Simon Johnson: Jamie Dimon and the Failure of the Nation

No matter how you wish to frame it, the Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained growth and recovery.

Baseline Scenario
Jamie Dimon And The Fall Of Nations
By Simon Johnson
May 31, 2012

“Why Nations Fail: The Origins of Power, Prosperity, and Poverty,” by Daron Acemoglu and James Robinson, is a

Gold Daily and Silver Weekly Charts - Brownian Motion

Here is a summary of what the spokesmodels said about precious metals today.

Yada-yada. Yada yada yada.
Non-Farm Payrolls report tomorrow will dominate the short term action perhaps depending on how the number comes in, but the real driver remains the sovereign debt situation with eyes on Greece and Spain in pariticular.

The Greek election mid month may provide some indication of their

SP 500 and NDX Futures Daily Charts - Weak GDP, But Markets Watch Payrolls and Greece

Watch for the Non-Farm payrolls report, and the Greek situation. Their elections are mid-month and could be a significant market driver.

Lauren Lyster Interviews CBO Whistleblower Lan Pham

From the February 2, 2012 Wall Street Journal story on Lan Pham's firing:

"I was repeatedly pressured by the CBO Assistant Director, Deborah Lucas, in charge of the Financial Analysis Division to not write nor discuss issues in the banking sector and mortgage markets that might suggest weakness in these sectors and their consequences on the economy and households."

The CBO's 2010 termination

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Bullion prices are bouncing around a bit today with stocks ahead of the Non-Farm Payrolls Report.

Needless to say, the premiums are a bit 'thin' especially on the Spicer family funds.

Sheila Bair on Tightening the Volcker Rule and the JPM 'Hedging' Fiasco

Sheila Bair will be sorely missed as one of the few coherent and less-servile regulators. She was appointed to her position in 2006 by George W. Bush, so no credit to Obama. She was most likely a happy mistake because Bush II certainly was not long on regulatory effectiveness with Hank Paulson at the helm.

Obama's appointments to the financial and economic oversight positions in his

Gold Daily and Silver Weekly Charts - About Those Special Issue Bonds and Full Faith and Credit

I was expecting another 'hit' on the futures contracts around the May-June contract dates I have posted several times.

Perhaps the antics today will be all for now. Let's see what happens.

Someone said something unintentionally funny about the Social Security Trust Fund bonds and the reliability of the US government today that I ordinarily would ignore, but it may serve to illustrate a point.

SP 500 and NDX Futures Daily Charts - Waiting for Greece and the Fed

The economic picture in the States is not good. It is muddling along, but is hardly sustainable or robust.

But the great attention of the markets now is focused on the Greek elections in mid-June, and what the Fed will do in the next meeting which is a few days later.

Taibbi: The Epic Failure of the SEC

"The big thieves hang the little ones."
I cannot argue with what Matt Taibbi says here, having quoted others like Bill Black about the same situation in great detail.

But in fairness to the SEC, this is hardly the case of a single regulator falling into porn-surfing indolence while they wait for another turn through the Wall Street revolving door.

The SEC is just another branch of regulatory

James Koutoulas Says JP Morgan Is Still Hiding Large Amount of MF Global Customer Money

I do not agree with Rick Santelli's throwaway line in the beginning that there was probably no illegality involved in JPM's trades in London, and certainly not with regard to Facebook where it appears that there was blatantly selective leaking of undisclosed negative financial information ahead of the IPO. And the corollary suggestion that any investigations there are a waste of time.

The

Freedom in Europe Is Eroding From the Edges, Financed by the Banks

"Greece is not an exception. It is one of the main testing grounds for a new socio-economic model of potentially unlimited application: a depoliticised technocracy in which bankers and other experts are allowed to demolish democracy."

Slavoj Žižek


"Corruption is a tree, whose branches are of an immeasurable length: they spread everywhere; and the dew that drops from thence hath infected some

The Death of the Gold Bull May Be Greatly Exaggerated -- Miner / Bullion Ratio at an Extreme Low

There was an opinion making the rounds today from a chief strategist named Suttmeier that the gold bull market was over because the 50 day moving average has fallen below the 200 day moving average for gold, commonly called a 'death cross.'

Interestingly enough he calls for a trading range, and not a further significant decline in gold, but rather a 5% trading range 'for years.'

During the

Greek 'Aid' Is Really Enhanced Vendor Financing and Foreign Bank Bailouts

“They don’t want to kill us [the Greek people] but keep us down on our knees so we can keep paying them indefinitely.”

