WEEKEND WRAP: Stocks Up 9-14% Since July 2; Buffett Goes For Gold; Powell's Jackson Hole Speech Sinks Bonds, Helps Precious Metals

Sell in May and go away?

Balderdash.

Summer slump?

Nonsense.

Stocks have had an amazing run through July and August, thanks to ultra-low bond yields driving money into stocks, momentum, and oodles of dollars going straight to Wall Street from the Federal Reserve.

As noted by countless economists, columnists, and stock enthusiasts, the backstops provided by the Fed have servd the interests of Wall Street in glorious ways, sending stocks soaring, the S&P and NASDAQ having made multiple record highs over the past eight weeks.

While the NYSE Composite Index and Dow Jones Industrial Average have not made it yet to new records, they're getting close and the Dow, specifically, will get a significant boost on Monday (the final trading day of August) when Exxon Mobil (XOM), Raytheon (RTX), and Pfizer (PFE) are replaced with Salesforce (CRM), Amgen (AMGN), and Honeywell (HON).

Already within 900 points of its all-time closing high (29,551.42, 2/12/20), it's within similar range of the intraday high of 29,568.57, which was also made on February 12. The added boost from the booting of three laggards with three high-fliers should send the industrials over the top, possibly this coming week.

Just how good the summer has been to investors is illustrated by the weekly closes for the past eight weeks, beginning July 6 and ending this past Friday, August 28. The slowpokes among the indices was the Dow and NYSE. The latter rose from a July 2 close of 11,991.52 to 13,170.96. It closed on the plus side seven of the eight past weeks for a 9.84% gain.

The Dow Industrials gained in five of the eight weeks, rising more than 2800 points from its July 2 close of 25,827.36, a gain of 10.94 percent.

The S&P closed at 3,130.01 on July 2, and added 378 points during the past eight weeks for a solid 12% upside, while the NASDAQ took home the top prize, vaulting from 10,207.63 eight weeks ago to its most recent record close of 11,695.63, a 14.6% gain. The S&P was up in seven of the past eight weeks while the NASDAQ finished in positive territory in six, including the last five straight.

So, whoever said the era of passive investing was over obviously hasn't taken account of the performance of index funds, which have sparkled recently, despite the narrative supplied to the market by the FAANMGs, the six tech stocks that have largely been responsible for the bulk of the gains in the NAZ and S&P. Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), Microsoft (MSFT) and Alphabet, parent of Google (GOOG) account for roughly 25% of the market capitalization of the entire S&P 500. Throw in Elon Musk's Tesla (TSLA) and one could make a very strong point about picking the right stocks over passive investing.

Apple, which recently announced a 4-for-1 stock split, was up 39% over the past eight weeks. Tesla gained a whopping 54%, while Amazon gained only 19%, though it and the other FAANMG components have been steady outperformers for years.

Warren Buffett, who turns 90 today, made news this week when it was revealed he was selling off some banking stocks while picking up shares of Barrick Gold. The information came from the latest 13F filing from Bershire Hathaway, the holding company for Buffett's global portfolio.

The punditry of the investment world made plenty of noise over the move, especially since Buffett had previously claimed to not think much of gold as an investment. One of the most-cited quotes attributed to Buffett's disdain for gold is "[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility."

While Buffett's purchase of some Barrick Gold shares (roughly $600 million) may look like a departure from the Oracle of Omaha's norm, the truth of the matter is that the shares account for a smidge more than 0.2 percent of Bershire's 250 billion stock portfolio. What's interesting about the move was that Berkshire closed its position in Goldman Sachs (GS), eliminating the Vampire Squid entirely from its holdings. It also trimmed positions in JPMorgan Chase (JPM) and Wells Fargo (WFC), but upped its position in Bank of America (BAC), which is now the second-largest holding, well behind #1, Apple.

It will be another three months before we'll know whether Berkshire intends to keep buying Barrick or even other gold-related stocks. For all anyone knows, Buffett could have a secret stash of gold and silver coins buried in his back yard, just in case.

Speaking of reasons to own gold and silver, the second estimate of second quarter GDP was released on Friday, and it was a slight improvement from the initial reading, but not enough of one to matter. The decline, which was estimated to be a record 32.9%, was revised to a 31.7% loss, still the largest on record by far. Making matters more concerning, it's been a fact for some time that the government spending portion of the GDP calculation has been inordinately high, and it now accounts for more than 50% of GDP. The other roughly one-half of GDP is largely consumer spending, people buying things they don't need with credit cards they can't afford to pay.

In the oil patch, the slow, relentless rise in the barrel price of oil continued apace with WTI crude peaking at $43.34 on the 26th - the highest price since March 3rd - before settling at $42.97 on Friday afternoon. Theprice of WTI crude has been below $40 just twice since July 2nd, with the recent prices nearing the top of the recent tight range. With the Labor Day holiday a week off, prices for crude and gas at the pump may begin to decline as the traditional end of summer normally results in lower prices, though these days have been anything but normal.

Treasury yields peaked on Friday, with the 10-year note ending at 0.74% and the 30-year at 1.52%, both the highest since June 16. Shorter-dated maturities were little affected by market noise nor Fed Chairman Jerome Powell's virtual keynote for the Jackson Hole symposium in which he promoted increasing inflationary policy incentives at the Federal Reserve. Powell's insistence that inflation of two percent or more somehow equates to the Fed's mandate of "stable prices" serves to point out what an abject liar he is and what a complete failure the Federal Reserve as a whole has been since its inception more than 100 years ago. The Fed has failed spectacularly in achieving both of its mandates as the dollar has lost 97% of purchasing power since 1913 and full employment - the other mandate - is about as far from the minds of the regional Fed presidents and governors of the FOMC as the Earth is from planet Jupiter.

Gold regained some respect on Friday, up $35 to close out the week at $1,964.83. Since peaking at $2,063.54 on August 6, the trend has been lower, but $1900 an ounce appears to be very strong support. With supply strained and demand still very high, recent dips look more like consolidation than manipulation, even though the spot price is subservient to the eminently exploitable futures market where daily claims on precious metals often exceed a year's production. Eventually, the futures market will face an untenable situation when the punters stand for delivery of real metal rather than a paper equivalent of dollars, yen, or euros. Once the COMEX fails to deliver physical in a timely manner - a possibility that's growing increasingly worrying - it's game over for the paper markets, where the rigging has kept the true price of gold to be discovered for decades.

In order to prevent such an occurrence, the CME has been and will continue to raise margin requirements for futures trading in precious metals until none but the biggest players - central banks, bullion banks, private banks, investment and commercial banks, insurance companies, and sovereign trusts - will be able to afford the buying and selling of futures contracts. Thus, the compression of prices could continue indefinitely while physical premiums soar beyond the rooftops.

Silver also appears to be in a consolidation phase, ranging between $26.45 and $27.67 the past two weeks. It finished up Friday near the top end, at $27.50. Considering the recent smackdown sent silver from a high of $29.13 to $24.79 in the course of one day, the recent close puts the loss at less than six percent, a complete nothing-burger in the highly volatile silver market. The inability of the futures' players to keep a lid on silver indicates that the riggers are losing control. Silver's market is much smaller than gold's, and the demand for physical has bordered on a mania recently due to its affordability and monetary and commercial value.

Here are the most recent prices on eBay (shipping - often free - included) for selected items (numismatics excluded):

Item: Low / High / Average / Median
1 oz silver coin: 31.90 / 48.95 / 39.05 / 37.98
1 oz silver bar: 32.95 / 42.00 / 36.75 / 35.98
1 oz gold coin: 1,985.00 / 2,178.90 / 2,090.41 / 2,107.55
1 oz gold bar: 2,006.16 / 2,114.59 / 2,078.62 / 2,081.75

An historical survey of prices from April, 2020 to the present is available here.

Concluding this edition of the WEEKEND WRAP, a reminder: There are just 65 days until Election Day and 117 days until Christmas. With any luck, we'll all know who the president is by the time we're unwrapping presents.

At the Close, Friday, August 28, 2020:
Dow: 28,653.87, +161.60 (+0.57%)
NASDAQ: 11,695.63, +70.30 (+0.60%)
S&P 500: 3,508.01, +23.46 (+0.67%)
NYSE: 13,170.96, +102.15 (+0.78%)

For the Week:
Dow: +723.54 (+2.59%)
NASDAQ: +383.83 (+3.39%)
S&P 500: +110.85 (+3.26%)
NYSE: +261.89 (+2.83%)

Banks Earnings Show Big Score for Wall Street, Not Much Hope for Main Street

Stocks took a breather Thursday, ending a four-day win streak on the Dow, after Bank of America posted second quarter results which saw their profit cut in half from a year ago.

That wasn't the only news to cross the tape on Thursday. Morgan Stanley's (MS) net income came in at an record $3.2 billion for the quarter, against the $2.2 billion the bank earned a year earlier and the $1.8 billian that had been expected by analysts in a Bloomberg poll.

Morgan Stanley’s investment bank had trading revenues up 68 percent, including a 168 percent increase in fixed income revenues, while investment banking fees were up 39 percent year on year.

Credit loss reserves were not of particular concern for the firm, posting just $239 million, as compared to consumer banks like JP Morgan Chase and Bank of America, which put aside multiple billions to shield against expected defaults on mortgages, credit cards and auto loans.

Overall, it was a banner week for the big banks, as all except Wells Fargo turned profits amid the confusion and government shutdowns stemming from the coronavirus.

Main Street businesses, which suffered the brunt of government action, must be looking at the banking sector with a jaundiced eye. While many small businesses were shut down for lengthy periods, the banks hauled in money as the stock market rallied wildly. Many of the small businesses - particularly retail, restaurant, health and beauty, and fitness establishments - will never reopen. Their silver lining will come with bankruptcy filings, where they will tell the banks that their loans will not be repaid.

