15 April 2014

Gold Daily and Silver Weekly Charts - From Sea to Shining Sea

"Plunderers of the world, when nothing remains on the lands to which they have laid waste by wanton thievery, they search out across the seas. The wealth of another region excites their greed; and if it is weak, their lust for power.

Nothing from the rising to the setting of the sun is enough for them. Among all others only they are compelled to attack the poor as well as the rich. Robbery, rape, and slaughter they falsely call empire; and where they create a desolate wasteland, they call it peace."

Tacitus, Agricola

Today was an absolute classic.

From one market to the other, from one lie to the next, they seem to have no fear, and certainly no shame.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Another Turnaround Tuesday


How'd you like that market action today.  A Robert Rubin special with the SP futures leading the markets higher out of a deep hole on 'Turnaround Tuesday.'

A bewildered reader asks, 'Do they realize what they are doing?'

To which I responded, 'Let's keep this straight.  Almost by definition, sociopaths and narcissists really don't give a fuck what happens as long as they are getting what they want now.  And you wonder why things are as they are?'

Have a pleasant evening.

Why Gold? 85% of Pension Funds Will Go Bust in 30 Years

I have not seen the scenarios run by Bridgewater Associates, but I do have respect for their name and their work.  I would like to know their assumptions.

In an inflation, stocks may do quite well, as their inflated valuations keep pace with inflation. Bonds are likely to get obliterated. In a stagflation not so much.  The Fed and the Treasury would like a modest inflation to provide a controllable dilution of debts without opening the door to a debt jubilee for the hoi polloi.  The Fed serves the Banks, and therefore the creditor class.  But a parasite must also preserve the relationship with their hosts.

The system is broken and the oligarchs do not wish to fix it, because they like things just the way that they are.    They have bought the politicians and are running the regulators.  What could go wrong?

It is hard to credit the Fed with a policy error when their actions seem to be so conscious and wanton.  But I am sure when the time comes they will claim ignorance as usual.

In line with a time of general frauds, Grant Williams has a particularly good essay this week, and you may wish to read it.  I admire his writing and insight as always.  The only slight quibble I might have is that a 'rigging' that is out in the open is hardly as foul and as fraudulent as one that is conducted under cover of denials and opaqueness.

So for example, I would not equate the Fed's 'rigging' interest rates through their well publicized open market operations with the same critical eye as I might consider the manipulating of certain commodity prices and inflation measures to hide its effects.  There is war and there is war profiteering, and there is war crime, as there is a difference between conducting a financial war, and machine-gunning the life boats full of innocent refugees in order to hide the effects of your misguided policies.

The point of a control fraud is deception and secrecy.  And I think the amount of it in our markets is unsustainable, and the moral hazard that nourishes this has its roots in the monied interests and their corrupted leadership.

"The 'pensions timebomb' keeps on ticking and as societies we become less prepared by the day.

Yet another report shows that the U.S. public pension system is in dire straits. This one comes from renowned hedge fund manager Bridgewater Associates.

The study estimates that public pension funds will earn an annual return of 4% or less in coming years due to near zero percent interest rates and financial repression. That, in turn, would cause bankruptcy for 85% of the pension funds within 30 years, the study warns.

Public pension plans now have only $3 trillion in assets to invest so that they can pay out $10 trillion of retirement benefits in coming decades, according to Bridgewater. The funds would need an annual investment return of about 9% to meet those obligations, the report says.

It is likely that many pension funds will go bust in the medium term and this may be a crisis that looms large sooner than the Bridgewater research suggests...

Pension funds traditional mix of equities and bonds may underperform in the coming years as many stock markets appear overvalued after liquidity-driven surges in recent years and bonds offer all time record low yields and are at all time record highs in price and can only fall in value in the coming years.

Pensions allocations to gold are exceptionally low internationally and yet gold has an important role to play in preserving and growing pension wealth over the long term.

Pension funds’ overexposure solely to paper assets and lack of diversification has cost pension holders dearly in recent years. This will almost certainly continue in the coming years."

Mark O'Byrne, Futures Mag

Read the entire article here.

14 April 2014

Gold Daily and Silver Weekly Charts - The Mother of Madness - Bart Through the Revolving Door

“Most men would rather deny a hard truth than face it.”

“A toast to the proud Lannister children: the dwarf, the cripple, and the mother of Madness.”

Tyrion Lannister, Game of Thrones

The lid has been shut down on silver with some serious force.

Gold continues to come in to the Comex warehouses to buttress them for the April delivery which proceeds. If there is so much loose gold around, as Shill & Troll have asserted, then why can't the Fed return Germany's gold for seven years?

