Stocks and Precious Metals Charts - Which Side We Have Chosen

 

"Self-regulation is at best a vulnerable strategy in any human concern involving trust, but is absolute folly in an industry where the emphasis and incentives are based on the ruthless pursuit of performance at any cost, and where such behaviour is lauded.

There is little doubt that strong personality types such as even marginal psychopaths can hijack an organization, a [political] party, or even a sub-culture given the right environment of moral relativism and complacency.  And if successful, they bring more of the morally ambivalent and weak-willed along with them.

The efficient market hypothesis is more a clever cover story than a legitimate scientific observation worthy of consideration in public policy discussions.  Transparency and oversight are absolutely essential in all financial matters.   The financial system, and their amoral enablers in politics and the media, have done enough damage to the world.  It is time to stop."

Jesse, Psychopaths on Wall Street, 17 March 2012

"The suspicions that the system is rigged in favor of the largest banks and their elites, so they play by their own set of rules to the disfavor of the taxpayers who funded their bailout, are true. It really happened. These suspicions are valid.”

Neil Barofsky, TARP Inspector General

"A lot of white-collar criminals are psychopaths.  But they flourish because the characteristics that define the disorder are actually valued.  When they get caught, what happens?  A slap on the wrist, a six-month ban from trading, and don't give us the $100 million back.  I've always looked at white-collar crime as being as bad or worse than some of the physically violent crimes that are committed."

Robert Hare

"Three dark personalities, narcissism, Machiavellianism, and psychopathy have been studied in businesses. Although the first two share similar traits with psychopathy, such as superficial charm, lying and manipulation, the inability to accept responsibility for their actions, and the complete lack of empathy, guilt and humility, a large body of research has demonstrated that psychopathic individuals are more dishonest, treacherous and destructive than the others. While all three dark personalities can be bad-news for a company, corporate psychopathy is the most dangerous.

If success is defined by the accomplishment of one’s goal, then I would say psychopathic individuals, by definition, are often successful. That is, they are successful at manipulating others into getting what they want, whatever the cost might be to others. Their ability to charm, manipulate and lie to others, coupled with the fact that their lack of empathy and guilt and failure to accept responsibility for their actions, gives psychopathic individuals the upper hand to attain their goals, by any means possible.

There is a difference between being confident and not being capable of humility or modesty. Good leaders will back their realization and success stories with verifiable facts and will do it with a certain dose of humility, occasionally giving credit to others. Moreover, good leaders will take some credit but will also give credit to their team members while psychopathic individuals are likely to take all the credit for previous achievements."

Cynthia Mathieu, The Devil Lurks In the Suit

"I wonder whether people who ask God to intervene openly and directly in our world quite realise what it will be like when He does. Then it will be God without disguise; something so overwhelming that it will strike either irresistible love or irresistible horror into every creature. It will be too late then to choose your side. That will not be the time for choosing: it will be the time when we discover which side we really have chosen, whether we realised it before or not."

C. S. Lewis, Mere Christianity, 1944

Stocks did their yo-yo routine again today, but nevertheless rallied back from their flighty drop of yesterday.

Gold and silver moved higher.   Both are within range of breaking out.

They may be tested by the Comex metals option expiration of next week.

VIX chopped sideways in familiar volatility.

The Dollar climbed back a little.

Have a pleasant evening.

Stocks and Precious Metals Charts - Images and Shadows - Dueling Jawbones

 

"And must there not be some art which will effect conversion in the easiest and quickest manner; not implanting the faculty of sight, for that exists already, but has been turned in the wrong direction, and is looking away from the truth?"

Plato, Republic: Allegory of the Cave

"To reduce a complex argument to its bare bones, [Sheldon Wolin, 'Inverted Totalitarianism'] since the Depression, the twin forces of managed democracy and superpower have opened the way for something new under the sun: 'inverted totalitarianism,' a form every bit as totalistic as the classical version but one based on internalized co-optation, the appearance of freedom, political disengagement rather than mass mobilization, and relying more on 'private media' than on public agencies to disseminate propaganda that reinforces the official version of events.

It is inverted because it does not require the use of coercion, police power and a messianic ideology as in the Nazi, Fascist and Stalinist versions (although note that the United States has the highest percentage of its citizens in prison of any nation on Earth).

The main social sectors promoting and reinforcing this modern Shangri-La are corporate power, which is in charge of managed democracy, and the military-industrial complex, which is in charge of superpower. 

The main objectives of managed democracy are to increase the profits of large corporations, dismantle the institutions of social democracy (Social Security, unions, welfare, public health services, public housing and so forth), and roll back the social and political ideals of the New Deal.  Its primary tool is privatization [and deregulation].

One other subordinate task of managed democracy is to keep the citizenry preoccupied with peripheral and/or private conditions of human life [culture wars] so that they fail to focus on the widespread corruption and betrayal of the public trust.

Among the commonplace fables of our society are hero worship and tales of individual prowess, eternal youthfulness, beauty through surgery, action measured in nanoseconds, and a dream-laden culture of ever-expanding control and possibility, whose adepts are prone to fantasies because the vast majority have imagination but little scientific knowledge.  Masters of this world are masters of images and their manipulation.

