10 March 2023

Stocks and Precious Metals Charts - Bank Runs and Flight to Safety


"Gold is unique among assets, in that it is not issued by any government or central bank, which means that its value is not influenced by political decisions or the solvency of one institution or another."

Salvatore Rossi, Chief of the Central Bank of Italy, 30 Sept 2013

"SVB [Silicon Valley Bank] has a host of problems associated with its specialty: The startup scene that is now facing a mass-extinction event.  Other banks don’t have that kind of exposure to startups. 

What rattled folks today was that SVB lost $1.8 billion on the sale of $21 billion of “available-for-sale” securities.  It sold them because it needed to raise liquidity and to “reposition” its balance sheet. 

Its depositors are startups that once had a huge amount of cash on deposit at the bank that they’d obtained from venture capital investors. But those startups are burning cash like there is no tomorrow, and they aren’t getting new funding, and so they’re draining their deposits from the bank. And the bank has to fund those cash withdrawals." 

Wolf Richter, Between a Rock and a Hard Place as Banks Run Out Free Money, Mar 9, 2023

"It [Nixon closing the gold window on a Sunday evening in 1971] was one of the most dramatic economic events ever, a very big deal and I was at the epicentre of it on the floor of the New York Stock Exchange.  He [Nixon] was spinning political speak, but what he was saying was that the U.S. has defaulted on its debts. And it got me thinking about what money is. What are dollars if they are not tied to gold?

I saw how the government lied or certainly spun things in a certain way. I had all these philosophical questions, like ‘Whom do you believe?  What is actually truthfully going on?’  All of this pulled me into the global macro markets.  The currency markets would be important to me for the rest of my life."

Ray Dalio

"Gold has worked down from Alexander's time.  When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory."

Bernard Baruch

"Through the mills of God grind slowly,
   yet they grind exceeding small;
Though with patience He stands waiting,
   with exactness grinds He all."

Baron Friedrich von Logau, Sinngedichte

The equity markets got hit with a double barreled shot of risk reassessment this morning.

The Jobs Report came in smoking hot this morning, which shattered the fanciful notions of a Fed pivot, yada yada.

And the Silicon Valley Bank joined Silvergate and gave up the ghost, sending shock waves of contagion and suspicion through the banking sector.

Neither event ought to have been all that much of a surprise, but given the superficial and self-serving fluff that passes for analysis on the Street and financial media, it was.

And of course there is the ongoing backdrop of the slow crumbling of the crypto house of cards.

Gold caught a legitimate flight to safety after its recent pounding lower, and went out near the highs.

Silver also rallied but gave some of it back in sympathy with equities.

The Dollar gave back a little of its recent gains.

The VIX rocketed higher, but also fall back somewhat as happy thoughts were spread around.

Next week we will have the March option expiration quad witching event.

So more volatility is likely.

People are concerned that the regulators are asleep at the switch, having been plied with industry opiates and congressional laissez-faire ideology.

In summary, markets remain fragile and susceptible to shocks. 

It's not a matter of intelligence so much as of willfulness.

Have a pleasant weekend.

09 March 2023

Stocks and Precious Metals Charts - The Great American Swindle - Bank Spank


"I would say that practically all the financial journals were on the take.  This includes reporters for The Wall Street Journal, The New York Times, The Herald-Tribune, you name it.  So if you were a pool operator, you’d call your friend at The Times and say, 'Look, Charlie, there’s an envelope waiting for you here and we think that perhaps you should write something nice about RCA.'  And Charlie would write something nice about RCA.  A publicity man called A. Newton Plummer had canceled checks from practically every major journalist in New York City."

Robert Sobel, PBS: The Great Crash of 1929

"The sense of responsibility in the financial community for the community as a whole is not small.   It is nearly nil."

John Kenneth Galbraith, The Great Crash of 1929

"An investigation later discovered that business journalists for at least eight papers promoted stocks in their writing in return for bribes.  The most embarrassing were at the Wall Street Journal, where reporters who wrote 'Broad Street Gossip' and 'Abreast of the Market' took payoffs for stock tips in the 1920s.

