For a second time in the past three weeks, stocks suffered another round of losses which accelerated as the week progressed. Of the major indices, taking the biggest hit were the Dow Industrials, followed by the NYSE Composite, S&P 500, and NASDAQ, in percentage terms.
The Dow's 3.31% fall was made possible by a Friday selloff which saw the blue chips decline by 730 points, the largest selloff since June 11, when stocks suffered a major blow preceded by an ominous island reversal of June 5, 8, 9, and 10. (see video below for more)
Friday's action may be presaging an oncoming decline of a magnitude rivaling the initial slide in March. The second quarter comes to a close on Tuesday and everybody on wall Street knows that it's difficult to "price in" a GDP decline which may be on the order of 35-50% when the first figure is announced on July 30.
Prior to that momentous milestone, corporate earnings reports will begin to flow to the street following next week's July 4 Independence Day holiday. The coming week will be shortened by a day, as Friday is a national holiday, giving most Americans a three-day weekend. Stock markets, banks, the postal service and most city and county offices will be closed. Hopefully, most of them will reopen on July 6.
For the week just concluded, treasury yields were clobbered, the 10-year note falling from 0.71 to 0.64%, the lowest since May 14 and approaching the record low of 0.58% from April 21st. As the 30-year bond yield fell from 1.47 to 1.37 over the course of the week, the curve flattened significantly, 125 basis points covering the entire complex. If this is what the Fed considers success in "curve control," they can have it, with the short end - one-month to two-years - covered by just five basis points (0.12 to 0.17%).
These low rates at the front end aren't by accident. They are policy and they are indicative of a recession if not outright depression. Adamant that they will not go to negative rates as has been the case in the Eurozone and Japan for years, the Fed's real rates have been in the red pretty much since the previous crisis in '08-'09, i.e., they were lower than the inflation rate. The one year note only crested above one percent in 2017. A year ago, it was yielding 1.92%, a stark comparison to Friday's close at 0.17%.
The Fed promised cheap credit and they are delivering.
Oil prices were slapped down after WTI crude tested $40/barrel, peaking at $40.73 on Monday, only to close out at $38.49 on Friday. Expect oil to continue trading sideways to lower if stock prices begin to falter, or, vice versa. Oil declines could help trigger or exacerbate a rundown on equities.
Precious metals were by far the big winners for the week. Both gold and silver advanced smartly despite a desperate attempt to crater their prices Friday on the NYMEX failed miserably. The morning rout sent gold reeling $20 to the downside, bottoming just below $1745 per ounce. So enamored with "V"-shaped recoveries, Wall Street got an unexpected one when gold prices recovered all of the losses within an hour and proceeded to close near the high for the day at $1771.50. Laughably, Friday's recorded London PM fix was set at $1747.60, setting up a $24 weekend arbitrage gap. Maybe, considering the problems the paper COMEX markets have had in recent months, it's not so funny for gold shorts, which are burning.
Silver savers should be delighted with the price action this week. Not only was a raid similar to the gold price suppression thwarted on both Thursday and Friday, but spot edged three cents higher than the closeout future price, at $17.83 the ounce, the highest Friday price since February 21, just prior to the epic COVID collapse.
Current physical prices continue to demand high premiums. This week saw prices for silver art bars absolutely explode higher, some one ounce bars selling above $40. Average and median prices for one ounce gold coins and bars were captured at prices $33 to $45 higher than a week ago.
Here's a glimpse at current selected prices on eBay (shipping included):
Item: Low / High / Average / Median
1 oz silver coin: 25.95 / 40.95 / 30.92 / 29.47
1 oz silver bar: 27.00 / 45.44 / 34.62 / 32.93
1 oz gold coin: 1,827.85 / 2,109.95 / 1,919.39 / 1,901.60
1 oz gold bar: 1,861.66 / 1,920.65 / 1,879.77 / 1,873.92
Argentina's Debt Crisis Far From Resolution
Argentina's government continues to play cat and mouse with international creditors, extending the deadline for negotiations concerning $65 billion worth of bonds to July 24.
Having already defaulted on a $500 million interest payment on May 22, the government is doubling down, indicating that it will miss another similar payment in June, which has a 30-day grace period. The chances of a settlement agreeable to the government and its creditors continue to deteriorate as interest payments are missed and the value of the bonds plummets, some selling off to as low as 37 cents on the dollar.
Talks stalled over the past two weeks as investors including BlackRock, Fidelity, AllianceBernstein, and Ashmore Group PLC, rejected a government proposal tied to agricultural exports while seeking recovery of between 49 and 57 cents on the dollar.
At the same time, the province of Buenos Aires, Argentina’s largest province, is negotiating with bondholders on the restructuring of $7.148 billion in debt and extended its deadline for a negotiated settlement to July 31.
Per previous proposals, payments would not begin being made on the currently-defaulted bonds until 2025. This article, published by the Council on Foreign Relations, offers the most comprehensive details, including charts that break down Argentina's $323 billion of debt, all of which is at dangerous risk levels.
At a time when the country's GDP is predicted to decline by 10 percent, the severity of the financial crisis cannot be understated, though mainstream television media in America has nearly completely neglected to report on the issue. Argentina has suffered through decades of boom and bust over the past 45 years, 20 of which showed GDP in decline.
It's not a question of when Argentina defaults on its debts, it's a question of how severe the defaults will be, how they will affect government pensions, and the ability of the government to maintain its status as a going concern. With a population estimated at 45 million, Argentina's problems are quickly becoming everybody's, as tens and perhaps hundreds of billions are in the process of being eviscerated.
With the government of President Alberto Fernandez content to play kick the can by extending the negotiation deadline for a fifth time, the dithering is taking its toll on investors. While a formal default has only been declared on portions of Argentina's debt, triggering the awarding of a credit default swap (CDS) recently, these things have a nasty way of snowballing into global crises, as was the case with Mexico in 1982, the Asian Crisis in 1997, and when Russia devalued the ruble in 1998.
Having to deal with some of the most severe lockdowns in the world due to the COVID-19 panic, Argentina is ill-prepared to deal with a financial hardship of this magnitude. The situation could spiral out of control at any time, when one side or the other finally throws in the towel and walks away. Consider Argentina's plight a fluid situation with more headlines and fireworks likely over coming months.
At the Close, Friday, June 26, 2020:
Dow: 25,015.55, -730.05 (-2.84%)
NASDAQ: 9,757.22, -259.78 (-2.59%)
S&P 500: 3,009.05, -74.71 (-2.42%)
NYSE: 11,604.43, -260.68 (-2.20%)
For the Week:
Dow: -855.91 (-3.31%)
NASDAQ: -188.90 (-1.90%)
S&P 500: -88.69 (-2.86%)
NYSE: -375.19 (-3.14%)
Peak Prosperity's Adam Taggert and friends discuss threats to the stock market, highlighted by their charting of the recent Island Reversal:
Showing posts with label treasury yield curve. Show all posts
Showing posts with label treasury yield curve. Show all posts
Sunday, June 28, 2020
Sunday, May 31, 2020
WEEKEND WRAP: Violent Protests... What Did You Expect? Civil Unrest Sweeps Across America
Twenty percent unemployment. 20%.
That's the number likely to be presented when the monthly data series, non-farm payroll is released Friday one hour before the opening bell.
More than 40 million Americans are out of work. Another 12-24 million are underemployed, meaning they are working at jobs in which they are overqualified or their work doesn't provide a full week's employment (under 35 hours). Add to that the millions on welfare or disability and what you have is roughly half the working age population - with the bulk of them under 40 years of age - with no work, either no income or income of a size insufficient to service their expenses, lots of time on their hands, and anger building.
While these unemployed Americans were forced to stay home over a period stretching anywhere from three weeks to two months (and counting) because of ordered lockdowns due to the coronavirus, they watched the US stock markets crash and recover, aided by trillions of dollars thrown to market makers, banks, brokerages, corporations, and financial intermediaries from the Federal Reserve. The unemployed were assisted in their plight by an additional $600 a week in benefits and a one-time $1200 special payment, which for many took weeks to arrive. All along, the people at home watched the stock market recover at a record pace, wondering how long it will take for their jobs, their lives to recover back to somewhere near prior levels.