The games will continue, until they don't.  Winning....
(Reuters) - Bart Chilton, an outspoken former regulator who spent more than six years as a member of the U.S. Commodity Futures Trading Commission, will join the law firm DLA Piper, the company said on Monday.

Chilton, a Democrat who left the CFTC last month, witnessed its transition from a little-watched overseer of futures markets into a powerful body put in charge of the $690 trillion swaps market after the credit crisis.

"Bart will be an invaluable resource for clients who will be subject to increased regulation over the next few years," the firm said in a statement...
Maybe Bart is just going undercover to find out if Jim Kidney was right about the allures of a plush corporate sinecure after a much-publicized, but effectively innocuous, regulatory career.

Have a pleasant evening.


SP 500 and NDX Futures Daily Charts - Wheel of Fortune

“Bad times have a scientific value. These are occasions a good learner would not miss.”

Ralph Waldo Emerson

Retail sales came in a little stronger than expected this morning, and Citi turned in decent quarterly numbers, despite its having failed the stress test.

So stocks rallied.   The economic indicators were excuses.  The market is close to achieving self-actualization.

The action in the rest of this week will let us know if this was a 'relief rally' or something more positive for stock prices.  Or just another opportunity for a short squeeze in a technical trade, in a market utterly dominated by internally focused gamesmanship.

Have a pleasant evening.

His Final Journey: Remembering the 149th Anniversary of the Assassination of Abraham Lincoln

"Unconscious, Lincoln was carried from Ford's Theatre to the nearby house of Williams Peterson at 453 10th Street. There, in a room rented to William Clark, a boarder, Abraham Lincoln died at 7:22 a.m., April 15, 1865.

When Lincoln died Secretary of War Edwin M. Stanton is reported to have uttered, 'Now he belongs to the ages.'"

"It is rather for us to be here dedicated to the great task remaining before us — that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion — that we here highly resolve that these dead shall not have died in vain — that this nation, under God, shall have a new birth of freedom — and that government of the people, by the people, for the people, shall not perish from the earth."

13 April 2014

Pay and Deregulation in the US Financial Industry

"It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud.   The behaviour that caused the mortgage bubble and financial crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident."

Charles H. Ferguson

“Thus did a handful of rapacious citizens come to control all that was worth controlling in America. Thus was the savage and stupid and entirely inappropriate and unnecessary and humorless American class system created. Honest, industrious, peaceful citizens were classed as bloodsuckers, if they asked to be paid a living wage.

And they saw that praise was reserved henceforth for those who devised means of getting paid enormously for committing crimes against which no laws had been passed. Thus the American dream turned belly up, turned green, bobbed to the scummy surface of cupidity unlimited, filled with gas, went bang in the noonday sun.”

Kurt Vonnegut, God Bless You, Mr. Rosewater

"Call me dark, but what I see here is a toxic relationship between deregulation, underpriced risk, and exorbitant, inefficient pay scales that contribute to the growth of inequality, not to mention the shampoo economy (bubble, bust, repeat)."

Jared Bernstein, A Striking Picture of Pay and Deregulation in Finance

A country foolishly deregulates the safeguards created by their forefathers, trusts to the natural goodness of those most hungry for wealth and power, and increases the incentives for enormous wealth by creating loopholes and cutting tax rates, and de-penalizing even the most shocking kinds of white collar crimes.  They recreate the mistakes of history with a wanton disregard for the consequences.

And still they wonder why.  Why do we persecute the poor, and idolize those who would rule us all, without pity or even normal cautions against crises ?  And they say, for God and freedom.

Financial corruption has twisted and perverted public policy, distorted the economy, and polluted the corridors of political and economic power with a flood of easy money.

h/t Jared Bernstein

A Brilliant Warning On Robert Rubin's Proposal to Deregulate Banks, circa 1995
Andrew Jackson Day Remembered

11 April 2014

Gold Daily and Silver Weekly Charts - Flight To Safety

The miners continued to get pounded along with tech momentum stocks as this week turned out badly for equities overall.

Gold is still outperforming silver, and has the taste of a minor 'flight to safety' in the price action.

The Comex warehouses continue to be a foggy snoozer, and stopped contracts are a formidable percentage of the deliverable gold category.

But the Comex is a shell game, and so I am not looking for things to start there, but to perhaps surface there once they start overseas with a break in the physical deliveries chain, despite the continuing assurances from the team of Shill & Troll that it is all in your mind, and that such a thing could never happen.

Have a pleasant weekend.