Eva Kyriadou
The similarity to the Icelandic situation is striking.  Greece must deal with the problem of decoupling from the Euro, but other than that the scenario seems fairly straightforward.

Greece needs to assert their independence, and have the will to make it 'stick.'

Gold Daily and Silver Weekly Charts - Gold Chart Shows About 10,000 Contracts Dumped in Quiet Market

I felt this bear raid coming on the tape, from the action I was seeing. I cannot express it better than that.

So I had sold my silver bullion trading position and trimmed back gold, adding a hedge in the first hour of trade.

The hit came around mid-day after the European close as you can see on the 5 minute June futures chart.

One does not drop 11,000 contracts in a ten minute period in what

SP 500 and NDX Futures Daily Charts - The Well Tempered Clavier

Geithner and Bernanke are playing a tune for us on the US equity futures markets, with the lead vocals coming from the SP 500 June contract.

Can you name that tune?

I do not think they can hit the high note without a serious bump of QE to sustain them. And Benny may provide it, if somewhat stealthily, mid month around the time of the Greek elections.


 

Barry Ritholtz Interview On the Financial Crisis from Capitalism Without Failure

Excellent interview as always by Barry, and an interesting list of suggested readings. His blog, The Big Picture, is among the best.

I would respectfully include ECONned by Yves Smith on the reading list. It adds a dimension of scholarship and detailed analysis found nowhere else.

Barry Ritholtz on the Crisis: Causes, Cures, Corptocracy, and Suggested Reading

When you get bit by a dog, you

Highly Resolve That These Dead Shall Not Have Died In Vain

"Change does not roll in on the wheels of inevitability, but comes through continuous struggle. And so we must straighten our backs and work for our freedom. A man can't ride you unless your back is bent."

Martin Luther King, Jr.


Judge of Nations, spare us yet,
Lest we forget—lest we forget.

Rudyard Kipling

Four score and seven years ago our fathers brought forth on this continent, a new

Bill Moyers & Company: Reckoning With Torture

"Some may argue that we would be more effective if we sanctioned torture or other expedient methods to obtain information from the enemy. They would be wrong. Beyond the basic fact that such actions are illegal, history shows that they also are frequently neither useful nor necessary."

David H. Petraeus, Commander, U.S. Central Command

“The bottom line is these techniques have hurt our image

Ted Butler Calls Out the CFTC On Silver Market Manipulation

Considering how patient and understated he has been for so long, and so often the voice of reasonableness, this latest piece from Ted Butler is a bit surprising in the directness and strength of his language.

Illegalities
By Ted Butler
May 25, 2012

The Commodity Futures Trading Commission (CFTC) has been negligent in failing to terminate the obvious manipulation ongoing in silver. Furthermore,

Gold Daily and Silver Weekly Charts - Fed Will Backstop a Run On the Exchange

The situation remains rather volatile and open to an exogenous event.

Gold has not yet broken its downtrend. We do have the option expiration under our belts at least and are entering a heavy delivery season.

I thought it was interesting that the US government has directed the Fed to backstop the Comex and ICE in the case of a liquidity event or a run on the exchange.

In that event be ready

SP 500 and NDX Futures Daily Charts - Tiptoeing Into the Long Holiday Weekend

Concerns about Greece and its potential impact on the global banking system continue to dominate the financial trade.

Some think that there will be some resolution this week because of the US holiday on Monday. That is possible.

If there is a positive resolution the equity markets will rally very hard. On the other hand if Greece withdraws from the euro, and perhaps even the EU altogether,

Max Keiser Interviews Teri Buhl On JP Morgan's Wells Notice

I found the description of the Wells Notice to be interesting.



Source

Teri Buhl's column discussing this and the implications.

US to Backstop the Anglo-American Derivatives Exchanges with Fed Dollars - 'Too Big To Fail'

It sounds like the principle of keeping AIG whole on its obligations so that it can pay off to the banks at 100 cents on the dollar. This should make Jamie feel a little better about his bad derivatives trades.

And Blythe should rest easy knowing that Benny has her back on those massive metals shorts.

Sounds like they even plan to have the Fed backstop the derivatives trade in London.

Heads

JPM Gave Risk Management Oversight To Museum Head Who Sat On AIG's Board

"Financial institutions such as JPMorgan love to buy derivatives because they are opaque, create fictional income that leads to real bonuses, and when, not if, they suffer losses so large that they would cause the bank to fail, they will be bailed out."