On Memorial Day, when four policemen in Minneapolis murdered George Floyd in broad daylight right in front of protesting bystanders, the fuse was lit for an explosion of pent-up frustration and anger. By Tuesday, people in Minneapolis took to the street to vent and the result was widespread violence, looting, burning of buildings, and utter disregard for authority as the police actually retreated from the swelling, uncontrolled mobs.
Wednesday through Saturday saw the protests turn violent in other cities. Denver, Atlanta, Louisville, Kentucky, New York, Boston, Los Angeles, Washington, DC, Portland, Oregon were among dozens which witnessed growing mayhem. By Saturday night, protests were witnessed in more than 75 cities and curfews imposed - with varying degrees of effectiveness - in 30 cities.
At a very early point the protests became no longer about George Floyd and police mistreatment and more about the disproportionate distribution of wealth, substandard living conditions, and a host of related issues.
For the most part, Americans don't like being told what to do or when to do it. By nature, Americans are bred for independence and freedom. The lockdowns and shelter-in-place orders clamped down on freedoms and shredded free speech, the right to assemble, freedom of choice, and freedom of movement. Prior to the violence of the week just past there were already anti-lockdown protests all over the country.
Now that we are amidst the overwhelming civil unrest that many had predicted, it's important to step back and view the carnage with an eye toward analysis and understanding. Authorities, such as the Democrat governor of Minnesota, Tim Walls, have asserted that as many as 80% of the people demonstrating in the streets are not locals, but imports from other areas of the country, their intent to spread unrest and wreak havoc on cities.
While this may or may not be true - it actually sounds ludicrous considering the sheer numbers - it's unlikely that the same numbers would apply in other cities. After all, with protests in more than 30 cities, the outsiders would have to have come from somewhere. Besides it being logistically inefficient, there would have been massive traffic spikes on the interstates. It just doesn't add up.
No doubt there are outside agitators, but there would also be agents provocateur from the authoritarian side of the equation.
The killing of George Floyd set this episode of violence into motion, but there's evidence that the main protagonist, officer Derek Chauvin, who pressed his knee into Floyd's throat for more than eight minutes, should have been aware of the death of Eric Garner, who was killed under similar circumstances in New York city in 2014. At least one or more of the other three officers holding down the handcuffed Floyd had to be aware of the similarities. These police knew exactly what they were doing. To believe otherwise is naive. Floyd's death, in a city notorious for mistreatment of minorities by the police, was very likely a set-up, to engender a violent reaction, just as the lockdown orders were conditioning of the public by authorities.
By the way, Floyd's supposed "crime" was passing a counterfeit $20 bill at a convenience store. Is it simply a coincidence that the image on the $20 bill is that of Andrew Jackson, "Old Hickory," who shut down the Second National Bank of the United States on September 10, 1833, and survived an assassination attempt on January 30, 1835? Coincidence? Maybe. Irony? Absolutely.
When the violence began in Minneapolis, the police either backed off in fear of their lives or stood down purposely, allowing looting and burning of buildings, cars, and trash receptacles to take place without limit. Law and order proponents have made reference to left-wing groups such as ANTIFA for inciting the riots, but for whom does ANTIFA actually work? The case can be made that their agitation serves the interests of authorities in government. As the violence and mayhem spirals out of control, the mayors and governors build up their forces with more manpower and firepower, and now, military support, as nearly a dozen states have activated the National Guard.
California, Georgia, Minnesota, Missouri, Nevada, Ohio, Tennessee, Texas, Utah, and Washington state, in addition to the District of Columbia have called in Guardsmen to help quell the uprisings. Martial Law is the next logical step as the protests continue though there is likely to be a pause followed by random acts of civil disobedience on a massive, if unorganized scale. People have had more than enough of a financial systems that favors the rich over the poor and middle class, a two-tiered judicial system - one for the rich and connected, one for those who are not, extreme inflation in housing and educational costs, rising taxes without sufficient representation, injustices by the elite and the governing class going unpunished, and their emotions are boiling over into untenable conditions across the nation.
Television media continues to push a narrative that the protests and violence are an outgrowth of racial tensions, rather than address the truth that the protests are more about generational and institutional inequality as evidenced by the massive numbers of black, white and Hispanics engaged, the vast majority of them under 30 years of age.
As cities burn, the obnoxious culture that is Wall Street is certain to respond, most likely in the wrong manner. All that matters in the realm of the economics of big business and central banking is higher share prices for the most-favored public corporations. While 40 million people were being laid off, fired, disengaged from jobs and income, the stock market indices gained back more than half of the losses initially incurred in late February and March. In the pretzel logic that is the inexorable ties between the Federal Reserve, the Treasury, and Wall Street, major cities erupting in riots and fires might be reason enough for fresh all-time highs in equities.
For the week, stocks continued their ten-week-long rally, tacking on 1.75 to over four percent on the major averages. The NASDAQ is within four percent of reaching all-time highs.
Over the shortened four-day week, treasuries were volatile with yields on the long end rising over the first three days but recoiling back on Friday as protests spread nationwide. The 30-year bond yield rose from 1.37% last Friday to 1.47% on Thursday, only to drop down to 1.41% Friday. The 10-year note closed out the week at with a two-week low yield of 0.65%.
Overall, the curve steepened to a spread of 125 basis points between the 2-year and 30-year with inversion between the six-month (0.18%) and 2-year (0.16%), indicative of recessionary conditions.
Oil prices seem to be consolidating. The July futures contract on WTI crude oil closed at $35.34 on Friday, in a range that appears to be suitable for all parties, considering the unlevel conditions on the ground.
The most volatility was evidenced in the precious metals space, especially silver, which advanced from a low of $16.80 per troy ounce to $18.05, closing out on Friday at $17.84. Gold finished up at $1728.70, off recent highs ($1748.30, May 20), though much improved from the week's low of $1694.60 per troy ounce.
On eBay, premiums remain elevated as shown by the most recent sales of one-ounce coins and bars:
Item: Low / High / Average / Median
1 oz silver coin: 25.50 / 39.71 / 28.47 / 27.47
1 oz silver bar: 18.49 / 43.90 / 30.36 / 29.70
1 oz gold coin: 1,853.63 / 1,975.49 / 1,882.36 / 1,876.89
1 oz gold bar: 1,658.20 / 1,883.81 / 1,828.94 / 1,849.35
Looking ahead, it's incredible how quickly the media focus changed from the fading coronavirus to the escalating street unrest. These are macro-issues, covering large swaths of people who are neither coalescing nor collectively unifying. If leaders emerge from the city protests, which is natural in large public movements, then it can be safely assumed that these protests and the background issues are real. If no leaders emerge, it's all more fakery and planned demolition of society, just like the pandemic, aka plandemic.
In the 1960s protests, leaders and organized groups were plentiful. Jerry Ruben, Abbie Hoffman, Dr. Martin Luther King Jr., Jane Fonda, Tom Hayden, Malcolm X, Eldridge Cleaver, Huey Newton, Angela Davis, and others are among the more memorable individuals from the era. Students for a Democratic Society (SDS), the Weathermen, the Southern Christian Leadership Conference, Black Panthers and many more splinter groups comprised peaceful and violent elements.
Songs expressed the prevailing movements of anti-war (peace) and civil rights. Joan Baez, Bob Dylan, Phil Ochs, Arlo Guthrie, Judy Collins, Pete Seeger, Peter Paul and Mary, the Byrds, Country Joe and the Fish, and many of the groups that played at Woodstock in 1969 were among the more prominent voices among the peace and civil rights movements.
One would expect leaders and groups to emerge and musicians to show the way forward. While it might be considered cynical to believe that current events are orchestrated by a devious deep state or other bad actors, it is not outside the realm of possibility. As the world has learned so often in recent times, conspiracy theory often emerges as conspiracy fact.
