20 November 2014

Russian Gold Reserves Continue to Expand

Russia added another 600,000 oz to its reserves in October.

Nothing to see here.  Move along.

Gold Daily And Silver Weekly Charts

There is quite a bit of volatility in the precious metals as they sit at this important resistance level ahead of what could be an important active month of December.

There was little delivery report activity, and the usual dribbles of bullion out of the Comex warehouses as noted below.

There is intraday commentary related to gold and silver and you may scroll down to read it.

I am leaving a bit early today to keep an appointment.  

I will catch up on any late news or market changes tomorrow.

Have a pleasant evening.


SP 500 and NDX Futures Daily Charts - Saving Private Equity

There was an astonishingly high Philly Fed number this morning.

It certainly helped to bring stocks out of their early slump.

I suspect that there was some misapplied seasonality in there somewhere, since the unemployment number and the rest of the bigger picture certainly does not support it.

I decided to say positive things to day or say nothing at all, so I will leave it at that.  Except that I reiterate my long standing belief that this experience of serial bubbles and widespread financial fraud will lead to new thinking in economics, and a change in the current financial system and Federal Reserve structure.

I can only hope that it will be for the better, and they will not have to knock more than two zeroes off the Dollar when they finally reform the system.

Have a pleasant evening.

Roger Babson's Ten Commandments For Investing

Some friends and I were discussing Roger Babson earlier today.  Several of us have a feeling that the markets may be approaching a critical juncture, and we were wondering how that might express itself, given today's Fed and government activism as opposed to the more ad hoc to stabilizing markets in Babson's day.

As you may recall he was an MIT trained engineer who became a famous stock market analyst and financial theorist. I have acknowledged in the past that my own particular style of charting was in part inspired by his approaches to force and resistance. He never really codified his techniques, so they are not all that well understood. But he used them to some great personal advantage.

I see in reviewing some of these fossilized chart remains that I used to put a great deal more energy into them when I was more actively trading.  On my old site I used to update charts several times per day and look at ten minute intervals, which may be appropriate to futures trading in size.

As a point of interest Babson helped in the creation of a 'business engineering' course at MIT, a first for an American University. Babson founded Babson College among other things.  I have written about Babson several times when discussing the events of 1929, but also about 'The Boulders of Dogtown' which are typical of the man.

But Babson is most well known for his prediction on 5 September 1929, "sooner or later, a crash is coming, and it may be terrific."

Roger Babson had ten commandments he followed in investing and encouraged his readers to do the same.  I was reminded of them when I looked up the exact date of his crash forecast that triggered 'the Babson Break.'

It pleased me that I had arrived at several of those commandments through personal experience but that lesson always involved the loss of capital, alas.  One hears these things, and they are sayings.  And then you encounter them in practice, and you learn them.  And so it is with most sound principles and advice.  And quite often whole peoples must relearn the principles of the past.

They are all valuable, but I have placed asterisks behind those that have served me most well, and some which bear the most vivid memories. lol

One thing Babson does not overtly mention is to follow the money, and understand who stands to gain what from any deal or transaction, but I think it is implied.  I would also urge one to never confuse reliable performance with luck, unless you aspire to be soundly lashed by the tails of probability.

One thing that did strike me oddly in reviewing this is to ask, 'is anyone except for a few old codgers like me investing anymore?'  It almost seems archaic to say, when everything is just a bet and most everyone is just a player.  It must have seemed that way to Babson as well, in the Autumn of 1929.

These were:
  • 1. Keep speculation and investments separate. **
  • 2. Don't be fooled by a name. **
  • 3. Be wary of new promotions.
  • 4. Give due consideration to your market ability.
  • 5. Don't buy without proper facts. **
  • 6. Safeguard purchases through diversification. **
  • 7. Don't try to diversify by buying different securities of the same company.
  • 8. Small companies should be carefully scrutinized. ***
  • 9. Buy adequate security, not super abundance.
  • 10. Choose your dealer and buy outright (i.e., don't buy on margin.) **

Sarah Lacy and the Darker Side of Über Corporatism

This is a stunning video, with some serious implications. I urge you to watch it. It involves abusing corporate power to smear and intimidate critics.

