27 August 2015

Gold Daily and Silver Weekly Charts - Bottom Watching

Gold took a gratuitous little hit on the NY open/London PM fix this morning. It was held down most of the day.

Silver managed to perk up nicely though, regaining the midpoint to the 15 handle. Next month will be more active for silver, and not so for gold.

Lets see if sparky can carry the day.

Not much ever happens at The Bucket Shop these days, so when Goldman takes 44,200 gold ounces for its house account as they did yesterday it is at least worth of note intraday which you can read about here.

I know, it's not that great, but it's something.  We're hard up for any real action here, except for the daily dump of paper to knock the prices lower in the AM with a slight recovery into the PM and then higher prices overnight.  Rinse and repeat the next day.

Chart formations for the precious metals have not meant much for, oh I don't know, about a year or so now.   Its just a steady knockabout lower, tap tap tap.

It may be dissipating.   Way to early to say.  But let's watch the chance for a rounding bottom here.  No charge for looking.  And after all, Summer is almost over.

Have a pleasant evening.

Check out those 1960's outfits and hairstyles. And that frilly blue cap?  Ouch!

SP 500 and NDX Futures Daily Charts - Walking the Dog

The revision to 2Q GDP came in higher than expected this morning.

Even more importantly, stocks did not fall out of bed overnight, so that gave the Streeters an opportunity to 'walk the dog' back up to less threatening levels after the decline on Monday got out of hand, compliments of the HFT algos.

Both of the futures I follow, the SP 500 and the NDX, have achieved a fifty percent retracement of the big decline. I have marked it on the charts.

Lets see if the dog walkers can keep the pooches in line for the close into the weekend tomorrow.

I know at least two aficionados of this pooch parade, Jan and Stan, who would like to see stocks recover in time for their big rate soiree in September.   Cannot have a paper with the dog messing the rugs.

They might well put down some heavy paper, and then go for it.  They may not get a better chance this year.

Have a pleasant evening.

Michael Hudson: Killing the Host, With Reckless Disregard

"In Killing the Host, economist Michael Hudson exposes how finance, insurance, and real estate, also known as the FIRE sector, have seized control of the global economy at the expense of industrial capitalism and governments. The FIRE sector is responsible for today’s extreme economic polarization, the 1% vs. the 99%, via favored tax status that inflates real estate prices while deflating the “real” economy of labor and production.

Hudson shows in vivid detail how the Great 2008 Bailout saved the banks but not the economy, and plunged the U.S., Irish, Latvian and Greek economies into debt deflation and austerity. Killing the Host describes how the phenomenon of debt deflation imposes punishing austerity on the U.S. and European economies, siphoning wealth and income upward to the financial sector while impoverishing the middle class."

I have not yet read Michael Hudson's soon to be released book Killing the Host.   However we do have some highlights of his thoughts coming out of his existing body of thought which I have followed, and also in this recent interview with Democracy Now which is included below.

I cannot agree completely with Mike Hudson's take on China in this interview.   No surprise, since we are two different people with different viewpoints and perspectives.  I think we also are from different economic schools of thought.  However I see much merit in most of what he is saying.

There was and is still a very dangerous speculative bubble and misallocation of capital that has been going on in China, that is often due to mismanagement, regulatory weakness, a surfeit of easy money, speculative fervor, and flat out corruption.   While China is working to correct many of those problems, their outlook is not all sunshine and rainbows.

And I would not say that they were just 'defending themselves' by building up enormous currency reserves that just happened to come there way.  I have not gone into this recently, but China took some very aggressive policy moves, including devaluing their currency against the dollar and then controlling it, and spread quite a bit of money in the right circles with regard to trade policy around Washington, to enable a mercantilist system in which they were able to build up their economy to some degree at the expense of the American middle class.  Although vast fortunes were also made by some of their all too willing partners in the West as well as their own emerging class of oligarchs.

But putting that aside, the outsized financial sector in the US, which was also enabled by a big money campaign for deregulation in Washington, marked by the overturn of Glass-Steagall, has certainly spawned a significant systemic problem of corruption and malinvestment, inequality reinforced by policy, and an eroding of democracy itself.

Until steps are taken to correct this, there will be no sustainable recovery.  People are fed up, and angry, and reaching for solutions some of which appear to be some rather poor choices made in extremis.   

And as for the wealthy, dumb, and distracted classes, busily keeping themselves out of any meaningful discussion with the amusing distractions of the triviata of their professions, while occasionally taking a fat stipend for spewing nonsense while nursing a steady share of the vig, the consequences of all this are going to roll over them like a tsunami at midnight.

And once again, 'who could have seen it coming.'

Related:  Of Bubbles and Busts:  Which Way For China (Oct 2009)

JPM Customer Delivers 500 Gold Contracts of Bullion, Goldman Takes Most For the House

It is not possible to interpret the action fully from this report below.  Let me stipulate that up front.