At the Close, Friday, May 29, 2002:
Dow: 25,383.11, -17.53 (-0.07%)
NASDAQ: 9,489.87, +120.88 (+1.29%)
S&P 500: 3,044.31, +14.58 (+0.48%)
NYSE: 11,802.95, -1.97 (-0.02%)
For the Week:
Dow: +917.95 (+3.75%)
NASDAQ: +165.29 (+1.77%)
S&P 500: 88.06 (+3.01%)
NYSE: +470.98 (+4.16%)
That's the number likely to be presented when the monthly data series, non-farm payroll is released Friday one hour before the opening bell.
More than 40 million Americans are out of work. Another 12-24 million are underemployed, meaning they are working at jobs in which they are overqualified or their work doesn't provide a full week's employment (under 35 hours). Add to that the millions on welfare or disability and what you have is roughly half the working age population - with the bulk of them under 40 years of age - with no work, either no income or income of a size insufficient to service their expenses, lots of time on their hands, and anger building.
While these unemployed Americans were forced to stay home over a period stretching anywhere from three weeks to two months (and counting) because of ordered lockdowns due to the coronavirus, they watched the US stock markets crash and recover, aided by trillions of dollars thrown to market makers, banks, brokerages, corporations, and financial intermediaries from the Federal Reserve. The unemployed were assisted in their plight by an additional $600 a week in benefits and a one-time $1200 special payment, which for many took weeks to arrive. All along, the people at home watched the stock market recover at a record pace, wondering how long it will take for their jobs, their lives to recover back to somewhere near prior levels.
On Memorial Day, when four policemen in Minneapolis murdered George Floyd in broad daylight right in front of protesting bystanders, the fuse was lit for an explosion of pent-up frustration and anger. By Tuesday, people in Minneapolis took to the street to vent and the result was widespread violence, looting, burning of buildings, and utter disregard for authority as the police actually retreated from the swelling, uncontrolled mobs.
Wednesday through Saturday saw the protests turn violent in other cities. Denver, Atlanta, Louisville, Kentucky, New York, Boston, Los Angeles, Washington, DC, Portland, Oregon were among dozens which witnessed growing mayhem. By Saturday night, protests were witnessed in more than 75 cities and curfews imposed - with varying degrees of effectiveness - in 30 cities.
At a very early point the protests became no longer about George Floyd and police mistreatment and more about the disproportionate distribution of wealth, substandard living conditions, and a host of related issues.
For the most part, Americans don't like being told what to do or when to do it. By nature, Americans are bred for independence and freedom. The lockdowns and shelter-in-place orders clamped down on freedoms and shredded free speech, the right to assemble, freedom of choice, and freedom of movement. Prior to the violence of the week just past there were already anti-lockdown protests all over the country.
Now that we are amidst the overwhelming civil unrest that many had predicted, it's important to step back and view the carnage with an eye toward analysis and understanding. Authorities, such as the Democrat governor of Minnesota, Tim Walls, have asserted that as many as 80% of the people demonstrating in the streets are not locals, but imports from other areas of the country, their intent to spread unrest and wreak havoc on cities.
While this may or may not be true - it actually sounds ludicrous considering the sheer numbers - it's unlikely that the same numbers would apply in other cities. After all, with protests in more than 30 cities, the outsiders would have to have come from somewhere. Besides it being logistically inefficient, there would have been massive traffic spikes on the interstates. It just doesn't add up.
No doubt there are outside agitators, but there would also be agents provocateur from the authoritarian side of the equation.
The killing of George Floyd set this episode of violence into motion, but there's evidence that the main protagonist, officer Derek Chauvin, who pressed his knee into Floyd's throat for more than eight minutes, should have been aware of the death of Eric Garner, who was killed under similar circumstances in New York city in 2014. At least one or more of the other three officers holding down the handcuffed Floyd had to be aware of the similarities. These police knew exactly what they were doing. To believe otherwise is naive. Floyd's death, in a city notorious for mistreatment of minorities by the police, was very likely a set-up, to engender a violent reaction, just as the lockdown orders were conditioning of the public by authorities.
By the way, Floyd's supposed "crime" was passing a counterfeit $20 bill at a convenience store. Is it simply a coincidence that the image on the $20 bill is that of Andrew Jackson, "Old Hickory," who shut down the Second National Bank of the United States on September 10, 1833, and survived an assassination attempt on January 30, 1835? Coincidence? Maybe. Irony? Absolutely.
Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the Eternal God, I will rout you out.
– Andrew Jackson (1767-1845)
When the violence began in Minneapolis, the police either backed off in fear of their lives or stood down purposely, allowing looting and burning of buildings, cars, and trash receptacles to take place without limit. Law and order proponents have made reference to left-wing groups such as ANTIFA for inciting the riots, but for whom does ANTIFA actually work? The case can be made that their agitation serves the interests of authorities in government. As the violence and mayhem spirals out of control, the mayors and governors build up their forces with more manpower and firepower, and now, military support, as nearly a dozen states have activated the National Guard.
California, Georgia, Minnesota, Missouri, Nevada, Ohio, Tennessee, Texas, Utah, and Washington state, in addition to the District of Columbia have called in Guardsmen to help quell the uprisings. Martial Law is the next logical step as the protests continue though there is likely to be a pause followed by random acts of civil disobedience on a massive, if unorganized scale. People have had more than enough of a financial systems that favors the rich over the poor and middle class, a two-tiered judicial system - one for the rich and connected, one for those who are not, extreme inflation in housing and educational costs, rising taxes without sufficient representation, injustices by the elite and the governing class going unpunished, and their emotions are boiling over into untenable conditions across the nation.
Those who make peaceful revolution impossible will make violent revolution inevitable.
-- President John F. Kennedy
Television media continues to push a narrative that the protests and violence are an outgrowth of racial tensions, rather than address the truth that the protests are more about generational and institutional inequality as evidenced by the massive numbers of black, white and Hispanics engaged, the vast majority of them under 30 years of age.
As cities burn, the obnoxious culture that is Wall Street is certain to respond, most likely in the wrong manner. All that matters in the realm of the economics of big business and central banking is higher share prices for the most-favored public corporations. While 40 million people were being laid off, fired, disengaged from jobs and income, the stock market indices gained back more than half of the losses initially incurred in late February and March. In the pretzel logic that is the inexorable ties between the Federal Reserve, the Treasury, and Wall Street, major cities erupting in riots and fires might be reason enough for fresh all-time highs in equities.
For the week, stocks continued their ten-week-long rally, tacking on 1.75 to over four percent on the major averages. The NASDAQ is within four percent of reaching all-time highs.
Over the shortened four-day week, treasuries were volatile with yields on the long end rising over the first three days but recoiling back on Friday as protests spread nationwide. The 30-year bond yield rose from 1.37% last Friday to 1.47% on Thursday, only to drop down to 1.41% Friday. The 10-year note closed out the week at with a two-week low yield of 0.65%.
Overall, the curve steepened to a spread of 125 basis points between the 2-year and 30-year with inversion between the six-month (0.18%) and 2-year (0.16%), indicative of recessionary conditions.
Oil prices seem to be consolidating. The July futures contract on WTI crude oil closed at $35.34 on Friday, in a range that appears to be suitable for all parties, considering the unlevel conditions on the ground.
The most volatility was evidenced in the precious metals space, especially silver, which advanced from a low of $16.80 per troy ounce to $18.05, closing out on Friday at $17.84. Gold finished up at $1728.70, off recent highs ($1748.30, May 20), though much improved from the week's low of $1694.60 per troy ounce.
