Second Leg Of The Bear Market Amidst An Epochal 400-Year Cycle

Despite the NASDAQ marking an all-time closing high of 12,056.44 on September 2nd, the month has not been kind to tech stocks in general or the NASDAQ in particular. Wednesday's 330-point decline sent the NASDAQ well into correction territory. The level of 10,850.80 was 10% off the high, so Wednesday's close at 10,632.99 has the index off by 11.8% in just 15 trading sessions.

The S&P 500, which also made an all-time high on September 2, closing at 3,580.84 that day, is also nearing correction levels. Wednesday's close of 3,236.92 marked a 9.6% drop from the high.

The Dow Jones Industrials, which has yet to exceed its February 12 record close of 29,551.42, dropped another 525 points on Wednesday after losing 510 points on Monday. In between, Tuesday's 140-point gain amounted to nothing more than a dead cat bounce. On Wednesday the cat was formally pronounced dead, as 28 of the 30 listed blue chips posted losses. Only Johnson & Johnson (JNJ), on news that it's coronavirus vaccine was entering phase 3 trials, and Nike (NIKE), which smashed fiscal first quarter earnings, saved the industrials.

In what could be the worst trade ever, NIKE stock soared nearly nine percent, closing at an all-time high of 127.11. Nike's 0.95 cents per share earnings doubled expectations (0.47) as apparently more people working or lounging at home have been ordering sneakers off Nike's website. The reasons that the Nike trade might turn out horribly are multiple, especially the current P/E multiple of 74, a number usually reserved for IPOs and hot tech start-ups. Nike is neither of those and further, its third quarter gains can largely be attributed to an influx of orders from people getting an extra $600 a week on unemployment during the first month of the quarter. Nike's fiscal first quarter ended August 31, meaning the company benefitted from two months (June and July) in which millions of unemployed people were making bank staying at home.

What do people who were making $400 a week working who had a windfall of an extra $200 a week buy? Sneakers. And TVs. Best Buy's third quarter earnings should be reasonably good.

Nike's blowout quarter comes on the heels of two consecutive earnings misses and the company's quarterly sales of $10.6 billion were about 1/2 percent below year-ago figures. Worst trade ever? From the looks of it, RobinHood traders and momentum chasers just did it.

Getting back to the Dow, the world's most widely-watched index finished up Wednesday down 9.4% from it's closing high, so any further setback will send it (and the S&P) through into correction. Considering the multivariate issues facing investors - COVID, elections, violent protests, slumping economy, enormous government deficits - it would make perfect sense for this correction to morph back down to bear market levels, especially since the Dow never completed its comeback. The record-breaking performance by its neighbors in the S&P and NASDAQ were fueled by the Federal Reserve throwing in a kitchen sink's worth of programs and facilities to shore up the sinking stock markets off the March lows and were primarily vaporware.

Beyond the Dow not reaching its previous record high, it's counterpart in the Dow Theory calculus - the Dow Jones Transportation Average - did in fact surpass it's all time high, just a week ago, peaking out at 11,555.14 on September 16. Just as the Transports have to surpass prior highs or lows to confirm a primary trend change from bull to bear or vice versa, the Industrials have to do likewise.

While the Transports did make new highs, the Industrials DID NOT, thus, a bear market and its March lows remain in play as the primary trend and any bulls who profess that the bear market which bottomed out on March 23 actually ended on June 8 when the NASDAQ recovered beyond its all time high, is full of themselves and needs to go back to investing school.

Depending on who's citing statistics, bear markets typically last between 14 and 22 months, not 11 weeks, as per the NASDAQ's phoenix-like rise from late March into early June. If this bear is just average, an 18-month variety, we are only six months into it. Discounting the concept that this bear market could be one of the worst ever, on a level beyond the sub-prime crash of 2007-2009 or the Great Depression, which lasted for decades and culminated in World War II, stocks are very early in the game.

It can safely be assumed that what's occurring presently is just the start of the longer, slower, more painful second leg down of a protracted bear market, as markets are now following the historic script rather than the ill-advised and famously-promoted "V-shaped recovery" narrative pushed forward by the financial media and administration caterwaulers, Steven Mnuchin, Larry Kudlow, and even, sadly, the president himself.

What the world is experiencing is not a run-of-the-mill slump or recession that's isolated to one or a few countries. This is a global solvency event encompassing every nation on the planet. This is the end game for fiat currencies backed by full faith and credit of central, private banks, not sovereign treasuries. Nations, companies and individuals are on the hook for the debt-binging of the past 50 years to the tune of more than $258 trillion, a number which has ballooned beyond the reported 331% of global GDP.

Renowned financial scholars Max Keiser and Stacy Herbert explain how the overriding trend dates back to 1602, the end of feudalism and the beginning of public stock ownership. The second part of the report features the conclusion of a segment with esteemed Dr. Michael Hudson focusing on the ideas of the late anthropologist, David Graber.

The 400-year cycle now coming to an end is not cyclical nor secular, but rather epochal.

We may be living in interesting times, but few, if any, wanted them to be this interesting.

At the Close, Wednesday, September 23, 2020:
Dow: 26,763.13, -525.05 (-1.92%)
NASDAQ: 10,632.99, -330.65 (-3.02%)
S&P 500: 3,236.92, -78.65 (-2.37%)
NYSE: 12,359.16, -243.38 (-1.93%)

Congress Provides For Itself Only; Federal Reserve Keeping The Lights On With Failed Currency

After markets closed with meaningless gains on Tuesday, the House overwhelmingly passed a stop-gap spending resolution to keep the federal government functioning through December 11. The measure now goes to the Senate, where it is certain to be adopted, and then on to the president's desk for final approval.

There is complete certainty that this spending measure will be signed into law, since it keeps the bankrupt federal government - which added another $3 trillion to the now $26.8 trillion in debt just this fiscal year (ends Sept. 30) - operating through the all-important elections.

The preening peacocks inhabiting the halls of congress and various enclaves in and around Washington, DC, adorned in the finest designer clothing and fanciest suits, made sure to keep their power party going, all at the expense of US taxpayers, who foot the bill - that part not financed by the Federal Reserve - for their fantastic folly of fiscal failure.

While these very same representatives of "the people" were unable to find the means to produce a second stimulus bill for the public, finding common ground to fund their own exploitative escapades was easily accomplished. If anything, this clearly shows that the elected officials in the federal government and their unelected underlings have little to no regard for their constituents while at the same time hoisting themselves up on pedestals of pride and glory, paragons of virtue and goodness.

They are nothing more than common grifters, the lot of them, fattening themselves on public funds, enriching themselves through insider information without regard to the welfare of the country. Wallowing in trillions of dollars of unpayable debt, they've expanded the federal debt to GDP ratio beyond 136 percent with no end to their profligate spending in sight.

As a whole, the United States congress - and to a large degree the present and previous holders of the office of the presidency - have, in the short span of 50 years, decimated the economy of the country. They are not alone in their insolvency. Most states, run by equally incompetent money-grubbers and cullers of favor, are also deeply indebted to the central bank, the Federal Reserve, itself an illiquid, insolvent fantasy.

The Federal Reserve has more than $7 trillion on its balance sheet, comprised of mortgage-backed securities, treasury bills, notes, and bonds, corporate debt, junk debt, and municipal debt, all marked to magic at flawed, make-believe par values. Without the ability to create currency out of thin air, the Federal Reserve would be first in line at the collection agency, followed closely by the zombie banks and corporations which cannot survive without central bank generosity. The vicious cycle of a central bank plying their very own monopoly money to prop up deeply-indebted banks, corporations, and governments has just about run its course. The currency is nearly worthless and everybody knows it.

The Federal Reserve, the US central bank, funder to the country and the rest of the world, is, and has been bankrupt since 2008, if not at an earlier date. The underpinnings of the global economy are shattered and nothing speaks to this reality more than the continuing stomping down of the price of gold and silver futures contracts and their counterparts in fraud, spot prices set by the London Bullion Market Association (LBMA).

The ability of the participants in these frauds - central banks, commercial banks, bullion banks and others - have managed to keep the prices of precious metals - real money - under wraps for decades. That overt manipulation of perception, making people believe that paper and promises are worth more than physical gold and silver has kept their fraud going since the end of the gold standard when then-president Richard M. Nixon formally closed the gold window on August 15, 1971.

Prior to that, US dollars were redeemable in gold. Since then, US dollars have been redeemable for debt, war, crime, unkept promises, and assorted military actions. Reality has been in suspended animation via normalcy bias for nearly 50 years. In the beginning of the fiat era, nobody wanted the system to fail because it was working for everybody. As time progressed, fiat currency has worked for fewer and fewer people. Incomes stagnated for most of the middle and lower classes while the rich got richer to the point at which we have arrived today: nothing is "normal," everything is contorted, twisted, contrived, absurd.

