12 January 2018

Stocks and Precious Metals Charts - Are You Not Entertained?


"And the Lord came and called, “Samuel! Samuel!”   And Samuel replied, “Speak, Lord, for your servant is listening.”

Then the Lord said to Samuel, “I am about to do something that will shock all those who hear of it.  I am going to chastise Eli and his people for their continuing offenses against me.  I have warned him that my judgment is coming."

1 Samuel 3:10-12

Stocks were on a tear again today, finishing at new highs.

The rally was sparked by renewed enthusiasm for the corporate tax cuts.  JP Morgan suggested in its earning report this morning that it sees upside from the tax reform bill.

Gold was also in rally mode, running up to the price resistance at 1340 after cracking through the intermediate trendline.   Silver also rallied a little harder, taking back all the losses it had from earlier in the week, finishing in the black for another week of gains.

There will be a stock option expiration next Friday.

The next Comex option expiration will not be until the 25th.

The stock market is frothy, and speculative frauds being tolerated, such as the meaningless name game with blockchain for quick stock gains, 

There may be some drama next week, as the next deadline for the continuation of the US budget to avoid a government shutdown on the 19th.

Trump did a remarkably odd thing for a political leader.  After strongly signaling to the Congress that he would approve a bipartisan compromise on immigration, as long as it contained provisions for border security, he ambushed a delegation presenting such a compromise in his office with two virulently anti-immigration Congressmen, and dismissed their compromise out of hand.  It was then he resorted to some particularly harsh language aimed at the lottery provision that reverberated in condemnations around the globe.

This may be an effective tactic in hardball negations in NY business deals, where one has the upper hand with their contractors, for example.  Some joker at one of our suppliers pulled that stunt on me in my corporate career.  The way he put it to a colleague, who told me later, is that he liked to punch his opponent in the stomach, and then say, 'let's race!'

And I said that his bosses should know that it would be 'for the best if he never stopped running.'  I never saw him again. It is relatively easy when you have done your homework, and have a good sense of where the leverage lies.  And the relationship between our two companies flourished for years afterwards.  It is never good when a manager has such a poor sense of relationship management and character judgement. Just because someone is fair does not mean that they are weak.

In terms of Washington, Trump just pissed in his own punch bowl by pandering to the fringe of this supporters, once again, stooping to what might best be described as an amateurish negotiating tactic.  US Senators have long memories, and that seemed like an odd move for a guy that is bound to need a lot of friends in the future.   Friends are hard to find;  life delivers enemies and obstacles for free.

Trump seems to be burning his bridges in front of himself.  These sorts of bullyboy tactics probably worked well for him in the past, especially in asymmetrical relationships with suppliers.  But applying that sort of thing in the wrong circumstance may betray a poor sense of situational awareness.  This is not good for the country, especially in areas of foreign policy and relationships. And we certainly could use a better negotiator than in our past dealings in the world, especially with regard to trade. But that is our fault, and the burden of corporatism, which has loyalty to none but itself.

Have a pleasant weekend.











"Not Nero, but God, rules the world."

Henryk Sienkiewicz, Quo Vadis


11 January 2018

Stocks and Precious Metals Charts - The Power Elite and the Deep State


"We suddenly have documentary proof that key elements of the U.S. intelligence community were trying to short-circuit the U.S. democratic process.  And that puts in a new and dark context the year-long promotion of Russia-gate.  It now appears that it was not the Russians trying to rig the outcome of the U.S. election, but leading officials of the U.S. intelligence community, shadowy characters sometimes called the Deep State...

But the main casualty is the FBI’s 18-month campaign to sabotage candidate-and-now-President Donald Trump by using the Obama administration’s Russia-gate intelligence 'assessment,' electronic surveillance of dubious legality, and a salacious dossier that could never pass the smell test, while at the same time using equally dubious techniques to immunize Hillary Clinton and her closest advisers from crimes that include lying to the FBI and endangering secrets."

Ray McGovern, The FBI Hand Behind Russia-gate

Stocks were on a roll higher today, with the major indices setting new all time highs.

No one can really see what will derail this new 'super bull' market, as they say on financial TV.

I can think of about a dozen things off the top of my head, but all of them are relatively low probability events.  But I do think this market is a bit frothy, with underpinnings made out of meringue.

But with the lift of the corporate tax cuts coming in under earnings, I would not get in the way of these markets.

So the VIX was down, stocks were up, and all is very well in tax cut land.

The precious metals managed to eke out some small gains.

I wonder if Dandy Don is 'mouse-trapping' himself by hanging his hat on the stock market as validation of his presidency.   I don't think it is a genuine validation, especially given its highly speculative nature.  I wonder how he might feel if the market tosses his administration a ten to fifteen percent correction later this year.  Live by greed, die by greed.

