20 March 2018

But If Not...

Excerpt of the Sermon "But If Not" by Martin Luther King

The God of the Markets
"O Nebuchadnezzar, we do not need to defend ourselves before you in this matter. If we are thrown into the blazing furnace, the God we serve is able to save us from it, and he will rescue us from your hand, O king.

But if not, even if he does not preserve us, we want you to know, O king, that we will not serve your gods or worship the images of gold you have set up and commanded us to worship."

Daniel 3:16-18

Now I want you to notice first, here, that these young men practiced civil disobedience.

Civil disobedience is the refusal to abide by an order of the government or of the state or even of the court that your conscience tells you is unjust. Civil disobedience is based on a commitment to conscience. In other words, one who practices civil disobedience is obedient to what he considers a higher law.

And there comes a time when a moral man can't obey a law which his conscience tells him is unjust. And I tell you this morning, my friends, that history has moved on, and great moments have often come forth because there were those individuals, in every age and in every generation, who were willing to say "I will be obedient to a higher law." These men were saying "I must be disobedient to a king in order to be obedient to the king."

And those people who so often criticize those of us who come to those moments when we must practice civil disobedience never remember that even right here in America, in order to get free from the oppression and the colonialism of the British Empire, our nation practiced civil disobedience.  For what represented civil disobedience more than the Boston Tea Party.

And never forget that everything that Hitler did in Germany was legal. It was legal to do everything that Hitler did to the Jews. It was a law in Germany that Hitler issued himself that it was wrong and illegal to aid and comfort a Jew in Hitler's Germany. But I tell you if I had lived in Hitler's Germany with my attitude, I would have openly broken that law. I would have practiced civil disobedience.

And so it is important to see that there are times when a man-made law is out of harmony with the moral law of the universe, there are times when human law is out of harmony with eternal and divine laws. And when that happens, you have an obligation to break it.

And I'm happy that in breaking it, I have some good company. I have Shadrach, Meshach, and Abednego. I have Jesus and Socrates. And I have all of the early Christians who refused to bow...

And this is what I want to say finally, that there is a reward if you do right for righteousness' sake...Don't ever think you're by yourself. Go on to jail if necessary but you'll never go alone.

Take a stand for that which is right, and the world may misunderstand you and criticize you, but you never go alone, for somewhere I read that "One with God is a majority," and God has a way of transforming a minority into a majority.

Walk with him this morning and believe in him and do what is right and he'll be with you even until the consummation of the ages. Yes, I've seen the lightning flash, I've heard the thunder roll, I've felt sin breakers dashing trying to conquer my soul but I heard the voice of Jesus saying still to fight on, he promised never to leave me, never to leave me alone; no, never alone, no, never alone. He promised never to leave me, never to leave me alone.

Where you going this morning, my friends, tell the world that you're going with truth. You're going with justice, you're going with goodness, and you will have an eternal companionship. And the world will look at you and they won't understand you, for your fiery furnace will be around you, but you'll go on anyhow.

But if not, I will not bow, and God grant that we will never bow before the gods of evil."

Stocks and Precious Metals Charts - FOMC Tomorrow

'Life is a school of probabilities.'

Walter Bagehot

Stocks were largely unchanged today. There are going to be watching Jay Powell's first FOMC meeting as Chairman when they issue their decision and guidance tomorrow afternoon.

Gold and silver were off a bit, based on a stronger 'King Dollar' as Larry Kudlow likes to say.

I thought it was interesting that China has apparently given some signals that in response to any US trade tariffs they might be inclined to take some action in the debt and currency markets.

The Fed is widely expected to raise their benchmark rate by 25 bp tomorrow. To do anything else would likely shock the markets.   Since they are raising rates for their own purposes, to get as far off the zero bound as possible before this latest asset bubble collapses, I imagine that they will keep pressing on until the economy starts to sputter so obviously that there will be no denying it.

I hope this is not one of those scenarios where the first undeniable indication of a serous problem will be a heart attack in the equity and bond markets.

So they will be updating their wording and 'dot plots' possibly, and traders will be watching to see if they indicate three or four rate hikes in 2018.  It's not clear to me that it makes a beans worth of practical difference whether the Fed raises three or four times this year.  But this is the kind of thing that these money-printed, risk-mispricing markets like to do.

It appears that this latest nor'easter named Toby is going to be much less benign than originally forecast, and is going to be clobbering the NYC metro and tri-state area tomorrow with about a foot of snow.

Dolly and I are enjoying some home made soup, and snuggling down for a long winter's day tomorrow.  I think the young man will be spending the night since NYU will be closed tomorrow.  He and Dolly have a remarkable rapport.

This is the fourth nor-easter we have had in three weeks. Its nice not to have to go anywhere if you don't want to.  Just like its nice not to have to play in these utterly crooked markets.

Have a pleasant evening.

19 March 2018

Stocks and Precious Metals Charts - Hey Mister Tangerine Man

Hey Mister Tambourine Man, play a song for me
In the jingle jangle morning, I'll come followin' you

Take me for a trip upon your magic swirlin' ship
All my senses have been stripped
And my hands can't feel to grip
And my toes too numb to step
Wait only for my boot heels to be wanderin'

I'm ready to go anywhere I'm ready for to fade
On to my own parade cast your dancin' spell my way
I promise to go under it.

