Stocks and Precious Metals Charts - The Extravagant Fallacy

 

"Those who directed the state in the time of Solon and Cleisthenes did not establish a polity which trained the citizens in such fashion that they looked upon insolence as democracy, lawlessness as liberty, impudence of speech as equality, and licence to do what they pleased as happiness, but rather a polity which detested and punished such men, and by so doing made all the citizens better and wiser."

Isocrates

"With the tools of democracy, democracy was murdered and lawlessness made ‘legal.’  Raw power ruled, and its only real goal was to destroy all other powers besides itself.”

Eric Metaxas, Bonhoeffer

"I know that my retirement will make no difference in its [my newspaper's] cardinal principles, that it will always fight for progress and reform, never tolerate injustice or corruption, always fight demagogues of all parties, never belong to any party, always oppose privileged classes and public plunderers, never lack sympathy with the poor, always remain devoted to the public welfare, never be satisfied with merely printing news, always be drastically independent, never be afraid to attack wrong, whether by predatory plutocracy or predatory poverty."

Joseph Pulitzer

"It’s not that the former Fed boss Greenspan was incompetent that is remarkable. Incompetence is common enough after all, even in important jobs. What’s remarkable is that so many people don’t seem, even now, to get it. Do people just believe high-quality self-justifying blarney? Or is it just that they apparently want to believe that critical jobs in a great country attract great talent by divine right."

Jeremy Grantham, Immoral Hazard, May 22, 2008

"The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal. Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, 'I have found a flaw.'  Congressman Henry Waxman pushed him, responding, 'In other words, you found that your view of the world, your ideology, was not right; it was not working.'  'Absolutely, precisely,' Greenspan said.  The embrace by America—and much of the rest of the world—of this flawed economic philosophy made it inevitable that we would eventually arrive at the place we are today."

Joseph Stiglitz, Capitalist Fools, January 2009


Stocks continued to rally higher into seriously overbought territory ahead of the FOMC decision tomorrow.

Gold, silver, and the Dollar fell.

VIX declined.

It's really all about how the Fed approaches its expected 'pause' tomorrow and the words that are used to shape the expectations around it.

The Fed has, through a series of overreaching policy errors and regulatory missteps, become the market.

The sweeping under the rug of their most recent insider trading scandal and the abuse of confidential information is appalling.

This will not end well.

Quad witch option expiration on Friday.

Have a pleasant evening.

Stocks and Precious Metals Charts - And Where They Make a Desert, They Call It Peace

 

"Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population.  Federal policy is increasingly dictated by the wealthy, by the financial sector, and by powerful industries.  These policies are implemented and praised by these groups’ willing servants, namely the increasingly bought-and-paid-for leadership of America’s political parties, academia, and lobbying industry.

If allowed to continue, this process will turn the United States into a declining, unfair society with an impoverished, angry, uneducated population under the control of a small, ultrawealthy elite. (fait accompli - Jesse)  Such a society would be not only immoral but also eventually unstable, dangerously ripe for religious and political extremism.

Thus far, both political parties have been remarkably clever and effective in concealing this new reality.  In fact, the two parties have formed an innovative kind of cartel—an arrangement I have termed America’s political duopoly, which I analyze in detail below.  Both parties lie about the fact that they have each sold out to the financial sector and the wealthy.  So far both have largely gotten away with the lie, helped in part by the enormous amount of money now spent on deceptive, manipulative political advertising.  But that can’t last indefinitely; Americans are getting angry, and even when they’re misguided or poorly informed, people have a deep, visceral sense that they’re being screwed.

The real challenge is figuring out how the United States can regain control of its future from its new oligarchy and restore its position as a prosperous, fair, well-educated nation.  For if we don’t, the current pattern of great concentration of wealth and power will worsen, and we may face the steady immiseration of most of the American population."

Charles Ferguson, Predator Nation


"The business interests of the US-companies that dominate the global IT business and payment systems are an important reason for the zeal of the US-government in its push to reduce cash use worldwide, but it is not the only one and might not be the most important one.

Another motive is surveillance power that goes with increased use of digital payment. US-intelligence organizations and IT-companies together can survey all international payments done through banks and can monitor most of the general stream of digital data. Financial data tends to be the most important and valuable.

Even more importantly, the status of the dollar as the worlds currency of reference and the dominance of US companies in international finance provide the US government with tremendous power over all participants in the formal non-cash financial system. It can make everybody conform to American law rather than to their local or international rules."

Norbert Haering, A Well Kept Open Secret

Stocks were on a short-squeezing tear higher today, with tech valuations reaching 'new era' levels.

Gold and silver traded weakly, but managed to regain most of the early losses.

VIX ticked higher.

The Dollar chopped sideways to nearly unchanged again.

The big story this week is going to be the Fed interest rate decision on Wednesday, and all that leads up to it including CPI tomorrow.

A 'pause' is widely expected, and in particular any phrasing around that in terms of future expectations will be watched closely.

And then as you know we will have a quad witch option expiration on Friday.

The Fed news *might* be sold, if it fails to live up to the market's inflated expectations.

The young man came home late last night, after having spent a week on an island in Greece at a technical conference with his fiancee.  A family heirloom ring was delivered to great delight, and the backdrop was very romantic with a Mediterranean flavor.

The fiancee visa problems between the US and China remain almost childishly obtuse and unnecessarily difficult, as a sign of the times.   But now at least the one month on each side of a trip quarantines due to Covid are no longer in the mix.

Have a pleasant evening.

Stocks and Precious Metals Charts - The Cruel Tutelage of Consequences

 

“This 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.

It is from our disposition to admire, and consequently to imitate, the rich and the great, that they are enabled to set, or to lead what is called the fashion.  Even their vices and follies are fashionable.

In many governments the candidates for the highest stations are above the law; and, if they can attain the object of their ambition, they have no fear of being called to account for the means by which they acquired it.  They often endeavour, therefore, not only by fraud and falsehood, the ordinary and vulgar arts of intrigue and cabal; but sometimes by the perpetration of the most enormous crimes, by murder and assassination, by rebellion and civil war, to supplant and destroy those who oppose or stand in the way of their greatness.”

Adam Smith, Theory of Moral Sentiments

"The real collapse of our currency began when it became evident that certain industrial circles were more powerful than the government."

Adam Fergusson, When Money Dies: The Nightmare of the Weimar Collapse

"America is caught in a confidence or credibility trap, in which the changes, investigations, and reforms necessary to restore trust to an economy or market are rendered unlikely because doing so would expose a pervasive corruption that the principals fear would destroy the careers of politicians and business people who may have permitted and even appeared to facilitate the control fraud that caused the financial crisis in the first place."

Jesse, America Trapped in a Massive Coverup of Fraud and Corruption, 22 January 2011

Unsustainable social and monetary arrangements are backed by force and fraud.  

As the fraud loses its power over perception, force must increase, until it cannot. 

Stocks gapped higher on the open, and then drifted back to their open during the day.

Gold and silver struggled to maintain their recent rally.

The Dollar gained some of its recent loss back.

This does smell like a setup for a thorough wash and rinse in equities, probably tied to some Fed and interest related rationale.  

We'll have to wait and see. 

Quarterly stock index option expiration next week.

Let's see what four witches have in store for us.

The air has cleared considerably up in the hills, and rains over the weekend may help the rest.

Have a pleasant weekend.