Already there is blood in the streets, literally, in cities large and small. Tens of millions are unemployed. Business failures have reached epidemic proportions atop the false narrative of the coronavirus and COVID-19. The country has fallen apart, fractured by the purveyors of a phony currency that has lost 98% of its value since 1913.

Stock prices and home prices are hand-in-hand the most egregious manifestations of the fraudulent currency. These assets are so overinflated as to make even the most bovine bulls blush. The median existing house price jumped 11.4% from a year ago to a record $310,600 in August.

In August of 1971, the median price for an existing single family home was roughy $26,400. The price released on Tuesday by the National Association of Realtors is nearly a 12-fold increase from 1971. Incomes have not kept pace.

Median income in 1971 was around $7000 a year. Today's median income is approximately $43,000, if one has a job. That's about a six-fold increase, which is why it now takes two incomes to afford a home, when it took only one in 1971 and prior. Nobody was able to keep pace with rampant asset inflation, which is a cover for the reality of an eroding currency and loss of purchasing power.

As the world spins through space and 2020, careening towards a date with destiny around November 3rd, there is no normal, new or otherwise. Everything is a distortion of reality, so take it with a grain of salt. The price of an ounce of silver is surely not $24, nor is $1892 the real price of an ounce of gold. It's all based on the faulty perception of a currency based on nothing but faith and hope having value. Faith is in the issuer, and the hope is that the value is retained.

Hope died in 1971. Faith is taking the next train out of town.

In case you missed it (we did), Episode E1594 of the Keiser Report, Pushing Plastic, Holding Junk Bonds is a tour de force for Max, Stacy, and, in the second half of the show, Max's guest, Michael Pento. This episode features some interesting historical perspectives from the 1970s, evoking memories of hippies, plastic recycling and the ghost of New York City mayor Abe Beame and Felix Rohaytn, chairman of the Municipal Assistance Corporation which was largely responsible for bringing the city back from the brink of bankruptcy in 1975.

If you're not old enough to remember the 1970s firsthand, consult with a local baby boomer friend or relative or do some reading. There is plenty of work on the internet which does justice to the period. It was a fascinating time in which the United States - and the rest of the world - formally, albeit mostly unknowingly, abandoned the gold standard and entered the age of floating fiat currencies, the era which is quickly and painfully coming to a dramatic conclusion.

Highly entertaining and informative, the show aired on September 17, just prior to the death of Ruth Bader Ginsburg.

At the Close, Tuesday, September 21, 2020:
Dow: 27,288.18, +140.48 (+0.52%)
NASDAQ: 10,963.64, +184.84 (+1.71%)
S&P 500: 3,315.57, +34.51 (+1.05%)
NYSE: 12,602.54, +40.76 (+0.32%)

The Current And Future Condition Of Currency Is A BlackRock Black Hole

After Monday's scary opening of a brand new week of investing on Wall Street (how exciting!) and the subsequent buying spree that left the NASDAQ - which was down as much as 270 points - just a little below unchanged and reduced losses on the Dow by half, there are probably more than a few people wondering just what's happening to their stock portfolio, 401k, pension plan, college fund (yeah, that's a good one), or even those paper notes in the wallet.

Courtesy of the world's oldest central bank - Sweden's Riksbank - we now have the answer... well, in a manner of speaking. The image at right shows a page from the 19-page document the country's central bank sent in response to a request by Bloomberg News for details of BlackRock’s research into the central bank's bond-buying program.

"The Swedish corporate bond market exhibits a number of singularities when compared to other Anglo-Saxon markets," the document showed. Almost everything else was blacked out.

The central bank, which is due to announce its next policy decision on Tuesday, said a further 68 pages of the report couldn’t be shared at all, as they, "in their whole, are covered by secrecy."

Therefore, in case anybody wants to know what's going on in the world of international finance or even your local credit union, they should refer to BlackRock, the publicly-traded company that the US Federal Reserve employed months ago to execute their own bond-buying scheme. BlackRock is still doing the Fed's - and other central banks' - dirty work, which, under normal circumstances would have been outlawed by the Fed's own charter, but, since there's a pandemic and central banks apparently have outrageous superpowers that allow them to violate laws and the constitutions of most countries, a fully-redacted explanation is about the best one can expect.

In other words, you, peon, are not supposed to see what's happening behind the curtain. You are supposed to remain clueless and intellectually vacuous. The central bank knows what's best for you. A life of debt servitude and poverty is your manifest destiny and how that is achieved you are not allowed to know.

If heavily-redacted central bank documents involving the currency of an entire nation isn't enough to shake up the few remaining trusting souls who think banks are all on the up-and-up, perhaps the report released Monday by the International Consortium of Investigative Reporters (yes, in a world dominated by fake news, there is actually such a group) will convince otherwise.

The group's investigation, known as FinCEN, revealed that a number of large international banks - including HSBC, JP Morgan Chase, Barclay's, Wells Fargo, Citibank and many more - were involved in money laundering for drug cartels, criminals, and oligarchs, all while their own compliance departments were flagging the transactions with suspicious activity reports filed with the US Treasury's Financial Crimes Enforcement Network, or FinCEN.

Though thousands of such reports - known as SARs - were received by Treasury, but little to nothing was done in the vast majority of cases.

Money that was laundered or funneled to shady organizations, crime families, or drug cartels between 1999 and 2017 amounted to more than $2 trillion.

While international banks routinely break laws, aid corrupt criminal enterprises, and launder money without interference, ordinary individuals wishing to withdraw as little as $2000 from a US bank are often subjected to outrageous questioning about the purpose for the withdrawal and are often told to return at a later date because the bank branch does not have the funds available.

It's no wonder that taking cash out of a bank branch might be troublesome, since the Federal Reserve reduced reserve requirements for financial institutions to zero, effective March 26th of this year.

Along with the recent nationwide coin shortage, restrictions on cash transactions in Europe and other countries, the future of of currency appears to be headed for a black hole.

Meanwhile, what used to be money, silver, along with gold, was slaughtered in the futures markets, losing roughly 10% in the course of a few hours. Silver futures slid from near $27 overnight to under $24 by 11:00 am ET. Gold briefly dipped below $1900 an ounce and has since recovered only slightly.

The obvious manipulation of gold and silver prices via the futures market for paper derivative contracts and adherence to these faulty price discovery mechanisms and spot prices set by the London bankers defies logic, unless you're a central banker, and then it makes perfect sense.

As is well known, central banks, which create currencies - dollars, yen, francs, euros, yuan - out of thin air, despise competition. Gold, and especially silver, is competition to their phony, fake, fiat currencies. As long as everybody uses them, all is well. The moment gold or silver become valuable, raising the public's interest in them, central bankers get very nervous and commit overt efforts to tamp down the rising prices of what's been money for thousands of years.

What's really happening is that their favored fiat is losing purchasing power at an exceedingly rapid rate as they magically produce more easy money and inject it into the system, creating inflation by increasing the money supply. Gold and silver would naturally be sought at higher and higher prices since their quantities are limited by what's already above ground and what's being mined on a regular basis, otherwise known as simple supply and demand.

Monday's market action is a prime example of how all markets are rigged against the best interests of the non-wealthy. While the Dow chopped its losses in half and the NASDAQ recovered almost fully, gold and silver were kept lower, bolstering the perception that they are not in demand when the exact opposite has been obvious for many months.

Until the COMEX and the LBMA are either ignored, exposed as frauds or dissolved, there will be no price discovery of value in precious metals. Both institutions are dominated by the same banks that launder money and assist in market-rigging of everything from LIBOR to individual stocks and bonds, including such standouts as Citibank, Goldman Sachs, JP Morgan Chase, and Morgan Stanley, which are all market makers in addition to being full members of the LBMA.

Putting it lightly, gold and silver investors have been getting short-changed for decades, ever since Nixon and the world abandoned the gold standard in 1971.

The future of money is looking more and more like a black hole, covered by a BlackRock.

At the Close, Monday, September 21, 2020:
Dow: 27,147.70, -509.72 (-1.84%)
NASDAQ: 10,778.80, -14.48 (-0.13%)
S&P 500: 3,281.06, -38.41 (-1.16%)
NYSE: 12,561.78, -271.79 (-2.12%)

WEEKEND WRAP: Stocks Continue Slide; Politics Adds Volatility To Markets

Taking it on the chin for a third straight week, stocks were not the idyllic space they had been through Spring and Summer. With the November elections just more than six weeks away, political rhetoric began to heat up after Friday's close, when Supreme Court justice Ruth Bader Ginsburg passed away at the age of 87.

Words of consolation and remorse outpoured from the usual sources, but just as quickly the mood turned political as Senate majority leader, Mitch McConnell, and other Republicans began making plans for confirmation hearings once President Trump sends up a nominee to replace the deceased justice. Democrats voiced opposition, suggesting that any Supreme Court appointment should wait until after the elections on November 3rd.