The revelations about the Journal reporters came out during hearings by the Senate Banking and Currency Committee in 1932, more than three years later, when Congressman Fiorello LaGuardia produced cancelled checks written to the Journal reporters from publicist A. Newton Plummer.  The stories based on the bribes had gone as far back as 1923."

University of North Carolina, History of Business Journalism

"I have come to realize that the vast majority of decent, wonderful people, have no idea how they are being hoodwinked day in and day out by the scum of this world.  We are lied to, misled, bamboozled, suckered, cheated, misrepresented, conned, manipulated and royally screwed!  They take us to the cleaners day in and day out in every way possible.  We, the people, pay the price of their cheating, their folly, their lying and their sheer stupidity."

Pierre Rinfret

Did these financial journalists and Wall Street operators back in the 1920s have no standards, and no shame?

We are very fortunate that such a thing could not happen today.  Can you imagine any self respecting analyst or media type or (maybe) a politician accepting actual physical checks for misdeeds that leave such a clear trail of evidence?   

In our modern era it would be much more likely to be cash in the form of hot tips on which way the High Frequency Trading wind will be turning the markets, privileged high-profile access, or some drinks and dinner, maybe even hookers and blow.  The only risks might be some nasal cartilage, a guilty conscience (as if), and extra time at the gym.

How gullible and cynical can people get? How blindly arrogant and worshipful of 'success?' 

When the mainstream media spreads lies and propaganda to support an unjust military action, or to discredit a whistleblower who is doing the journalists' purported job, that is one thing.  And to support the epitome of Ponzi schemes based on some new and vaguely plausible technology favored by the moneyed interests is another.  

That's not corruption, it's just time-honoured and ridiculously profitable bawdy good fun by the unprincipled few, that keeps the horrors of honest and equitable governance at bay.  Oh, you object to institutional corruption and graft, comrade?

But soiling your hands by accepting coarse and dirty checks for aiding and abetting fraus?  Please, no checks accepted. Evidence trail and all that.

Stocks took a proper nosedive this afternoon after staging the usual morning rally.

The reason attributed to this was concern about some of the bleeding edge banks like Silvergate, and now the Silicon Valley Bank.  This led to a drawdown in share prices of the the Too Pig To Fail behemoths:  JPM, Wells Fargo, Citi, and Bank of America.

The Dollar declined a bit as short term yields back off their recent highs.

Gold rallied as a consequence, but silver fell a bit in sympathy with equities.

Wash - rinse - repeat.

The looting and lying will continue until consequences for lawlessness in the system are restored.

The usual long term consequences for such actions are still in force, contrary to the elite fashionable opinions and preferences.

“Then the rich man said, ‘I beg you, Father Abraham, send Lazarus to my father’s house.  For I have five brothers for him to warn, so that they also will not come to this place of desolation and torment.’  But Abraham said, ‘They have Moses and the Prophets. Let them listen to them.’  But the rich man again said, ‘No, Father Abraham, but if someone from the dead comes back and speaks to them, they will repent.’  And Abraham said, ‘If they do not listen to Moses and the Prophets, neither will they listen if someone warns them who has risen from the dead.’” 

Luke 16:27-31

They'll never learn.  

Because the dark force that they have taken into their hearts doesn't want to leave.

Jobs. Jobs. Jobs. Non-farm Payrolls tomorrow.

Have a pleasant evening.

08 March 2023

Stocks and Precious Metals Charts - Principalities and Powers


“The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least to neglect, persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments.”

Adam Smith

"Whoever commits a fraud is guilty not only of the particular injury to him who he deceives, but of the diminution of that confidence which constitutes not only the ease but the existence of society."

Samuel Johnson

"It would be no sin if statesmen learned enough of history to realize that no system which implies control of society by privilege seekers has ever ended in any other way than collapse."

William Dodd, US Ambassador to Germany, 1933

"Every society gets the kind of criminal it deserves."

Robert F. Kennedy

Stocks fluctuated again today ahead of the Non-Farm Payrolls report on Friday.

Gold and silver finished a little lower to unchanged.

The Dollar chopped sideways.


Have a pleasant evening.