18 December 2014

NAV Premiums of Certain Precious Metals Trust and Funds - Time To Get Real

 
'How did you know?'
 
So asks the new reader(s) at Le Café, during some protracted exchanges over the past week in which I characterized this drop in stock prices as a corrective move, à la the familiar wash and rinse, that was likely to end around the time of the FOMC meeting.
 
Things are dire.  The economy is awful.  War is breaking out.  Stocks are in a bubble.  Ack, ack. Yada, yada.
 
And in the face of all this faux fundamental turmoil, I suggested one or two price levels at which stocks would turn around, and almost to the day.  Well actually I would same I nailed it to the day of the FOMC announcement.
 
Yeah, yeah, but what are they going to do next?  With dates and details.  All the finer people and financial channels provide such information on demand.  We want to be rich!! 
 
So what is my secret?    
 
Have I mastered sailing over the Elliot Waves?   Found the long lost secret of the Roger Babson method?  Learned the art of stock chart reading from my famous forbears who were mavens of the markets?   Gotten in tight with insiders, and have been given the secret gnostic knowledge?  Am I a legend?
 
No, hardly, as if, hell no, and just ask my wife.   I just read the tea leaves and put out a forecast that was a good one.  It sometimes happens that way.
 
After watching the tape, almost every day for the past fifteen years and trading part time for about twenty five before that, you can get a feel for the action, and the convergence of events.   And my particular method of charting helps one to find the lay of the land, to map out the likely progression of actions without being internally predictive.
 
Yes, there is always room for the unexpected, the unanticipated event, but if you want to keep standing in the pits you quickly learn from the school of probability.  Or go sit down.
 
The 'events' that were taking place were nothing new.  There has not been a recovery for what, six years?  The US has been aggressively extending its power overseas for how long?   What was new was the volume and tenor of the commentary, designed to make people think a certain way.  It was becoming so shrill that the time for a bottom was getting closer, GIVEN the light volumes and non-committal character of the action.  What I call a 'technical trade.' And the timing for a year end rally was dominant, almost a given. 
 
This was a professional job, which I sometimes euphemistically call 'technical trade,' and nothing could have been more clear.  They were washing out their dogs for the year end, and taking some profits to raise cash, and positioning their portfolios for the year end pump.  'They' are not always homogenous, but there are certain times where professional courtesy becomes widely accepted.  Mostly bonus times.
 
I don't know anything.  No one knows for sure, and no one can 'beat the market' regularly over a long period of time unless they are just collecting rents, or cheating, whether it is being done under legal cover or not.   You can earn a decent return if you work very hard at it and practice sound money management principals, and don't get all full of yourself or your system.  Value investing works over long time scales, especially during swing periods of growth.
 
There is a lot of cheating going on. There is always cheating but now we are in a white collar crime wave.   It is one of the few things that you can count on.  And it is becoming such an accepted practice that they hardly bother to hide it anymore.   And the number of people that are 'in on it' either indirectly or directly is surprising, from the media to the Congress.
 
At some point this will fall apart, and it won't be pretty.  I have said how many times that a raw deal like the US Dollar hegemony is run by fraud and force, and as the fraud weakens the force must increase?   There will be a reckoning.  And we are not necessarily the good guys in this one. 
 
Some consensus issues are more 'natural' than others.  Nine out of ten people in recorded history valued gold and silver.  The fiat paper currency is a recent phenomenon, and founded on power disparity.  It is a modern god that will suffer none other, whether it be metal or labor or anything else that is of historic value.  It may cloak itself in traditional values, but it is a beast that seeks to price everything according to its will.
 
We are in a currency war.  Most things flow from that.  The markets have been ruined by HFT, insider trading, pervasive rigging supported by the moral hazard of handing out wrist slaps for million dollar thefts.
 
We live in historic times, and a number of macro trends seem to be building to a crescendo. Better to take the longer term view of things to see what is really going on.  Stay flexible, but skip the short term trading.  Grab something real, and hang on to it.  And that often involves something more than just money.

Need little.  Want less.  Love more.


David Cay Johnston: Keynote Address to Symposium on Wealth Disparity In America



David Cay Johnston is an American investigative journalist and author, a specialist in economics and tax issues, and winner of the 2001 Pulitzer Prize for Beat Reporting.