Bob Dylan, Hey Mister Tambourine Man

Stocks took a dive today, with a broad wave of selling with about 450 of the SP 500 stocks going lower.  What was odd about this was that there did not seem to be any flight to safety, with bonds and the precious metals flat, and the US Dollar lower.

The catalysts for the selloff were relatively slight for such a broad reaction.

 Facebook is implicated in a misuse of its users profile information by Cambridge Analytica who used it to craft tailored political campaign messaging in the last Presidential election.

There is also quite a bit of tension on the international and domestic political horizons that are making the markets edgy at these levels.

There is also a two day FOMC meeting this week, with an expected 25 bp rate increase almost certain. But all eyes will be on the 'dot plots' this Wednesday afternoon to try and discern if there will be three or four rate increases this year.  The markets are already starting to price in four.

The stock market bubble has been fueled by the Fed and the US monetary and fiscal policies.  They have been pumping quite a bit of money, top down, with most of it (if not all) being snagged by the one percent and put to their own uses, which do not favor broad demand or real GDP growth.  We have seen the usual growth of monopolies, non-productive deal-making, and paper asset bubbles.

So at the end of the day, the reason for today's big selloff is that there is another financial asset bubble in equities as noted here previously, led by the FANG tech stocks.

Narrowly led bubbles lead to wild volatility swings before they finally revert to the mean.  And that reversion in this case is likely to be in the neighborhood of a 20%+ stock market correction.

Financial reform is not only being neglected, the GOP with the help of corporate Democrats are rolling back the mild financial reforms from the widely disappointing Obama Administration.   This is not going to end well.  And they are driving huge deficits to benefit their cronies and donors.  Not that Obama did not essentially do the same thing for Wall St.

Hillary was in India saying the usual tone deaf and elitist things that are so popular among Beltway Liberal Democrats these days.   There are rumours she will run again in 2020.  She may still have the raw power within her hapless and self-referential party to get nominated, but barring a GOP selection of some even more outrageously bad candidate I don't think her chances will be good.   She is the poster child for the kinds of things that the public wants to change.

The times they are a-changin'. And at some point the winds of change may start blowing a hurricane.
Come senators, congressmen
Please heed the call
Don't stand in the doorway
Don't block up the hall
For he that gets hurt
Will be he who has stalled
There's a battle outside
And it's ragin'.
It'll soon shake your windows
And rattle your walls
For the times they are a-changin'.
Tomorrow is the first day of Spring.

Have a pleasant weekend.

18 March 2018

Hypocritical Corporate Democrats Selling Out While Feeling Your Pain

"You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time."

Abraham Lincoln

As always, the GOP does the same thing in the service of Big Money, and much worse and most of the time, unabashedly.  I don't spend a lot of time on them because they don't seem to be a potential vehicle for the kinds of economic change that we need the most.  Their service is to the monied interests and every cockamamie think tank ideology that supports the one percent and then some.

But the Democrats, who are the traditional party of the working class and the New Deal, keep trying to ride this 'lesser of two evils' gimmick and avoid doing more than talking about badly needed genuine reform.  They want to have their cake and eat it too.  The cake is public office, frosted with huge Big Money political contributions, speaking fees, and post-office payoffs.

Don't blame Bernie or Jill Stein for Hillary's loss.  And don't blame the voters, or write off half the country, the blue collar working class and the working poor, in the arrogant, elitist manner of Mitt Romney.  But the Clinton campaign did, and it is clear that Hillary has learned nothing from her loss.

Her high disapproval ratings across a broad portion of the electorate were well known.  And the reasons for this disapproval showed up clearly in her campaign, which epitomized all the self-referential policies that the out of touch Beltway Democrats have been pursuing since before 1990.   The 'best qualified candidate' of all time lost to a reality show host and a fast-talking NY real estate developer.

And they lost the Congress, most of the governors' offices, and broad support in the middle and lower working classes in their pursuit a credentialed elite supported by the one percent, hidden beneath the figleaf of identity politics.

Their attitude is that the working class has 'no where else to go.' And when working people do occasionally go someplace else in their desperation for change, they are condemned, vilified, thwarted, and further alienated.

There was a groundswell of popular support for Bernie Sanders.  His broad appeal and ability to raise non-corporate money was an undeniable phenomenon, an indication of where the Democratic base was heading.  And it was determinedly and at times brazenly ignored, ridiculed and then suppressed by the Democratic insiders and their consultant/media enablers who feed on their money machine.

The Democrats have abandoned their New Deal principles and constituency, and do as little as they can for the public.  Meanwhile they have been pursuing the same kind of razzle dazzle elitism that has been their brand since the Clintons showed them how easy it was to have big personal paydays. 

And they are not likely to change until there is a rebellion within their own party that tosses them out, or a third party rises up to replace them.

That is what the people who live off the donation/consultants money flows fear the most— that someone will disturb their own 'good thing.'  And they become the very things that they pretend to despise while maintaining a hypocritical rationale that grows thinner by the day.