While not a rosy picture for either side, the banks will manage to recoup some of their losses if they wish to claim real estate or significant assets in court proceedings from the broke businesses and sell them off in fire sales to the highest bidders, if any are to be found.

Vulture investors are sharpening their claws at the prospect of hundreds of thousands of commercial establishments and billions of dollars worth of salvage assets hitting the auction blocks at pennines on the dollar.

When the crisis is finally put to rest at some unknowable future date the retail landscape of urban and suburban America will be changed forever. Gone will be the majority of boutique retail shops and family-run restaurants.

If the future pans out according to the plan set out by the Federal Reserve, federal and state governments, it will belong to Amazon, Wal-Mart and Target and dining out will offer a choice between KFC, Taco Bell, and McDonald's.

Chains such as Cheesecake Factory, Buffalo Wild Wings and Applebee's may or may not survive, dependent upon how much longer the public feels compelled to submit to the madness of government mandates.

According to the loan loss reserves posted by the likes of Citi (C), Wells Fargo (WFC), JP Morgan Chase (JPM) and Bank of America (BAC), losses are mounting, but have yet to reach critical levels. Defaults on commercial and residential mortgages will take months and years to sort out, along with personal bankruptcies, credit card, and auto lease and loan defaults.

Thanks to the actions by the Federal Reserve, the banks appear solvent and well-capitalized for now, but that may change, dependent upon two primary factors: 1) the degree and length of government mandates on lockdowns, mask-wearing and social distancing, and, 2) the November elections for president, senate and house of representatives.

No matter the case, a deep and long depression appears all but certain.

At the Close, Thursday, July 16, 2020:
Dow: 26,734.71, -135.39 (-0.50%)
NASDAQ: 10,473.83, -76.67 (-0.73%)
S&P 500: 3,215.57, -10.99 (-0.34%)
NYSE: 12,350.11, -41.19 (-0.33%)

Rise of Gold and Silver Signaling the End of Fiat Currencies, Bad Government, Fake News

Lately, Money Daily has been intriguing readers with mentions of signal to noise ratio as a fitting analogy to stocks, currencies, and societies.

While there's no hard numbers to verify the contention that most of what's been happening on the stock markets and in the general news has been noise, there are actually a number of good reasons to believe that most of what's presented for public consumption is more hype than reality, thus, noise has triumphed over signal since the beginning of the pandemic at least, and probably even further back in time than that.

Paramount to the noise argument is the recent rally in stocks. While the world was gripped with fear and uncertainty over the coronavirus, the stock market sank and then quickly rebounded, erasing most of the losses incurred during the rapid decline of February and March. The level of indifference to reality was nowhere more pronounced than on the NASDAQ, which not only rebounded, but launched itself to all-time highs, all of it happening while many US states and countries were shuttered, flummoxed over the pandemic and at less than full operational capacity. The NASDAQ is one of a few prime examples of the noisy nature of our times.

In terms of currencies, nothing hits home as hard as the Fed's balance sheet, which has exploded from under four trill to over seven in a matter of months. Intent on smashing the business cycle, something they've managed to somewhat handle over the past decade, as a response to deteriorating financial conditions, the Federal Reserve embarked upon a path of insane resistance to reality, buying up all manner of assets, from high-grade bonds to junk to munis and ETFs, with assistance from the Treasury and its Exchange Stabilization Fund.

Most of the programs the Fed has been and is currently entertaining are nothing more than stop-gap measures, highlighted by currency creation out of thin air to an extreme level of irresponsibility. The Fed has managed to pervert and distort the global economy to a point at which it - thanks to the Cantillon Effect - continually rewards those at the top of the economic heap while adding distress to the lower rungs of society, exacerbating the wealth gap to a point that not only rivals that of the Robber Baron era of the late 19th and early 20th centuries, but has greatly exceeded it.

The Fed's machinations, near-zero interest rates, meandering mouthings on Modern Monetary Theory (MMT) (which is complete and utter trash in a classical economic sense), and continuing interventions into the formerly-free markets is about as noisy as it can get without fully drowning out the signal of reality, which, of course, is the intent. They, like all central banks in the global fiat era, push the falsity of paper money without intrinsic backing or value.

All major and minor currencies are based on nothing but faith in central bank authority. That condition - which has never before existed in the history of the world - eventually leads to ruination and it is proceeding apace.

On top of it all are the fakery of a pandemic which kills older, obese people with existing medical conditions to a degree that 95% of all deaths attributed to the disease are of this order, various ill-informed government responses, lockdowns, riots, looting, calls for social change, and scare-mongering led by a pompous media devoid of journalistic integrity. All of the media coddling, jawboning, and incessant warning is fake, completely and unequivocally. Nothing about the rising number of positive cases or the potential for serious complications from the virus affecting any more than a small consort of the general population is mind-numbingly true.

All of it is fake, false, a purposeful lie perpetuated by the mainstream media to put the entire planet under a trance and replace good government with tyranny and false dictates. It's a scam and it's nothing but noise, lots and lots of noise, significant of nothing meaningful.

At last, like the calvary charging into battle to save the day as in old Western movies, come gold and silver, real money for the past 5000 years. Despite decades of bad-mouthing, manipulation, and degradation by central bankers and financial media, the twin pillars of economic freedom are rising to the rescue of civilization, though for many, the time is too late.

Because gold and silver have been so universally shunned and banished to "ancient relic" status by the Keynesians of the day, most middle and lower class citizens will not be saved. Some reckon that 95% of the world's population has little to no gold or silver. Even though gold, in particular, has been kept on the balance sheets of central banks as a tier-one asset for time immemorial, these same central banks and their cohorts have repeatedly lied and cajoled the minions into believing that it is inconsequential.

Were that true, why then has gold risen dramatically over the past year, reaching all-time highs against all currencies and approaching an all-time high against the world's reserve currency, the dollar? It is because gold is money. Silver is money. All else is currency or derivatives of paper currencies.

Gold and silver are the real signal that will drown out the noise of phony markets, counterfeit currencies, bad governance, social division, and media overreach. They are saying that now is the time for change. That now is the time to end the madness and the lies and the corruption that is enslaving the people of the world.

There is little doubt that gold will exceed $1900 an ounce this year. It just broke through the $1800 barrier on Wednesday and there is nothing to stop its progress. In fact, central bank pandering and counterfeiting is fueling its growth. Silver, as usual, is tagging along, but will eventually become its own pillar of strength for the middle classes as it is more affordable and more easily transferrable than gold.

Gold and silver are sending a clear signal. Get out of fiat currencies and take up the mantle of real money. Anybody who does not heed this call will suffer consequences befitting of fools.

At the Close, Wednesday, July 8, 2020:
Dow: 26,067.28, +177.10 (+0.68%)
NASDAQ: 10,492.50, +148.61 (+1.44%)
S&P 500: 3,169.94, +24.62 (+0.78%)
NYSE: 12,086.39, +96.26 (+0.80%)

NASDAQ Makes New All-Time High As Protests, Coronavirus Continue, FOMC Meets

It's official.

We live in Bizarro-world.

Protests stemming from the police killing of George Floyd continue to proliferate across the United States and around the world at the same time the COVID-19 coronavirus spreads against government efforts to control it. At the same time, stocks continue to erase the losses from the initial virus shock that occurred in March when stocks dove into bear market territory.

As for the shortest bear market in world history - five weeks - it's exceptionally amusing to see the money magicians at the Federal Reserve and other central banks around the world create trillions of dollars (and yen, and euros, and pounds, and yuan) out of thin air and see that money flow almost directly into stocks, as if there were no other asset class in the world. Obviously, there are other assets classes, but the stock market is the one which delivers the most bang for the buck, so much so that the NASDAQ made a new all-time high on Monday.

That's just not normal. Nothing about the Fed-induced stock rampage is normal. To make a point, one could attest to it being mostly fake. It's fake money, counterfeited by the Federal Reserve, funneled to primary dealers to ram into stocks whose earnings have been cratering for months, some for years.

Measured in earnings growth or other metrics, stocks have never been more expensive, making a case for the "greater fool" theory where one buys shares in an overvalued company at an inflated price based on the idea that somebody dumber than you will buy it at an even higher price. It's working. There are fools a'plenty making a mockery of fundamentals and due diligence cashing in at incredible rates of return.

Take for instance the NASDAQ, which closed at 6,904.59 on March 16, the bottom of the COVID-19 shock treatment. Monday's record close of 9,924.75 marks an incredible return of 43.74 percent in less than three months. Annualized, that's a return of more than 174 percent, a figure that would have everybody in the world retiring at 40 in the ultimate "buy the dip" scenario.

Obviously, that kind of return is unthinkable, or, at least it used to be, until we entered Bizarro-world where cats mate with mice, birds sing full operas and Tom Hanks becomes a top home run hitter in the major leagues... if there was such a thing as professional baseball, which there is not, nor is there likely to be this year.

In bizarro world, Hertz, which filed for bankruptcy a few weeks ago and traded for under a dollar last week, soar to over $5.50 on Monday. There's a 500% return right there, in just a few days. Thank you Jerome Powell, unrivaled leader of Bizarro-world.

Speaking of Mr. Powell, the FOMC begins a two-day meeting this week at the end of which they will announce their monetary policy. The ritualism of the Fed harkens back to tribal proceedings of the Aztecs, wherein the almighty witch doctor or shaman would enter the temple of the gods - with or without virgins - and emerge a day or two later with a proclamation for the masses. The wizened leader would announce that the rainy season was ending, or that pomegranates could cure mental illness.

The savages would praise the leader and spend the evening partying and dancing until they wore themselves out. It's an apt analogy for the ritual FOMC meetings which are held 10 times a year, or, for the anachronistically-unchallenged, SSDD.

Tuesday's meeting will extend to 2:00 pm ET on Wednesday, at which time the money masters will make their announcement that all is well, release a summary of economic projections, and hold a press conference at which Chairman Powell will amuse and bedazzle the attendant financial media slaves.