Since 2009 he has been a Distinguished Visiting Lecturer who teaches the tax, property and regulatory law of the ancient world at Syracuse University College of Law and Whitman School of Management.' From July 2011 until September 2012 he was a columnist for Reuters, writing, and producing video commentaries, on worldwide issues of tax, accounting, economics, public finance and business. Johnston is the board president of Investigative Reporters and Editors.






17 December 2014

Gold Daily And Silver Weekly Charts - Patience Patients, the Clinical Monetary Trials Will Continue


The Fed brought out not so much the jawbone, but perhaps its dentures, and changed 'considerable' to 'patient' and set some expectations for a rate hike perhaps as early as April.

Of course this is all rubbish, and the Fed will do what they need to do to protect the US' financial paper, especially in the time of currency war.

Gold took a somewhat perfunctory hit by the little wiseguys sometime after the announcement, almost as an afterthought, and silver pretty much held its level.
 
If they can't keep the genie in the bottle we might be getting ready to rock 'n roll.  Can you feel things winding up, getting tighter and tighter, as the paper kings keep pushing it to the limit?
 
We can be patient too, Bubbe Yellen, while we wait for some potentially considerable changes to come.

I am leaving a bit early today to do things related to family and the holidays. These things will remain. The trappings and vanities of Empire are already turning to dust.

Gold and silver will be fine I suspect. But we must be wary of the desperation of those who are both corrupt and powerful.

Happy Hanukkah to all my Jewish friends, acquaintances, and patrons of Le Café.

Have a pleasant evening.


 

SP 500 and NDX Futures Daily Charts - Easy as She Goes

The markets are continuing their bounce off support today, after the Fed did little except move their lips a little in their last statement for 2014.
 
They will be 'patient' and I imagine they expect that you will be too.
 
The charts will be updated with the remainder of today's action tomorrow.
 



 

The Children of Victorian Britain, In the Heart of Empire


“Unfettered capitalism is a revolutionary force that consumes greater and greater numbers of human lives until it finally consumes itself.”

Chris Hedges


"Take up the White man's burden,
And reap his old reward:
The blame of those ye better,
The hate of those ye guard."

Rudyard Kipling


"For better or worse — fair and foul — the world we know today is in large measure a product of Britain's age of empire. The question is not whether British imperialism was without blemish. It was not. The question is whether there could have been a less bloody path to modernity. Perhaps in theory there could have been. But in practice?

...The policy mix favored by Victorian imperialists reads like something just published by the International Monetary Fund, if not the World Bank: free trade, balanced budgets, sound money, the common law, incorrupt administration and investment in infrastructure financed by international loans."

Niall Ferguson, Empire and The Empire Slinks Back


"To found a great empire for the sole purpose of raising up a people of customers, may at first sight appear a project fit only for a nation of shopkeepers. It is, however, a project altogether unfit for a nation of shopkeepers; but extremely fit for a nation that is governed by shopkeepers."

Adam Smith, The Wealth of Nations


"First...there is not a single prince, state, or potentate, great or small, in India, with whom they have come into contact, whom they have not sold: I say sold, though sometimes they have not been able to deliver according to their bargain. Secondly, I say, that there is not a single treaty they have ever made which they have not broken. Thirdly, I say, that there is not a single prince or state, who ever put any trust in the [East India] Company, who is not utterly ruined; and that none are in any degree secure or flourishing, but in the exact proportion to their settled distrust and irreconcilable enmity to this nation."

Edmund Burke: Speech on Mr. Fox’s East India Bill, Dec. 1, 1783


"Human beings are themselves considered consumer goods to be used and then discarded. We have created a “throw away” culture which is now spreading. It is no longer simply about exploitation and oppression, but something new...

While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few. This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation. Consequently, they reject the right of states, charged with vigilance for the common good, to exercise any form of control...

The thirst for power and possessions knows no limits. In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule."

Francis I, Evangelii et Gaudium




David Cay Johnston: The Hunger Games Economy


“All the animals, the plants, the minerals, even other kinds of men, are being broken and reassembled every day, to preserve an elite few who are the loudest to theorize on freedom, but the least free of all.

