on a percentage basis, and many other financial assets as well.

We will be hearing from the FOMC within the hour.

Ubi sunt? The mighty rise and are fallen, but the word and the spirit endure.

Gold Daily and Silver Weekly Charts - FOMC Tomorrow - The Gathering Storm

“The combination of power, optimism and abstract thinking makes powerful people more certain. The more cut-off they are from others, the more confident they are that they are right.”

Margaret Heffernan, Willful Blindness


"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

Gold showed some strength today despite the long run up from the bottom it experienced for the expiration of the June options on the Comex.

FOMC tomorrow.

It is not so much the unethical and almost stupidly selfish actions that are so corrosive to trust, but the increasingly brazen, criminal coverups that are stretching the social fabric to the breaking point.

And they 'never see it coming.'  Because they are willfully blind.

Let's see what happens.

Have a pleasant evening.