Gnsburg's demise having been widely anticipated, it's likely that President Trump had already developed a short list of potential replacements and will send a nominee to the Senate on short order. With a 53-47 majority, the chances of a nominee surviving what should amount to circus-like hearings and a full senate vote are contentious and will add fire to an election season that already has plenty of divisive issues for the electorate to contemplate.

Trump recently released a list of 20 possible contenders for the vacancy, among them 11 women, including circuit court judges Bridget Bade, Barbara Lagoa, Martha Pacold, Sarah Pitlyk, Allison Jones Rushing, Amy Coney Barrett, Elizabeth Branch, Joan Larsen, Britt Grant, Allison Eid, and Kate Comerford Todd, a former senior vice president and chief counsel for the US Chamber Litigation Center.

On Saturday, President Trump announced that he would name a woman as a nominee to replace Ginsburg and that he would announce his decision this coming week.

As the election approaches, markets face more turbulence from various sources. Politics may begin to overshadow the fading narrative of COVID-19, though it would not be surprising to hear more warnings of another wave of infections from the likes of Anthony Fauci and other pandemic and vaccine proponents.

While the Dow Industrials were essentially flat on the week, Friday's trading was particularly troubling with the intraday low briefly below 27,500, but stocks rallied weakly into the close, shadowing losses that could have been more severe.

Decelines Thursday and Friday erased 850 points from Wednesday's intraday high of 28,351.36. More concering is the Dow's retreat from the September 3 five-month high of 29,164.38. All tolled, the Dow's recent losses put it only 6.4% below its all-time high of 29,551.42 from February of this year, so, despite the pullback, the move is likely to be considered a healthy consolidation from an overheated position by market observers.

The NASDAQ finished up its third straight week of losses as Thursday and Friday's results sent the daily tally under its 50-day moving average for the first time since late April. Leading the way lower were the FAANMGs (FB, AAPL, AMZN, NFLX, MSFT, GOOG), darlings of the tech space, which had put on incredible gains since March and were ripe for a pullback. Somehting

Also falling below its 50-day moving average on the daily chart, the S&P 500 suffered its third consecutive week sustaining losses.

A lone winner on the week was the NYSE Composite, which put in a fractional gain. It's worth mentioning that the NYSE and Dow Industrials have not achieved new highs since the March crash, as opposed to the NASDAQ and S&P, both of which have set multiple records since the COVID Crash. Whether or not the recent losses continue on into a correction will likely play out over the next two weeks, but certianly some direction will be discernable when companies begin reporting third quarter results beginning the second week of October.

Weighing in on recent activity, former Fed governor, Randall Kroszner, opined that the after-effects of COVID-19 would be longer-lasting and more profound than those stemming from either 9-11 or the Great Financial Crisis of 2008-09.

What should be of particular note are bank stocks, among the earliest to report. Giants Bank of America (BAC), JP Morgan Chase (JPM), Citigroup (C), Goldman Sachs (GS) and others begin rolling out third quarter results right after Columbus Day (October 12). Loan loss reserves will be in focus as banks and other financial insitutions like credit card issuers CapitalOne (COF) and Discover Financial (DFS) have been handing out deferrals and forbearances like candy to cardholders and mortgagors unable to make required monthly payments.

With the easy skipping of payments having mostly run its course, credit insitutions are beginning to end these programs, some requiring regular montly payments on credit cards in September. The nationwide program of mortgage forbearance on federally-insured loans continues through the end of 2020. Even with these programs in place, expectations for massive defaults by consumers are going to put a dent in bank stock earnings for the period, as they have done in the first and second quarters.

Volatility returned to markets in a big way in September. The remaining days of the month and into October appear poised to heighten the uncertainty and keep markets from any meaningful andvance. The potential for a correction or a return to bear market conditions are heightened.

During the week, treasuries saw little change, with yields on the 10-year note and 30-year bond rising three basis points, to 0.70% and 1.45%, respectively. Complacency in the bond space may turn out to be short-lived, though the fixed income market has shown to be resilient throughout the COVID crisis. With the Fed pretty much assuring that the federal funds rate will remain at or near zero through 2023 in Wednesday's FOMC policy anouncement that steadfastness should continue in the absence of a severe pullback in stocks. Much of what's currently on the plate of traders and investors has been priced into stock and bond markets. Visions of 2021 may not be as sanguine.

The price of crude oil rose throughout the week, with WTI bouncing off the 9/11 close at $37.33 to finish the most recent week at $41.11 a barrel. Crude remains ranebount between the high 30s and low 40s.

Precious metals were under pressure again, expecially nearing the end of the week, a somewhat contradictory position. Gold was up a mere $10, rising to a Friday close of $1,950.86 from the prior week's finish at $1940.55. Year-to-date, gold is up 28.58%.

Spot silver was barely changed on the week, closing at $26.78 an ounce, up a mere five cents from the previous Friday finish.

While spot prices continue to stagnate, the buying of precious metals as a hedge against everything continued at a rapid pace with stackers and savers gobbling up available inventory from dealers at premium prices. The following are the most recent prices for common items on eBay (numismatics excluded, shipping - often free - included):

Item: Low / High / Average / Median
1 oz silver coin: 32.00 / 37.50 / 35.76 / 36.00
1 oz silver bar: 33.50 / 42.45 / 37.01 / 35.94
1 oz gold coin: 2,000.00 / 2,104.06 / 2,067.29 / 2,057.05
1 oz gold bar: 1,975.13 / 2,071.22 / 2,050.02 / 2,060.86

At the Close, Friday, September 18, 2020:
Dow: 27,657.42, -244.56 (-0.88%)
NASDAQ: 10,793.28, -116.99 (-1.07%)
S&P 500: 3,319.47, -37.54 (-1.12%)
NYSE: 12,833.57, -114.88 (-0.89%)

For the Week:
Dow: -8.22 (-0.03%)
NASDAQ: -60.26 (-0.56%)
S&P 500: -21.50 (-0.64%)
NYSE: +60.53 (+0.47%)

Stocks Slide Into Friday, Looking To End Two Week Skid

Note: Google's Blogger platform (where these posts are created) has forced all users into their new format, which should still be in Beta. Apologies in advance for any formatting or typographical errors (no spell checker that we could find).

Stocks took another dive on Thursday and are looking to close out the week on a positive note. The major indices are still up for the week, but not by much. A repeat of Thursday's action on the NASDAQ would send that index into the red for the third straight week, while the Dow is already up nearly one percent on the week and the SA&P 500 clinging to a 16-point gain.

Inaction by congress to pass another COVID-related stimulus bill has Wall Street somewhat flummoxed to say nothing for the Federal Reserve, which seemed to be begging for some form of fiscal relief, saying that monetary policy alone could not effectively bring about a meaningful recovery.

Futures are indicating an opening with a very slim upside.

At the Close, Thursday, September 18, 2020:

Dow: 27,901.98, -130.40 (-0.47%)

NASDAQ: 10,910.28, -140.19 (-1.27%)

S&P 500: 3,357.01, -28.48 (-0.84%)

NYSE: 12,948.45, -49.41 (-0.38%)

It's Constitution Day; Fed Signals Zero Fed Funds Rate Until 2023; Initial Jobless Claims 860,000; Markets Tanking

Today is national US Constitution Day.

In case the US constitution is alien to you or you haven't perused it in a while, today might be a good day to refresh your memory on the original document that led to placing America among the greatest nations of the world.

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

-- preamble to the constitution of the United State of America

Focusing on the capitalized words alone - Union, Justice, Tranquility, Welfare, Blessings, Liberty, Posterity - consider how the goals of our constitution are being handled today and especially since the 2020 pandemic, now bordering on seven months hence.

As a country, the United States can hardly be called a Union under today's circumstances. Cities across the country have been set on edge and ablaze by notorious terrorist groups such as ANTIFA and BLM, whose insistence on putting race above reason and union are tearing the country apart, community by community.

These very same people call for Justice while burning, looting, rioting, demanding that all Americans respect the credo of "Black Lives Matter" over all else, insisting that "All Lives Matter" is not appropriate to their cause and that "White Privilege" and "Systemic Racism" are at the root of their protestation, which, at its heart is divisive, disruptive, and degenerative.

Because of these people, there is no Tranquility. Most of them would prefer to be on Welfare rather than take on a job and work for an honest living.

They are able to spread their message of racism and hatred with the Blessings of large swaths of the Democrat party, many mayors and city councils, and a compliant media which fails repeatedly to point out the failure of their messaging.

Thanks to the media, the rioters and protesters, the self-ordained medical junta, the governors of various states, and mayors of various cities, individual Liberty has been denied and obstructed via unconstitutional edicts, recommendations, orders, and draconian lockdown measures.

At the pace the country is going, we will leave to our Posterity not a nation, but the picked over bones of what was once a place endowed with a proud history, a land of opportunity, a welcoming refuge from tyranny and oppression.






