Stocks and Precious Metals Charts - Grifters in an Ocean of Lies - Stock Option Expiration on Friday

 

"A common feature of all these earlier troubles [panics such as 1907 and 1914] was that having happened they were over.  The worst was reasonably recognizable as such.  The singular feature of the great crash of 1929 was that the worst continued to worsen.  What looked one day like the end proved on the next day to have been only the beginning.

Nothing could have been more ingeniously designed to maximize the suffering, and also to insure that as few as possible escaped the common misfortune.  The fortunate speculator who had funds to answer the first margin call presently got another and equally urgent one, and if he met that there would still be another.  In the end all the money he had was extracted from him and lost. 

The man with the smart money, who was safely out of the market when the first crash came, naturally went back in to pick up bargains. The bargains then suffered a ruinous fall.  Even the man who waited out all of October and all of November, who saw the volume of trading return to normal and saw Wall Street become as placid as a produce market, and who then bought common stocks would see their value drop to a third or a fourth of the purchase price in the next twenty-four months.

The Coolidge bull market was a remarkable phenomenon. The ruthlessness of its liquidation was, in its own way, equally remarkable."

John Kenneth Galbraith, The Great Crash of 1929

"The period of financial distress is a gradual decline after the peak of a speculative bubble that precedes the final and massive panic and crash, driven by the insiders having exited but the sucker outsiders hanging on hoping for a revivial, but finally giving up in the final collapse."

Charles Kindleberger, Manias, Panics, and Crashes: A History of Financial Crises, 1978


The hallmark of forecasting a crash is a 'trigger event' that causes the rally that fails. 

If there is no trigger event the usual market interventions by the fiscal and monetary authorities can turn the markets back up, and prolong the putative financial asset bubble until the real economy catches up to its valuations, or an event of sufficient magnitude finally occurs and a severe correction ensues. 

Like snow building for an avalanche, at some point in an extended bubble it may take an event of much lesser magnitude than one might expect to set off the slide.  Of late, however, the Fed and the Exchange Stabilization Fund have become so determined to support markets that the events tend to be of a greater magnitude.  So what has happened in the past may not happened now. 

Stocks continued their decline today.   Goldilocks seems to have the vapours.

Gold and silver took a pause most likely with an eye to the stock market option expiration on Friday.

The Dollar slipped off the 106 handle.

VIX marked time at an elevated level.

It would be hard for me to remember a time when so many masks fell off the powerful, who increasingly drop all pretense to the rule of law, and any sort of morality other than 'do what thou will is the whole of the law.'

But God has a way of standing before the nations with judgement.

This is going to end badly, and many innocent people will be caught up in their wickedness.

It would be better for many of these criminals and their enablers if they had never been born.

Have a pleasant evening.

Stocks and Precious Metals Charts - How Time Flies - Tactics and Strategies

 

"This forecast was published on my old website (Yahoo Geocities) at the beginning of 2005, when optimism was running high, the maestro was still on his throne, black swans still an uncommon topic, and the US was in a fresh bull market in stocks with a growing housing bubble that very few would admit, and many would vehemently deny.  

I have edited out extraneous contemporary detail, and most of the charts which are dated, except for one. I edited out some grammatical errors and awkward phrasing.  I have also renumbered the footnotes and eliminated several for the sake of simplicity and relevance."

Jesse, 11 January 2010

"Predicting the failure of a complex system is not easy.  One can examine it as a whole, and determine that it will fail, and often calculate what must change in order to allow the system to function more reliably.  But it is often beyond our power to calculate exactly how it will fail, and consequently when it will fail. 

This does not invalidate the observation that the system will ultimately fail.  It merely underscores the unpredictability of timing a failure with the degrees of freedom inherent in a calculation with a large number of exogenous variables. 

There are four major types of tipping points:

o Demand:  a break in the level of consumption in the US caused by the unwillingness or ability of households to incur further debt to support consumption beyond real wage growth

o Supply:  a major disruption in the supply of an essential commodity like energy, food, or raw materials, or even the realization that a major commodity is in shorter supply than expected, such as silver or oil.

o Monetary:  an inability of foreign central banks to continue to monetize the US trade deficit and budget deficit through the recycling of their trade surplus into US debt securities.

o Systemic failure:  the failure of a major counter party that threatens the US financial system, particularly in the hugely leveraged derivatives market.

Jesse, Long Term Forecast: The Humpty Dumpty Economy, 2005 

"Many of us like to ask ourselves, 'What would I do if I was alive during slavery?  Or the Jim Crow South?   Or apartheid?   What would I do if my country was committing genocide?'  The answer is, you're doing it. Right now."

Aaron Bushnell

“You may choose to look the other way, but you can never say again that you did not know.”

William Wilberforce


Stocks ended up with another ranging day which seems to be so common now in this 'roller coaster' valuation ride. 

This reminds me of this same time of year, but in 1929.

Stocks finished flat to lower.

VIX fell from its lofty close from yesterday.

The Dollar chopped but held on to the 106 handle.

There is a stock market option expiration this Friday.

The geopolitical situation is on a hair trigger.

It's all about managing risk in a market such as this.

There was an intraday post about the Performance of Various Assets including Precious Metals in General Market Declines.

During times of unrest and war the lies start flowing hot and heavy, and often delivered with a great deal of unwarranted hubris and presumed audience ignorance.  

Jerome Corsi does a reasonable job in this video of summing up the case for the hidden details in the National Security State assassination of JFK.  They are other books that go into more details including motivations but this is a nice summary. 

This was the beginning of the fall of the Republic, and the rise of oligarchy and Empire.

Have a pleasant evening.

 

Performance of Various Assets including Precious Metals in General Market Declines

 

First, let's realize that not all 'crashes' are the same. 

They are precipitated in different ways from different contexts, and with post decline actions by the fiscal and monetary authorities, and of course exogenous events. 

This expresses as the duration of the decline from top to bottom, and the speed and duration of the 'recovery.'

The Crash of 1987 was a 'liquidation event' that occurred as a break in confidence during a market bubble based on faulty fads and assumptions including portfolio insurance.

 In a liquidation event almost everything is sold in a panic to raise liquidity (cash).

The recovery was facilitated by the monetary actions of then Fed Chairman Alan Greenspan.

Here is a picture of the tech bubble collapse of 2000-2002 

Although the miners (HUI) in this case took a heavy hit in the initial decline, their recovery was notable in its outperformance.

There is a similar scenario for the Crash of 1929-33, but the price of gold is heavily influenced by the actions taken in the gold market by the government. Monetary gold was withdrawn from circulation, and afterwards revalued higher to help stabilize the banking system.

The performance of Homestake Mining post crash is legendary.