William K Black

This is JP Morgan, America's mightiest and unsinkable 'showcase bank,' run by its toughest and craftiest CEO, that holds the

No Justice: SEC Probes Lehman For Three Years, Recommends Nothing

Corruptio optimi pessima.
(The best things when corrupted become the worst.)

Aristotle, Nicomachean Ethics
Not even a wristslap.

Well at least the SEC released its report. The craven curs and hypocrites at the CFTC have been studying the criminal manipulation of the silver market for more than four years, and as of yet have not even had the decency to release their findings, and then proclaim

Gold Daily and Silver Weekly Charts - Quiet Option Expiration With a Little Gut Check

Precious metal holders were jerked around a little today on the option expiration. I would anticipate another hit tomorrow to test the hands holding in the money calls, which are converted to active futures contracts at the close.

All eyes are on Europe and the western central banks.

Gold needs to break the big downtrend to prove that the decline is over. Until then I would not feel

SP 500 and NDX Futures Daily Charts

Another nothing day, marking time. The traders want to see what happens in Europe, and what Ben and his pals will do in response.

Gold Daily and Silver Weekly Charts - V Bottom Ahead of Option Expiration?

Intraday commentary on important dates in the next two weeks here.

May 24
OG - June 2012 Gold American Options - Last Trade Date
OG - June 2012 Gold American Options - Settlement Date

May 29
QO - June 2012 COMEX miNY Gold - Last Trade Date
QO - June 2012 COMEX miNY Gold - Settlement Date
GC - May 2012 Gold - Last Trade Date
GC - May 2012 Gold - Settlement Date

May 31
GC - May 2012 Gold

SP 500 and NDX Futures Daily Charts - Intraday Reversal

Boys will be boys.

Fed's Kocherlakota: I Reject Your Reality and Substitute My Own

"'When I use a word,' Humpty Dumpty said, in rather a scornful tone, `it means just what I choose it to mean -- neither more nor less.'

`The question is,' said Alice, `whether you can make words mean so many different things.'

`The question is,' said Humpty Dumpty, `to be master -- that's all.'"

Lewis Carroll

I thought it was interesting that Narayan Kocherlakota, president of the

Key Comex Dates For Gold In the Next Two Weeks

Here are some key dates on the Comex for the Gold Futures and Options.

Tomorrow is the June Gold Options Last Trade and Settlement Date

Next week is the Last Trade and Settlement for the Gold futures contract.

This is historically a heavy physical delivery period for gold and silver.

I suspect that this latest price action is less about Europe and Greece, and more about Chicago and New York

William Black on JP Morgan and the Failure to Regulate Wall Street Fraud

"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...And yet none of this conduct

Max Keiser Interviews Francine McKenna On JP Morgan and MF Global

"In this respect England exhibits the most remarkable phaenomenon in the universe in the contrast between the profligacy of its government and the probity of its citizens. And accordingly it is now exhibiting an example of the truth of the maxim that virtue & interest are inseparable.

It ends, as might have been expected, in the ruin of its people, but this ruin will fall heaviest, as it ought

PBS Frontline: MF Global's Six Billion Dollar Bet

PBS Frontline did an exceptionally good job putting this together.

Watch it if you can and pass it along.

By the way, Steve R. Meyers is the same person who formerly did the video analysis on commodities which we had here.


Source

Gold Daily and Silver Weekly Charts - Schlock and Awe

SP 500 and NDX Futures Daily Charts - More of the Same

Late day headline about Greece ready to leave Euro caused a light sell off in stocks which had been up much of the day.

Really, nothing of significance yet.

Gold Daily and Silver Weekly Charts - Is That Jamie's Ring You're Wearing?

More fruitless games in the metals today, and probably some needed consolidation.

SP 500 and NDX Futures Daily Charts - The Wages of Greed

"Men are qualified for civil liberty in exact proportion to their disposition to put moral chains upon their own appetites; in proportion as their love to justice is above their rapacity; in proportion as their soundness and sobriety of understanding is above their vanity and presumption; in proportion as they are more disposed to listen to the counsels of the wise and good, in preference to the

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

BBC Interview with Nassim Taleb on JPMorgan

"It is one of the serious evils of our present system of banking that it enables one class of society, and that by no means a numerous one, by its control over the currency to act injuriously upon the interests of all the others and to exercise more than its just proportion of influence in political affairs."

Andrew Jackson, Farewell Address

Rational people keep struggling with the 'why' of

CFTC Commissioner Bart Chilton On the Irony of JP Morgan's Trading Loss

"Financial institutions such as JPMorgan love to buy derivatives because they are opaque, create fictional income that leads to real bonuses and when (not if) they suffer losses so large that they would cause the bank to fail, they will be bailed out."