As far as honoring and adhering to our constitution, the Federal Reserve System, a private banking organization which, in 1913, was granted a charter to pillage the American people with a fiat currency in the form of bills of credit (Federal Reserve Notes), in contravention to the constitution that nothing other than gold and silver can be used as legal tender. When it created the charter for the Federal Reserve System, congress exceeded its authority to assign the power of issuing legal tender as bills of credit.

For 107 years, the United States has been operating with a bank charter that is neither constitutional nor legal and the current congress steadfastly refuses to amend the charter for the Federal Reserve or expunge it entirely.

Americans will never be free until the Federal Reserve System is completely nullified and constitutional money, backed by gold and silver reinstated.

Adding insult atop a century of injury, on Wednesday, the Federal Reserve concluded another of its Federal Open Market Committee (FOMC) policy meetings on Wednesday, stating that it would keep its key lending rate - the federal funds rate (or intra-bank rate) - at or near zero until 2023.

In the press conference following the policy announcement, Chairman Jerome Powell suggested that congress and the president need to pass another stimulus bill, as if the Fed's own endless monetary magic, via creation of currency out of thin air and backstopping or buying all debt, from corporate bonds, to junk, to treasuries, to munis, wasn't already enough of a monstrosity.

Action on a second major coronavirus stimulus bill has been stalled in congress since late July and prospects of anything passing through the House and Senate to the president's desk are dim.






The House is scheduled to go into recess on October 3rd and not return until after the elections. The Senate is scheduled for a recess beginning October 12.

On the Fed's policy announcement Wednesday - the final FOMC meeting prior to the November 3 elections - stocks, which were mixed prior to the 2:00 pm ET announcement, initially rose, but uniformly fell as the trading day commenced, with the Dow and NYSE Composite barely holding onto slim gains and the NASDAQ and S&P 500 finishing in the red.

As Thursday's opening bell approached, the weekly initial unemployment claims data was released, sending stock futures further into negative territory when new claims came in 860,000, close to the prior two weeks which saw 880,000 initial claims.

Initial claims such as have been witnessed since the beginning of the pandemic in March have been exaggerated over previous recessions, where initial claims would run hot - around 600-800,000 per week -at the start, but settle into a lower range of 250-380,000. Current initial and ongoing claims are well beyond historic norms.

As of this writing, Dow futures are off by about one percent; NASDAQ futures are down more than two percent.

Get ready for another culling.

At the Close, Wednesday, September 16, 2020:
Dow: 28,032.38, +36.78 (+0.13%)
NASDAQ: 11,050.47, -139.86 (-1.25%)
S&P 500: 3,385.49, -15.71 (-0.46%)
NYSE: 12,997.86, +30.67 (+0.24%)

How Big A Bubble Can The Fed Blow And How Low Can Interest Rates Go?

September 2, 2020: NASDAQ reaches an all-time closing high of 12,056.44.

Twelve years prior, on the same date in 2008, the NASDAQ was still recovering from the dotcom meltdown and 9-11 attacks, closing at 2,349.24. Six months later, the NAZ would find itself at nearly half that value, 1,268.64, as the sub-prime crisis took its toll. If you bought at the high in 2008 and held, your annualized return is 14.6% compounded. If you bought at the low, it's 20.65% and your investment is worth nearly 10 times what you paid just 12 years ago. That is simply not realistic.

Following both the dotcom/9-11 and sub-prime declines, the Federal Reserve stepped up and adjusted markets so that they would recover via cuts in the federal funds rate. In 2000, the Fed cut the rate from 6.5% to 3.5% just before 9-11. After that, the Fed reduced the federal funds rate first by a full percentage point, and eventually all the way down to one percent.

The one percent rate - which was supposed to be temporary - did last only one year, from July 2003 to June 2004, during which time the US engaged in a war with Iraq. Then, the Fed embarked on a series of 25 basis point raises, peaking out at 5.25% from July 2006 to July 2007. After that came sub-prime, and the Fed dropping its key interest rate rapidly. Over the course of the next 17 months (August 2007 to December 2008) the Fed lowered the federal funds rate all the way down to a range between 0.00% and 0.25%.

Again, this historic ultra-low interest rate was supposed to be temporary, but this time, temporary was longer. Stretching from December, 2008 until December, 2015, the Fed kept the federal funds rate at whats now known as the "zero-bound," a range between 0.00% and 0.25%.

When the Fed thought the economy was strong enough for it to increase interest rates again, they began a series of 0.25% hikes. From December, 2015 to December, 2018, they managed to get the federal funds rate back up to a range between 2.25-2.50%. with the economy faltering again, they cut, from July to December, 2019, by one percent, back to 1.25-1.50%.

At the end of February, 2020, the rate stood at around 1.50%, but along came the coronavirus and the Fed, in two swift moves, knocked their key rate all the way down to 0.00-0.25% again, the actual rate steadying between 0.05% and 0.10%, where it remains today. Stocks, which fell off the table in March, have recovered to make record highs in the NASDAQ and S&P, with the Dow getting to within two percent of its previous all-time high.






Once again, this zero-bound rate is supposed to be temporary. Bear in mind that the first temporary cut lasted a year, but the second - from 2008 to 2015, lasted seven years. The current low rate may, extrapolating from past experience, may last 40 years or longer, though the Fed has hedged itself via all manner of bond-buying schemes they call "facilities" designed to keep America's big business - and the rest of the world - afloat. In that case, most of the people invested in stocks will be dead or dying, the world and its broken markets handed off to new generations.

Snapping back to reality, the Fed can't actually keep its key rate at zero for 40 years and everybody knows that. They are faced with two bad choices: 1) follow Japan and Europe into the land of negative rates, or 2) do nothing and hope for the best.

The Fed does have two other options, and they are similar. One is to scuttle the whole facade of currency created at interest, backed by nothing and return to a standard of currency backed by something tangible, like gold or silver, or, scrap it all and introduce a currency again created by debt and backed by nothing, but this time make it digital, with no actual coins or bills, a cryptocurrency, like Bitcoin.

That last option is the one they're likely to take, it being the easy way out, where they don't have to admit their abject failure, and one in which they could conceivably - in their boxy, self-centered minds - keep interest rates at or near zero for 40 years or longer. Or at two percent, or five. After all, they control the currency and all aspects of it. They can do whatever they like.

Not to put too fine a point on it, but such an action by the Fed would be disastrous for just about everybody. As it stands today, most people are completely unsure about the future, be it the next month, next year or next decade. More people are out of work than ever before (go ahead, include welfare, disability and other government non-work programs in an unemployment calculation and see what you get), and the economy of not just the United States, but the whole planet, is in the toilet and about to be flushed.

If the Fed replaces the dollar with a cryptocurrency, a "digital dollar," they're also likely to introduce some form of UBI, or Basic Universal Income. They will pay people not to work.

Adam Smith, the father of modern economics, based his theories on three forms of capital: labor, currency, and hard assets, the most important of which was labor. If the Fed - which has already reduced the value of currency to zero - institutes UBI, they'll have taken away the second leg of the three-legged stool which is economics, labor, and reduced its value to nothing. An economy, be it local, national, or global, cannot stand on a one-legged stool, the remaining leg being hard assets, those being business equipment and facilities, land, gold, and silver.

Adamant about keeping nothing but the fiat currencies of the world functioning, the Fed will take quite the circuitous route to asset-backed currency and restoration of the value of labor. In the interim - be it four years or 40 - the global economy will crash and burn. The Fed - itself a private bank owned by people and institutions veiled off from the general public - and their central bank allies - will buy up everything of value for pennies on the dollar, a dollar which they themselves created. It's the worst and most devastating scam in the history of the world and it's unfolding right before our tired eyes.






Naturally, the Fed's plans do not operate in a vacuum. There are other pieces to their twisted puzzle, most significant among them the will of individuals and groups of individuals opposed to he ongoing destruction of the currency, the economy, and their lives.

We see it already in the "prepper" movement, Marxist ANTIFA and BLM protesting, looting, and rioting, goldbugs, silver stackers, and those who have opted out, returned to land and water, to farming, to a subsistence lifestyle.

Therein lies the future. The vast majority of people on planet Earth, perhaps as many as 95% of them, have no idea of what has been happening or is occurring. They will be the beneficiaries of the new world order of cryptocurrency, universal basic income, fast food made from GMO elements or worse, centralized media and educational propaganda, the big pharma medical monopoly, and what basically amounts to slavery.

People who believe they have a choice will try to take different paths to the future but they will be largely on their own because they are vastly outnumbered by those who don't believe they have any choices.

Take a look around. See how many people are wearing masks. See how few aren't and there are your answers to today's headline. Interest rates cannot go any lower (though they might), and the Fed bubble can be enormous. As large a bubble they blow, it is likely to be their last.

The NASDAQ is fewer than 900 points off its all-time high. It will almost certainly exceed that number, probably within weeks. The value of stocks has never been so extreme and all of it because the Federal Reserve has managed to decimate the purchasing power of the currency - the US dollar - by 98% since its inception in 1913.