It seems that a 'customer' trading with JPM has allowed 500 of their August gold receipts to be taken for 'delivery.' And most of them, 442 to be exact, were picked up by Goldman Sachs for their 'House' account.

In and of itself this may not be so significant. For example, we do not know who the 'customer' at JPM might be, or why they might have been selling their bullion receipts. Perhaps they were just raising some cash to cover stock losses.

And we do not know why Goldman picked up receipts for 44,200 ounces of gold at $1124. And what exactly this 'house account' might be.

Goldman has been stopping, or taking deliveries, for their House account pretty steadily this month.

Don't be too impressed by the words, because a 'delivery' just means paper receipts change hands.  Most of the time nothing really happens to the bullion, at least in The Bucket Shop.  It just gets shoved around the plate.  Up for delivery, back to storage, rinse and repeat.

I do like to keep track of how many receipts are marked 'deliverable' or offered for sale at the prevailing price, compared to the potential number of claims, or active contracts.

This is how it is for gold.   Silver, not so much.

CNT seems to be using the Comex for an actual sale and delivery and withdrawal mechanism for their actual business of obtaining a supply of bullion for their wholesale customers.

What an odd thing to do, actually transact deals between people who will take and use what they sell.  Well, they are an oversized coin shop, so you will have to excuse them.

And as the pit slugs will be quick to point out, we do not know exactly what this transaction on this report 'means.'  That is in the nature of these markets and their reports.  It could have been this, it could have been that.   Don't stand too close to the table kid.

I just thought it was interesting, and wanted to make a note of it for future reference.   I am curious to see how things in the warehouse reports set up for the big month of December.

And besides, it's nice to watch someone busy doing God's work.

26 August 2015

Gold Daily and Silver Weekly Charts - The Only Certainty Is Change - Option Expiration

The stock market was finally taken in hand by some adults, who worked to stabilize the prices, and then slowly and deliberately walked it backed up, getting a little greedy perhaps in the last hour when they started running the bears into short covering.

I do not expect this to end well. It is just a matter of time, and timing.

To that end I have posted intraday my favorite commentary on hubris and will to power that was American finance and politics in the 1920s. It is titled Remembering the Summer of 1929.

You may wish to do yourself some service and watch the entire documentary.  It is worth it.

Today was an option expiration at The Bucket Shop.  Gold and silver fell somewhat to the campaign of managing the wallets of passing speculators, as well as perceptions.  The pinnacle of the Banks, the Fed, seeks to restore confidence in paper, and discourage even a thought of just about every other alternative.

The dollar managed to rally a bit back up today. A stronger dollar is definitely not in the interests of the US economy, but it does favor the predatory financial class.  And since they are 'in the driver's seat' of the markets these days, they bend them to their will as they may.

Forces backing the supremacy of  US dollar based paper financial assets and decision making are fighting this trend towards economic and monetary alternatives in the rest of the world with all their power.  So we are watching an historic, great drama unfolding.

The rise and decline of Empire are often not discernible to the participants at the time, and often tend to follow their own schedules, seemingly slow and then in great rushes of change that seemingly could not have possibly been foreseen.

And never forget this great truth that in the long timescale of monetary history, gold and silver are almost constants, but purely paper money is just a glimmer, a relative flash in the pan that is here, and then it is gone, with whatever passing regime of the day that may have fathered it.

Gold and silver are forged in the hearts of great and uncommon stars, and nowhere else. And the trappings and ornaments of mortal men are often powerful, and sometimes seemingly irresistible for a time, but in the end they are just dust, returning to the vanity and nothingness of their creators.

As will even gold and silver return to nothingness, at some even more and very distant day.    But the soul of even the most common and ordinary person will endure in its Creator forever.  So let us mark our priorities accordingly.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Walk the Market Higher, Slowly and Deliberately, and Then?

Yesterday we saw a furious rally in the morning that failed, and badly.

Today the bulls and their backers in various moneyed quarters were a little smarter. They gather themselves together, stabilized the market at a sustainable bottom, and then slowly and deliberately walked it up into the close.

This should give a little cheer to the rest of the world, and hopefully we will see some more stability especially in the Asian markets.

Nothing has changed, really. This is all perception and cosmetics.

Not one thing has changed.  Nothing.   This was only a taste of things to come if nothing really changes.

There is not an ounce of will to reform anything in New York and Washington. What we saw this week was the pigs getting frightened that they were losing control, and especially losing ready access to their personal feedbags.

The worst thing that these jokers can do now is get overconfident and greedy, and run the markets back up, trying to achieve the former high so they can get their dopey rate increase out in September or October.  I would not put this past them since for the most part they are fluff and stuff, lacking all wisdom and proportion.  

If they do this, and if the market falters and begins a slight downward again, the risks to the economy are unimaginable to most. But they are especially unimaginable to these myopic, puffed-up, bureaucrats at the Banks, and the indentured servants of Big Money in Washington.

Have a pleasant evening.