William K Black
When the next financial crisis occurs remember the things that Bart Chilton says in his op-ed piece below. Things like

Gold Daily and Silver Weekly Charts - Something Wicked This Way Comes

“Something has to be done because it’s totally out of control these days. I mean you can’t have bank runs like we’re seeing. The one thing the powers that be, the central banks and the governments, have tried to do is to avoid what I call a ‘Liquidation Event.’

Ever since we saw what happened when Lehman was liquidated, they realized we can’t go there. Fannie was taken over as well as AIG

SP 500 and NDX Futures Daily Charts - Facebook Face Plant

The Commencement Address That Won’t Be Given
By Robert Reich
Friday, May 18, 2012

Members of the Class of 2012,

As a former secretary of labor and current professor, I feel I owe it to you to tell you the truth about the pieces of parchment you’re picking up today.

You’re f*cked...

Read the rest here.
Facebook closed largely unchanged from the IPO price after an initial pop up to 42. On

Bill Moyers Interviews Simon Johnson on JP Morgan Chase and the Next Financial Crisis

“The signs that I see, the body language, the words, the op-eds, the testimony, the way these bankers are treated by certain congressional committees, it makes me feel very worried. I have a feeling in my stomach that is what I had in other countries, much poorer countries, countries that were headed into really difficult economic situations. When there’s a small group of people who got you into

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Jim Rickards On JP Morgan's Trading (Gambling) Loss - The Hypocrisy of Plutocrats

JPMorgan, the nation's largest bank, receives an explicit federal subsidy (deposit insurance) and a much larger implicit federal subsidy. It's improper for the megabank to use these subsidies to speculate in derivatives. And yet it can do so with hardly any serious regulatory consequences.

Financial institutions such as JPMorgan love to buy derivatives because they are opaque, create fictional

Chris Powell Answers Doug Casey's Questions About Gold Manipulation

I had read Casey's piece, but quickly lost interest in it at the argument that the gold market is so big it cannot be manipulated by the poor weak central banks and their surrounding commercial banks who are practically bankrupt.

If someone is a value sophisticate in a segment of the market, but does not understand and have concern for the power of the Federal Reserve and its associated banks

Gold Daily and Silver Weekly Charts - Massive Short Covering Rally From Deeply Oversold

Facebook priced after the bell, 421 million shares @ $38 with a PE of 107 and a Price/Sales of 25.

This is "the largest internet IPO in history" (Ring Ring Ring).

It will start trading in the public markets, as opposed to dark pools and private deals, tomorrow after 11 am Eastern Time.  That will make share acquisition a bit problematic in Europe.

The wiseguys are geared up for a multiday

SP 500 and NDX Futures Daily Charts - Facebook Cometh - Last of the Dot Bombs?

Big down day in the US markets today as the trading desks flushed out their weaker positions and got ready to pump up Facebook tomorrow for what could work out to be the mother of pump and dump operations. I do not expect the fat lady to sing tomorrow, but I think she will start warming up for what could be remembered in a few years as the end of an era, a watershed event.

Let's see what

Devaluing the Dollar - Against What?

When people talk about devaluing the dollar, as opposed to reissuing it completely, the natural question is, against what? What would one devalue it against officially if you do not wish to reinstitute a formal gold standard, which is clearly the preference of the Western central bank.

One likely candidate might be the SDR issued as a new currency for global trade, and for the pricing of 

Net Asset Value Premiums Of Certain Precious Metal Trusts and Funds

A Quick Look At the Market Technicals: SP500, Gold, Silver, VIX

The gold and silver charts have not been updated for today's rally.

As is clear from the metals charts, gold and silver were DEEPLY oversold short term. So this *could* be a relief rally. The talking heads say it was because of the weak leading indicators this morning with overtones of QE3, but I think it is more likely that the momentum traders took it as low as it would go without hitting

Another Take on Inequality From Nick Hanauer and the Restoration Roundtable

I would add that the source of the payment for the consumption is a major factor.

If it comes from a growing median wage that permits consumption and savings by the broader public, then the virtuous cycle is engaged.

However, if the consumption comes from borrowing and credit expansion with the benefits flowing overseas or to the wealthy, there is no virtuous cycle, or the amelioration of

Corzine Syndrome: JPM's Stealth Prop Trading Unit Was Crafted for Risky Profit and Reported Directly To Jamie Dimon

I want to put a spike in all this spin around the CEO defense, that poor Jamie could not have possibly known what was going on in London because the company was so large, and he is such a busy man. Sarbanes-Oxley was designed to put a stop to that lame excuse touted out by defense lawyers and apologists in the media every time something like this happens.