Speaking of the Donald, some time ago I suggested that this implausible and histrionic Russia-gate investigation fomented by the Clintonistas appears to be a thinly-veiled fishing expedition.   The target is not any significant 'collusion' to throw the election, but much more likely an obstruction of justice, coming off dodgy private real estate deals and assorted financial arrangements with a small group of Russian oligarchs that involve money laundering and a certain very large German bank.

Watching the well-paid courtiers of power in politics and the media dancing through hoops to make the case for this grand collusion conspiracy has been quite a spectacle.

I am in no way a supporter of Trump or his agenda. He reinforced that again today by noting that the US has too many immigrants from shithole countries, and not enough immigrants from countries like Norway. 

But I cannot use my dislike for Trump to ignore the damage that the Clintons have done to the Democratic Party.  They had been using it as their private piggy bank and its leadership as their servants.  The people's loss of confidence in the party is likely to take years to repair.

The Democrats may need a twelve step program to recover from their addiction to easy money and power.  So far they are in extreme denial and deflection.  I am concerned that if they get a backlash wave of seats in this year's election, that they will go into the 2020 elections and blow it all over again using the same old arrogant gameplan.

And as also previously noted, the Republicans appear to be captivated in the service of big money, almost beyond practical hope of redemption.

Tough times for the quiet of the land.

Have a pleasant evening.













10 January 2018

Stocks and Precious Metals Charts - This Forgotten Babylon


"The bows of the mighty are broken,
but the weak are clothed with strength.
Those with plenty must labour for bread,
but the hungry need work no more.

The childless wife has children now
but the fruitful wife bears no more.
It is the Lord who gives life and death,
he brings men to the grave and back;
it is the Lord who gives poverty and riches.

He brings men low and raises them on high.
He lifts up the lowly from the dust,
from the dungheap he raises the poor
to set him in the company of princes,
to give him a glorious throne."

1 Samuel 2:4-8


"In Egypt's sandy silence, all alone,
Stands a gigantic Leg, which far off throws
The only shadow that the Desert knows:
I am great Ozymandias, saith the stone,
The King of Kings; this mighty City shows
The wonders of my hand. — The City's gone,
Nought but the Leg remaining to disclose
The site of this forgotten Babylon.

We wonder, and some hunter may express
Wonder like ours, when through the wilderness
Where London stood, holding the wolf in chase,
He meets some fragment huge, and stops to guess
What powerful but unrecorded race,
Once dwelt in that annihilated place."

Horace Smith, Ozymandias, 1818

Stocks were slumping and the precious metals caught a bid as an exclusive story at Bloomberg said that China is considering curtailing or even halting its purchases of US Treasuries.

Bloomberg's own spokesmodels were snickering the mere possibility of that aside, as just a rumour, and unthinkable to boot.

And the markets seemed to join in as stocks recouped most of their losses, and the precious metals back off. Bonds had an interesting ride as well as the US dollar.

The gold inventories in Hong Kong CME warehouses remain markedly low.

Have a pleasant evening.





And Now Comes the Internet Censorship


"A credibility trap is when the regulatory, political and/or informational functions of a society have been so compromised by a long term, generalcorruption that they cannot address any meaningful reform without implicating, at least incidentally, themselves.  The status quo has at least tolerated the corruption and fraud, if not profited directly from it, and most likely continues to do so.  The power brokers have become susceptible to various forms of blackmail.  And so a failed policy is sustained long after it is seen to have failed, because admitting failure is not an option for those who hold positions of advantage and power."

Jesse


"One of the primary characteristics of narcissists is their exaggerated sense of entitlement.  It's hardly surprising then that so many politicians somehow think they deserve to game the system.  After all, from their self-interested perspective, isn't that what the system is for?  In their heavily self-biased opinion, if they want something, by rights it should be their's.  So, nothing if not opportunistic, they take from public and private coffers alike whatever they think they can get away with. And given their grandiose sense of self, they're inclined to believe they can get away with most anything."

Leon F. Seltzer


"Representative institutions no longer represent voters. Instead, they have been short-circuited, steadily corrupted by an institutionalized system of bribery that renders them responsive to powerful interest groups whose constituencies are the major corporations and wealthiest Americans. The courts, in turn, when they are not increasingly handmaidens of corporate power, are consistently deferential to the claims of national security."

Sheldon Wolin, Inverted Totalitarianism


"The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform."

Simon Johnson, The Quiet Coup


"On Wall Street he and a few others—how many?— three hundred, four hundred, five hundred?—had become precisely that—  Masters of the Universe."

Tom Wolfe, Bonfire of the Vanities

The pain of remaining human—  when the increase in wickedness unleashes the age old enemy, and makes the love of most grow cold.

How does the status quo deal with an erosion of confidence in their actions in the late stage of a cycle of looting and abuse, caught as they may be in a credibility trap?

