20 October 2014

The Age of Narcissism

"Suddenly, abused and battered wives or children, the unemployed, the depressed and mentally ill, the illiterate, the lonely, those grieving for lost loved ones, those crushed by poverty, the terminally ill, those fighting with addictions, those suffering from trauma, those trapped in menial and poorly paid jobs, those whose homes are in foreclosure or who are filing for bankruptcy because they cannot pay their medical bills, are to blame for their negativity.

The ideology justifies the cruelty of unfettered capitalism, shifting the blame from the power elite to those whom they oppress."

Chris Hedges

We will always come across such personalities.  But there are some times, in some cultures, where such character traits may become not only more accepted, but socially incented, rewarded, and even fashionable.  

I think this is an important subject, because the current fiat culture in the United States has a strong element of collective and individual narcissism, expressed in the role models it upholds, the people who rise to great power, and in general, a feeling of historical and global exceptionalism that dare not be questioned.

We may do as we wish, because of who we are. This is our century. And if others object, they either have no right to do so, or are merely acting out of fear and jealousy of our greatness.

Hallmarks of Narcissism

 A pervasive pattern of grandiosity (in fantasy or behavior), need for admiration, and lack of empathy, beginning by early adulthood and present in a variety of contexts, as indicated by five (or more) of the following:
•Lacks empathy - is unwilling to recognize or identify with the feelings and needs of others
•Has a grandiose sense of self-importance (e.g., exaggerates achievements and talents, expects to be recognized as superior without commensurate achievements)
•Has a sense of entitlement, i.e., unreasonable expectations of especially favorable treatment or automatic compliance with his or her expectations
•Is interpersonally exploitative, i.e., takes advantage of others to achieve his or her own ends
•Is often envious of others or believes others are envious of him or her
•Requires excessive admiration
•Shows arrogant, haughty behaviors or attitudes
•Believes that he or she is "special" and unique and can only be understood by, or should associate with, other special or high-status people (or institutions)
•Is preoccupied with fantasies of unlimited success, power, brilliance, beauty, or ideal love

Frank Ochberg is one of my favorite modern psychologists. His primary area is PTSD. But his insights on a variety of topics is often insightful.


19 October 2014

'Confidence' Is a Corollary In a Fiat Culture: The Triumph of the Shills

"When the political process becomes controlled by multi-national corporate interests, the US government becomes a tool of those interests. When multi-national corporations own the mass media as they presently do, honest democratic debate becomes unlikely.

As we witness corporate power becoming a dominate force in international relationships, it will surely continue to diminish independent national sovereignty under the banner of 'free trade.'"

Joseph A.

Economists are fretting about the current notion that the US is caught in a secular stagnation.  They are concerned because they believe that this is what is driving stock prices lower.  And lower stock market prices are upsetting to their masters.
 They are concerned that people are believing in stagnation as a sort of urban myth, and that makes it real.  Seriously.  Belief is not an effect, but a primary cause in their minds. 

The biggest myth that I know of is that confidence alone, no matter whether it is founded in fundamental reality, is enough to ensure a permanent plateau of financial asset growth.  If we believe something, it is.  No matter whether reality reflects it or not.

It is the corollary to the fiat culture that holds that if they say it, and we believe it, then that is enough.   They maintain their power to decide, and this is their real end.  Not accomplishments, not solutions for others, but the maintaining of their status quo. 

And so the Fed and the ruling elite will say whatever is needed to be said, whether it makes any sense or not, and paint pictures with their words and statistics, to make the people believe. If they believe, they will buy, using increasing levels of debt if needed.

Animal spiritism is the cargo cult approach to a financial recovery. If only we believe, then everything will be all right, and we can live in the Potemkin villages that we build with a debt that can never be repaid.

Or as Fernando said, 'It doesn't matter if you feel good, you only need to look good, and baby, we look marvelous.'

Confidence is not a crutch, not a substitute for fundamental growth. It is a spark, and it cannot burn the wet wood of a stagnant or declining real median wage. Just because some fools can believe something does not make it true, even in the Humpty Dumpty world of our pampered princes.

18 October 2014

No Recovery: Longest Sustained Fall In UK Real Wages In Recorded History

Why is there no sustainable recovery?

Because of the policy errors of the West to save the corrupt financial system, but abandon the people whom 'the system' is intended to serve.

You may read the story about why the Bank of England is likely to keep interest rates low, which accompanies this graph, in the Financial Times.

Domestic Democracy or Foreign Imperialism, But Not Both

"Once you go down the path of empire, you inevitably start a process of overstretch, of tendencies toward bankruptcy, and, in the rest of the world, a tendency toward the uniting of people who are opposed to your imperialism simply on grounds that it’s yours, but maybe also on the grounds that you’re incompetent at it.

Indeed, one wonders whether we have already crossed our Rubicon, whether we can go back. I don’t know.