Toward the end of his study he [Wolin] produces a wish list of things that should be done to ward off the disaster of inverted totalitarianism:  'rolling back the empire, rolling back the practices of managed democracy; returning to the idea and practices of international cooperation rather than the dogmas of globalization and preemptive strikes; restoring and strengthening environmental protections; reinvigorating populist politics; undoing the damage to our system of individual rights; restoring the institutions of an independent judiciary, separation of powers, and checks and balances; reinstating the integrity of the independent regulatory agencies and of scientific advisory processes; reviving representative systems responsive to popular needs for health care, education, guaranteed pensions, and an honorable minimum wage; restoring governmental regulatory authority over the economy; and rolling back the distortions of a tax code that toadies to the wealthy and corporate power.'

It is extremely unlikely that our party apparatus will work to bring the military-industrial complex and the 16 secret intelligence agencies under democratic control. Nonetheless, once the United States has followed the classical totalitarianisms into the dustbin of history, Wolin’s analysis will stand as one of the best discourses on where we went wrong."

Chalmers Johnson, A New Way of Understanding How the U.S. Is Controlled, May 16, 2008

Today's market action just made me laugh.

Fed Chairman Jay Powell and His Merry Pranksters did good work to soothe the risk markets today, doing their required 25 bp rate increase, but wrapping it well and tenderly with whispers of all the right dovish nothings.

But alas Yellen, the Iron Banker, responded to the Congress today that there were no formal plans to backstop the entire banking system by insuring all deposits fully.

Which by the way would require an Act of Congress, as if.  

These jokers are too busy trying to take away food relief for the hungry and any hopes for decent healthcare at affordable prices. 

And so after the warm Fed afterglow, the risk markets headed south in what might be termed as a 'fit of pique.'   Or  a 'hissy fit.'

Les enfants terribles of the financial system, the Banks, led stocks lower.

The Dollar dropped.

Gold and silver rallied higher.

VIX rebounded.

Let's see what tomorrow may bring.

Have a pleasant evening.

 

Stocks and Precious Metals Charts - Organized Indifference and Managed Discontent

 

"In particular, over a protracted period of good times, capitalist economies tend to move from a financial structure dominated by hedge finance units to a structure in which there is large weight to units engaged in speculative and Ponzi finance."

Hyman Minsky, The Financial Instability Hypothesis

"As Hyman Minsky once said, and the moderns seem to have forgotten, 'Anyone can create money; the problem is in getting it accepted.'   He should have added, except by force [force is bad monetary policy by other means].  Reform goes hand in hand with recovery."

Jesse, Moral Hazard of the Fed's Current Policy, 24 January 2013

"Twenty-five years ago, when most economists were extolling the virtues of financial deregulation and innovation, a maverick named Hyman P. Minsky maintained a more negative view of Wall Street; in fact, he noted that bankers, traders, and other financiers periodically played the role of arsonists, setting the entire economy ablaze. Wall Street encouraged businesses and individuals to take on too much risk, he believed, generating ruinous boom-and-bust cycles.  The only way to break this pattern was for the government to step in and regulate the moneymen."

John Cassidy, The Minsky Moment, The New Yorker, 4 February 2008

“In order that a select few might live in great opulence, millions of people work hard for an entire lifetime, never free from financial insecurity, and at great cost to the quality of their lives. The complaint is not that the very rich have so much more than everyone else but that their superabundance and endless accumulation comes at the expense of everyone and everything else, including our communities and our environment.”

Michael Parenti

"If we are indeed in a Minsky Moment, which we think we are, then monetary inflation by the Fed and government intervention without reform will most likely increase the probability of a protracted stagflationary repression in the United States, and possibly lead to civil unrest and an exogenous [compelled] reform of the system.  An abandonment of the system as it is with a turn to fascism has been the historic choice of Wall Street.  The political lobbying against systemic reform by the Bankers and their sycophants will be intense and as persuasive to the many as most appeals to fear.  However, their reckless advice leads to a trip to the brink of the abyss."

Jesse, Which Way Out of the Minsky Moment, 23 March 2008

Below is a video of a recent talk by Thomas Frank, one of the best historical analysts of contemporary American politics and economics.

I recommend you watch it, with the caveat that he begins by characterizing the Republican party in fairly blunt and unattractive terms.  But then he turns and savages the Clinton - Obama wing of the Democratic Party. 

Frank is a centrist.  That means in this polarized environment and partisan hysteria he probably upsets most everyone who holds to strong and implacable positions on the left and the right.

But it important to at least consider our current social and economic troubles in a new way, from a new perspective, since the old model has been consistently failing most Americans for the past 30 years.

You may not agree with it, but you can at least have it as a way of organizing your thoughts about what is happening during those idle moments when hating the 'other side' and big label boogeymen grows old.

Stocks were bubbling higher, floating up ahead of the FOMC decision tomorrow.

The Dollar chopped sideways.

VIX plummeted.

And gold and silver were nailed from first thing in the morning.

Given their recent gains a stiff correction was probably well in the cards, especially with a Fed Day approaching.

But still, it underscores the problem with applying the rules of bull stock markets and market driven commodities to the precious metals markets, which is a rat's nest of hidden leverage and manipulation of prices more in keeping with a currency.   

I expect the Fed to raise 25 bp tomorrow, but then to potentially say something idiotic and self-serving to the favored few.

So let's see what happens.

Have a pleasant evening.