It was a bit humorous to watch the talking heads discomfort with some of the implications and statements.  The West coast anchors tend to be more business focused and laid back than their New York based cousins who are more deeply into the Wall Street culture.

I am not familiar with Sarah Lacy's work as a journalist and editor, but as a debater she is on point and brilliant.

I am not completely unfamiliar with the attempted use of power to suppress people's views. Outside of professional circles it is petulant and childish, given to snarky emails, snide backstabbing, and cliquish exclusion. You know, the kinds of things one often finds within University departments, corporate bureaucracies, and the blogosphere. lol.

But too often where serious power and money is involved it is real, it is a threat, and it cannot be tolerated if there is to be any aspiration to a free and open society. And we are fools if we allow such power to grow and its abuse to be tolerated, for the misguided fears for our security, much less some short term easy money.

19 November 2014

Can You Help the Fed Figure Out What Is Wrong With The Recovery™

Why doesn't the public spend and save more?

"We are determined to make every American citizen the subject of his country's interest and concern; and we will never regard any faithful law-abiding group within our borders as superfluous.

The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little."

Franklin D. Roosevelt, Second Inaugural Address

Senate Report Reveals Powerful Manipulative Positions of Goldman, JPM In Global Commodities

"We had to struggle with the old enemies of peace--business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob."

Franklin D. Roosevelt

"Why is JP Morgan getting so much heat?   Maybe because it is a massive international crime syndicate."

JPM and Goldman sought and obtained manipulative powers in global commodities, even while they were being bailed out on the back of the American people?   Oh no, nothing like this could be true, or so the shills and toadies of the moneyed interests will say.  Just get the government out of our way, and everything will be all right.  The market is naturally rational and efficient, pure and pristine.   No Bank would risk its reputation by doing anything illegal.

Especially when they buy off and intimidate enforcement, write the laws, and do what they will. 

I doubt that anything meaningful will be done about this.  The corruption runs deep.  In corporatism the private and public elites are largely interchangeable.  Different roles, similar objectives.

The politicians may make a good show of it, and talk harshly to their witnesses.  And then take their money, and lick their hands.

But at least we know more about what is true, and what is not.

Perhaps this may help you understand those who do not wish to remain under the power of the Banking cartel, and may be in a better position to do something about it.

Senate Report Criticizes Goldman and JPMorgan Over Their Roles in Commodities Market
By Nathaniel Popper and Peter Eavis
November 19, 2014

A two-year Senate-led investigation is throwing back the curtain on the outsize and sometimes hidden sway that Wall Street banks have gained over the markets for essential commodities like oil, aluminum and coal.

The Senate’s Permanent Subcommittee on Investigations found that Goldman Sachs and JPMorgan Chase assumed a role of such significance in the commodities markets that it became possible for the banks to influence the prices that consumers pay while also securing inside information about the markets that could be used by the banks’ own traders

Bankers from both firms, along with other industry executives and regulators, will testify about the allegations at hearings on Thursday and Friday.

The 400-page report, which was made public on Wednesday evening, included case studies on nine different commodities in which banks have taken big positions, including the 100 oil tankers and 55 million barrels of oil storage that were owned by Morgan Stanley, and the 31 power plants owned by JPMorgan at one point.

The subcommittee discussed several reasons that these commodity operations could create problems. The potential for price manipulation and the unfair advantage that banks can gain in these markets were among the top concerns expressed by Senator Levin and Senator John McCain, the top Republican on the subcommittee.

But both senators also echoed previous warnings that the enormous holdings of oil, uranium and other hazardous materials could expose the banks to significant legal liability that could, in turn, lead to runs on the banks.

A 2012 study by the Federal Reserve, cited in the report, found that banks have not put aside enough money and insurance to adequately prepare for the “extreme loss scenarios” involving commodities...

Read the entire article here.