The Department of Defense is not, today, a department of defense. It’s an alternative seat of government on the south bank of the Potomac River. And, typical of militarism, it’s expanding into many, many other areas in our life that we have, in our traditional political philosophy, reserved for civilians. Domestic policing: they’re slowly expanding into that.

So, what do I suggest probably will happen? I think we will stagger along under a façade of constitutional government, as we are now, until we’re overcome by bankruptcy."

Chalmers Johnson

That bankruptcy will not only be financial, but moral and spiritual.  It will be a fiat culture, that is, reality will be defined as whatever power says it will be.
Below is a talk given by Chalmers Johnson in April, 2007

This was before the financial crisis and bailouts.

And before the Reform President Obama largely ratified the abuses of his predecessor and given over the welfare of the people to the corporations and the moneyed interests, finance and militarism, the pen and the gun, the bullet and the bribe.



17 October 2014

Gold Daily and Silver Weekly Charts - Life During Wartime

There is a steady drain of silver from the warehouses. Not large enough to matter, but a million ounces here, a million ounces there.

Let's see if the precious metals can make that triple bottom stick, and break the downtrend.

Longer term it is all about the physical supply. That is what matters in a nutshell. Everything else is commentary.

Have a pleasant weekend.


SP 500 and NDX Futures Daily Charts - Wild, Wild Week

The Fed's jawboning and some timely buying in the SP futures saved the US equity market, for this wild, wild week.

Follow through is essential, because technically stocks are not out of trouble.

Consumer sentiment is a lagging, not a leading indicator.

The notion that the US is exceptional and immune to problems overseas, especially Europe, is a canard.

What will they think of next?

Have a pleasant weekend.

16 October 2014

Gold Daily and Silver Weekly Charts - Moral Hazard, Policy Errors, and History Repeating

"Financial repression is sometimes the effect of policy even if it is not the intent. It manifests itself, for example, when policy makers react more forcefully to declines in asset prices than to increases.

Price increases tend to be treated with benign indifference. But declines often lead policy makers to respond with force, deploying fiscal stimulus and monetary accommodation. Market participants then conclude that governments have their backs...

Efforts to manage and manipulate asset prices are not new. But history provides little comfort that these practices work. Interfering with market prices occasionally buys time, but rarely do policy makers seize the window of opportunity to enact structural reform.

Financial repression embeds the wrong incentives—obfuscation begets delay, and a robust recovery becomes unattainable."

Kevin Warsh, The Financial Repression Trap, 2011

This is also one definition of 'moral hazard.'   And the fingerprints of officialdom were all over the markets today, pushing favored prices higher, and other disfavored prices lower.

The Fed's Bullard came out with a laughable statement that the Fed might consider extending QE3, which is fairly meaningless given that we are nearly at the end of the taper.

But concerted buying in the futures, specifically in the SP, gave a little more 'oomph' to the jawboning, and the markets were able to turn it around, although weakly, but still well off the lows.

I enjoyed watching the closing ticks on the SP futures into the end of day trade, and the quick drop off in the time from when the cash market closed at 4 PM and the futures paused at 4:15.

This is going to be a long grind in the metals I'm afraid. It will take quite a while for the reckoning to come, but then it does it will happen much more quickly than most suspect.
That is the way these big changes always happen: slowly, then all in a rush.

There was nothing of interest in the Comex metals warehouses and delivery reports, except perhaps a drain of silver stored at Scotia Mocatta which has been quite heavy of late.  But the other warehouses are well supplied in Comex terms.
What is most objectionable perhaps is that the current crop of pampered princes are repeating the very errors that led to and prolonged the human misery of the Great Depression. 
While they feign ignorance, and when pressed on their failures in the case of Chairman Greenspan even hide behind the excuse of blind ideological incompetence, it is difficult to believe that we have learned nothing, and continue repeating folly in the name of reason.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Fed's Bullard and the PPT To the Rescue

Stocks were selling off this morning, but the Fed's Bullard jawboned them off the bottom with the speculation that the Fed might have to extend QE3.

That gave the signal to the market, although what he actually said especially about the price of oil was somewhat contradictory, and did not make all that much sense.

But the Plunge Protection Team, tapping any needed money from the Exchange Stabilization Fund, started buying the SP futures, and continued to do so at a couple of key points in the day, and particularly into the close, with some wild price swings. The SP futures dropped almost 10 into the close off that late day buying pump.

So what next. Really, it's out of the Fed's hands, since the weakness is global. While the Fed could do much more, in particular as a key regulator, I do not think that they will be able to do it, with the kind of craven, financially coddled pampered politicians that are in leadership positions in the West. London and Washington come to mind in particular.

Stocks are at key support here, and the powers that be would like to see a bottom made here quite badly. Tomorrow is key for no further sell off, to give investors doubts and time to think about it over the weekend.

So let's see what happens.

Have a pleasant evening.