This is the point where we seem to be, when the facade of benevolent justice starts slipping away, and the looting and self-dealing becomes all too visible, on brazen display in scandal after scandal,  special privileges and bailouts, and historic inequality.

And if there is an erosion of confidence, it surely cannot be due to anything that the best among us have done.  They are wise and benevolent, heavily burdened by the task of guiding the public.

So there must be some foreign enemy or internal dissidents, actively trying to  cause people to lose confidence in their rule.

When you run out of credible answers, one solution is to stop people from asking the questions.   An offer of the bullet or the bribe is often effective for those with significant profiles and platforms.  It is being used now more than you may know.   The pressure on the well-informed to be silent is presently palpable.  The quiet sacrifice of many people of conscience is under-appreciated.

A broader and more general use of censorship is sufficient for the rest.   Concentration of mainstream media ownership in a few powerful hands is soon followed by increased and unilateral censorship powers over the wider variety of remaining independent sources.

There is a case to be made for restricting certain types of public speech, especially that which incites the public to violent prejudice. But that case must be narrow, highly transparent, and exceptional and infrequent. Unfortunately in times of general corruption measured restraint becomes abusive, widely and secretly used to silence any form of truth-telling and dissent from the established narratives and powers.

And it should be noted that in the cases of the most extreme examples of hate speech in history, their power was not in their eloquence, or the powerful logic of their arguments, of which they had neither.  If we look at them now their language is crude and their ideas vulgar, false, and repugnant..

No, their power was that no one was able to speak out freely against them, to dissent from their obvious misstatements and errors, that were repeated endlessly without anyone who could effectively stand against them.  And the people followed those lies into the abyss.

The Intercept
First France, Now Brazil Plan to Empower the Government to Censor the Internet
By Glenn Greenwald

Yesterday afternoon, the official Twitter account of Brazil’s Federal Police (its FBI equivalent) posted an extraordinary announcement. The bureaucratically nonchalant tone it used belied its significance. The tweet, at its core, purports to vest in the federal police and the federal government that oversees it the power to regulate, control and outright censor political content on the internet that is assessed to be “false,” and to “punish” those who disseminate it. The new power would cover both social media posts and entire websites devoted to politics...

Tellingly, these police officials vow that they will proceed to implement the censorship program even if no new law is enacted. They insist that no new laws are necessary by pointing to a pre-internet censorship law enacted in 1983 – during the time Brazil was ruled by a brutal military dictatorship that severely limited free expression and routinely imprisoned dissidents...

The move to obtain new censorship authority over the internet by Brazilian police officials would be disturbing enough standing alone given Brazil’s status as the world’s fifth most populous country and second-largest in the hemisphere. But that Brazil’s announcement closely follows very similar efforts unveiled last week by French President Emmanuel Macron strongly suggests a trend in which government are now exploiting concerns over “Fake News” to justify state control over the internet...

Beyond having one’s political content forcibly suppressed by the state, disseminators of “Fake News” could face fines of many millions of dollars. Given Macron’s legislature majority, “there is little doubt about its ability to pass,” the Atlantic reports.

Both Brazil and France cited the same purported justification for obtaining censorship powers over the internet: namely, the dangers posed by alleged Russian interference in the 2016 U.S. election. But no matter how significant one views Russian involvement in the U.S. election, it is extremely difficult to see how – beyond rank fear-mongering – that could justify these types of draconian censorship powers by Brasília and Paris...

So for those who are comfortable with the current French leader overseeing a censorship program in conjunction with courts to censor “Fake News” from the internet, do you trust the Trump administration to make those determinations? Do you trust Marine Le Pen?...

Read the entire essay at The Intercept here.

Given the growth of intolerance, a surprisingly large segment of the public will not only tolerate, but may welcome censorship.  They wish to escape the pain of thinking, of being human.  They wish to smash all the mirrors that reflect their growing inhumanity.

"It seems that under the overwhelming impact of rising power, humans are deprived of their inner independence and, more or less consciously, have given up establishing an autonomous position toward the emerging circumstances.

The fact that the foolish person is often stubborn must not blind us to the fact that he is not independent. In conversation with him, one virtually feels that one is dealing not at all with him as a person, but with slogans, catchwords, and the like that have taken possession of him.

He is under a spell, blinded, misused, and abused in his very being. Having thus become a mindless tool, the foolish person will also be capable of any evil and at the same time incapable of seeing that it is evil. This is where the danger of diabolical misuse lurks, for it is this that can once and for all destroy human beings.”

Dietrich Bonhoeffer


“A true opium of the people is a belief in nothingness after death— the huge solace of thinking that for our betrayals, greed, cowardice, and murders that we are not going to be judged.”

Czesław Miłosz