And Bizarro-world will continue.

At the Close, Monday, June 8, 2020:
Dow: 27,572.44, +461.46 (+1.70%)
NASDAQ: 9,924.75, +110.66 (+1.13%)
S&P 500: 3,232.39, +38.46 (+1.20%)
NYSE: 12,836.60, +195.16 (+1.54%)

Nothing Can Stop The Mighty Fed Printing Press And Back Room Bookkeepers

The protesting, rioting, and looting was noticeably on the downswing Tuesday night. It could be seen as a sign that cities and states have things under control or just a lull in the overall action. Depending on location, it's likely a little bit of each.

Before the curfews took effect, the Masters of the Universe on Wall Street managed to enrich themselves and shareholders just a little bit more, sending stocks through the proverbial roof, with most of the gains happening in the final half-hour of trading. The Dow, for instance, was up about 100 points at 3:30 pm ET. By the closing bell, it had gained 267 points.

Apparently, there's little to no downside for corporations no matter what happens in the real world. Pandemic? No problem. Print more. Widespread civil unrest? Meh. Print more. Supposedly, a nuclear holocaust would send the major indices to record highs.

What's amazing about the rally since late March is not that it has come with a background of lockdowns, over 100,000 deaths, street protests, rioting, looting, and assorted public dislocation, but that stocks were overvalued even at the low point. First quarter earnings reports were dismal, yet stocks continued their ascent to nosebleed levels that are now more overvalued than almost any time before.

The current CAPE ratio (Robert Shiller's 10-year P/E ratio) stands at 28.96. For purposes of comparison, the same ratio just prior to the 1929 crash was about 30. The figure before the panic of 2008 was around 27.50. Only the dotcom era produced a record high higher than Black Tuesday and the most recent levels, when it peaked at 44.19. For reference, the median CAPE is 15.78.

What we have is a market of zombie corporations controlled by financial manipulators, expert at buying back shares with borrowed money at near-zero interest, limiting the number of shares outstanding to goose the price of the stock higher. Many companies don't really make money anymore. They just play games with the books to make it look like they do.

In the background, other elements of the price-fixing regime that has become Wall Street back rooms, the NY Fed and controllers at Treasury and monolithic banking operations (primary dealers, but mostly JP Morgan Chase) keep gold and silver under wraps on the COMEX, as they did on Tuesday, slapping down the recent runaway rally in precious metals. That's a necessary evil under the control economy because the Fed doesn't like competition for their Federal Reserve (debt) Notes and gold and silver are real money, rather than just currency, like every other sovereign fiat.

Also well under the control mechanism is the price of oil, which is forbidden to fall to prices that comport to affordability for drivers of gas-powered vehicles. There was a brief opportunity to save a little at the pump, but that's now over, with oil pushing toward $40 a barrel. Truth be told, oil is old news. Renewables have taken a serious bite into the overall market share, especially solar, as advancement in solar panels have made self-generated electricity as cheap as what's supplied by fossil fuel plants and in some instances, cheaper.

The price of oil can go to $200, but people with solar installations and hybrid or EVs (electronic vehicles) will barely notice. What they will notice is the slowdown of the outlying economy, which would be crushed under regular unleaded at $6 or $7 a gallon.

There's no stopping this juggernaut monstrosity of a stock market nor the destructive money printing of the Federal Reserve. If and when stocks nosedive again, the Fed will just increase its balance sheet another for or five trillion, loan out money at negative rates and call it a day. By then, there will be no economy, just some cheap, fake import from China masquerading as a market.

Later this morning, ADP will release May private payroll numbers, which will be a disaster and a presage of Friday's non-farm payroll report for May. None of it will matter. Even with unemployment at 20%, stocks will still stroke higher. Welcome to the new world of finance, where nothing matters other than questionable or fraudulent bookkeeping and willful ignorance.

At the close, Tuesday, June 2, 2020:
Dow: 25,742.65, +267.63 (+1.05%)
NASDAQ: 9,608.38, +56.33 (+0.59%)
S&P 500: 3,080.82, +25.09 (+0.82%)
NYSE: 12,046.41, +146.17 (+1.23%)

Fed Reduces Bank Reserve Requirements to ZERO Nationwide; Hydroxychloroquine Proves Effective; Stocks Gain; Gold, Silver Mashed

A few developments in the financial sphere over the holiday weekend were worth noting.

Reserve Requirements

As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions.

Did anybody see or hear that announcement from the Fed?

It must have been announced via double-secret handshake pinky-swear written in invisible ink on flash paper. Thankfully, Mike Maloney has been keeping tabs on the out-of-control Fed and released the information in a video over the Memorial Day weekend.



Actions by the Federal Reserve concerning currency in circulation evokes memories of this famous South Park clip:



Also developing over the weekend (when nobody was paying attention), the World Health Organization announced a "temporary pause" to clinical trials on hydroxychloroquine (HCQ) as a treatment for COVID-19, based on a report from the medical journal, The Lancet, on May 22 which had published an observational study on HCQ and chloroquine and its effects on COVID-19 patients that have been hospitalized.

The study included some very sketchy data and besides being "observational", rather then relying on the gold standard: randomized double blind clinical trial, the study looked at patients already hospitalized from COVID-19, when the benefits of HCQ, especially when taken in conjunction with zinc, is effective as a preventative drug and also has shown in various anecdotal cases to be effective as a treatment for asymptomatic people who tested positive for COVID-19 and also those showing early symptoms of the virus.

A Texas nursing home treated patients and staff with HCQ, Azithromycin (Zithromax, Z-Pak) and zinc with amazing results, only one death from 56 residents and 33 staff who tested positive. Great video coverage in this report.

Costa Rica has been using HCQ effectively to combat COVID-19 with exceptional results. Costa Rica’s reported fatality rate of 1.2 per 1,000,000 population is one of the lowest in the world.

Coronavirus Treatment: India Expands Use Of Trump's Hydroxychloroquine As WHO Halts Trials

Dr. Chris Martenson, who has no bias or agenda, and has been producing some of the most informative and extensively-researched video reports on the virus since January, offers much more:



Oh, yeah, we can't test HCQ because it's so dangerous... to Big Pharma's bottom line. The generic drug costs roughly 10 cents per dose to produce.

And, in case you missed it, President Trump signed an executive order on May 19, which instructed all federal agencies to...

"address this economic emergency by rescinding, modifying, waiving, or providing exemptions from regulations and other requirements that may inhibit economic recovery, consistent with applicable law and with protection of the public health and safety, with national and homeland security, and with budgetary priorities and operational feasibility."

This was presented earlier on Money Daily, but advisors believe the president's executive order was created to keep federal and state agencies on short leases as regards enforcement of stay-at-home, lockdown, social distancing, and other orders and restrictions on the American public and especially on small business.

The markets on Tuesday were the usual mix of stocks and oil up, gold and silver smashed, bonds flat.

At the Close, Tuesday, May 26, 2020:
Dow: 24,995.11, +529.95 (+2.17%)
NASDAQ: 9,340.22, +15.63 (+0.17%)
S&P 500 2,991.77, +36.32 (+1.23%)
NYSE: 11,603.00, +271.03 (+2.39%)

Brave New World Beckons As Algos Gone Wild Erase Vaccine Hopes, Feds Try Keeping Up With Lockdown Liftings

Stocks took a pretty major blow in the final hour of trading Tuesday, when Stat News, which is focused on health-related material, reported that Moderna's phase one trial of a COVID-19 vaccine was thin on critical data according to experts, in contrast to the glow that permeated Wall Street Monday over the same trial.

When that story crossed the wires, it wiped out - in a matter of minutes just before 3:00 pm ET - all of the sparse gains on the day for the NASDAQ and S&P, and sent the Dow Industrials tumbling in a textbook case of how stock-trading algorithms distort and disrupt what used to be markets run by human beings.

Moderna (MRNA) dropped nearly 10.5% on the day, after gaining 20% on Monday, wiping out most of that one-day wonderfulness. Moderna closed Friday at 66.68, rose to close at 80.00 on Monday and finished up Tuesday at 71.67.

Easy come, easy go.

The Dow, which was in the red almost all day, dropped more than 200 points in 10 minutes. Gains on other exchanges were wiped out in one fell swoop. Such is the fickle nature of equity markets in the days of fake news and extreme momentum chasing and yield seeking.

Elsewhere, Home Depot (HD) took a $640 million after-tax hit due to its response to the pandemic, which included expanded paid time off for hourly employees, weekly bonuses, and extended dependent-care benefits. Earnings per share for the first quarter came in at $2.08, down from $2.27 in the prior-year period and $0.18 below analyst expectations. Home Depot was down 7.25, a loss of nearly three percent on the day.

Walmart blew everything away in its quarterly, reporting adjusted earnings per share of $1.18, up from $1.13 in the prior-year period. Total sales for the big box giant jumped 8.6% to $134.6 billion, handily beating analyst estimates by $3.7 billion. Comparable-store sales in the U.S. soared 10%, driven by strong demand for food, consumables, and health and wellness products.

Even those blockbuster numbers couldn't stop investors from unloading Walmart stock, which finished the day down 2.71 (-2.12%). The stock made a 52-week high less than a month ago.

Housing starts were down 30.2% in April. Building Permits down 20.8% for the most recent month.

Other than all that, there wasn't much excitement on Wall Street, which thrives on gains, no matter where they're sourced.

The major issue facing stocks and the overall economy is how well the Federal Reserve can keep up with the rolling knock-on effects from the coronavirus and government response to it. With the national lockdown winding into a roving re-opening phase, some areas are seeing business and communities getting back to some semblance of normalcy, which is now a moving target. Schools remain closed almost nationwide, while rural communities have fared much better in terms of case incidence and economic slowdown than urban areas.