The CIO operation was transformed

Gold Daily and Silver Weekly Charts - Facebook, Greece, and the Hollow Men

I am leaving a bit early this evening.

Facebook and Greece are dominating the market, and both in their own ways are contributing to the selling.

The wiseguys see Facebook coming out at around 36-38 and intend to run it up I think to the 60+ are and then dump it for a quick return. So they are raising cash and, gasp, selling even AAPL to do it.

Greece has the markets edgy for all the usual

SP 500 and NDX Futures Daily Charts - Facebook Cometh Tomorrow Night

Leaving a bit early today. Will catch up tomorrow.

Facebook will price after the bell tomorrow. Expectations are for about $36 per share or so.

There was some interesting hypocrisy on Capitol Hill this morning by the Republicans who are red-faced over the JPM antics, since they have been adamant about turning back regulations.

A friend sent this in to my email.  I did not see it, so I do

Hot Money Bets Backed By Taxpayers: Extreme Moral Hazard of 'Too Big To Fail' - Credibility Trap

The professor makes some excellent points about the real world of finance that bear some serious thought. He certainly left the Bloomberg spokesmodels yammering in search of a sound byte.

He misses a key point however. It is not that Jamie Dimon does not know, or even that he cannot know, about the risky speculation in his firm. It is that the system is so designed now that in the long run he

Goldman Data Admits to Naked Short Selling, Disclosing Client Positions, Abusive Legal Practices

“He should be someone we can work with, especially if he sees that cooperation results in resources, both data and funding, while resistance results in isolation.”

Goldman Sachs


"To be a sophisticate in the 21st century requires the ability to shut one's eyes and one's mind to anything that one does not want to see or think about. The more glaring that the contradiction between what is said

Eliot Spitzer on JPM and Bank Reform

“For all sad words of tongue and pen, The saddest are these, 'It might have been'.”

John Greenleaf Whittier
Flawed indeed.

Slate
Flawed Dimon
By Eliot Spitzer
May 14, 2012

What to do with Jamie Dimon? The CEO and Chair of JPMorgan Chase has tried so hard in the past several years to seem the “good banker.” He is so charming and gracious, yet all the while lobbying, cajoling, pushing, and

Gold Daily and Silver Weekly Charts - More Liquidation on Greece and Facebook

More concern on Greece and what will happen if it leaves the Euro had traders fleeing risk and commodities including gold and silver.

There is also quite a bit of secondary liquidation being done as traders raise cash for 'the Big Flip' when Facebook comes out after the bell on Thursday.

Expectations are for the stock to price in the 30's, and then run up in the secondary market into the 60's

SP 500 and NDX Futures Daily Charts - RNN Interviews Bill Black on JPM

Fears about what will happen with Greece and the Euro weighed on stocks.

There is also secondary liquidation as funds raise cash to play the big pop in the Facebook IPO which prices after the bell on Thursday.

Expectations are that the stock will come out in the 30's and pop higher to 50's at which point the momentum traders will start to flip it and hand it off to mom and pop and the pension

Max Keiser Interviews Nomi Prins on JPM and Derivatives Bets

Nomi Prins: On JPM, the Whale Man, and Glass-Steagall

This is one of the better commentaries on JPM and the history and imperatives of banking regulation that I have seen recently.

I do not wish to beat this to death, but I have read too many glib economist and stock tout comments sloughing this off as 'no big deal.' Not surprisingly, these were many of the same people who said similar things during the build up of the credit bubble and the

Partnoy's Complaint: Lawmakers Must Heed the Wisdom of the 1930s

Here is Frank Partnoy's prescription for financial reform. Essentially he says that half measures are not sufficient. Wall Street will always find loopholes in weak regulation, and they have plenty of help in this in the halls of power in Washington, and in the think tanks, universities and the media. 

Even President Obama seems to be in denial about the effectiveness of his reforms, and the

Gold Daily and Silver Weekly Charts - The Unhappy Life of Sir Francis Bacon

I ignored the markets for the most of today, although I did add a bit to my bullion position 'on the dip' as they say, and took a little off the more volatile portion of my short equity hedge.  Today was a good day to avoid the noise and reconnect with the broad perspective.

I spent part of the day rereading Dean Church's biography of Sir Francis Bacon from my library. I first came across

SP 500 and NDX Futures Daily Charts

By and large a tedious day, better spent reading than watching. High drama and all that, but the Facebook IPO awaits.

