“One day, we will have to stand before the God of history. And we will talk in terms of things we've done. And its seems to me that I can hear the God of history saying, 'That was not enough. For I was hungry, and you fed me not. I was naked, and you clothed me not. I was devoid of a decent sanitary house to live in, and you provided no shelter for me. And consequently, you cannot enter the kingdom of greatness.'" Martin Luther King
Stocks have been gyrating the last couple of days, largely on little things like comments from central bankers.
I think much of the 'action' and the increased volatility has more to do with the stock option expiration this Friday the 16th as with anything that could be considered fundamental. Stocks are in bubble valuation territory however, and the 'real' volumes remain light compared to the algo driven volumes.
This is a corrupt system which you tolerate, so get used to it or seek to change it and make it just for everyone.
"Two-thirds of the directors at the New York Fed are hand-picked by the same bankers that the Fed is in charge of regulating.
Today, the United States is No. 1 in corporate profits, No. 1 in CEO salaries, No. 1 in childhood poverty, and No. 1 in income and wealth inequality in the industrialized world.
Today, the top one-tenth of 1% owns nearly as much wealth as the bottom 90%. The economic game is rigged, and this level of inequality is unsustainable.
We need an economy that works for all, not just the powerful.
I think what the American people are saying is enough is enough. This country, this great country, belongs to all of us. It cannot continue to be controlled by a handful of billionaires who apparently want it all."
Bernie Sanders
"Then the kings of the earth, their nobles and their commanders, the rich, the powerful, and every one of their willing slaves and free men, hid in the caves and among the rocks of the mountains. And they cried to the mountains and the rocks, 'Fall on us, and hide us from the face of the one who sits on the throne, and from the righteous anger of the Lamb.'"
Rev 6:15-16
We had our answer, a real workable solution, and we trampled it in the dirt and threw it away, because it did not flatter our vanity.
Today we had the expected correction in the markets. It was the first stock market move greater than one percent since the Brexit decision in July.
Stocks came down hard on nothing particularly new. And bonds followed as yields rose, and the reckless pursuit of returns without regard to risks reversed.
They had all been greatly overextended by a calculated and intentional mispricing of risk, and today we had a minor settling of accounts.
That mispricing of risk had not been at all accidental, and was well supported by many fine words and false rationalizations that were repeated by the pundits in the media who afterwards will shamelessly plead ignorance, despite their pretentious claims to the well paying rewards of authority. It is what I have called 'the CEO defense.'
Gold gave up a little less than silver, which has a higher industrial component, but even moreso, a higher beta. This was a result of the dollar moving slightly higher in the usual currency cross trading.
I took the short broad stocks hedge for my silver positions off in the afternoon, probably a little too early, but these leveraged instruments are notoriously volatile, and they had done their job for me. I always seem to be a little early in these things.
Next week will be heavy on economic data as indicated in the calendar below.
People always say at these times, 'what is next?' Not, 'what can we learn from what just happened.' Not, 'what can I do personally to make things better for everyone, and not just myself.'
This is probably not such a great thing, and will be quickly forgotten enough. But the reckoning of accounts will come, when gold will be more likely moving up many, many dollars ovrnight. And the fear in the markets will be palpable. And the mood of the people will become ugly.
The politicians have failed, the regulators have failed, the people have failed to be vigilant and vocal for justice for all, and not just for their own private benefits.
But these are all things that you know, and that you have been told many, many times. And you will think about it for a day, and then most likely forget all about them.
In the end the only pity is not to have saved yourself, your real self, the part of you that matters and will remain and has lasting value, and which is also the substance of those whom you love.
And the good news is that it is almost never too late to come back home. The pity is that in their stubborn pride and foolish greed some will not. This is the only tragedy.
The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.
“He did not care for the lying at first. He hated it. Then later he had come to like it. It was part of being an insider, but it was a very corrupting business.”
Ernest Hemingway, For Whom the Bell Tolls
"And the shark has pretty teeth,
there they are for all to see;
and Macheath has a sharp knife,
but no one knows where it may be."
Berthold Brecht, Die Moritat von Mackie Messer
Were you surprised at what happened today, the big drop on the seemingly inconsequential 'news' that the ECB may not continue to expand stimulus, and that the Fed may be inclined to raise rates, even the slightest bit?
Even as Wall Street was dipping its flags in the blood of the victims of 9/11.
You ought not to have been, if you have been following the commentary here.
The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.
“They shall never get the upper hand!” said Alfred.
“That’s right,” said St. Clare; “put on the steam, fasten down the escape-valve, and sit on it, and see where you’ll land.”
“Well,” said Alfred, “we will see. I’m not afraid to sit on the escape-valve, as long as the boilers are strong, and the machinery works well.”
Harriet Beecher Stowe, Uncle Tom's Cabin
The dollar took back a little from its drop yesterday, and gold and silver commensurately gave up a little of their gains.
What is most striking is the manner in which gold and silver are trading as currency crosses. While this makes sense within a certain market context of short term valuations, it tends to overlook, if not completely ignore, the commodity feature of the metals.
This is what makes them unique among currencies. They are self-sufficient. They have no counterparty risks or true masters, as they are not created, only discovered and exchanged.
It is a modern monetary phenomenon to believe that when it comes to monetary valuations, anything goes.
And for it time it does. Until it does not.
And then the dislocation caused by the reckoning of the balance sheets of theoretical values with hard realities may be quite impressive.
Stocks were struggling to make a silk purse out of the sow's ear of an economy today.
The pivotal point was the ability to turn APPL around, despite their so-so announcement of the iPhone today which was largely technical improvements, some of which matter, but which may not compel anyone to upgrade.
And so we saw the Nasdaq pushing to another new high, as the broader market in the SP 500 does not really confirm the move.
Tomorrow we will see what the ECB has up their sleeves rates-wise.
Let us pray for those whose hearts are hardened against His grace and loving kindness by greed, fear, and pride, and the seductive illusion and crushing isolation of evil.
We pray that we all may experience the three great gifts of our Lord's suffering and triumph: repentance, forgiveness, and thankfulness. And in so doing, may we obtain abundant life, and with it the peace that surpasses all understanding.
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