Having just passed the midway point of the second quarter, there's little doubt anywhere that the blow to GDP will be tremendous. The latest estimates for second quarter GDP range from -42% to -20% and those guesses may be overly optimistic. Being that just about everything was shut down for the entire month of April and most cities - where economic activity is paramount - just beginning to open up to vehicle and foot traffic, there's a very real possibility that the current quarter could collapse by more than 50 percent. Much is dependent on the consumer mindset, which is currently a mixed one.

Having already received bailout currency from the federal government and generous additions to unemployment insurance, lawmakers in Washington are slow-footing the follow-up. House Democrats launched a $3 trillion second stimulus measure on Friday, but Republicans in the Senate are calling the bill dead on arrival, preferring to take time to assess the result from round one before committing to more fun money for small business and individuals.

One unmistakable aspect of the government's bailout efforts is the unexpected consequences from giving people who were laid off or furloughed in the early days of the lockdown movement an additional $600 a week in unemployment compensation. As it turns out, a very large percentage (up to 70% according to some estimates) of workers are making more now sitting at home collecting benefits than they were when they were gainfully employed and many of them are refusing to go back to their old jobs. Would anybody have suspected that hard-working Americans would rather stay home and cash checks from the government rather than grind out a 9-to-5 existence?

It shows, yet again, that government is always the problem and never the solution. Welcome to socialism 101 and a test run of Universal Basic Income (UBI). Alongside Modern Monetary Theory (MMT), now in live alpha testing by the Federal Reserve, the federal government and its central bank have slingshot the American public into a brave new world of radical economics, the long-term effects known by exactly nobody, though skeptics believe it will eventually result in either a worldwide depression, neo-feudalism (Max Keiser and others easily figured that one out), hyper-inflation, and a growing divide between haves and have-nots, already a chasm-sized gap.

Best bet is to be ready for all of the above by investing in hard assets, growing a garden, learning as much as possible about animal husbandry (at least chickens), and obtaining skills necessary to eek out a meager existence without the benefit of a central authority. Younger people will increasingly find such advice tiresome and boring, but the jobs and careers they were engaged in before the crisis occurred will almost certainly be greatly affected, with an emphasis on the negative.

Along those lines, unless local governments begin the process of trimming their robust budgets, cities and towns face imminent crises, the bigger ones looking at enormous needs that neither the federal government nor the Federal Reserve can fulfill.

Life will gradually return to a dystopian almost-normal in coming months. Thankfully, Summer is on the horizon, along with warmer weather and outdoor activities which should provide relief from the mask-wearing, social distancing, and fear mongering so prevalent in the current environment. On the other hand, things are heating up pretty quickly on all fronts. Expecting more disruption, displeasure, discontent, disparate government actions, fraud, fakery, and general dysfunction would be a solid frame of reference for anyone wishing to come out on the other side of this - circa 2022 - somewhat sane and intact.

At the Close, Tuesday, May 19, 2020:
Dow: 24,206.86, -390.51 (-1.59%)
NASDAQ: 9,185.10, -49.72 (-0.54%)
S&P 500: 2,922.94, -30.97 (-1.05%)
NYSE: 11,248.97, -153.26 (-1.34%)

Stocks Post Weak Gains Ahead of April Retail; Gold, Silver Bid, Approaching Breakout Levels

Following a weak open, which looked to see stocks extend their losing streak to a third straight session in the red, stocks pivoted, gradually rising off the lows (the Dow down more than 400 points early on) to eventually finish with fair, though hardly secure gains, the advance prompted right at the Dow Jones Industrials' 50-day moving average.

For the seventh time in the past eight weeks, the major averages put on gains in the face of staggering employment losses, as new unemployment claims came in hotter than anticipated, with 2.98 million fresh filings, bringing the two-month total over 36 million out of work.

Equity moves were likely not correlated well to the unemployment data, as the gains all appeared after the news had been known for hours. The more likely scenario was one which has been playing out since the Federal Reserve stepped up its bond-buying activity, but quantitatively and qualitatively. Flush with cash, primary dealers and cohorts ramped into stocks, erasing some of the losses from the prior two sessions.

The move, which is mostly market noise rather than anything substantial, is likely to have been in vain. With investors eyeing what are certain to be horrific April retail sales figures Friday morning, futures are pointing down two hours prior to the opening bell.

Sensing weakness in equities, precious metals caught a long-overdue bid, with gold bounding as high as $1732.70, and silver breaking out to a high in early Friday morning trading of $16.48 per troy ounce.

Premiums on both gold and silver remain high, with popular one-ounce silver bars and coins selling in a range of $23-30, while gold fetches well above $1840 routinely for one ounce coins, rounds, or bars. Despite whatever nonsense the mainstream financial media is throwing out as justification for stocks over real money, demand for precious metals is, and has been, at extremely high levels since early March with no abatement seen on the horizon. The outsized demand has created a supply shortage and has miners and smelting operations working at breakneck speed to maintain at least some modicum of reliability.

With input costs around $1250 for gold miners, exploration and excavation should continue at a strong pace as prices rise and demand continues strong. Undervalued for the past seven years at least, gold and silver mining companies may be looking at solid, if not spectacular, profits in coming quarters.

Bond traders were also able to capitalize on the recent weakness in stocks. The yield on the 10-year note has fallen from a May high yield of 0.73% on Monday to close at 0.63% on Thursday. The 30-year closed Monday at 1.43%, its highest level since March 25, but finished Thursday yielding 1.30% and under pressure.

Oil continues to be a favorite plaything of the speculative class, making a two-month high at $28.25 on hopes that some pickup in demand has occurred since states began getting back to business from May 1 forward. Despite an enormous glut on the supply side, specs and oil company execs are latching onto any rumor or fantasy to get the price off the recent decades-deep lows.

The world continues in a state of shock and despair over the coronavirus debacle and various government attempts to both stem its advance and keep their economies on life support. Indications are that some of it's working, but not very well, overall.

Stocks will need a three percent gain on Friday to avoid a negative print for the week. Only the rosiest prognosis would believe that even remotely possible, though the Fed's heft has overcome dire predictions more than once during the current crisis.

Stay liquid. Next posting will be Sunday's WEEKEND WRAP. Life on Wall Street may be not so sweet if all the currency thrown into markets doesn't produce anything more than a 50% spike off the lows, but that head-and-shoulders pattern on the Dow - now with a sloping right shoulder - is beginning to appear ominous.

At the Close, Thursday, May 14, 2020:
Dow: 23,625.34, +377.37 (+1.62%)
NASDAQ: 8,943.72, +80.56 (+0.91%)
S&P 500: 2,852.50, +32.50 (+1.15%)
NYSE: 10,927.41, +97.97 (+0.90%)

Stocks Triggered By Federal Reserve EFT Buys, Negative Interest Rate Fears; PTJ Buys Bitcoin

Once more, the Dow Jones Industrial Average failed to break above a key level, giving up morning gains after President Trump reiterated his desire for the Fed to entertain negative interest rates. Bank stocks were especially hard hit as the belief is that rates below zero would further hamper their ability to control the spread and turn profits despite the ability to skim directly from deposit accounts via the minus sign on yields.

Alongside the president's tweeting, the Federal Reserve began purchasing corporate debt ETFs, beginning with investment grade bonds but eventually swinging down the ladder to high yield, among the most dodgy and riskiest of fixed income products. The intent was announced on March 23, as a response to the coronavirus epidemic, and put into practice during Tuesday's session, with investment firm, BlackRock, as the intermediary, using funds from the Fed and US Treasury.

Seen as the ultimate backstop for stocks and the debt market, the scheme is one of nine separate facilities the Fed is employing to help stabilize - or in most cases, pump higher - markets.

The various backstops being deployed by the Fed, in conjunction with the currency-killing qualities of negative interest rates should eventually result in a gigantic bubble in the Fed's balance sheet, holding investment vehicles that are headed straight to the fiat scrapyard, another sign that the world is heading toward a currency crisis and a new monetary regime.

The attempt to vault beyond the 50% retrace of the March collapse was the third in the past month. The Dow peaked on April 17 when it closed at 24,633.86. After Tuesday's selloff, the head-and-shoulders chart pattern is clearly defined, a strong signal that a major decline is likely.

In recent days, and just prior to its halving, Paul Tudor Jones has bought into Bitcoin, expressing his view that the cryptocurrency will act as a hedge against the inflation he sees coming from central bank money-printing, telling clients it reminds him of the role gold played in the 1970s.

In a quote that is certain to become his trademark, Jones, founder and CEO of Tudor Investment Corp., said:

“The best profit-maximizing strategy is to own the fastest horse.”

Unabashedly, Jones believes Bitcoin will win the investment race over the coming years, along with gold, silver and other hard assets.

Jones' entry into the crypto-market stands in stark contrast to famed investor Warren Buffet and his holding company Berkshire Hathaway. Buffet has openly stated that he would never invest in gold or Bitcoin. After selling off his positions in the airlines at a sizable loss, Buffet's Berkshire Hathaway is sitting on some $150 billion in cash, loathing the concept that he finds nothing of compelling value to purchase presently.

Obviously, one of these investing titans is going to be proven wrong. It appears that at the present time, Jones may be holding the winning hand, or, in racing parlance, the live long shot.


At the Close, Tuesday, May 12, 2020:
Dow: 23,764.78, -457.21 (-1.89%)
NASDAQ: 9,002.55, -189.79 (-2.06%)
S&P 500: 2,870.12, -60.20 (-2.05%)
NYSE: 11,055.58, -225.78 (-2.00%)

Deflation, Inflation, Hyperinflation, Signal to Noise Ratio, Gold, Silver, and the End of the Dollar

Everything that has happened so far was predictable.

The worldwide government response to the COVID-19 pandemic was as easy to see for cynics and skeptics as the eventual lying that would take place. First, back in January and early February, the federal government told the public that the threat to Americans from the coronavirus that was ravishing China was minimal. Gradually, that advice was replaced by travel restrictions to and from mainland China, then to and from Europe, until finally, infections and deaths from the virus began to multiply in America.