On eBay, premiums remain elevated as shown by the most recent sales of one-ounce coins and bars:
Item: Low / High / Average / Median
1 oz silver coin: 25.50 / 39.71 / 28.47 / 27.47
1 oz silver bar: 18.49 / 43.90 / 30.36 / 29.70
1 oz gold coin: 1,853.63 / 1,975.49 / 1,882.36 / 1,876.89
1 oz gold bar: 1,658.20 / 1,883.81 / 1,828.94 / 1,849.35
Looking ahead, it's incredible how quickly the media focus changed from the fading coronavirus to the escalating street unrest. These are macro-issues, covering large swaths of people who are neither coalescing nor collectively unifying. If leaders emerge from the city protests, which is natural in large public movements, then it can be safely assumed that these protests and the background issues are real. If no leaders emerge, it's all more fakery and planned demolition of society, just like the pandemic, aka plandemic.
In the 1960s protests, leaders and organized groups were plentiful. Jerry Ruben, Abbie Hoffman, Dr. Martin Luther King Jr., Jane Fonda, Tom Hayden, Malcolm X, Eldridge Cleaver, Huey Newton, Angela Davis, and others are among the more memorable individuals from the era. Students for a Democratic Society (SDS), the Weathermen, the Southern Christian Leadership Conference, Black Panthers and many more splinter groups comprised peaceful and violent elements.
Songs expressed the prevailing movements of anti-war (peace) and civil rights. Joan Baez, Bob Dylan, Phil Ochs, Arlo Guthrie, Judy Collins, Pete Seeger, Peter Paul and Mary, the Byrds, Country Joe and the Fish, and many of the groups that played at Woodstock in 1969 were among the more prominent voices among the peace and civil rights movements.
One would expect leaders and groups to emerge and musicians to show the way forward. While it might be considered cynical to believe that current events are orchestrated by a devious deep state or other bad actors, it is not outside the realm of possibility. As the world has learned so often in recent times, conspiracy theory often emerges as conspiracy fact.
At the Close, Friday, May 29, 2002:
Dow: 25,383.11, -17.53 (-0.07%)
NASDAQ: 9,489.87, +120.88 (+1.29%)
S&P 500: 3,044.31, +14.58 (+0.48%)
NYSE: 11,802.95, -1.97 (-0.02%)
For the Week:
Dow: +917.95 (+3.75%)
NASDAQ: +165.29 (+1.77%)
S&P 500: 88.06 (+3.01%)
NYSE: +470.98 (+4.16%)
Friday, May 29, 2020
Trump Ramps Up Social Media Battle; Argentina Continues Defaulting; Gold, Silver Premiums Persist
Not that anybody should be concerned, but Argentina defaulted on a $500 million interest payment a week ago, on May 22nd. Money Daily had been covering the story but slipped up and missed the breaking news over the Memorial Day Weekend. No excuse. We blew it. 20 lashes.
Anyhow, it's not over down Buenos Aires way, as representatives from both sides - the Argentine government and a gaggle of international creditors - continue to seek a solution, setting a June 2nd date for a plan to restructure $66 billion of the country's debt. Realistically, this being the ninth time Argentina has defaulted on its obligations and the third time this century, hopes of reaching any kind of deal that satisfies both the creditor and debtor seems well removed from the realm of the possible.
President Trump issued another executive order Thursday afternoon, this one coming after Twitter tagged a couple of his tweets with fact-checks.
The order calls for new regulations under Section 230 of the Communications Decency Act "to make it so that social media companies that engage in censoring or any political conduct will not be able to keep their liability shield," Trump said.
The tweets in question concerned Trump's opposition to mail-in ballots in the upcoming November election, which he believes would result in a cascade of fraud. Twitter added some fact-checking language stating that fraud isn't an issue with absentee ballots.
That, and his announcement of a press conference Friday to address growing concerns over China's dispute with Hong Kong (and now India), sent markets tumbling into the red after making small gains in Thursday's session.
Escalating the situation, early Friday morning, Trump tweeted about the ongoing violence in Minneapolis and elsewhere:
Accessing the President's tweet on the Twitter platform brings up the following message: This Tweet violated the Twitter Rules about glorifying violence. However, Twitter has determined that it may be in the public’s interest for the Tweet to remain accessible. Beside it is a button that gives the user the option to display the tweet or keep it hidden. That seems to be an exercise in futility on Twitter's part, possibly drawing even more attention to the tweet in question than had they just left it alone and allowed the public to decide and debate its appropriateness.
Twitter continues to dig its own grave because the President certainly isn't going to back down when he has the complete arsenal of the Department of Justice at his disposal. It's become rather obvious to just about everybody that Twitter, along with their social media counterparts, Google, Facebook, and others, that these companies have abused their free reign over what gets published and where on the internet for a long time without any oversight. Having set up their own rules and guidelines they've often trampled on first amendment rights of users, citing their status as private companies as cover for their subjective agenda.
It would appear that President Trump is serious about limiting their ability to shape opinion. It's certain that the issue will end up in the courts and may take years to resolve. Meanwhile, the mainstream TV networks, ABC, NBC, CBS, CNN, and Fox, and newspapers such as the New York Times and Washington Post continue to spread half-truths, fake news, and outright lies on a regular basis. Whether the president's wrath extends to limitations or punishments for biased reporting in other areas of the media remains to be seen, but there is sure to be intense focus on the media leading up to the November elections.
Elsewhere, confusion reigns supreme in the precious metals space. Since mid-March there has been a schism between the futures price of gold and the spot price, with the gap sometimes great enough to encourage arbitrage in a relatively risk-free trade. Usually, the spot price is a few dollars below the futures bid, but the spread has widened and exhibited volatile behavior recently. Silver has also joined the party, with spot and futures prices deviating sporadically.
Of course, the spot and futures prices are little more than bookmarks these days compared to the premium prices being paid for actual physical metal on eBay. Gold and silver are both sporting heavy premiums, with gold selling at the one ounce level at $120-180 over spot and one ounce silver going for $23-30 when the spot price has been hovering in the $16-17 range. Silver, probably the most undervalued commodity in the world, has approached 100% premiums in recent days.
As more people become aware of the fraudulent nature of futures trading where major players such as JP Morgan Chase are allowed to flaunt size limits and engage in spoofing, naked shorting, and are never forced to stand for delivery, physical markets are becoming the go-to for investors with serious intentions of protecting their wealth with precious metals.
Yields in the treasury space rose across the curve on Thursday, with the 30-year bond hitting 1.47%, a two-month high. The spread between the 2-year note (0.17%) and the 30 is now 130 basis points, 10 points higher than a week ago. Tighter lending conditions may not be in the Fed's best interests at this time, but the present issue is likely one of supply. The Fed has been begging fiscal authorities (congress and the president) to unleash more stimulus spending so as to facilitate the Fed's monetizing of the debt, spreading its largesse to equity market participants.
If the government isn't going to ramp up deficit spending, the Fed will be looking over its shoulder at rising rates with too little supply coming to market. This is just one of the unintended consequences of massive money printing on a global scale. At some point, with all hands outstretched, there's not enough to go around and a struggle is engaged for the scraps thrown to the market. The Fed is committed to buying everything, but if there's not enough everything around, they risk severe impairment of credit markets.
Congress needs to get on the bandwagon with all due alacrity lest the Fed run out of debt to monetize, jeopardizing the massive stock rally they have recently engendered.
Finally, in spite of the price of oil (once again, on the futures market) having roughly doubled over the past month, and with it, rising gas prices at the pump, there's still a massive glut on the supply side and slack demand against it. WTI crude in the $32-36 range is a resistance level the market will find difficult to overcome. Economies aren't roaring back to life following the global lockdowns, rather, they're reengaging in fits and starts, and not nearly at capacity. The major oil producers have done their level best to halt the price decline, but there's only so much production that can be cut from counties whose very existence relies upon regular selling of crude oil.
The summer, if authorities allow free movement, should be affordable, at least as concerns automotive touring.
Friday's trading session opens in a little more than an hour from this posting. With the Dow ahead by nearly 1000 points this week, unless there's a major pullback on Friday, Wall Street will shove another fat week of gains into America's face.