I can’t even give you hope that it will be different someday— that they’ll come out, and forget death, and lose their technology’s elaborate terror, and stop using every form of life without mercy to keep what haunts men down to a tolerable level— and be like you instead, simply here, simply alive.”

Thomas Pynchon, Gravity's Rainbow

As you know The Hunger Games society has been a recurrent theme here for some time.

An elite minority economically oppresses the rest of the nation, using force and fraud to keep the public in line.

The Capitol district is unproductive, effete, and consumed with the self, consumption, fads, status, power, and fashions. And of course the sentimentality and reality televised gore of The Hunger Games themselves.  They are beautiful on the outside, in inwardly filled with every manner of corruption and the bones of their victims.
 
The games are designed to provide the Districts with some hope, but primarily fear.  Anyone may be chosen and destroyed, with debt increasing the odds of being chosen.

Hope and fear.  And what happens when the people lose confidence in a corrupt and manipulative system, and therein lose their hope? 

And may the odds be ever in your favour.

The ‘Hunger Games’ Economy
By David Cay Johnston
December 15, 2014

That our Congress is intent on taking from the many to enrich the few was on full display during passage of the new $1.1 trillion federal spending bill, as five provisions show.

In a Washington run by and for oligarchs, official theft happens suddenly and without warning. No public hearings. No public debate. Instead, as we saw in North Carolina and Wisconsin, it occurs with just abrupt moves to shift power and money from the many to the richest few.

And with little focus by our best news organizations on the consequences for people’s lives, especially if they are in the 90 percent, many people have no idea they just got officially mugged.

The continuing resolution to fund the government was combined with an omnibus spending bill to create a 1,603-page statutory monster called the “cromnibus.” Among the provisions that show how both political parties help corporations pick the pockets of the vast majority, while far too many mainstream journalists help obfuscate the awful truth...

Read the entire article with details here.



16 December 2014

Gold Daily and Silver Weekly Charts - Once We Were Good


"Do not imagine that these most difficult problems can be thoroughly understood by any one of us. This is not the case. At times the truth shines so brilliantly that we perceive it as clear as day.

Our nature and habit then draw a veil over our perception, and we return to a darkness almost as dense as before. We are like those who, though beholding frequent flashes of lightning, still find themselves in the thickest darkness of the night."

Maimonides
 
Today was a volatile day in the markets to say the least.  And gold and silver in particular had been taken out and beaten over the last two days by the triumphant US dollar.
 
US equities are probably the best example of this volatile market.  Stocks plunged on the open, rallied back to triple digit gains in the Industrials, and then sold off again into the close.
 
The continuing drop in Oil is creating quite a few concerns with funds, companies, and even nations. 
 
There is almost no doubt in my mind that this is the result of a gameplay with the US and Saudi Arabia, coupled with slack demand from emerging economies like China.  Saudi Arabia is more than happen to maintain high supply levels to spank Putin for the US, and they are also cleaning out the investments in oil production in the more marginal explorations and fracking that depend on higher prices.
 
The big news all day was the plunging Russian rouble, which is under assault on the forex markets by the Western banks, assisting with plunging oil revenues.   Reminders of the Russian default in 1998 were being broadcast, although given that Russia has about 10% debt to GDP that is not much of a sovereign threat. 
 
More likely we would see Russian investments fail and corporate bonds default in emerging market portfolios.  In other words a commercial rather than a sovereign failure which we saw the last time in 1998 when the rouble failed and was reissued.  In contravention to the theories of MMT I might add, as short and selective as their memories seem to be.
 
Jeb Bush is apparently going to be running for President in 2016.  Oh joy, Bush v. Clinton.  Come mister tally man, tally me bananas.
 
FOMC tomorrow.  With the dollar this strong I seriously doubt the Fed will be raising rates anytime soon.  But they might make some noises.
 
This is a currency war.  Never forget it when you are attempting to find sense and surety in this. And we are not necessarily the good guys this time. 
 
I am not sure what is more disheartening.  The shamelessness of the neoliberal thugs, or the pettiness and selfish grasping of the so called intellectual class,  utterly lacking in any moral compass or principle except their own howling in subjective wells of dwindling power, as visions of progressive reform swirl down the sink of forgotten dreams, into the maw of the Beast.
 
Have a pleasant evening.