By mid-March and into the first days of Spring, the veil had been lifted and the virus was spreading rapidly across the United States, thanks to millions of international travelers on ships and airplanes that had been allowed to come and go as they pleased through the winter. Individual cases turned into clusters and clusters to severe outbreaks, especially in New York City, not surprisingly a hub for international travel.

By the time congress got around to passing emergency legislation, lockdowns and shelter-in-place recommendations were put into play by governors of the individual states. The legislation contained the usual: massive injections of currency into Wall Street (because we can't have a stock market crash), a pittance for the public, and payments to hospitals for treating patients infected with COVID-19: $13,000 for each patient admitted; $39,000 for each patient put on a ventilator.

Anybody who has been following government and Federal Reserve policy knew that the response would be to throw massive amounts of currency at the problem because that's all they know about how to handle crises.

And here we are. The government is now readying a fourth "stimulus" bill, chock full of more handouts, bailouts, and currency drops. This time, the public gets nothing. States and municipalities are going to get tons of currency to bail out their broken, drained public coffers and keep millions of teachers, cops, firemen, and paper-pushers on the job and their pensions partially funded because having the Fed backstop municipal bonds simply wasn't enough. Hospitals will get more currency. Small businesses will get another tranche of loans, pressing cynics to respond that cities get grants, while businesses have to pay it back.

All of this currency printing and government deficits won't amount to a hill of beans because the transmission mechanism for the velocity of money is broken. Cops, teachers, and firemen will get paid, but they'll be scared to take on new debt and will spend much of their money paying down credit card bills and overpriced mortgages. After another crash to lower levels, the stock market will stabilize.

The US will have deflation, widely, in big-ticket assets like stocks (market crash), bonds (rolling defaults), real estate (forbearance today leads to foreclosure tomorrow), trickling down to things like furniture (no interest for 5, 6, 7 years), cars (rebates, cash back, 0% financing), and appliances (oversupply). Food, especially meat, which is getting a bit pricey right now due to chinks in the supply chain, will not be affected much. Food was the one thing that didn't go up or down much during the Great Depression of the 1930s. It was cheap enough so that people didn't starve, though meats were generally considered close to being luxuries, so no worries there, until hyperinflation. Besides, even if you have a tiny back yard, you can grow some vegetables of your own to offset any price rises in meats. Why do you think your mother was always telling you to eat your vegetables? Sometimes there just isn't enough meat.

After six to 18 months of deflation, all the while the Fed printing dollars like maniacs and the government running massive deficits (probably over $8 trillion this fiscal year alone (through September 30), prices will seem to stabilize. By this time next year (2021), many will think the crisis has passed, mostly because that's what they'll be telling you on TV. But, it's just a lull. Inflation will return as all that currency begins to be spent into the economy. As the velocity of money ramps up, the Fed will respond by raising interest rates, but it won't matter. The game is on, with hyperinflation underway, the currency will continue losing value and eventually, there will be a massive default on dollar debt.

Forget, for for a few weeks or a few months what's happening on a day-to-day basis. It's mostly noise. The signal to noise ratio (SNR or S/N), a measure used in science and engineering that compares the level of a desired signal to the level of background noise, in today's economy, politics, and society, is very low, meaning the signal is barely transmitting the message as it is being drowned out by the noise.

In terms of decibels, to hear what's really happening in the world, the signal has to be about 60, the level of sound as conversational speech. If the noise is that of a rocket launch (180), the SNR is 0.33 and the noise drowns out the signal. When the SNR gets to above one (1), the signal can be heard. Putting that in perspective, a signal sound of a balloon popping is 125, a toilet flushing is 75, producing a SNR of 1.67. Those are appropriate today, as the balloon popping can metaphorically represent the debt bubble bursting and the toilet flushing the sound of US dollars losing value, going down the drain. That hasn't happened yet, but, as time progresses, the SNR will rise, pass 1.00 and the signal will eventually be loud and clear, one that everybody can hear. That's when inflation proceeds to hyperinflation, with prices rising faster than the Fed can print new currency.

It is at that point that you'll want to have gold, but especially, silver, because it will outperform the currency, just by standing still. Truth of the matter is that gold and silver don't really rise in price. An ounce of silver or a gram of gold is still an ounce or a gram. But the purchasing power of the currency is falling because there's more money circulating. Thus, in a very natural correspondence, gold and silver rise in value as the currency falls, which is why three 1964 dimes (90% silver) can buy more gas at the pump today, in 2020, than in 1964.

In the year 1964, the average retail price of gas in the U.S. was $0.30. So, back then, you could put a gallon of gas in your car with three 1964 (or earlier) dimes. Today, three dimes from 1964 or earlier are worth a silver melt value of about $1.10 each, so, with gas prices currently deflating to around $1.50 a gallon, you could buy more than two gallons of gas, even with silver (and gold) prices being suppressed. That's deflation. One could buy just one gallon and use the other roughly dime-and-a-half to help pay for the increased price of pork or beef. That's inflation. Inflation and deflation can and will occur - in different products or services - simultaneously.

Silver, even under the severe constraints imposed by the futures, central banks, the BIS, and other manipulators, has increased in value 1100% since 1964, an annual, non-compounded return of 16.67%. Try getting that from stocks or bonds. And silver is going higher. Much higher. The price of an ounce of silver in dollars is likely to double in the next few years, then double again, and again, as the dollar is gradually debased, losing all that's left of its purchasing power. Your 1964 dime will buy at least a gallon of gas or the equivalent in bread or beef or whatever items you wish to purchase. It will have value, as precious metals have for more than 5000 years. The dollar, and with it, the pound, yen, euro, yuan, and any other currency not backed by or tethered to a tangible asset (it doesn't have to be gold; it can be anything) will revert to its intrinsic value of ZERO, or close to it because every other country will be going through similar scenarios as the United States.

That's where this is all headed. Price deflation with currency inflation through Spring or Summer 2021, relative calm from 2021 to maybe the beginning of 2023, but likely before then, with inflation ramping up; then hyperinflation for two years before a complete monetary system reset is the only solution. It's not the length of time for these varying processes to occur that's importance, it's the sequence (deflation, calm (some inflation), inflation, hyperinflation) and the ability to spot the subtle changes that matters most.

Completely wrecking a global economy takes time. The Fed's been at it since 1913, and in 107 years have reduced the purchasing power of the dollar by about 97%. The last three percent - and the sopping up of all the malinvestment and toxic assets will take time... about three to four years.

Anything that has more upside than downside from random events (or certain shocks) is antifragile; the reverse is fragile.

We have been fragilizing the economy, our health, political life, education, almost everything… by suppressing randomness and volatility. Much of our modern, structured, world has been harming us with top-down policies and contraptions… which do precisely this: an insult to the antifragility of systems. This is the tragedy of modernity: As with neurotically overprotective parents, those trying to help are often hurting us the most.

-- Nasim Taleb

It would be nice if we started listening to the people who have been right rather than the people who have theories.

-- Mike Maloney, The Hidden Secrets of Money, Episode 7, Velocity & the Money Illusion

At the Close, Wednesday, May 6, 2020:
Dow: 23,664.64, -218.45 (-0.91%)
NASDAQ: 8,854.39, +45.27 (+0.51%)
S&P 500: 2,848.42, -20.02 (-0.70%)
NYSE: 10,999.99, -135.41 (-1.22%)

COVID-19 A Massive Scam Perpetrated At the Highest Levels, Media, Industry, Finance Complicit

Just about everything being shoved down the throats of Americans (and, we can safely assume, the rest of the world) about the coronavirus by the mainstream media (MSM) is either questionable, being drawn into question, refuted, or outright bunk. Examples will be given in this installment of the WEEKEND WRAP.

The United states is approaching one million confirmed cases of the virus, and has already surpassed 50,000 deaths. The actual number of cases of the virus is orders of magnitude higher, as preliminary antibody studies from New York and California have shown.

The California study, undertaken in Santa Clara county, home to San Francisco, shows that "prevalence estimates represent a range between 48,000 and 81,000 people infected in Santa Clara County by early April, 50 to 85-fold more than the number of confirmed cases,” the authors wrote. Published on April 17, the number of confirmed deaths in Santa Clara County was 99, meaning that the true mortality rate is somewhere between 0.12 percent and 0.2 percent, meaning that roughly one or two people in every thousand would die from the virus, a number very close to that of the ordinary seasonal flu.

The same kind of results are shown in New York, where 13.9% of people in New York's first antibody study tested positive, meaning they had the virus and recovered; that means up to 2.7 million people could have been infected statewide and the mortality rate would have been roughly 0.5 percent, not the 4.5 to 6 percent that the media has been touting. There are also widespread reports of the numbers being artificially inflated, throwing in all deaths of people who tested positive for COVID-19, regardless of the underlying cause.

The federal government has been doling out billions of dollars to states via the CARES act which, through Medicaid, pays hospitals $13,000 for COVID-19 patients, upping the bounty to $39,000 if one is put on a ventilator.

As many as 80% of people put on ventilators die, and many doctors are refusing to use them in treatment of severe cases, though hospital administrators - in dire need of funding - continue to push for their use, despite the findings that prove a suspiciously-poor recovery rate.

The ongoing controversy over hydroxychloroquine, in conjunction with zinc and sometimes, arithromycin, which Money Daily has already covered on Thursday, April 24 continues to rage between the truth and the mainstream media's fear angle.

Here's Laura Ingraham with an expert cardiologist explaining why the media shouldn't be running around with their hair on fire over the FDA's warning about hydrochloroquine:



...and then there's the complete nonsense about "flattening the curve" through stay-at-home orders, lockdowns, staying six feet apart that has decimated the global economy.

The effect of the lockdown was to keep the hospitals from being overrun. In the entire United States, few hospitals have been overrun with COVID-19 patients, mostly in New York City, Boston, and a few other hotspots. Most hospitals have treated very few coronavirus sufferers. It wasn't about saving lives because the disease will still spread, albeit at a slower pace. Additionally, the vast majority of people who die from coronavirus are elderly and/or suffering from other maladies (co-morbidities).