Good luck with your stocks and bonds, all electronic, trapped in investment vehicles which you neither own nor control, and of little to no real value. In the long run, they will buy nearly nothing.

At the Close, Tuesday, September 15, 2020:
Dow: 27,995.60, +2.27 (+0.01%)
NASDAQ: 11,190.32, +133.67 (+1.21%)
S&P 500: 3,401.20, +17.66 (+0.52%)
NYSE: 12,967.18, +34.50 (+0.27%)

Wall Street Entirely Detached From Economic Reality

Because nothing in the financial universe travels in straight lines, stocks took the high road on Monday to prove to the world that all is well, everywhere, all the time.

Meanwhile, just a few headlines:

Protest in Kalamazoo, MI
Protests, Lancaster, PA
Protests, Cops Shot, Los Angeles, CA
Planned Protests of President Visiting Philadelphia
Protests, Sacramento, CA
Protests, St. Louis, MO






At Least 50 Shot, 10 Dead in Chicago Weekend Shootings
Shootings, Grand Rapids, MI
At Least 6 Dead in NYC Weekend Violence
Detroit, MI: 4 Weekend Homicides
46 Shot, 12 Dead in Baltimore Shootings

Food Banks In San Francisco Double
Feeding America Says 54 Million May Need Food Banks In 2020
Greater Chicago Food Depository Sees Increased Demand
Increased Demand At Memphis Food Banks






That's just a sampling of what's going on in the world's largest economy. Apparently, investors see protests, violence, and starvation as net positives.

At the Close, Monday, September 14, 2020:
Dow: 27,993.33, +327.69 (+1.18%)
NASDAQ: 11,056.65, +203.11 (+1.87%)
S&P 500: 3,383.54, +42.57 (+1.27%)
NYSE: 12,932.69, +159.65 (+1.25%)

WEEKEND WRAP: Stocks Fall For Second Straight Week; Oil Skids; EU Seeks Digital Currency

For the second consecutive week, equity investments in big caps looked like the wrong place to be plying currency in these turbulent times. Led by the NASDAQ and S&P 500, stocks dumped in three of three of the four trading days following the Labor Day weekend. Hard hit were household tech names like Apple, Amazon, Google, Tesla, and Netflix, but bank stocks also participated in the widespread selling as did almost every other market segment.

Key elements driving the declines remained as they have for months: coronavirus, lockdowns, school and business closures, election concerns, mass protests, and occasional rioting. Adding to the mix were forest fires devastating Western states and ongoing international trade disputations, especially those between China and the United States. The EU had its own spat going with Great Britain, which has decided to chart its own course in its ongoing separation from the mainland economic bloc.

Overriding all of the usual issues was the usually-ineffective congress, which continued to flail about over any kind of relief resolution. It's not so much that the house and senate can't come to mutually-agreeable terms, it's more that as a legislative governing body they are feckless, unrepresentative, unresponsive and devoid of common sense. On capitol hill, there's little interest to come to the aid of the masses. It is almost as if, suddenly, the entire congress has re-discovered fiscal responsibility. Don't count on it, though. They just don't want to help out the American public, looking down from their preening and primping perches on the huddled minions like all tyrannical bodies are prone to do.

So, Wall Street managed to express its disapproval the only way it can, by selling, instead of buying, stocks. Ho-hum. Major indices all managed to end the week nesting at or near their 50-day moving averages, a meaningless tactic by the monied gang of crooks and thieves masquerading as America's bankers and financial genii. Stocks dare not fall below desirous levels, lest they incur the ire of the almighty Federal Reserve, of which its federal open market committee (FOMC) meets this coming week (Tuesday and Wednesday).






After all, the Fed has, following the fast crash of March, put the money people onto easy street once again via a binge-buying of virtually all outstanding debt, backstopping even the riskiest loans and hoisting up companies that should be headed to bankruptcy proceedings. Stocks cannot be allowed to lose value. Not only would that truncate the V-shaped-recovery narrative, but it would send shock waves of negative sentiment throughout the economy. The Fed will not stand for that, so it is expected to become the soul of dovishness as the coming week progresses.

So much is predicated on the Fed "put" that it had better work out to the advantage of the one-percenters. Otherwise, a hard dose of economic reality might just cause real panic, a shakeout from over-indulgent investment chasing, an abrupt end to churning, controlling, high-frequency spoofing, and a host of big money hijinks hat keep the wheels of financialization intact.

There might not be a crash, but a slow, steady decline in stock prices seems to be well underway. This second leg down won't inspire shock and awe, headlines of doom, or frightening one-day drops. It will be more like Chinese water torture: precise and deliberate, exacting excruciating dull pain over a long period.

Treasuries are catching onto the game gradually. All issuance of less than five years duration has been at the zero-bound for months and is not moving nor movable. The 10-year note took the bulk of the safety play, dropping five basis points in yield to end the week at a moribund 0.67%. The 30-year dropped four, to 1.42%.

Oil was the big "tell" of the week, losing any momentum it may have had, with WTI crude settling out at $37.33 a barrel, down 14% from its high of $43.39 on August 26. If stocks aren't willing to tell the whole story, oil, which greases the skids of the global economy is screaming a "run for the hills" signal.

As is usually the case when stocks get hit, precious metals had to be spanked as well, despite there being no correlation between stocks and gold or silver, but rather, in a sane world, an inverse relationship might apply.

Rather than taking an overt beating, gold actually gained on the week, though not by much. Closing out on September 4 at $1,933.94, it ended this week at $1,940.55. Silver actually did lose a little, trading down from $26.91 to $26.73 per ounce. Both moves in the metals were well short of one percent, which has to offer some hope for the proponents of real money, as the main stock indices fell anywhere from one to four percent on the week. There's always something good to be said about out-performance.

Here are the latest prices on eBay for common gold and silver items (numismatics excluded, shipping - often free - included):

Item: Low / High / Average / Mean
1 oz silver coin: 32.74 / 45.10 / 39.27 / 40.03
1 oz silver bar: 32.94 / 44.20 / 35.42 / 34.02
1 oz gold coin: 1,929.90 / 2,324.37 / 2,077.02 / 2,070.47
1 oz gold bar: 2,028.90 / 2,111.09 / 2,057.38 / 2,056.68






Notably, the ECB has been, and continues to explore the possibility of the creation of a central bank digital currency (CBDC). Central banks are afraid that big tech firms with their own digital currencies could shut them and government out of their monetary roles in national and international economies.

Now, wouldn't that be a crying shame. Central banks - all of them private institutions - wouldn't be able to wouldn't be able to issue currency at interest, create mountains of debt, impoverish millions of people, change interest rates at their pleasure, intervene in markets, prop up failing businesses, distort and destroy price discovery, leverage deposits as loans at 20:1, 30:1 or even more ridiculous ratios, create massive asset bubbles, stoke inflation, track and record all transactions, and generally enslave the entire global population with currencies backed by nothing but their own hot air and blind faith.

Would the world be a better place with a Bitcoin standard or even a Libra, the blockchain currency that is the brainchild of Facebook?

Perhaps, though the dangers are inherent and obvious. While Bitcoin, Etherium and all cryptocurrencies are supposedly secure - though most of them have been hacked or otherwise compromised - they're all electronic and would cease to operate at the most critical of times, when the lights go out. The same applies to Libra or any other privately-held cryptos, plus, they would be subject to the dictates of their owners, and less prone to market forces.

Blockchain-based currencies have the advantages of being stable, portable and divisible, but they are by no means a store of value. Only currencies backed by physical assets, such as gold and silver, maintain that standard. The ultimate answer trends toward diversification and convertibility, in terms of sovereign currencies backed by the natural holdings of individual nations, be it oil, gold, silver, water, energy, or whatever is the unique strength of a country.

It would be refreshing - if not preposterous to the central bankers of the world - to hear considerations of tried and true currencies backed by gold and silver rather than the perverse fascination with untested techno-centric solutions, but that, sadly, is not the case. The world is hurtling toward digital money at breakneck speed. Central banks have been plotting and planning its rollout for years and it will become reality. It will be centralized, globalized, prone to error and miscalculation, hackable, inconsistent, unstable, and likely to cause more deprivation and suffering than the world has been forced to bear through the last 50 years of the failing fiat experiment.

At the Close, Friday, September 11, 2020:
Dow: 27,665.64. +131.06 (+0.48%)
NASDAQ: 10,853.54, -66.05 (-0.60%)
S&P 500: 3,340.97, +1.78 (+0.05%)
NYSE: 12,773.04, +66.35 (+0.52%)

For the Week:
Dow: -467.67 (-1.66%)
NASDAQ: -459.59 (-4.06%)
S&P 500: -85.99 (-2.51%)
NYSE: -144.11 (-1.12%)

Senate Bails On Coronavirus Relief Package; Congress Needs To Go Back On Vacation... Forever

You have to hand it to the politicians in Washington. They've really become Ninja Masters at pissing off everybody.