At the Close, Thursday, May 28, 2020:
Dow: 25,400.64, -147.63 (-0.58%)
NASDAQ: 9,368.99, -43.37 (-0.46%)
S&P 500: 3,029.73, -6.40 (-0.21%)
NYSE: 11,804.91, -32.62 (-0.28%)
Anyhow, it's not over down Buenos Aires way, as representatives from both sides - the Argentine government and a gaggle of international creditors - continue to seek a solution, setting a June 2nd date for a plan to restructure $66 billion of the country's debt. Realistically, this being the ninth time Argentina has defaulted on its obligations and the third time this century, hopes of reaching any kind of deal that satisfies both the creditor and debtor seems well removed from the realm of the possible.
President Trump issued another executive order Thursday afternoon, this one coming after Twitter tagged a couple of his tweets with fact-checks.
The order calls for new regulations under Section 230 of the Communications Decency Act "to make it so that social media companies that engage in censoring or any political conduct will not be able to keep their liability shield," Trump said.
The tweets in question concerned Trump's opposition to mail-in ballots in the upcoming November election, which he believes would result in a cascade of fraud. Twitter added some fact-checking language stating that fraud isn't an issue with absentee ballots.
That, and his announcement of a press conference Friday to address growing concerns over China's dispute with Hong Kong (and now India), sent markets tumbling into the red after making small gains in Thursday's session.
Escalating the situation, early Friday morning, Trump tweeted about the ongoing violence in Minneapolis and elsewhere:
....These THUGS are dishonoring the memory of George Floyd, and I won’t let that happen. Just spoke to Governor Tim Walz and told him that the Military is with him all the way. Any difficulty and we will assume control but, when the looting starts, the shooting starts. Thank you!
— Donald J. Trump (@realDonaldTrump) May 29, 2020
Accessing the President's tweet on the Twitter platform brings up the following message: This Tweet violated the Twitter Rules about glorifying violence. However, Twitter has determined that it may be in the public’s interest for the Tweet to remain accessible. Beside it is a button that gives the user the option to display the tweet or keep it hidden. That seems to be an exercise in futility on Twitter's part, possibly drawing even more attention to the tweet in question than had they just left it alone and allowed the public to decide and debate its appropriateness.
Twitter continues to dig its own grave because the President certainly isn't going to back down when he has the complete arsenal of the Department of Justice at his disposal. It's become rather obvious to just about everybody that Twitter, along with their social media counterparts, Google, Facebook, and others, that these companies have abused their free reign over what gets published and where on the internet for a long time without any oversight. Having set up their own rules and guidelines they've often trampled on first amendment rights of users, citing their status as private companies as cover for their subjective agenda.
It would appear that President Trump is serious about limiting their ability to shape opinion. It's certain that the issue will end up in the courts and may take years to resolve. Meanwhile, the mainstream TV networks, ABC, NBC, CBS, CNN, and Fox, and newspapers such as the New York Times and Washington Post continue to spread half-truths, fake news, and outright lies on a regular basis. Whether the president's wrath extends to limitations or punishments for biased reporting in other areas of the media remains to be seen, but there is sure to be intense focus on the media leading up to the November elections.
Elsewhere, confusion reigns supreme in the precious metals space. Since mid-March there has been a schism between the futures price of gold and the spot price, with the gap sometimes great enough to encourage arbitrage in a relatively risk-free trade. Usually, the spot price is a few dollars below the futures bid, but the spread has widened and exhibited volatile behavior recently. Silver has also joined the party, with spot and futures prices deviating sporadically.
Of course, the spot and futures prices are little more than bookmarks these days compared to the premium prices being paid for actual physical metal on eBay. Gold and silver are both sporting heavy premiums, with gold selling at the one ounce level at $120-180 over spot and one ounce silver going for $23-30 when the spot price has been hovering in the $16-17 range. Silver, probably the most undervalued commodity in the world, has approached 100% premiums in recent days.
As more people become aware of the fraudulent nature of futures trading where major players such as JP Morgan Chase are allowed to flaunt size limits and engage in spoofing, naked shorting, and are never forced to stand for delivery, physical markets are becoming the go-to for investors with serious intentions of protecting their wealth with precious metals.
Yields in the treasury space rose across the curve on Thursday, with the 30-year bond hitting 1.47%, a two-month high. The spread between the 2-year note (0.17%) and the 30 is now 130 basis points, 10 points higher than a week ago. Tighter lending conditions may not be in the Fed's best interests at this time, but the present issue is likely one of supply. The Fed has been begging fiscal authorities (congress and the president) to unleash more stimulus spending so as to facilitate the Fed's monetizing of the debt, spreading its largesse to equity market participants.
If the government isn't going to ramp up deficit spending, the Fed will be looking over its shoulder at rising rates with too little supply coming to market. This is just one of the unintended consequences of massive money printing on a global scale. At some point, with all hands outstretched, there's not enough to go around and a struggle is engaged for the scraps thrown to the market. The Fed is committed to buying everything, but if there's not enough everything around, they risk severe impairment of credit markets.
Congress needs to get on the bandwagon with all due alacrity lest the Fed run out of debt to monetize, jeopardizing the massive stock rally they have recently engendered.
Finally, in spite of the price of oil (once again, on the futures market) having roughly doubled over the past month, and with it, rising gas prices at the pump, there's still a massive glut on the supply side and slack demand against it. WTI crude in the $32-36 range is a resistance level the market will find difficult to overcome. Economies aren't roaring back to life following the global lockdowns, rather, they're reengaging in fits and starts, and not nearly at capacity. The major oil producers have done their level best to halt the price decline, but there's only so much production that can be cut from counties whose very existence relies upon regular selling of crude oil.
The summer, if authorities allow free movement, should be affordable, at least as concerns automotive touring.
Friday's trading session opens in a little more than an hour from this posting. With the Dow ahead by nearly 1000 points this week, unless there's a major pullback on Friday, Wall Street will shove another fat week of gains into America's face.
At the Close, Thursday, May 28, 2020:
Dow: 25,400.64, -147.63 (-0.58%)
NASDAQ: 9,368.99, -43.37 (-0.46%)
S&P 500: 3,029.73, -6.40 (-0.21%)
NYSE: 11,804.91, -32.62 (-0.28%)
Sunday, May 10, 2020
WEEKEND WRAP: Fed Fiat Funny Money Has Managed to Short-Circuit the Crisis, for Now
Against a backdrop of Great Depression-like numbers - 33 million Americans out of work and an "official" unemployment rate of 14.7% - equity investors enjoyed a remarkably positive week, with all major indices rising by at least 2.50%, with the NASDAQ leading the way with a six percent gain.
The NASDAQ's advance was not only remarkable, but it is also ludicrous. The tech-heavy index has advanced beyond both its 50 and 200-day moving averages and is within 720 points of its all-time high. Investors in the speculative sector of the market have either divorced themselves from reality or are seeing something the rest of the world is missing. Money has to go somewhere, even money from the Federal Reserve, released to companies across the investing spectrum, but most of it appears to be heading toward Silicon Valley.
No doubt, chasing momentum has amplified the absurd move to the NASDAQ, which is likely a dangerous precedent. Many of the companies moving higher sport P/E ratios well above the norm, even the norm in a major bull market, a position that was shattered eight weeks ago.
Some of the standouts in the nebulous NASDAQ unicorn universe include Alphabet, parent of Google (GOOG), bottomed out at 1056.62 on March 23, and closed Friday at 1388.37.
Netflix (NFLX) fell out at 298.84 on March 16, but has since rebounded to Friday's close of 435.55.
Amazon (AMZN) reached an all-time high of 2474.00 on April 16, after dropping to 1676.61 on March 12, an amazing gain of 47.6% in just over a month. Amazon may be a superb, dynamic company, but it's arguably extremely overvalued, with a P/E of 113.
Facebook (FB) finished at 146.01 on March 16 and closed at 212.35 on Friday.
Some investors have been getting fat while the larger economy has, for the most part, imploded.
As almost all states (47 of 50 as of Saturday, May 9) have at least partially reopened their businesses and relaxed stay-at-home and other restrictions on the populace, anecdotal reports show that business is still a long distance from anything approaching normal, i.e., prior to the COVID-19 pandemic.