According to statistics out of New York City, 95% of the deaths due to coronavirus were from 45-75+ years of age.

Moving on to testing, all that testing is going to do is probably enrich the companies that make the tests and confirm that a lot more people than previously assumed had contracted COVID-19 and are now immune.

Instead of shutting down the entire economy, the rational approach would have been to quarantine seniors and people with pre-existing conditions - primarily diabetes, high blood pressure, heart-related ailments - but that wasn't considered. Instead, we've trashed more than 200 years of capitalism over an infectious disease that's barely more deadly than the seasonal flu. It will rank as one of the greatest blunders (or planned event) in the entire history of the planet.

The conclusion is that all developed nations were in on the coronavirus scam (or, as some are calling it, the plandemic) because the elites already had a plan in place to disrupt national economies, destroy governments, enslave people, and usher in a new world currency while covering up the imminent crash of stock markets and, eventually, all fiat currencies. The entire process will take years - it's been underway for decades - but this was a major part of the overall effort, and it seems to be succeeding.

The main casualties so far:

Nursing homes
Small businesses
Sporting events
Concerts
Cruises
Colleges
Confidence

Winners:

Wall Street
Big Government
Mainstream Media (MSM)
Health Care / Big Pharma

Bah! You've been had, and the after-effects are going to be even worse.

Now, on to the markets, or, what's left of them.

Stocks had an up and down week, but ended down with all but the NASDAQ finishing with losses of just under two percent. The darling NASDAQ was nearly flat, losing just 15 points (-0.18%). This was just the second weekly loss of the last five, since the Fed stepped in last month with massive funding programs.

Despite trillions being thrown at banks and what are now zombie corporations, the major indices are still in bear markets, though they are all resting right about at their 50-day moving averages.

If anything, they seemed to have plateaued for the time being. Another downdraft could be coming, but, with all the Fed currency behind them, shorting this market is strictly for those who can afford massive losses. Being in this market for any reason is simply a fool's errand. Stocks are headed toward a massive crash, which has only been prevented by the Fed. Eventually, fundamentals matter, and many major corporations, since stock buybacks are now frowned upon, have resorted to leveraging up with debt, conveniently purchased by the Federal Reserve and their unlimited currency campaign.

Oil magically rebounded after posting negative numbers upon the maturity of May futures. June futures for WTI crude are resting comfortably at $16.94 a barrel. It's a bonanza for drivers, with prices at the pump the lowest in a generation. Gas hoarding, once people get back on the road, could be a real thing. It's cheap, why not?

Treasury bonds are a graveyard. The curve flattened out to a mere 107 basis points as the long end collapsed. Yield on the 30-year fell to 1.17%, while one-month bills ended the week yielding 0.10%. The 10-year note finished out the week with a yield of 0.60%. Since demand for treasuries is shrinking rapidly, the curve and steepness or flatness of it will hardly matter any more. The Federal Reserve will be buying most, if not all, of the issuance within months as monetization takes flight fully. The disaster in capital funding, like most of the rest of the monetary and fiscal weirdness, has only just begun.

Bonds are screaming that the condition of the economy is one of being on a deathbed with Dr. Fauci overseeing the patient. It's sure to continue a downward spiral, leading to death. Getting people back to work won't alleviate the condition since many small businesses will not reopen. The onrush of bankruptcies and credit defaults are about to accelerate. Many renters - commercial and residential - are planning on not paying their rents come May 1, which is this coming Friday, suggesting that this week may look like a picnic compared to the carnage caused by the realization that a good third of the country is going broke the first full week of May.

Gold and silver made gains on the COMEX, and were little changed, though lower on eBay, where buyers can actually get physical precious metals delivered on a reasonable time basis (1-4 days). Dealers are still placing premiums on both gold and silver, and delivery times remain weeks off with many of the more popular items still out of stock.

Here are this week's figures from sales on eBay:
Item Low High Avg. Median
1 oz silver coin 25.15 31.74 27.57 27.44
1 oz silver bar 23.20 31.16 26.34 25.85
1 oz gold coin 1,819.85 1,962.25 1,884.09 1,880.50
1 oz gold bar 1,849.95 2,002.65 1,901.98 1,893.92

To close out this edition of the WEEKEND WRAP, a final word about the lockdown and states "opening up" as it were: We should not have been in lockdown in the first place. The coronavirus, or COVID-19, is not a killer disease for more than 90% of the population. It now appears, after blowing out all the hyperbole and media spin, that the state-by-state lockdown was pre-planned at the highest levels. It was completely unnecessary, as evidenced by the results out of Sweden, which was one country which chose not to torpedo their economy. The Swedes have experienced the same or fewer cases of infection per capita and fewer deaths than their counterparts. Their example is the one which should have been followed.

Additionally, as part of the plan to bail out Wall Street and next, the states themselves, economic conditions are more likely to continue deteriorating over the near term. Accumulating hard assets is advisable, whereas investing should be regarded as gambling in a rigged casino, unless you are ultra rich and have inside information. Most of us do not.

Go out and hug somebody. COVID-19 is a massive psy-op designed to demoralize and dehumanize. Don't let them win.


At the Close, Friday, April 24, 2020:
Dow: 23,775.27, +259.97 (+1.11%)
NASDAQ: 8,634.52, +139.77 (+1.65%)
S&P 500: 2,836.74, +38.94 (+1.39%)
NYSE: 11,017.90, +101.20 (+0.93%)

For the Week:
Dow: -467.22 (-1.93%)
NASDAQ: -15.62 (-0.18%)
S&P 500: -37.82 (-1.32%)
NYSE: -190.40 (-1.70%)

Banks Profit From Coronavirus; Governments Equivocate; Fed Keeping Stocks Afloat

Since there is too much information being thrown around on the coronavirus crisis, here are some of the top headlines:

Stocks rallied again after another 4.4 million people filed for unemployment relief, but the gains were wiped out when the World Health Organization (WHO) leaked a report that suggested trials on Gilead Science's (GILD) treatment drug, remdesivir, were not going well. Gilead finished down 4.2%, and the entire US stock market complex finished the day essentially unchanged.

Thursday, as the House pushed through $484 billion in round two of the bailout loan program for small businesses, Bank of America, JP Morgan Chase and other big banks raked in $10 billion in fees for processing the first round of small business PPP loans. As they usually do, the federal government made sure to take care of their major campaign donors. One burning question: since Ruth Cris is returning the $10 million loan they received, is JP Morgan Chase returning the $100,000 fee they "earned" for processing the loan?

Then there's this video that shows Fox News reporter John Roberts and New York Times photographer Doug Mills in the White House coronavirus press briefing room this past Tuesday caught on a hot mic. The two discuss the fatality rate of the virus, with Roberts saying it's between 0.1 and 0.3 percent, and Mills responding that it's in line with the ordinary flu. Some news outlets are characterizing the video as misleading, suggesting the two are joking. Judge for yourself.

According to a study by the Department of Homeland Security (DHS) which highlighted Thursday's White House press briefing, warm weather, sunlight, and low humidity could have mitigating effects on coronavirus. This theory has been bandied about since the early days of the pandemic, and there's been no substantial evidence to claim that normal summer weather will slow down the spread of the virus or kill it completely, though most flu viruses are negatively affected by warmer weather.

The best evidence is likely anecdotal, as countries with warm climates in the Southern Hemisphere and near the equator have actually been less-severely affected by COVID-19 than more northern countries like the United States, Russia, most of Europe and Canada. For instance, Australia, which first began reporting cases of the virus in February (similar to Northern Hemisphere's July), has had 6,674 reported cases, but only 78 deaths. Malaysia, whose capitol, Kuala Lumpur is situated 350 km or 217 miles from the equator, has reported 5,691 cases but only 96 deaths. This suggests that while the spread may be slowed somewhat, the virility, or severity, of the virus may be diminished. Time will tell, especially in the US and Europe, as warmer weather approaches and states and countries begin reopening their economies.

Since April 7, the Dow Jones Industrial Average, the index of 30 leading US companies, has traded in a very thin range between 22,634 and 24,232, a mere 1,598 points in an extremely volatile market. The COBE Volatility Index, or VIX, which tracks volatility, has been below 39 just two times since March 5. Normally, the VIX holds between 10 and 18 with great regularity. Anything above 20 is considered to be edging toward extreme and readings over 40, which have been common during the coronavirus campaign, are rare. On March 18, the VIX registered a reading of 85.47, exceeded only by a high mark of 89.53, on October 24, 2008, at the height of the Great Financial Crisis.

Managing to keep the Dow in such a tight range can only be due to the Fed's massive inputs of cash to primary dealers via various funding vehicles created during the coronavirus crisis. Trillions of dollars have flowed to banks, who routinely put that currency to work buying stocks and keeping blue chip equities in a fairly well-defined pattern. Stocks go up, they go down, they go back up. The Fed is in control of what used to be a free, fair market. Freedom and fairness in publicly-traded stocks hasn't existed for quite some time. Now they are virtually extinct entities.

What most of the headlines and alternative media narrative suggests is that the global public is being used, abused and largely misinformed. Governments in developed nations are employing the virus and public lockdowns as cover for the failed global fiat currency economic system that will have to be replaced shortly, within six months to three years, depending on how long those in power can keep people from overthrowing the entrenched oligarchs, kleptocrats, cronies, and assorted liars and thieves in government, business, and the media.

When the new world currency is announced, it will likely be all digital (blockchain technology) because paper and coin currency is "dirty" and "may carry viruses." At least that would seem to fit the accepted game plan that's being etched out on an ongoing basis. It will be up to individuals - not governments - to either accept or reject new currencies offered by the same people who destroyed the old system or opt for alternatives like gold, silver, bitcoin, and the tried and true efficacies of bartering goods and services.