Back from a recess vacation that lasted more than a month, it was the senate's turn to show the American people that they care more about being re-elected than the actual welfare of those purportedly voting for them, failing to get even a slimmed-down version of a virus-related stimulus bill past a procedural vote.

Negotiations on a second round of $1200 stimulus checks have been nothing short of a made-up farce - much like the case-demic coronavirus scam - since the middle of July when Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows made near-daily visits to House Speaker Nancy Pelosi's office to work out a plan to help out struggling Americans who had to put up with virus panic, job losses, school closures, business closures, lockdowns, stay-at-home orders, mandatory mask mandates, social distancing rules, and an endless barrage of propaganda from the mainstream media designed to keep them all in line and afraid to interact with fellow human beings.

Those "negotiations" fall apart mid-August and there's been no progress since, by design. Now that the pols are back in their cozy little cocoon otherwise known as the "seat of power" in Washington DC, they figured it would be good optics for the senate to take up matters, look like adults, and give it a go. The result was another week of wasted efforts and senators on both sides of the aisle looking more like adulterers than adults, playing partisan politics with a bill that didn't even include a scrap of relief for ordinary Americans, and especially the self-employed and senior citizens.






It's not that funds are urgently needed by anybody, but the bill included $105 billion for school re-openings, and an inordinate amount of space was devoted to limitations on liabilities for governments from towns and villages to cities and states, hospitals, health care workers and medical-related businesses. It seems the purpose of the bill was to spend more money on things people already pay taxes or fees to support (schools, both public and private, primary, secondary, and colleges) and prevent individuals from suing their local governments, hospitals, et. al., rather than providing some quick cash to those who would likely go out and spend it. As it turns out, the senate can't even play CYA very well.

The senate's failure set off a wave of selling on Wall Street, which isn't particularly fond of government standing in the way of excessive amounts of cash being dispersed willy-nilly, some of which would positively end up in their greedy little hands.

If it hasn't been apparent for the past forty years, it should be plain to see that voting for senators and members of the House of Representatives is simply an exercise in futility. None of the elected people have any interest in providing representation to the people they supposedly represent and when it comes time to explain their failures they can rely on the other party as a convenient scapegoat when the truth of the matter is that both parties are really all part of one big club - and, as the late George Carlin said - "and you ain't in it."

All said, this latest scripted adventure into pseudo-politics is par for the course. Congress hasn't done much of anything of direct benefit to the American people for quite a long time, which is why the overall approval rating hovers somewhere between 12 and 15% and has for decades. It's clear that while our system of a representative republic government generally is sound, the need for massive change has never been more apparent. Term limits would be a good start, but wholesale sacking of every one of the senators and representatives would be a better solution.

After all, if all they're capable of doing is perpetuating their own failed legacy, why bother with them at all? They spend money they don't have, creating massive deficits year after year, they all somehow become magically rich while in office, and they take vacations - like the one just concluded - while their constituents are struggling to make ends meet.

If and when Americans awaken to the real problem in this country - which isn't systemic racism, police inequities, or any other platitudinous value system the media and politicians wish to deride - the massive oversizing of government at every level, there could be a reckoning, recovery, and faith in the future. It's not just at the federal level, either. The overbearing, corrupt, incoherent lawmaking and enforcement has trickled all the way down to the local levels. From cops to teachers to dog catchers, they're all on the take, they're all getting paid while what used to be a thriving middle class is decimated. The people are supposed to pay taxes to support their own enslavement, follow orders and vote for the lesser of two evils when in fact there is no choice. That has been proven over and over and over again and it gets worse with every election cycle.

Government already accounts for more than 50 percent of GDP. Where does it stop? When it's 80%, 100% and all we're doing is working to pay taxes to keep these other people - who produce nothing but rancor and divisiveness - in comfortable positions with health care we cannot afford and pensions which far exceed those in comparable positions in the private sector?






Enough is enough. There are too many politicians, too many political favors, too few parties, too many teachers, cops, pencil pushers, social workers and do-nothing workers. Put them on leave. Let them collect unemployment for a change. See how they like it.

By the way, there was another sell-off on Wall Street yesterday, meaning that all of you people trapped in 401k or other pension or stock programs from which you cannot escape lost money. And you'll continue to lose money and purchasing power as long as you play by their rules and allow some faceless stock analyst or broker to manage what used to be your money. Stock markets have been pumped up for the past 12 years - since the financial crisis of 2008 - by the Federal Reserve and stock buyback programs. Many of the companies in which your funds are invested are worthless. It just hasn't been made known to the general public, but it will be soon enough.

Oil was down once again. Over the past few sessions, WTI crude has been whacked down from the $40-42 range to a $36-38 range. Gas prices will soon follow lower, which is about the only silver lining in this upside down world of pretend and extend economics.

Stock futures are looking up on Friday morning pre-open, but it will take a gargantuan effort to produce a winning week for stocks. Thursday's pump and dump was the fourth down day in the last five. In order to produce a positive result for the week the Dow would have to be up 600 points at the close, the NASDAQ would need a gain of 400 points. Otherwise, chalk up a second straight week of losses for the major averages.

That's all for Friday. See you all back here Sunday morning for the WEEKEND WRAP.

At the Close, Thursday, September 10:
Dow: 27,534.58, -405.89 (-1.45%)
NASDAQ: 10,919.59, -221.97 (-1.99%)
S&P 500: 3,339.19, -59.77 (-1.76%)
NYSE: 12,706.69, -179.11 (-1.39%)

Stocks Bounce, Jobless Claims Remain Elevated, Wall Street Braces For More Panicky Selling

After three straight days of losses, investors dusted themselves off and bought the dip on Wednesday, an intrepid strategy that worked wonders during the heydays of QE, but may prove harmful to a portfolio in the second leg of a bear market, which is precisely what is unfolding currently.

While stocks made a nice move on Wednesday, the major indices failed to cover the losses from even the prior session and they slumped noticeably into the close, giving up between a quarter and a third of the day's winnings.

With Thursday's opening bell a little less than an hour away, futures are pointing to a mixed to slightly lower open, just the kind of turbulence that is to be expected, especially with initial jobless claims coming in at 884,000, a carbon copy of the prior week's release.

In terms of signal to noise, selling seems to be the dominant signal, pumped action higher mostly leftover noise from the easy money short squeeze and Fed push of the past five months. Stocks are still at nosebleed levels and any punches that land are going to unleash a a torrent of blood flow. As stated in Wednesday's post, earnings season will more than likely deliver bad news. Even though expectations for most companies will have been guided lower, year over year comparisons will clearly show that growth has stalled out for many companies.

The political, social and economic climates continue to be challenging to say the least, leading to uncertainty in markets, a condition unwelcome on Wall Street. Big money will be rotating out of vulnerable positions, though finding safe havens in individual stocks may become a fool's errand as the recession proceeds and market sentiment sours.

Running to corporate bonds can only provide temporary relief and with yields at embarrassingly-low levels fund managers should find little relief there. The options available are almost certain to run somewhere between bad and horrible.

As the declining scenario unfolds - with days of gains shadowed by continued losing sessions - the winners will be those seeking not to advance their capital, but to preserve what's left of it. The recovery and expansion of the economy touted by mostly perma-bulls or spokespeople for the White House will turn out to be more in a series of false promises. This is not to say that President Trump will be significantly challenged in the election. He will win in a landslide despite the media's best effort to cloud the minds of voters with scenes of COVID-19 horrors, street protests, vandalism, looting, and rioting. His handlers have to talk up the economy. It's all they know and actually speaking the truth about a painful economic experience is strictly off limits in the charged political environment.

All of this uncertainty will eventually lead to one profound tactic. Buying gold and silver as a hedge and wealth preserver will prove to be not only prudent but probably highly profitable. The US dollar is losing strength and the Fed's opaque message of inflation can lead to nothing good, unless higher prices for everything useful or necessary somehow becomes a desirable outcome.

The message to goldbugs and silver stackers has never been clearer. With prices depressed from the month ago highs, precious metals are at bargain levels. The one caveat is that in the case of a stock market crash, the metals will also take a hit, though not as badly as one might expect. Nobody in their right frame of mind is going to sell gold at under $1900, nor silver under $24 an ounce. Those are pretty well established support levels and all indications are that they will trend higher as the economy of not just the United States, but that of every country on the planet is taken down to brass tacks and spare parts.

Markets and economies all go through phases and periods of boom and bust. As the fiat currencies - dollar, euro, yen - burn to ashes, gold and silver, the undeniable real hard money assets, will prosper.

At the Close, Wednesday, September 9, 2020:
Dow: 27,940.47, +439.58 (+1.60%)
NASDAQ: 11,141.56, +293.87 (+2.71%)
S&P 500: 3,398.96, +67.12 (+2.01%)
NYSE: 12,885.80, +197.73 (+1.56%)

Rough Day On Wall Street As Second Phase Of Bear Market Gets Underway

Just back from a holiday weekend and the end of a long summer, traders went to work selling everything on Monday.