I did add some bullion 'on the dip' and trimmed up the more volatile hedge which had swollen in value.

Keiser Report Interviews John Titus of 'Bailout' Which Premieres on 16 May in Chicago

There is a fairly nice description of the 'credibility trap' in this very interesting discussion between Max Keiser and John Titus.

I had said in my major forecast from 2005 that at some point the Bankers would make the US an 'offer which they think that they cannot refuse.' The film references that sort of negotiation tactic. There is another crisis coming, and another offer which will

Carl Levin On JPM's Exploitation of the Loophole Which the Fed and Treasury Helped to Create

Carl Levin does a good job of bringing the discussion back on point again and again.

Tavakoli: JPMorgan May Be a Trading Accident Waiting To Happen

I think the next financial crisis is less than two years away, and it will strike the global real economy as badly as the banking crisis with the collapse of Lehman Brothers.

Jamie Dimon's SNAFU: JPMorgan's Other Derivatives' Losses
By Janet Tavakoli
05/12/2012

In an August 2010 commentary about JPMorgan's losses in coal trades I wrote: "The commodities division isn't the only area in which

JPMorgan Used Political Influence With Fed and Treasury to Create London Loss Loophole In Volcker Rule

"It is impossible to calculate the moral mischief, if I may so express it, that mental lying has produced in society. When a man has so far corrupted and prostituted the chastity of his mind as to subscribe his professional belief to things he does not believe, he has prepared himself for the commission of every other crime."

Thomas Paine
Using political influence with the Fed and the Treasury

Gold Daily and Silver Weekly Charts - Facebook Cometh, So Paper Prevails

More capping pressure on the metals today. With Open Interest holding steady and the accumulation patterns intact it seems more like short selling to hold down price. That can only last for so long, and is the stuff of V bottoms.

The Facebook IPO prices next Thursday and that is a 'big event' for the Street.

But let's see how Europe fares. Liquidity panics are painful in the short term.

SP 500 and NDX Futures Daily Charts - The Facebook IPO Cometh

JPM dropped a bit of a bombshell last night, as the great Jamie Dimon confessed the losses at their London based CIO 'hedging operation.'

I had to chuckle today as the Street mavens attempted to direct and deflect that event, so as not to interfere with the much awaited Facebook public offering is expected to be priced next Thursday, May 17th.

I expect that the Street will rally to the

JP Morgan Failure Shows the Incompetency of the Fed As Regulator And a Corrupted Government

...And They Repeatedly Fail to Protect the Public From It.
"How can we expect righteousness to prevail when there is hardly anyone willing to stand up for a righteous cause?

Such a fine, sunny day, and I have to go..."

Sophie Scholl, last words

The spin machine is revving up, and the spokesmodels are gesticulating wildly, in an effort to direct and deflect this failure of governance at JPM

Sharkboy Hits Dock - JPM Takes 'Significant Loss' in Derivatives Book - 'Could Get Worse'

 How Are the Mighty Fallen
“The enormous loss was just the latest evidence that what banks call ‘hedges’ are often risky bets.”

Senator Carl Levin


"From top to bottom of the ladder, greed is aroused without knowing where to find a comfortable foothold. Nothing can calm it, since its goal is far beyond all it can attain. Reality seems valueless by comparison with the dreams of fevered

Gold Daily and Silver Weekly Charts

SP 500 and NDX Futures Daily Charts

Another day another kabuki dance.

Max Keiser Interviews Chris Whalen on the Banks, And Accounting at Wells Fargo

This is an interesting discussion.  I have enormous respect for Chris Whalen, bearing in mind that he is very much a member of the banking community and this must by its very nature affect his priorities if but a little.

And of course, Max is always Max, and always interesting.  When he shifts his schtick into low gear (pun intended) he is an excellent interviewer. I wonder if Comedy Central

Michael Hudson and Pierre Rinfret: The Myth of Alan Greenspan

Although he is now passed away, and his internet site has been discontinued, economist Pierre Rinfret published some rather pithy descriptions of the people whom he had known during his long career as an economist in the commercial world, and the halls of power of the US government.    I was reminded of that today by the video from Michael Hudson which is included at the bottom.

Pierre Rinfret 

Accumulation/Distribution Trends in Gold and Silver - Building the V Bottom

The accumulation trends seem rather steady despite the recent volatility in price and protracted sawtooth downtrend.

I have included GLD and SLV in case the futures calculations had induced some distortions.