There may indeed be more than one global currency: one for international trade and governments, and one for everyday commerce by the people. Whatever occurs, the next few years are likely to be convulsive and disruptive to what most people consider normal.

At the Close, Thursday, April 23, 2020:
Dow: 23,515.26, +39.44 (+0.17%)
NASDAQ: 8,494.75, -0.63 (-0.01%)
S&P 500: 2,797.80, -1.51 (-0.05%)
NYSE: 10,916.67, +8.11 (+0.07%)

The Bubble Has Been Popped; All Fiat Currencies Will Become Worthless; The New Normal Will Be Absurd

Leave it to the most corrupt governments in the history of mankind to put the world into a global depression. This isn't about China, or the United States, it's about all of them. France, Egypt, Indonesia, it doesn't matter. Every government in the world is corrupt to the core, led on by central bankers, market manipulators, and the lure of riches.

It's likely always been that way, but it just seems to be much worse now than ever before. There's no honesty, no integrity, no compassion in any of the soulless monsters that some refer to as "our leaders." Well, our dear leaders have led everybody down a path of ruin and injustice, pain and despair.

And it certainly doesn't help matters when the mainstream media has become completely useless. Neither do they investigate nor present truth. They are not journalists. They are note takers, headline mongers, zombified readers of tele-prompters. They spew propaganda directly from government sources.

Enough.

The world is currently so bizarre that the price of crude oil traded at a negative price. On Monday, the May contract for US West Texas Intermediate (WTI) oil, the benchmark for US crude prices, fell to its lowest-ever, a negative price of -$40.32 per barrel. Because of demand destruction by a near-global lockdown and a supply glut that has filled storage capacity to the brim, producers were forced to pay buyers to take delivery as contracts expired.

Here is an explanation of how this happened.

The upside-down futures market will provide more insanity in days to come. It's not as though everybody's going back to work tomorrow or next week, or that airline travel will suddenly become all the rage again. The June contracts are likely to witness similar madness.

Stocks responded to a degree, though hardly with the expedience one would have expected. For a time, the NASDAQ was actually trading in positive territory. Eventually, even the most stubborn of the bulls had to relent.

As the coronavirus crisis and lockdowns continue, stocks should be expected to decline. They haven't because the Fed is backstopping everything on wall Street by buying up all the bad paper that being tossed to the wind. Through Special Purpose Vehicles (SPVs) which circumvent the law, the Federal Reserve is buying up municipal bonds, investment grade (IG) bonds, High Yield (HY) bonds, Junk bonds, and much more in addition to their usual purchasing of treasury and mortgage-backed securities, in a desperate effort to provide liquidity in what has become an illiquid market. Eventually, they will resort to buying equities outright, just as the Bank of Japan and Swiss National Bank has done.

When the Fed becomes the global lender and buyer of last resort, all of the companies listed on the exchanges will be worthless because they will not have enough free cash flow to cover the interest on their debt. The money center and investment banks are already insolvent, and have been since 2008, kept alive by massive injections of fiat currency via the Fed's discount window, interest on reserves, various accounting frauds, and other chicanery only people as deranged and greedy as these money maniacs have become.

National currencies are imploding at an increasingly rapid pace, all fiat, backed by nothing, eventually headed to worthlessness. Perhaps some day in the not too distant future, the Fed will pay people to take currency off their hands, such as happened with oil on Monday. The ECB, most European nations and the Bank of Japan already do, most of their national bonds carrying negative yields. Having the entire planet's economy shut down certainly hasn't helped matters.

Eventually, the creators of this mess will improvise a new global currency to "save the world," which would be more insanity unless it is backed by gold and/or silver. Desperate people will line up to exchange their worthless dollars, yen, euros, and pounds for what will likely be of digital design, capable of being tracked by the purveyors of debt, the same ones who imploded the prior system.

There will be riots, protests, starvation, rampant crime, lawlessness of a degree nobody can even imagine before the central banks arrive with their ultimate solution. It's all part of the plan. Nobody will be able to do anything without using the agreed-upon new currency. The only hope for preventing the world turning into a ghastly neo-feudal nightmare is the wholesale repudiation of central banks, debt-backed currencies, and fractional reserve banking. It's going to be a very wicked time.

That's all for today. It's too disgusting and depressing to even bother trying to explain the present circumstances and the blighted future that awaits.

At the Close, Monday, April 20, 2020:
Dow Jones Industrial Average: 23,650.44, -592.05 (-2.44%)
NASDAQ: 8,560.73, -89.41 (-1.03%)
S&P 500: 2,823.16, -51.40 (-1.79%)
NYSE: 11,003.88, -204.41 (-1.82%)

US Federal Government Disrespects Its People; $2 Trillion To Wall Street While Citizens Wait for Checks

At 8:30 am ET Thursday morning, April 9, 2020, the Labor Department announced that 6.6 million people applied for unemployment benefits last week. That's in addition to the nearly 10 million who applied for benefits the prior two weeks.

Have you received your $1200 check from the government yet?

Didn't think so. You are aware that Wall Street had access to $2 trillion weeks ago, right?

That's the number TWO (2) with twelve zeroes behind it. Like this: $2,000,000,000,000.

Bear in mind, the corporate money is coming to corporations via the Federal Reserve, which is not part of the federal government. It is and always has been a private bank, so there's really nothing "federal" about it. As far as the "reserve" portion of their name, they have no money in reserve. They have a balance sheet of nearly $6 trillion, all in various bonds or notes or obligations, otherwise known as debt. Much of it is not worth the paper its printed on or the electrons holding it in cyberspace.

There's no "reserves" at the Federal Reserve. They whip up currency out of thin air. A few keystrokes on their computer and viola! currency at their pleasure. The currency is represented by Federal Reserve Notes, or those pieces of paper some people carry around with pictures of dead presidents on them. Those are the ones, fives, 10s, 20s, 50s and 100-dollar bills floating around in the economy. There is only $1.75 trillion in actual printed currency according to the Federal Reserve. That's a little less than $6000 for every man, woman, and child in America.

The rest of the currency is in electronic form. The currency in your bank account is not really there. Try going to a bank branch and asking for $40,000 in cash, even if you have $100,000 in your account. First, you'd have to fill out IRS form 8300, because any transaction of $10,000 or more, the federal government wants to know about it. They think you might be a drug dealer, human trafficker, money launderer, or maybe a terrorist. It's all part of the Bank Secrecy Act, officially known as the Currency and Foreign Transactions Reporting Act. Then, after you've filled out the form, the bank's branch manager will likely tell you that they don't have that much money on hand. After that, you might have to come back on a later date to get some of it, make multiple trips, and go through a lot of hassle to get your hands on your currency.

This seems an appropriate place to explain the difference between money and currency. Here's Mike Maloney (an expert on the subject) to explain in less than three minutes:



The great financier, J.P. Morgan, put it in even simpler terms: Gold is money. Everything else is credit.

With that out of the way, have you received your $1200 yet?

No. Of course not. But Wall Street has already gotten theirs, and probably already spent it too. The stock market has been mostly up lately, the Dow Jones Industrial Average having risen from a close of 18,591.93 on March 23 to close at 23,433.57 Wednesday.

On March 17, Treasury Secretary Steven Mnuchin said President Trump would like to get money into the hands of people within two weeks. That was more than three weeks ago. Now, Mnuchin says the first direct deposits will be going out some time next week.

In other words, continue to wait. The government will be here to help in moments, er, days, er, weeks, maybe.

While Wall Street is open for business as usual, millions of Americans - roughly three quarters of the country - is under some form of stay-at-home or lockdown restriction. Ordinary people can't go to work, send their kids to school (they're closed), or venture beyond the boundaries of their own homes without some express, immediate need, like getting groceries, or picking up a prescription drug.

It's a shame. It's also likely unconstitutional. Americans are supposed to have the right to freely assemble. It's in the Bill of Rights, the First Amendment:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

So, not only does the federal government not want you to have any money, they also don't want you going anywhere or associating with other citizens. Because of COVID-19, the government has "suggested" people congregate at distances of six feet apart. Many states have outlawed meetings or congregations of 10 or more people, some, five or more. They don't want you to get together with your fellow citizens, either.

As you wait for your money from the government, ask yourself if $1200 is worth having your first amendment rights taken away. As with anything else that sounds too good to be true, like free money from the government, there are strings attached.

And, while you're pondering that, how about those small business loans that are supposed to help businesses that have been forced to close so that the coronavirus doesn't spread. Those non-essential businesses are getting the run-around from the very same banks (JP Morgan Chase, Citi, Bank of America, Wells Fargo) that were bailed out in 2009, continued to get favors from the Federal Reserve and the federal government since then, and have been getting oodles of cash over the past six months, even before the COVID-19 crisis.

Those loans are full of boondoggles and conditions that limit how much a business qualifies for and what they have to do in order to receive a loan and more conditions for loan forgiveness. It's likely that most small businesses would be better off not taking the loans, toughing it out, filing for reorganization under bankruptcy laws and moving forward without inept government assistance.

The American public is being conned and abused by the very people they voted into office along with the media, the banks, and the Federal Reserve. State and local governments are only marginally less disrespectful. It all stinks to high heaven.

They don't respect you. They don't care about you. They want to control you. That should be obvious to everybody by now.

At the Close, Wednesday, April 8, 2020:
Dow Jones Industrial Average: 23,433.57, +779.71 (+3.44%)
NASDAQ: 8,090.90, +203.64 (+2.58%)
S&P 500: 2,749.98, +90.57 (+3.41%)
NYSE: 10,902.59, +365.54 (+3.47%)

WEEKEND WRAP: COVID-19 Crisis Will Peak Within Three Weeks, but the Economic Crisis Will Continue for Years

(Simultaneously published at Downtown Magazine)

OK, this was a long week, and stocks got clobbered again, but it could have been, and should have been, worse. The main indices were down between two percent (S&P 500) and three percent (NYSE Composite). For most citizens of the world who are under forced quarantine, the week was a painful experience. The vast majority of people would just like to be back at work, earning a living to support their families. The partially-manufactured COVID-19 crisis is keeping most of the developed nations' economies and people in lockdowns, on purpose, to impose government will over everyday people.