Wall Street is pushing a narrative that the country and the economy is all well and good, the recovery - in terms of stock prices - well underway, even as cases of coronavirus are still prevalent and rising in some cases and deaths continue at a run rate of over 1,000 a day. How well that works out for investors won't likely be known for some time. For now, investors, and the companies getting the most attention, are sitting pretty.
Crude oil continued to be under pressure from both a supply glut and slack demand, hovering in the mid-20s throughout the week. The June contract on WTI crude rose from $19.78 last Friday (May 1) to $24.74 a barrel this Friday (May 8). The contract expires within two weeks and there hasn't really been much improvement on the supply side of the equation, though demand has improved as the United States and most other countries around the world have begun getting back to business.
The treasury curve steepened over the course of the week. The entire complex is covered by 129 basis points as of Friday, up from 117 the prior week. All of the yield gains were at the long end. As money rushed out of bonds and back into stocks on Friday, the 10-year note added six basis points, to 0.69. The 30-year bond yield gained from 1.31 to 1.39.
Precious metals continued to be among the most-desired asset class since the onset of the pandemic. Both gold and silver are selling at massive premiums (up to $200 for gold, 40-80% for silver) and dealers are still experiencing supply issues with many popular items out of stock, though available to order. Delivery times have come back a bit, with gold and silver in quantity available within two weeks of placing orders.
Here are representative recent prices (5/9-5/10) on eBay for standard gold and silver coins and bars (prices include shipping):
Item: Low / High / Average / Median
1 oz silver coin: 24.45 / 38.00 / 30.58 / 30.48
1 oz silver bar: 23.00 / 30.95 / 26.77 / 26.20
1 oz gold coin: 1,750.00 / 1,946.65 / 1,854.84 / 1,841.99
1 oz gold bar: 1,799.99 / 1,871.52 / 1,843.90 / 1,851.47
In cryptocurrency-land, the Bitcoin Halving approaches. Fr those unfamiliar with the concept, the "halving" is the predetermined moment when Bitcoin’s block subsidy gets cut in half. The halving of Bitcoin’s block subsidy occurs every 210,000 blocks (approximately every four years) and is a key feature of Bitcoin. It is because of the Halving that there is a capped supply of 21 million bitcoin that will ever exist. The halving is scheduled to take place Monday at approximately 6:49 pm ET.
Bitcoin surpassed the $10,000 mark in US dollars, but fell back to the $8850 range in anticipation of the event.
And, just to throw another spanner into the works, the government of Argentina failed to reach agreement with creditors by its self-imposed Friday deadline, essentially defaulting on $65 billion worth of bonds, though talks between the two sides are continuing. Argentina will formally default on May 22, as it missed a $503 million payment last month and the grace period is expiring.
Talks were extended through Monday in hopes that Argentina could avoid its ninth sovereign default.
At this juncture, everything is at risk. According to recent economic data, the global economy is flat on its back. Most developed countries are either in a recession or about to enter one. The response to the coronavirus has ramped up unemployment and knocked down GDP estimates.
Thanks to massive infusions of capital from the Fed and other central banks to both business and individuals, the crisis has been managed to a degree, but the future remains a guessing game. Whether or not QE to infinity will save the day - and the underlying currencies - is a real gamble.
At the close, Friday, May 8, 2020:
Dow: 24,331.32, +455.43 (+1.91%)
NASDAQ: 9,121.32, +141.66 (+1.58%)
S&P 500: 2,929.80, +48.61 (+1.69%)
NYSE: 11,354.34, +232.68 (+2.09%)
For the Week:
Dow: +607.63 (+2.56%)
NASDAQ: +516.37 (+6.00%)
S&P 500: +99.09 (+3.50%)
NYSE: +295.77 (+2.67%)
The NASDAQ's advance was not only remarkable, but it is also ludicrous. The tech-heavy index has advanced beyond both its 50 and 200-day moving averages and is within 720 points of its all-time high. Investors in the speculative sector of the market have either divorced themselves from reality or are seeing something the rest of the world is missing. Money has to go somewhere, even money from the Federal Reserve, released to companies across the investing spectrum, but most of it appears to be heading toward Silicon Valley.
No doubt, chasing momentum has amplified the absurd move to the NASDAQ, which is likely a dangerous precedent. Many of the companies moving higher sport P/E ratios well above the norm, even the norm in a major bull market, a position that was shattered eight weeks ago.
Some of the standouts in the nebulous NASDAQ unicorn universe include Alphabet, parent of Google (GOOG), bottomed out at 1056.62 on March 23, and closed Friday at 1388.37.
Netflix (NFLX) fell out at 298.84 on March 16, but has since rebounded to Friday's close of 435.55.
Amazon (AMZN) reached an all-time high of 2474.00 on April 16, after dropping to 1676.61 on March 12, an amazing gain of 47.6% in just over a month. Amazon may be a superb, dynamic company, but it's arguably extremely overvalued, with a P/E of 113.
Facebook (FB) finished at 146.01 on March 16 and closed at 212.35 on Friday.
Some investors have been getting fat while the larger economy has, for the most part, imploded.
As almost all states (47 of 50 as of Saturday, May 9) have at least partially reopened their businesses and relaxed stay-at-home and other restrictions on the populace, anecdotal reports show that business is still a long distance from anything approaching normal, i.e., prior to the COVID-19 pandemic.
Wall Street is pushing a narrative that the country and the economy is all well and good, the recovery - in terms of stock prices - well underway, even as cases of coronavirus are still prevalent and rising in some cases and deaths continue at a run rate of over 1,000 a day. How well that works out for investors won't likely be known for some time. For now, investors, and the companies getting the most attention, are sitting pretty.
Crude oil continued to be under pressure from both a supply glut and slack demand, hovering in the mid-20s throughout the week. The June contract on WTI crude rose from $19.78 last Friday (May 1) to $24.74 a barrel this Friday (May 8). The contract expires within two weeks and there hasn't really been much improvement on the supply side of the equation, though demand has improved as the United States and most other countries around the world have begun getting back to business.
The treasury curve steepened over the course of the week. The entire complex is covered by 129 basis points as of Friday, up from 117 the prior week. All of the yield gains were at the long end. As money rushed out of bonds and back into stocks on Friday, the 10-year note added six basis points, to 0.69. The 30-year bond yield gained from 1.31 to 1.39.
Precious metals continued to be among the most-desired asset class since the onset of the pandemic. Both gold and silver are selling at massive premiums (up to $200 for gold, 40-80% for silver) and dealers are still experiencing supply issues with many popular items out of stock, though available to order. Delivery times have come back a bit, with gold and silver in quantity available within two weeks of placing orders.
Here are representative recent prices (5/9-5/10) on eBay for standard gold and silver coins and bars (prices include shipping):
Item: Low / High / Average / Median
1 oz silver coin: 24.45 / 38.00 / 30.58 / 30.48
1 oz silver bar: 23.00 / 30.95 / 26.77 / 26.20
1 oz gold coin: 1,750.00 / 1,946.65 / 1,854.84 / 1,841.99
1 oz gold bar: 1,799.99 / 1,871.52 / 1,843.90 / 1,851.47
In cryptocurrency-land, the Bitcoin Halving approaches. Fr those unfamiliar with the concept, the "halving" is the predetermined moment when Bitcoin’s block subsidy gets cut in half. The halving of Bitcoin’s block subsidy occurs every 210,000 blocks (approximately every four years) and is a key feature of Bitcoin. It is because of the Halving that there is a capped supply of 21 million bitcoin that will ever exist. The halving is scheduled to take place Monday at approximately 6:49 pm ET.
Bitcoin surpassed the $10,000 mark in US dollars, but fell back to the $8850 range in anticipation of the event.
And, just to throw another spanner into the works, the government of Argentina failed to reach agreement with creditors by its self-imposed Friday deadline, essentially defaulting on $65 billion worth of bonds, though talks between the two sides are continuing. Argentina will formally default on May 22, as it missed a $503 million payment last month and the grace period is expiring.