Not that stocks weren't deserving of lower valuations, they were and still are. This is just the beginning of a trend that began late last week. If this is the start of the second leg down for stocks, it promises to be slower, longer and more painful than the quick initial burst in March.

Stocks have been pumped higher throughout the fake COVID pandemic, despite an economy that has rotted from within. We are witnessing the destruction of the US economy and of what was - a mere 30 years ago - the greatest country on the face of the planet. Financialization, which began in the 80s and accelerated to its zenith in 2008, is now in the process of unwinding all of the malinvestments made through those years. Today's companies are barely profitable unless they are a niche tech company with no or limited competition such as Google, Apple, Facebook, Amazon, and Netflix, but they are all overvalued, the trade crowded, weak hands taking losses.






There may be day-to-day gains, but the trend is clearly to the downside. Stocks are being liquidated by large investors and funds. The smart money is getting out, leaving the dumb money as ultimate bag-holders. In this secondary bear market phase, buying dips will only provide returns for day-traders and some momentum chasers. Long term investors will get taken to the cleaners.

Expect this phase of the bear market to gradually undermine all investments. All major indices will exceed the lows made this March, though the entire process could take as long as two years. In the interim, the Wall Street casino is open for business, ready to scalp proceeds from unsuspecting people with money and no clue as to what's really happening.

Many of the Western states are on fire, literally, and the cites are being destroyed from within, a process that's been ongoing for many years. Older, Eastern "rust belt" cities are bankrupt, as are the states of New Jersey, Illinois, New York, and California. While the media wants everyone to focus on the presidential election and wear masks to somehow thwart an infectious pathogen that does little harm to 99.98% of the population, the pillars of industry are crumbling. Rats - brokers, bankers, CEOs - are jumping ship as the destruction accelerates.

Stocks may rebound here and maybe for more than a week or even two, but in the end they are mostly overvalued and will suffer losses just on that regard. Loss of confidence and lack of investible capital will bring stocks to more sensible levels and eliminate those who cannot make ends meet, i.e., zombie companies.

Fed intervention will not help in a condition that is turning from a liquidity crisis to a solvency crisis, two different animals.

Note well the decline in the price of oil on Tuesday. It was absolutely hammered and will continue to test lower lows over coming months. The economy is imploding and extra funny money from the government or from the Federal Reserve isn't going to fix what's broken. Crony capitalism, corruption, media collusion, and the end of globalization are all coming together to destroy what's left.

A great reset is coming, possibly before the end of the year, though the implications will reverberate throughout the global system for decades.

Thus far, stocks have seen only minor damage. When third quarter earnings begin to roll out in about a month, the handwriting will be there for everyone to see. Stocks should enter correction (-10%) within weeks and resume bear market posture (-20%) some time in October, or, at the latest, after the November 3 elections, which are certain to be a fiasco of mammoth proportion.

At the Close, Tuesday, September 8, 2020:
Dow: 27,500.89, -632.41 (-2.25%)
NASDAQ: 10,847.69, -465.41 (-4.11%)
S&P 500: 3,331.84, -95.12 (-2.78%)
NYSE: 12,688.07, -229.03 (-1.77%)

WEEKEND WRAP: Stocks Battered, Protests Expand, Congress, Federal Reserve Readying Unveiling of Digital Dollar

Following two relatively "calm" weeks in the markets, the week that included the last day of August (Monday) into September proved to be quite volatile, setting up the return of congress after Labor Day as a consequential event.

As the week progressed, the usual uppity attitude of equity markets began to turn, reaching a level closing in on the bizarre behavior the has engulfed the world's population, as in the wearing of masks everywhere, all the time, for no good reason.

While it is certainly true that there is an actual pathogen known as COVID-19 and that it and its variants have spread globally, there is also ample evidence to ascertain that the pathogen (or virus) is hardly as deadly to healthy people as officials from the WHO and CDC, the government, large swaths of the medical community, and especially the media would have anyone believe.

The CDC recently refined some of its data to conclude that only six percent of the deaths in the United States attributable to COVID-19 were caused by the virus ALONE. Through the week just past, that six percent figure (and the coincident number of 9,210 of 153,504 total deaths at the time) was tossed around social media, tweeted by President Trump, purportedly debunked by the mainstream media - first by local affiliates, then by more national and international outlets - re-bunked, resurrected, damned by none other than Dr. Anthony Fauci and finally left out in the open to foment more rage, anger, and divisiveness between anti-vaxxers, anti-COVID "conspirators" and the masked muzzled masses of the general population.

Growing dissatisfaction with government lockdowns and restrictions prompted demonstrations and rallies in countries as diverse as Great Britain, Germany (where some protesters stormed the legendary Reichstag), and, most recently, Australia, and online in China.

Coronavirus and the debate over whether the pandemic is better described as a plandemic or SCAM-demic is just one of three main themes which will grow in intensity as the US November 3rd elections approach. The other two are the economy - and by inference the stock, bond and precious metals markets - and the ongoing Black Lives Matter violent protests that have swept across American cities coast to coast.

This edition of the WEEKEND WRAP will cover the first two of those themes, leaving to say that the BLM/ANTIFA Marxist protesting, looting, burning and rioting will continue virtually unabated until the elections and probably well beyond, no matter who wins or loses.

In terms of the economy, matters turned from complacency to panic on a dime as Wednesday turned to Thursday, with the major stock indices fell by the greatest percentages since the middle of June.

On Wednesday, the S&P 500 and NASDAQ, respectively marked their 22nd and 43rd closing record highs of 2020, and the Dow finished above 29,000 for the first time since February, bringing it to within two percent of its Feb. 12 all-time closing high (21,551.42).

On Thursday, everything changed. As of 4:00 pm ET on Thursday, the September 3 markets looked like this:
Dow: 28,292.73, -807.77 (-2.78%)
NASDAQ: 11,458.10, -598.34 (-4.96%)
S&P 500: 3,455.06, -125.78 (-3.51%)
NYSE: 12,966.14, -310.61 (-2.34%)

It was an absolute drubbing, seemingly out of nowhere, as first time unemployment claims came in at the lowest level since March, 881,000, seasonally adjusted. Apparently having seen or had enough of stock market gains based on multiple expansion among a small number of stocks - the FAANMGs, Facebook, Amazon, Apple, Netflix, Microsoft, and Alphabet, parent of Google - market-propping initiatives and a bevy of easy-money facilities from the Fed, and a government stalemate on a second round of stimulus checks and extension of enhanced unemployment benefits.

Smart money folded, leaving the stock market to novice Robin Hood traders, semi-professional day-traders and the retail public.

On Friday, even after August non-farm payrolls showed 1.4 million jobs added to the labor market and an unemployment rate falling to 8.4% from 10.2%, both better than expectations, sellers were out and about, sending stocks to plumb depths approaching important moving averages. Most of the heavy selling pressure was experienced in the first hour of trading, with all of the indices getting a very good bounce when the NASDAQ touched its 50-day moving average at 10,875.87, right around 10:45 am ET.

That timely move saved what could have been an absolute rout and left the markets just a little bit bruised heading into the extended Labor Day weekend. As markets drew to an exhausted closing Friday, all the averages were well above their 50-day moving averages and even further above their 40-week moving averages on the weekly charts.

The Street.com suggests in this article that selling on Friday might not have been such a bad move.

With Monday an extra day off, even though international markets will trade as usual, market participants will be looking at Tuesday's open with renewed interest though an indicator in Tuesday morning's futures is unlikely to foretell of longer-term prospects for America's industrial and financial markets. While it does appear as if big money has fled or is at least paring down some positions, the moves in treasuries Thursday and Friday confuse the narrative.

On Thursday, yields dropped as expected, with the 10-year note losing five basis points, from 0.68% to 0.63%, and the 30-year shedding nine (1.43% to 1.34%). Friday's dip and bounce produced a huge ramp in yields (selling off of bonds) as the 10-year spurted nine basis points to 0.72% and the 30-year closing out the week at 1.46%. These were enormous moves in what used to be normally benign markets. This past week's volatility in the fixed income space was almost without comparison. All said and done, the longer-dated maturities ended the week just slightly lower from the prior Friday close (0.74% on the 10, 1.52 on the 30). Everything shorter than the 10-year note was virtually unchanged.

Developments to come include an expected showdown over the fifth round of coronavirus relief between House Democrats and the White House. The two sides have moved marginally closer to a deal - which is still widely expected, especially with elections coming up - since talks stalled out in early August. There's also an apparent agreement on a continuing resolution to keep government operating into the 2021 fiscal year, which begins October 1.

Scheduled for September 15-16, the Fed's next FOMC meeting looms. The Fed may or may not be issuing any surprises at that time, though, as politicized as it has become, Chairman Powell might unleash a torrent of tidbits during the press conference following the "no change" policy announcement. After his Jackson Hole policy realignment to inflation "no matter what" stance, nothing the Fed Chairman utters is likely to raise eyebrows any further than they already are.