On the last chart I include the Chalkin Money Flows for GLD which are remarkably positive except for the year end selling we saw at the end of 2011.

Someone had mentioned this phenomenon

Gold Daily and Silver Weekly Charts

The miners showed a positive divergence today.

If gold is going to set up an inverse H&S bottom it must hold support at 1570 although 1580 is preferable. Otherwise we will be looking for a double bottom.

Intraday commentary here.

SP 500 and NDX Futures Daily Charts

The momentum trade has fallen into an easy pattern of lower futures prices overnight, and then an intraday rally starting around the European close.

To say that I do not trust this market is an understatement. It is running on liquidity and waiting for another fix from the Fed or the ECB.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds - Miners Rally

I see you stand like greyhounds in the slips,
Straining upon the start. The game's afoot:
Follow your spirit, and upon this charge
Cry 'God for Harry, England, and Saint George!'

Henry V, Act 3, Sc. 1
If only investing were so dramatic, and the signals so clear, as they are to insiders by privilege, and foolhardy amateurs by the dawdling nature of their inevitable insolvency.

Those of us who

The Question Is 'How Best To Default' and Not 'How Best to Maintain the Unsustainable'

"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks."

John Dalberg Lord Acton

Greece is the most awkward of the EU countries by far in terms of economic fit.

There is no conceivable way that Greece can remain in a single currency union without regular transfer payments from the rest of the EU to compensate them for

Gold Daily and Silver Weekly Chart - World Markets Decouple from US Prices in Oil

With regard to gold and silver, the premiums on the trusts and funds, which I put out earlier today, smell more like capitulation and a forming bottom than anything else. That is, unless the markets in general 'fall out of bed' as they did in 2008 in a panic selloff seeking liquidity.

Below is an interview which Max Keiser has with Leah McGrath Goodman about the speculation in the oil markets.

SP 500 and NDX Futures Daily Charts - VIX

With earnings season almost over, jitters about Europe bit more deeply.

Key SP futures support is at 1345 with 1350 providing a potential rallying point. Below that is 1330, 1315, and 1300.

While VIX remains elevated it did not expand dramatically today which is a bit of a divergence for the short term, and helped to prompt the short covering rally into the close.

Net Asset Value Premiums Of Certain Precious Metal Trusts and Funds

Unless stock prices sell off further these premiums on the metals are more indicative of a bottom formation than anything else.

But that is a big 'if' given the risk aversion sparked by the disorder in Europe.

For long term investors, this is relatively meaningless, a great deal of noise.

Someone asked me today what will break these paper games. I do not know, but in the short term the

Bill Black: Austerity During a Serious Recession Is Economically Insane - A Warning From History

"The German’s and the ECB are not demanding any sacrifices from European elites. They explicitly target the working class and government workers’ wages and oppose any increased taxation of the wealthy. The Berlin Consensus is a road map to ever greater inequality."

Bill Black


"Thank God the US opted for bailouts and not handouts...People in economic distress should suck it up and cope."

Les Rapports de Force Entre Nicolas Sarkozy et François Hollande

Although the recent Presidential election results were close, there was in fact a more clear division of support geographically.



Link to original here.

Gold Daily and Silver Weekly Charts - Psycho Killers Qu'est-ce Que C'est?"

"Hi. I've got a tape I want to play."

David Byrne, Talking Heads
I think today was a number 36.

Do you think they could just eliminate the traders and exchanges and run the whole US futures complex with CGI from J. P. Morgan's servers?

Hi, this is Virtual Maria from the massively multiplayer NYSE...

Just take Charlie Munger's advice and put your life savings into the equity markets slot

SP 500 and NDX Futures Daily Charts - Something Is Not Right With The US Markets

"The markets are broken, and people desperately would like to see them fixed."

Joe Saluzzi

Are we supposed to take this nonsense seriously?

Oh yes, I want to put my life's wealth into something that has less integrity than carnival toss or a floating crap game.

Charlie Munger is a such a bloviating wanker.

Gold Daily and Silver Weekly Charts - Miss in Non-Farm Payrolls - Qu'ils mangent de la brioche

Miserable day for stocks and one of the worst weeks of the year for the major equity indices.

Gold and silver held up fairly well in today's equity sell off.

Happy Cinco de Mayo.

It appears that Charlie Munger believes that the people of India and the Mideast are not civilized.  And God only knows what he might say about the Chinese, including their central bank.  Don't they know they are

SP 500 and NDX Futures Daily Charts

As you have probably heard, the Non-Farm Payrolls report came in quite a bit light at 115,000 against the consensus number of 160,000.