Talks were extended through Monday in hopes that Argentina could avoid its ninth sovereign default.
At this juncture, everything is at risk. According to recent economic data, the global economy is flat on its back. Most developed countries are either in a recession or about to enter one. The response to the coronavirus has ramped up unemployment and knocked down GDP estimates.
Thanks to massive infusions of capital from the Fed and other central banks to both business and individuals, the crisis has been managed to a degree, but the future remains a guessing game. Whether or not QE to infinity will save the day - and the underlying currencies - is a real gamble.
At the close, Friday, May 8, 2020:
Dow: 24,331.32, +455.43 (+1.91%)
NASDAQ: 9,121.32, +141.66 (+1.58%)
S&P 500: 2,929.80, +48.61 (+1.69%)
NYSE: 11,354.34, +232.68 (+2.09%)
For the Week:
Dow: +607.63 (+2.56%)
NASDAQ: +516.37 (+6.00%)
S&P 500: +99.09 (+3.50%)
NYSE: +295.77 (+2.67%)
Sunday, April 19, 2020
WEEKEND WRAP: Americans Angered Over Lockdowns, Unfairness; Government Proposes Re-Opening
Was it a coincidence that the president released his guidelines for states to reopen their economies just as civil unrest was percolating across America?
Probably not. Very little happens by chance in the hyper-charged world of politics. The timing was no accident. From the looks of the well-prepared document sent out by the White House, these guidelines had been thought out and processed well in advance. Whether the co-mingled events of Thursday constitute conspiracy or just good planning is a debatable topic.
Whatever the case, most Americans won't be going back to work any time soon. The presidential guidelines call for 14 days of declining trajectory of COVID-19 cases or other criteria. Presently, the numbers are still rising in most states, so expect the level of unrest amongst the working class - what's left of it - to only increase in coming days.
At the same time, the fetid morass that came out of the recently-enacted relief bill is cause for even more dissent. While public corporations received government largesse instantaneously, small businesses suffering from shutdowns cited distressing experiences dealing with banks charged with administering their loans, and that was before the funding dried up and was gone. The so-called Paycheck Protection Program (PPP) was availed to a very small percentage of businesses needing assistance, falling well short of anything approaching appeasement. Some lucky individuals began receiving $1200 direct deposits from the feds, and a good number of the 22 million unemployed started getting the extra $600 in weekly unemployment payouts.
Frustration with the rollout of the PPP small business loans was possibly ameliorated by the extra cash afforded unemployed people. There are more than a few people presently reporting a weekly windfall far in excess of what they were making while actually working, so where is the incentive for businesses to keep employees on the books - with the mandate of employers providing up to three months of paid family leave during the crisis - when the government is offering a better deal?
Again, the clashing narratives of extra unemployment compensation and forgivable loans to small business was not happenstance. It is no accident that the federal government gave generously with few strings attached to bail out Wall Street's darlings while confounding and confusing small business and wage earners.
It would take a monumental leap of faith to overlook either the government's gross incompetence or purposeful negligence. From the start, the entire coronavirus affair looks like, smells like, and feels like a deceitful scam, perpetrated to gloss over a multi-trillion dollar scheme to rescue the money center banks and their big corporation, stock-buyback, campaign contributing cohorts.
It worked, and so well that Americans are now clamoring and demanding to get back to their wage-and-tax slavery, otherwise known as a steady job. On Thursday, when the Labor Department reported another 5.5 million new unemployment claims, boosting the number since lockdowns and stay-at=home orders went into effect to over 22 million, stocks managed small gains on the day, but closed out the week on Friday with massive gains.
Over the course of the four weeks in which large numbers of unemployed were reported, stocks gained in three of them, accosting middle and lower class wage earners with an unhealthy kick in the teeth each time for their "sacrifice." The unfair collusion between big business and big government apparently is being tolerated for the time being, though the restlessness of the citizenry has become palpable, the bad taste becoming less palatable with each passing day of isolation and perceived abuse.
A less civil society would have already manned the ramparts and forced the issue. In Michigan, at least, the state house was under assault by thousands of protesters in what may be a sign of things to come. Americans shouldn't stand for such out-and-out double dealing by their government, but it looks like they will, at least until the unemployment money runs out. Or the food runs out. As it stands, they have already taken away Americans' right of assembly (banning large gatherings) to free movement, freedom of choice, and as the crisis commences, governors and bankers will be picking winners and losers, denying re-openings and/or loans to businesses that are deemed "non-essential."
When the Roman Republic transitioned to becoming the Roman Empire the will of the people waned and government fiat became law, with little to no public input or appreciation. Juvenal, a poet of the late first and early second century, decried the dreadful state of affairs in his satires, his most famous phrase coining the term for pacifying the masses, panem et circenses.
Since the government of the United States - and elsewhere around the world - has already mandated an end to the circus aspect of American life by outlawing public gatherings such as sporting events - no baseball, no basketball, hockey, or soccer, and no fans - how soon they take away the bread (food), or price it at unaffordable levels, remains to be seen. The audacity and mendacious aspects of the government response - federal, state, and local - to the coronavirus pandemic puts into play a popular uprising in opposition to government that is increasingly being viewed as unfair, uncaring, and unaccountable.
This viewpoint is not held in isolation. It is shared by many. For perspective, the most recent Keiser Report gives an outstanding testament for the general outrage. It may be Max and Stacy's best effort ever produced (and this is episode 1529). The message is clear, concise, and to the point. Having the brilliant economist, Dr. Michael Hudson, in the second segment is a significant bonus. America, and likely, the rest of the world, is about to enter a new age of unbridled financial repression unless the citizenry rises up to smite the government and rentier class. Max and Stacy hit the nail hard and directly on the head.
Now, to recap the week in what used to be markets, everything is either broken, controlled, or manipulated. Precious metals can no longer be realistically priced by the futures. For decades, they have been manipulated by central banks and the bank for International Settlements (BIS). If there is any doubt, read the extensive body of work done by the Gold Anti-Trust Action Committee (GATA). Be forewarned. It is voluminous. Likely the most accurate, true market for gold and silver is on - of all places - eBay, where private parties and dealers buy and sell precious metals in an open, largely unregulated market.
Here are recent (April 18, 19) prices for 1 ounce silver and gold coins on eBay* (quote order is LOW, HIGH, AVERAGE and MEDIAN):
One troy ounce silver coin: 25.50, 61.00, 36.19, 31.89
One troy ounce silver bar: 23.75, 33.00, 27.74, 27.38
One troy ounce gold coin: 1,860.00, 2,004.19, 1,919.82, 1,917.97
One troy ounce gold bar: 1,826.00, 1,905.37, 1,860.95,1,858.34
*Prices were generated using eBay's sold (recently ended) function for the 12 most recent sales of standard (non-numismatic) bars, rounds and coins. Prices included shipping (often free).
Compare the public market price (eBay) to the futures prices and judge for yourself which standard should be used when pricing precious metals. In addition to many dealers being sold out of many popular items, for the past month to six weeks dealers have been imposing minimum order amounts and shipment delays of 15-45 days.
Futures (fake) prices (April 17):
Silver: $15.20/troy ounce
Gold: $1686.50/troy ounce
How about some US Treasury bonds for your portfolio? The benchmark 10-year note yielded between a record low, 0.61%, and 0.76% for the week, closing out on Friday at 0.65% The entire yield curve is 115 basis points end to end, from the 30-day (0.12%) and the 30-year (1.27%). The best that can be said for the treasury yield is that it's better than all other developed national debt, most of which offer negative yields through to 10 year bonds.
Those with faith in government might still want to drop $10,000 on a 10-year note for a whopping return of $76 a year and a grand total of $760 if held to maturity. Others might be hedging that the yield will drop even lower or into negative territory and then sell the bond at a profit. For such a paltry return, neither scenario offers much upside potential.
The one bright spot for the global population is the price of oil and gas. Some states are selling gas at the pump for under $1.00 per gallon as the price of WTI crude closed out last week at $18.12, the lowest in decades. That's overtly deflationary.
