We discuss the return of fear as global stock markets begin to wobble. We also examine the role of central banks in performing magic tricks that are far too convincing, thus conning investors to misallocate capital. In the second half, Max interviews investment banker and author Chris Whalen about global stock markets and the perhaps unpayable debts of many nations, states and municipalities around the world – including Puerto Rico and Chicago.
No, unfortunately, this is not a headline from The Onion.
In a world in which U.S. foreign policy looks more like tragic comedy than a projection of strength and democracy, things continue to get more and more surreal. I suppose this is what happens when an inept status quo fails to step aside (or be imprisoned), despite decades of gross mismanagement and monumental failure.
We see the negative outcomes all around us. Whether it’s the destruction of the American middle class and a solidification of an untouchable oligarchy following the forced taxpayer bailout of the financial status quo, or the humanitarian disasters and chaos across the Middle East that resulted from a zero accountability policy for military-industrial-intelligence complex “leaders.” When those in positions of power face zero repercussions for their failed actions, this is exactly what you get.
DAILY PRICES Today’s Gold Prices: USD 1141.90, EUR 1012.23and GBP 744.10 per ounce. Yesterday’s Gold Prices: Bank Holiday in UK Friday’s Gold Prices: USD 1,125.50, EUR 998.23 and GBP 730.99 per ounce. (LBMA AM) Gold was marginally higher yesterday and closed at $1135.50 per ounce, up $1.10. Silver was 0.3% higher and closed at $14.64 per ounce. Gold rose 3.5% in August as stocks globally saw sharp falls on growing concerns about the Chinese and the global economy. Silver was 1% lower for the month of August and also acted as a hedge from falling stock markets globally.
Asset Performance in August – Finviz.com
Internationally, stocks had their worst month in the last three years. In one of the most volatile trading periods since the financial crisis, August saw $5.7 trillion erased from the value of stocks worldwide and no major stock market was left unscathed.
The S&P 500 was down a significant 6.3% and the Dow Jones Industrial Average ended the month 6.6% lower, while the Nasdaq was down 6.9%. At one stage losses were much higher but a sharp bounce toward the end of the month meant the declines were that as bad as they looked like they would be.
The weak performance of equity markets in August was mirrored across the world’s major financial centres, with the FTSE down 6.7%. The pan-European FTSEurofirst 300 index recorded a monthly loss of 9% – its worst monthly performance since August 2011.
“After the stunning price action of the last couple weeks we have seen BTCUSD grind up the traders seeing patterns that aren’t there, complete chopfest. Rather than whittling away hard earned profits remember NO position IS a position — just need to know when them time is. Just like me, many other traders in the Whaleclub believe that sometimes not trading is a right decision and people should appreciate that.”
In case you aren’t up to speed on your Japanese history, the nation’s post WWII Constitution prohibits military action unless it’s in self-defense. Clearly a sensible approach, which is why the current Japanese government, led by the demonstrably insane and incompetent Prime Minister Shinzo Abe, wants to get rid of it.
This story is very important. Not only will this action increase the likelihood of World War III in the Far East, but it’s another important example of a government acting against the will of the people….
DAILY PRICES Today’s Gold Prices: Bank Holiday in UK today
Friday’s Gold Prices: USD 1,125.50, EUR 998.23 and GBP 730.99 per ounce.
Last week gold and silver prices fell and gave up some of the gains from the previous week. Gold was 2% lower on Friday and indeed 2% lower for the week and closed at $1134.40 per ounce. Silver was 4.5% lower for the week and closed at $14.59 per ounce but is just 1.8% lower for the month of August.
*Note: Premiums on silver eagles have risen again – from 22% on Friday to 28% today
August has been a tumultuous month with stocks seeing sharp losses and gold has again protected investors from sharp losses. Gold has had a 3.36% gain for the month so far (see table below).
Gold is on track for the best monthly advance since January after most market participants were surprised by the devaluation of China’s currency.
The physical marketplace remains extremely tight with shortages and delays continuing to be seen for many popular coins and indeed bars. A further indication of the tightness in the bullion market, particularly in silver, is seen in the rising premiums for silver eagles. Premiums on the very popular silver coins from the U.S. Mint have risen again – from 22% on Friday to 28% today.
By financial independence, I don’t mean an inherited trust fund–I mean earning an independent living as a self-employed person. Sure, it’s nice if you chose the right parents and inherited a fortune. But even without the inherited fortune, financial independence via self-employment has always been an integral part of the American Dream.
Indeed, it could be argued that financial independence is the American Dream because it gives us the freedom to say Take This Job And Shove It (Johnny Paycheck).
When stock markets are free-falling 10+% in a matter of days, it’s natural to seek some answers to the question “why now?”
Some are saying it was all the result of high-frequency trading (HFT), while others point to China’s modest devaluation of its currency the renminbi (a.k.a. yuan) as the trigger. Trying to finger the proximate cause of the mini-crash is an interesting parlor game, but does it really help us identify the trends that will shape markets going forward?
We might do better to look for trends that will eventually drag markets up or down, regardless of HFT, currency revaluations, etc.
I worked as a financial derivatives broker in London from 2008 to 2010, at a company clinging on for life in the midst of the financial crisis. That is not a particularly long time to work as a broker, but I was never aspiring to it as a career. I was an activist on a adventure on the ‘dark side’, immersing myself in the culture of high finance in an act of subversive financial anthropology.
Of course, you might ask why I did this. I perceived it as an experimental form of activism, one that I later came to refer to loosely as ‘culture hacking’. It is a form of deviant anthropological activism. I say ‘deviant’ because it is not ‘straight’ activism, with its insistent focus on good versus evil. Rather, it is bent, ambiguous, dirty, corrupted, dark activism, as much directed at yourself as it is at some external party.
Do you want to challenge financiers who back dictators and surveillance companies? Do you want to be able to enter a corporate general meeting and critically engage with CEOs as a shareholder activist? Do you want to build networks of insider contacts who can give you information? Do you want to blend like a chameleon into the fabric of investment bank conferences? Do you want to feel fused into the emotional and human foundations of powerful institutions otherwise cloaked in technocratic, economic jargon? If so, read the rest of this story (5000 words) here: Dark Side Anthropology