What the Fed isn't openly opining over is the almost certain unveiling of Digital Dollars and Digital Wallets soon to be opened at banks, credit unions and post offices (yes, post offices) across the fruited plains of America. In the video below, Lynette Zang of ITM Traders delves deep into the machinations well underway in congress and at the Federal Reserve for the change from debt-based money to pseudo-crypto currency and the eventual elimination of physical cash. Just in case Lynette's video is unconvincing to any remaining conspiracy-theory-deniers, perhaps a closer look at the Federal Reserve's branding efforts well underway for FedNow bucks will be more convincing. The Federal Reserve itself isn't exactly shy about the coming changes. This link explains FedNow Services and links to more press releases, speeches and FAQs on the subject.

Coindesk also covers the Digital Dollar movement in congress with an overview here and here.

A bill titled the Banking for All Act was introduced by Ohio Senator Sherrod Brown on March 23, 2020 - oddly enough, the same date that markets bottomed - and was immediately referred to the Senate Banking, Housing, and Urban Affairs Committee. A draft of the bill (Senate Bill 3571) is available in pdf format.

The relevant date for the unleashing of the Digital Dollar is tentatively (no later than) January 1, 2021. Happy New Year, serfs!

Near the end of the video, Mrs. Zang mentions "NESARA", a term with which some - including this author - may not be familiar. While a detailed examination of the topic, which stands for National Economic Security And Recovery Act, we'll leave it - and the scary reference to "drain the swamp" terminology which might endear to some Q followers - to an introduction by Wikipedia reference. Obviously, more research and study on the topic is likely warranted.

Not without notice was the sudden, dramatic drop in the price of oil as the week drew to a close. WTI crude absolutely fell off a cliff on Friday, registering a drop of -3.87% from its Thursday close of $41.37, heading into the long weekend at $39.77 USD/bbl., down -1.60, marking just the third time WTI crude futures have closed below $40/barrel since July 2nd, the last day of trading in the commodity before the Independence Day holiday. Is it mere coincidence that the price of oil and its important relationship to gas at the pump rises just before the big summer holiday and falls just before the last? It makes perfect sense in a normal world where people drive more during the summer, but the price movements beg the question when much of the world is on lockdown with many businesses closed and people eschewing regular summer vacations during a supposedly-deadly pandemic.

On the week, gold and silver again suffered losses. The central bank community of conniving cheaters and colluders are making a mockery of the markets and price discovery as the end game to fiat money approaches.

Spot Gold dropped another $30 over the course of the week, finishing at $1,933.94, very close to the bloodbath low of early August. A similar fate befell silver, though not as severely as gold was downed, closing out the week at $26.91 after getting a boost to $28.14 an ounce on Monday. As much as the intervening operatives wish to deflate the prices of precious metals, premiums at dealers continue to be elevated, though not quite as much as during the early days of the "pandemic" when supplies were short and demand was high. Demand remains elevated, but supplies are returning to near normal levels.

Recent (09/06/20) prices for common items on ebay (shipping - often free - included), numismatics excluded:

Item: Low / High / Average / Median
1 oz silver coin: 31.77 / 37.90 / 33.90 / 33.50
1 oz silver bar: 30.99 / 45.99 / 37.23 / 35.81
1 oz gold coin: 2,000.00 / 2,165.00 / 2,086.21 / 2,085.47
1 oz gold bar: 1,988.99 / 2,068.92 / 2,035.44 / 2,034.81

Finally, here's Lynette Zang covering the topic of Federal Reserve's digital dollar:



At the Close, Friday, September 4, 2020:
Dow: 28,133.31, -159.42 (-0.56%)
NASDAQ: 11,313.13, -144.97 (-1.27%)
S&P 500: 3,426.96, -28.10 (-0.81%)
NYSE: 12,917.15, -48.99 (-0.38%)

For the Week:
Dow: -520.56 (-1.82%)
NASDAQ: -382.50 (-3.27%)
S&P 500: -81.05 (-2.31%)
NYSE: -253.81 (-1.93%)

Thursday's Stock Slide Tempered By August Non-Farm Payrolls at 1.371 Million, Unemployment Rate, 8.4%

There's no getting around it, stocks got pounded on Thursday.

When what must have seemed like an eternally-long day of relentless selling, the S&P 500 had dropped 3.5%, the Dow was down 2.8% and the NASDAQ took the brunt of the hit, down nearly five percent.

Since June 11, Thursday's drubbing was the worst single-day drop for the NASDAQ and the S&P 500. The cause for the sudden departure from exorbitant optimism may have been a needed jolt of reality, as the US economy remains mired in a COVID-related mess and the "V-shaped" recovery theory looking more doubtful as congress dithers over a second aid package to hard-hit individuals and businesses and violent protests continue to plague large American cities.

Among the casualties were some recent high fliers. Apple (AAPL) dropped 8% on on the day. Tesla (TSLA, 407.00, -40.37) skidded 9%, finishing the day down 19% from the record high achieved on Monday (498.32). Chip maker AMD (AMD) lost 8.5%. Another big name in the chip sector that has traded to the upside throughout the rally, Nvidia (NVDA), lost 9.2%.

The stocks added to the Dow Industrials Monday didn't provide any cover either. Honeywell (HON), Amgen (AGM), and Salesforce.com (CRM), were among the worst performers on the index, losing 3.58%, 3.96%, and 4.22%, respectively. These were the companies chosen to replace dullards ExxonMobil (XOM), Raytheon (RTX), and Pfizer (PFE) to propel the Dow to record highs. So much for best-laid plans.





Money was flowing out of stocks and into bonds, a story that's been developing all week. The 10-year note, which ended last Friday with a yield of 0.74%, finished Thursday at 0.63%. The slide on the 30-year was more pronounced. It ended last week with a yield that was the highest since June, 1.52%, but dropped to 1.34% Thursday.

As investors were looking forward to the August non-farm payroll data from the BLS and an upcoming three-day weekend, concern is that Thursday's reversal of fortune might not be a one-off but rather a second leg of the carnage that developed in February and March, when the coronavirus was still incubating in the US and government lockdowns and stay-at-home orders had not yet been issued.

Following the stock swoon in March, the Fed stepped up with $3 trillion in loan guarantees and a smorgasbord of programs, facilities, and initiatives designed to limit the damage to US stocks. They provided cover for iliquid stocks and sent the indices soaring to new heights over the next five months.

There's growing evidence that the market has been left to retail investors as insiders have been cashing out with extraordinary gains at a breakneck pace. Most professional investors had at least an inkling of suspicion about the foundation of the sharp rally off the March lows and were likely those jumping ship as stocks got crushed... for a day. The potential for a re-rally is still evident, and it doesn't have to be right away. Stocks could slide even further in coming days before serious money comes back into the market on the dip.

As congress readies to get back to business - if that's how one would characterize what they do up there - following the Labor Day weekend, the market can be buoyed by the White House and House of Representatives at least coming to an interim solution to keep the government operating. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi have apparently struck a deal in principle for a continuing resolution to extend government operations into the 2021 fiscal year, starting October 1.

At 8:30 am ET, there was some encouraging news, with non-farm payrolls for August coming in slightly above expectations at 1.371 million. The unemployment rate fell by a massive amount, from 10.2% in July to 8.4% as of this reading. Futures are gradually improving ahead of the cash open at 9:30.





In other news, that paragon of virtue, Goldman Sachs (GS), has avoided jail time for some of its highest executives via a settlement with the government of Malaysia in the 1MDB scandal.

Goldman Sachs had to boost its legal reserves by $2.01 billion to account for the Malaysia settlement, shaving its second-quarter net income by 85% and wiping out what had been a surprise jump in profit due to trading gains.

Not to worry. The Vampire Squid - as Goldman Sachs is known - will probably just steal that amount or more from some other non-white country, or maybe France. Or, they could be reimbursed by the Federal Reserve, to which $2.01 billion amounts to a rounding error.

Those unfamiliar with the Goldman-1MDB scandal that involved theft, money laundering, corrupt government officials, bribery, and even murder of political opponents, is encapsulated in this scathing report by the Harvard Law School Forum on Corporate Governance.

With bad news seeming to have taken some of the wind out of Wall Street's sales, the good news is that there are some college football games this weekend (two were played on Thursday, with seven more slated for Saturday) and the Kentucky Derby will be run Saturday at Louisville's Churchill Downs, albeit four months late. Many of the horses will be wearing blinkers and all of the jockeys will be wearing masks. Oh, well...

At the Close, Thursday, September 3, 2020:
Dow: 28,292.73, -807.77 (-2.78%)
NASDAQ: 11,458.10, -598.34 (-4.96%)
S&P 500: 3,455.06, -125.78 (-3.51%)
NYSE: 12,966.14, -310.61 (-2.34%)