The next move in the equity indices will be rather important.

ETFs Part 2: The Next MF Global or Trigger For a Broader Collapse - But Timing Is Everything

It is the introduction of synthetic derivatives in place of actual holdings, and the abuse of counterparty exposure with one's own organization thereby concentrating risk, that start to make these financial creatures look even more deadly, and more like control frauds, than one might have previously imagined.

I think that when one of these constructions fails, as one must almost surely do, we

Ritholtz: An Uncompromised View of Contemporary American Politics and Economics

The excerpts from this interview are to the point, and it is a rather sharp point at that.

I somehow missed them the first time around, probably due to a family illness, but someone sent this extended set of excerpts from the two interviews that Jonathan Miller did with Barry Ritholtz.

To say that Barry Ritholtz 'pulls no punches' is like saying that Joe Louis had a nice right cross.

Its a

Forbes: United States Is a Plutocracy and Academic Economists Are the Vichy

Forbes?!

Interesting piece, but what was most interesting was that it is from Forbes, 'the Capitalist Tool' business magazine, and not Rolling Stone or Mother Jones.

As Bloomberg television, and Mayor Bloomberg's city administration I might add, go full bore plutocrat, Forbes is standing for genuine reform, or at least permitting it to be discussed? As Sheldon Cooper on Big Bang Theory

Gold Daily and Silver Weekly Charts - Pete 'n' Repeat - Fed Is the 'Vampire Squid of Squids'

A bit much perhaps, ahead of the Non-Farm Payrolls.

Let's see if those are inverse H&S bottoms forming up on the gold and silver charts, or something else.





ADDITIONAL STATEMENT BY BILL MURPHY, CHAIRMAN OF THE GOLD ANTI-TRUST ACTION COMMITTEE

HEARINGS ON THE METALS MARKETS, MARCH 25, 2010


On March 23, 2010 GATA Director Adrian Douglas was contacted by a whistleblower by the name of

SP 500 and NDX Futures Daily Charts - Jitters In Front of the Non-Farm Payrolls

The Political Continuum and the Uncomfortable Center

It will be important to keep this model in mind as we go forward.

Turmoil and crisis favor polarization, and fear brings out the extremes of both sides who unfortunately tend to make the most noise, because they are often wrong but rarely in doubt.

It will be hard to maintain a centered approach if you are independent or moderate. The far right will see you as a leftist, and the far left

ETFs and Derivatives Will Be the Next Trigger Event for a Major Financial Crisis

ETFs and derivatives may be fine for a trade or a hedge to a trade, but by no means are most of them that I have looked at worthy of a long term hold.  I distinguish them by their opacity, leverage, and lack of transparent audits from legitimate physical trusts.

And some of the ETFs, especially in commodities and on the short equity side, appear to be almost fraudulent both in construction and

House May Call For Independent Counsel to Investigate MF Global

It is never the crime, but always the obstruction of justice that does them in. 

Obama may be fortunate.  The House Republicans may make noises about a truly independent investigation, but I doubt that it will happen. 

The credibility trap runs far and wide, and on both sides of the aisle.

Fox
House Republicans Expected to Call for Independent Counsel to Investigate MF Global Failure
By Peter

Bill Black: Geithner Channels Greenspan and Airbrushes Fraud out of our Crises

Tim Geithner is a creature of the system, and no doubt a part of the problem.  But only a part. He is appointed and serves at the pleasure of the President.

The root of the problem is the pervasive corruption of American politics, intellectual discussion, and public policy by Big Money.   And a culture that tolerates a total lack of shame for the abuse of power and trust in the pursuit of

Gold Daily and Silver Weekly Charts - Coiling and Capping - Azalea

The fraud will continue until confidence is restored.



This is for my good friend Harold in Canada.

SP 500 and NDX Futures Daily Charts - Shout and Feel It

ADP came in light, but the market shook it off. It is waiting for the Non-Farm Payrolls on Friday, and the next sugar high from Uncle Ben.

Be the 'Top Tweet' for Goldman - Social Media Strategist and Community Manager Needed

Gold Daily and Silver Weekly Charts - Stormy Blues - Down Don't Worry Me

Boring day really, a good day to short the stocks early after the 'better than expected' economic news, and then go out and do something useful.

And I did, making up the charts as I expected them to finish and pre-scheduling the posts.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Pennies From Heaven - Trickle Down Theory

Early rally on 'good economic news.' It was worth a short, to add back to the hedge on bullion.

Boring day really. A good day to work in the garden and take the pooch for a long walk. And so I did.