At the Close, Friday, April 17, 2020:
Dow: 24,242.49, +704.79 (+2.99%)
NASDAQ: 8,650.14, +117.78 (+1.38%)
S&P 500: 2,874.56, +75.01 (+2.68%)
NYSE: 11,208.29, +390.29 (+3.61%)
For the Week:
Dow: +523.12 (+2.21%)
NASDAQ: +496.57 (+6.09%)
S&P 500: +84.74 (+3.04%)
NYSE: +71.69 (+0.64%)
Probably not. Very little happens by chance in the hyper-charged world of politics. The timing was no accident. From the looks of the well-prepared document sent out by the White House, these guidelines had been thought out and processed well in advance. Whether the co-mingled events of Thursday constitute conspiracy or just good planning is a debatable topic.
Whatever the case, most Americans won't be going back to work any time soon. The presidential guidelines call for 14 days of declining trajectory of COVID-19 cases or other criteria. Presently, the numbers are still rising in most states, so expect the level of unrest amongst the working class - what's left of it - to only increase in coming days.
At the same time, the fetid morass that came out of the recently-enacted relief bill is cause for even more dissent. While public corporations received government largesse instantaneously, small businesses suffering from shutdowns cited distressing experiences dealing with banks charged with administering their loans, and that was before the funding dried up and was gone. The so-called Paycheck Protection Program (PPP) was availed to a very small percentage of businesses needing assistance, falling well short of anything approaching appeasement. Some lucky individuals began receiving $1200 direct deposits from the feds, and a good number of the 22 million unemployed started getting the extra $600 in weekly unemployment payouts.
Frustration with the rollout of the PPP small business loans was possibly ameliorated by the extra cash afforded unemployed people. There are more than a few people presently reporting a weekly windfall far in excess of what they were making while actually working, so where is the incentive for businesses to keep employees on the books - with the mandate of employers providing up to three months of paid family leave during the crisis - when the government is offering a better deal?
Again, the clashing narratives of extra unemployment compensation and forgivable loans to small business was not happenstance. It is no accident that the federal government gave generously with few strings attached to bail out Wall Street's darlings while confounding and confusing small business and wage earners.
It would take a monumental leap of faith to overlook either the government's gross incompetence or purposeful negligence. From the start, the entire coronavirus affair looks like, smells like, and feels like a deceitful scam, perpetrated to gloss over a multi-trillion dollar scheme to rescue the money center banks and their big corporation, stock-buyback, campaign contributing cohorts.
It worked, and so well that Americans are now clamoring and demanding to get back to their wage-and-tax slavery, otherwise known as a steady job. On Thursday, when the Labor Department reported another 5.5 million new unemployment claims, boosting the number since lockdowns and stay-at=home orders went into effect to over 22 million, stocks managed small gains on the day, but closed out the week on Friday with massive gains.
Over the course of the four weeks in which large numbers of unemployed were reported, stocks gained in three of them, accosting middle and lower class wage earners with an unhealthy kick in the teeth each time for their "sacrifice." The unfair collusion between big business and big government apparently is being tolerated for the time being, though the restlessness of the citizenry has become palpable, the bad taste becoming less palatable with each passing day of isolation and perceived abuse.
A less civil society would have already manned the ramparts and forced the issue. In Michigan, at least, the state house was under assault by thousands of protesters in what may be a sign of things to come. Americans shouldn't stand for such out-and-out double dealing by their government, but it looks like they will, at least until the unemployment money runs out. Or the food runs out. As it stands, they have already taken away Americans' right of assembly (banning large gatherings) to free movement, freedom of choice, and as the crisis commences, governors and bankers will be picking winners and losers, denying re-openings and/or loans to businesses that are deemed "non-essential."
When the Roman Republic transitioned to becoming the Roman Empire the will of the people waned and government fiat became law, with little to no public input or appreciation. Juvenal, a poet of the late first and early second century, decried the dreadful state of affairs in his satires, his most famous phrase coining the term for pacifying the masses, panem et circenses.
... Already long ago, from when we sold our vote to no man, the People have abdicated our duties; for the People who once upon a time handed out military command, high civil office, legions — everything, now restrains itself and anxiously hopes for just two things: bread and circuses.
-- Juvenal
Since the government of the United States - and elsewhere around the world - has already mandated an end to the circus aspect of American life by outlawing public gatherings such as sporting events - no baseball, no basketball, hockey, or soccer, and no fans - how soon they take away the bread (food), or price it at unaffordable levels, remains to be seen. The audacity and mendacious aspects of the government response - federal, state, and local - to the coronavirus pandemic puts into play a popular uprising in opposition to government that is increasingly being viewed as unfair, uncaring, and unaccountable.
This viewpoint is not held in isolation. It is shared by many. For perspective, the most recent Keiser Report gives an outstanding testament for the general outrage. It may be Max and Stacy's best effort ever produced (and this is episode 1529). The message is clear, concise, and to the point. Having the brilliant economist, Dr. Michael Hudson, in the second segment is a significant bonus. America, and likely, the rest of the world, is about to enter a new age of unbridled financial repression unless the citizenry rises up to smite the government and rentier class. Max and Stacy hit the nail hard and directly on the head.
Now, to recap the week in what used to be markets, everything is either broken, controlled, or manipulated. Precious metals can no longer be realistically priced by the futures. For decades, they have been manipulated by central banks and the bank for International Settlements (BIS). If there is any doubt, read the extensive body of work done by the Gold Anti-Trust Action Committee (GATA). Be forewarned. It is voluminous. Likely the most accurate, true market for gold and silver is on - of all places - eBay, where private parties and dealers buy and sell precious metals in an open, largely unregulated market.
Here are recent (April 18, 19) prices for 1 ounce silver and gold coins on eBay* (quote order is LOW, HIGH, AVERAGE and MEDIAN):
One troy ounce silver coin: 25.50, 61.00, 36.19, 31.89
One troy ounce silver bar: 23.75, 33.00, 27.74, 27.38
One troy ounce gold coin: 1,860.00, 2,004.19, 1,919.82, 1,917.97
One troy ounce gold bar: 1,826.00, 1,905.37, 1,860.95,1,858.34
*Prices were generated using eBay's sold (recently ended) function for the 12 most recent sales of standard (non-numismatic) bars, rounds and coins. Prices included shipping (often free).
Compare the public market price (eBay) to the futures prices and judge for yourself which standard should be used when pricing precious metals. In addition to many dealers being sold out of many popular items, for the past month to six weeks dealers have been imposing minimum order amounts and shipment delays of 15-45 days.
Futures (fake) prices (April 17):
Silver: $15.20/troy ounce
Gold: $1686.50/troy ounce
How about some US Treasury bonds for your portfolio? The benchmark 10-year note yielded between a record low, 0.61%, and 0.76% for the week, closing out on Friday at 0.65% The entire yield curve is 115 basis points end to end, from the 30-day (0.12%) and the 30-year (1.27%). The best that can be said for the treasury yield is that it's better than all other developed national debt, most of which offer negative yields through to 10 year bonds.
Those with faith in government might still want to drop $10,000 on a 10-year note for a whopping return of $76 a year and a grand total of $760 if held to maturity. Others might be hedging that the yield will drop even lower or into negative territory and then sell the bond at a profit. For such a paltry return, neither scenario offers much upside potential.
The one bright spot for the global population is the price of oil and gas. Some states are selling gas at the pump for under $1.00 per gallon as the price of WTI crude closed out last week at $18.12, the lowest in decades. That's overtly deflationary.
At the Close, Friday, April 17, 2020:
Dow: 24,242.49, +704.79 (+2.99%)
NASDAQ: 8,650.14, +117.78 (+1.38%)
S&P 500: 2,874.56, +75.01 (+2.68%)
NYSE: 11,208.29, +390.29 (+3.61%)
For the Week:
Dow: +523.12 (+2.21%)
NASDAQ: +496.57 (+6.09%)
S&P 500: +84.74 (+3.04%)
NYSE: +71.69 (+0.64%)
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