Andrew Huszar has a great editorial today at WSJ about his experiences as a part of the Fed’s TARP program. It is well worth reading, here. The commentary doesn’t add much new information for those of us who have been extremely cynical of the Fed’s role in financial markets, but it continues the ever-increasing awareness that the Fed has blown a bubble and is now trapped. The Bubble has become self-aware! It’s a very funny state of existence for the financial markets. I have little doubt that ten years after the system has blown up, officials will assert that “no one could have possibly foreseen…”
Here is a collection of recent reading material that has been interesting to me. I have actually been much better about re-tweeting articles than getting them here, on the blog, just fyi (I think that . Without further ado…
Monty Pelerin on “Politics as Crime,” a theme that I think is becoming increasingly apparent even to mainstream viewers.
Matt Tiabbi, one of my favorite political writers, recently focused his attention on the looting of public pension funds. He followed it up with an amusing rebuttal to various protests against his initial article.
At some point in the next decade or so, my children will start to hit college age. I am, and always have been (even as I attended), a believer that higher education is largely a scam. Basically bought certification for skills can be learned as well or better on one’s own. Charles Hugh Smith on, as he terms it, the needed revolution in “higher education.”
I had been in the precious metal miners last month, then sold most of my holdings a few weeks ago. The time may be ripe to re-enter. SLW is my preferred play since silver tends to be more volatile than gold, and miners more volatile than the hard asset itself. In other words, I feel like its a more leveraged play on the potential rise in precious metals prices. After breaking above resistance last month, SLW has pulled back to technical support from both is 50 day SMA and a rising trendline. This strikes me as a good spot to re-enter SLW.
From The Big Picture, a WSJ info-graphic detailing the SEC’s astonishing lack of prosecutorial vigor.
The Guardian relates a recent account of the U.S. government intervening to have a dissenting blog post from a Johns Hopkins professor taken off-line. What free speech?
Chris Kimble looks at AAPL’s long term chart wonders whether more downside could be on the way.
A great graphic at Zero Hedge asking, “guess what stabilizing event took place in 1913?”
The U.S. equity market seems to be waffling as to whether they want to break down or break out. It never ceases to amaze me that QE (taper or not) drives the market rather than any correlation to economic reality on Main Street. Is there any doubt that the stock market not longer reflects economic reality? Instead, it had become a policy tool used to bolster economic confidence. The old axiomatic belief that the market reflects and anticipates reality has been turned on its head, with Fed policy explicitly juicing the market in hopes that sufficient stock market strength will bolster confidence on Main Street. But I digress.
Some interesting reading:
The Fed does not deny that it is manipulating stock prices through policy.
Bryan Rich at Forbes appears to believe, like I do, that “confidence” is the primary goal in Fed decisions.
Nothing like having a major bank CEO declare there’s a 0% chance of a 2008 repeat to suggest a repeat of 2008 may be right around the corner.
In an unrelated but interesting article, Charles Hugh Smith reminds us that America’s love of “convenience” is likely a major driver in escalating obesity, diabetes, heart disease, etc.
As the political machine works to get the mainstream media on board with bombing Syria, the U.S. hypocrisy should not be left unmentioned.
From Michael Krieger at LibertyBlitzKreig, a list of 10 instances in which the U.S. used chemical weapons.
The U.S. knew of Iraqi use of chemical weapons in the 90′s, and did our best to insure they were maximally effective against Iran.
I haven’t provided many charts in recent months and the primary reason is that I got a new “workstation” in my 9-to-5 job. As is the tendency among larger corporations these days, administrative rights have been further restricted on my new station. Practically speaking, that means I can no longer use my beloved TD thinkorswim program, which was my charting baby. It’s an awesome program, for those of you who haven’t tried it. It remembers every trendline and keeps them in place through any/all scaling. Sadly, I no longer have access to it during the day – which is when I am typically looking at the market. I have been riding the precious metals turnaround for over a month now and think it could just be breaking out in earnest. But today, I thought I’d mention the broader market. The SPY has formed a pretty steady upper trendline in its linear chart and recently sold off when hitting that line. Also, Moneyflow – which is tends to be a very good lead indicator (although often VERY early) – has continued to decline precipitously, and is down to its lowest level since 2011. Notice how moneyflow declines foreshadowed market declines in both 2011 and 2012 (and on longer term charts, the pattern is even more clear). This year, that has not been the case (due to QE?). I expect that will change in time.
The major danger of programs like the NSA’s intrusive surveillance is that it presents those in positions of power and/or authority with the opportunity to abuse their access. There is always some risk of authority over-stepping its bounds, but by legalizing infringements in particular cases, the “norm” or “anchor” is re-positioned in the public mind. Since 2001, we as westerners (certainly as Americans) have grown accustomed to invasions of our privacy and come to think of it as par-for-the-course. What was unthinkable in 1955 (assassinating a U.S. citizen by executive order without trial, for example), has become another ho-hum necessity in the “war on terror.” But who is terrorized? Ultimately, i suspect it will be whoever opposing the political establishment.
Enter Glenn Greenwald, the Guardian journalist who revealed Edward Snowden’s evidence to the public and has led the journalistic investigation of the NSA’s surveillance infringements. The GCHQ, England’s equivalent of the NSA, detained the partner of Glenn Greenwald on Sunday morning and held him for questioning for 9 hours (the maximum allowed without leveling a formal charge). Greenwald sounded defiant in response to the “intimidation attempt.” Sadly, this escalation of state abuse is predictable. What starts as protection “for the people” can all-too-easily result in general repression of political dissent. And that appears to have been the case on Sunday. Simon Jenkins commented that the “war on terror” is now “now corrupting every area of democratic government.” Alan Rudbridger has also written an excellent editorial about the very real danger that state repression poses to journalism. I am heartened that, despite the fact that there remains stiff resistance to change from the political establishment, at least it feels like winds of change may be rustling a bit. I love Greenwald’s defiance. Here’s hoping more people catch on. Below is a mini-documentary Laura Poitras put together in 2012 featuring William Binney, one of the early NSA whiste-blowers whose calls went unheeded.
Passing along a good info-graphic from the Washington Post:
I assume the actual number of violations is some multiple higher than the reported number…
Sure enough, the Guardian is reporting two U.S. Senators have confirmed that NSA infringements far exceeded those initial reports.
Today’s reading is more focused on the Ponzi of Politics than that of finance.
Reuters broke a story today revealing that the DEA was funneling info from NSA databases to help launch their own criminal investigations.
Glenn Greenwald at the Guardian reports that the NSA has repeatedly blocked members of the House of Representatives from gaining access to information, disputing the claim that there is “House oversight” of the NSA program.
The Guardian asks the question I have about the much-publicized U.S. Embassy closings: what the chances this isn’t a prop to drum up support for NSA surveillance?
From the world of finance, John Maudlin asks “Can it get any better than this?” In other words, how long can the bubble last??
Nothing new to this story, but the most recent jobs number shows the ongoing dominance of part-time jobs. From Zero Hedge.
Yves Smith and naked capitalism with the dirty on how traders game bonuses, and the system.
Perhaps that’s because the current administration (like its predecessor) continues to reward big business (i.e. its contributors) over small business (i.e. the folks who tend to create jobs).