It's a shame how many will be cowed by government and led to believe the many lies that have been perpetrated during this period.

The beginning effects of the Fed backstopping companies has already been noticed. Some dime-store variety stocks were being bid up as the rest of the market was heading lower through the week. Companies (no names, for now, until more than a few weeks data is collected) evidenced buying at stop loss triggers. Not many were allowed to fall to anywhere near the recent lows.

Stocks should get another taste of selling in the coming week, as most of the news will be about overloaded hospitals, stressed out medial workers, press conferences by the president and his "team." It will be interesting to note how hard the Fed works to stave off a return to 18,212 on the Dow and similar drops on the other indices. They will likely keep losses to a minimum. It would not surprise at all would stocks stage another rally.

The treasury yield curve is about as flat as it can be, signaling nothing good. 115 basis points, or, just more than one percent, covers the entire complex from one-month bills (0.09% yield) to 30-year bonds (1.24%). The 10-year note is flatlining at 0.62%. The Fed, via its SPVs (Special Purpose Vehicles) is desperately buying commercial paper, in addition to treasury bonds, agency mortgage-backed securities, ETF paper, and municipal bonds. They're busy buying up the world's debt with the only currency that matters, the US dollar, conjured up daily out of thin air. The Federal Reserve's balance sheet has ballooned to nearly $6 trillion in their attempt to blow the global credit bubble a lot larger.

Oil caught a huge bid after President Trump supposedly brokered a deal between the Saudis and the Russians, making a record gain on Thursday and another huge leap forward in price on Friday. While there is rampant skepticism over whether there is any kind of deal afoot (the Saudis denied it), the recent price jump - WTI crude went from $21.76 per barrel on Wednesday to a high of $26.35 Thursday, and closed out Friday at $28.34; Brent went from $26.90 to $34.11 over the same span - is unlikely to be long-lasting. Until the Saudis and Russians have eliminated 50-60% of the shale drillers in the US, there aren't going to be any concessions. Additionally, the rampant supply glut and limited demand should keep the price around $20-24 per barrel.

Gold and silver continue to decouple from the fraudulent futures prices. Gold settled out just below $1600 the ounce, silver about $14.00. For real prices on physical silver and gold, one must go to eBay of all places, where there is a wide-open market for coins, bars and assorted bullion. An ounce of gold is ranging between $1800-$2000, while silver cannot be had for under $22 per ounce. These are the real prices, and are heading up quickly because demand is through the roof, many miners are idled, reducing supply, hoarding is rampant, and delivery times from established dealers (30-45 days in some cases) cannot match the one-to-three day deliveries by independent eBay sellers, and those prices have built into them a 10% commission to eBay and do not include shipping, which only adds to the real prices.

There's a definite possibility that the COMEX and LBMA will soon be disregarded completely and a free, open, un-manipulated market will emerge at the world's biggest online bazaar and elsewhere on the internet as fiat currencies are inflated away and real money begins to take root at the consumer level.

Random Notes and Recommendations

JP Morgan put out a study which concluded that the world will be on the downside of the case infection rate curve in two months. Rubbish. Check out this site for the US:

http://covid19.healthdata.org/projections

The United States will be peaking and on the downslope of the curve within 2-3 WEEKS, not 2 months, and European nations are already on the downslope.

All the noise over ventilators, on which two-thirds of the people die anyhow, is just wasted time and money. The small business "loans" are garbage, full of loopholes and boondoggles for small business.

As usual, Wall Street got their trillions in the blink of an eye. American citizens will have to wait until the government gets around to figuring out how to pay them their $1200. Average time, from right now, 3-6 weeks.

Gee, thanks for helping us all out.

Open up MLB. It would be nice to see the some home runs, swings and misses, stolen bases, sign-stealing, and all that good stuff by May 15 at the latest. Even a shortened season would be acceptable. Americans, average Americans are the ones who deserve all the credit. They took social distancing and stay-at-home seriously, which was very helpful in slowing the spread of COVID. We should all get $10K, and Wall Street nothing, because those companies contributed nothing, and most of the companies getting bailout money do nothing. The people should revolt once this is over.

The government, local, state, and federal are the destroyers of liberty. All of them are worthless parasites and when this is all over they'll all pat themselves on the backs for doing such a bang-up job, when, in reality, it was mostly a big hoax.

Here is an exceptional interactive chart which shows the curve (the one we're actively flattening by social distancing and other mediations) in the United States and in every state individually, with figures for numbers of beds, ICU beds, and ventilators needed and available.

It clearly shows the curve peaking between April 15 and 21. The response curve will peak first, followed quickly by the number of COVID-19 cases curve. After that, it's all downhill for the dangerous pathogen that has disrupted lives and economies worldwide.

Brent Johnson's Dollar Milkshake Theory

Brent Johnson is CEO of Santiago Capital. He has been creating and managing comprehensive wealth management strategies for the personal portfolios of high-net-worth individuals and families since the late 1990s.

If you watch no other video on money, gold, or finance, this is the one you definitely should see.



Also, Mike Maloney's GoldSilver.com is an excellent resource. Recently, Mike has been doing pretty much daily videos with consolidated information from a wide variety of sources, funneled through his intuitive, calculating mind. Here is a recent entry with some revealing charts by the incredible analyst John Hussman, another number-crunching maniac who's been studying and disseminating information on the economy in a series of market commentaries at his Hussman Funds website.

Here is Mike Maloney's April 3rd video:



Make sure to get Mike's free e-book, Guide to Investing in Gold & Silver, the #1 All-Time Bestseller On Precious Metals Investing, available at his site.

At the Close, Friday, April 2, 2020:
Dow Jones Industrial Average: 21,052.53, -360.87 (-1.69%)
NASDAQ: 7,373.08, -114.23 (-1.53%)
S&P 500: 2,488.65, -38.25 (-1.51%)
NYSE: 9,880.63, -181.77 (-1.81%)

For the Week:
Dow: -584.25 (-2.70%)
NASDAQ: -114.23 (-2.53%)
S&P 500: -52.82 (-2.08)
NYSE: -306.58 (-3.01%)

Dow, S&P Gain Third Straight Day; Fed Buying Evident

There are signs everywhere that the Federal Reserve has taken an active role in the stock market, especially in the US, but probably abroad as well, in cahoots with their central bank partners, as stocks have recovered sharply over the past three days after being battered by fears stemming from the coronavirus global pandemic, or COVID-19.

Probably the most glaring evidence - outside of the Dow's near-500-point gain in the final 12 minutes of trading Thursday - is the ballooning of the Fed's balance sheet, which has grown by $507,323,000,000 ($507.323 billion) in just seven days, from March 18 to the 25th.

Being almost completely transparent, the Fed, in recent days has announced that they would purchase everything from municipal debt, to corporate debt, to exchange traded funds (ETFs) in the open market in order to "stabilize" the situation. There's one good reason why the Dow was up 1,351 points on a day that started with the announcement that more than three million Americans has lost their jobs in the past week, and it's because the Federal Reserve, with literally unlimited amounts of buying power, was actively in the market.

While this will come as a surprise to pretty much 90% of all Americans, central bank direct activity in equity markets has been an open secret in financial circles for at least the past decade. The Swiss National Bank (SNB) and Bank of Japan are major shareholders in many corporations, including Apple (AAPL) and many others. The BOJ has been buying ETFs in earnest since as early as 2012, when their balance sheet exploded from 150 trillion yen ($138 billion US) to 550 ($506 billion US). Today, the Bank of Japan owns stocks and bonds equal to the country's entire economic output, or 100% of GDP. In essence, the Bank of Japan owns the Japanese economy. It is the Japanese economy and a similar scenario is beginning to emerge in the United States, and likely in the European Union as well.

Other independent central banks in Australia, Canada, England, Brazil, and elsewhere are probably considering doing the same in their stock markets if they haven't already.

It's not as though central banks are complete foreigners to intervention in markets. They've completely distorted the capital markets for years, buying up agency (government) debt and mortgage-backed securities en masse before and after the Great Financial Crisis in 2007-09 to the point at which trillions of dollars in government bonds carry negative yields.

So, instead of just buying debt, why not stocks? Ask your broker. I'm sure he or she will have a ready answer after convulsing on the floor in either laughter or tears.

Elsewhere, treasury yields fell across the spectrum, the 10-year note checking in at 0.83%. Gold and silver have returned to being an afterthought in the futures market and largely unavailable in physical quantities. Gold is still testing recent multi-year highs, closing up $11.60 on Thursday to $1624.50 per ounce. Silver closed down slightly to $14.41 in the futures market. Meanwhile, dealers report widespread shortages amid massive demand for "everyman's gold."

Being that silver is so much less expensive than gold, it is available to anybody with a couple of sawbucks. Thus, it is THE prime target of central banks, as their greatest fear is to have a competing currency accepted by the middle and lower classes. It would kind of ruin their monopoly on currency. It's been going on for hundreds of years and isn't likely to change soon.

Oil was beaten down again on Thursday, with WTI crude closing out at $22.60 a barrel, down nearly two dollars from Wednesday's finishing price. Unleaded gasoline is cheap around the globe, the irony being, with so many coronavirus lockdowns or "stay at home" orders in place, gas is a bargain, but nobody can go anywhere.

At the Close, Thursday, March 26, 2020:
Dow Jones Industrial Average: 22,552.17, +1,351.62 (+6.38%)
NASDAQ: 7,797.54, +413.24 (+5.60%)
S&P 500: 2,630.07, +154.51 (+6.24%)
NYSE: 10,536.28, +574.89 (+5.77%)