Wednesday, October 31, 2018

Piggy Bank for Statists

"Shut it down. Shut it down, now."
--Telco operator (Die Hard)

As long as government can shower special interest groups with economic resources, then politicians will be for sale. Campaign finance laws will not stop this as there are other avenues for buying political favor.

Markets for political favor will only be shut down when the spigot of economic resources flowing to government is turned off. Two valves must be shut. One is the income tax valve.

The other, as Ron Paul and Lew Rockwell observe, is the Federal Reserve valve.
Because overt confiscation via income taxes has a ceiling before people will revolt, the Fed is a more lucrative channel for acquiring resources. The Fed is indeed the piggy bank for statists.

Tuesday, October 30, 2018

Speculating is not Saving

Coleman: My life savings, sir. Try not to lose it.
Billy Ray Valentine: Lose it? In a couple of hours, you're gonna be the richest butler that ever lived.
Ophelia: I worked real hard for this, Louie. I hope you know what you're doing.
--Trading Places

A local investment advisor who advertises on the radio frequently states that people can't afford NOT to be in the stock market. He argues that stocks, with their combined capital gains and dividend payouts, protects savings against inflation.

What he doesn't mention is what Ron Paul and his FB link quoting Tom Woods, note here. Buying stocks involves speculation. Speculation puts economic resources at risk. Those saving for the future should not be speculating.
By definition, saving means setting aside resources for future use. As RP and TW observe, in the days of hard money, savers could merely set aside gold and silver coins. There was no need to worry about these coins losing their value in terms of how much economic resources they represented.

The age of fiat money has changes that mindset. People know that saving by setting aside Federal Reserve notes is a losing proposition. Even by the vastly understated official statistics on inflation, paper money loses purchasing power to the tune of 2-3% per year. Do the math. How long does it take your dollar-denominated saving hoard to lose 10%, 25%, 50% of its value at that rate?

Destruction of the purchasing power of paper money via inflation has forced savers into risky markets. When they do so, these people are no longer savers. They are speculators. They are putting capital at risk.

Unless they get lucky, these savers-turned-speculators are likely to lose a large portion of true savings that way.

position in gold, silver

Monday, October 29, 2018

Voting for a Living

Hundred dollar car note
Two hundred rent
I get a check on Friday
But it's already spent
--Huey Lewis & The News

Six years ago, then presidential candidate Mitt Romney noted that nearly half of all Americans pay less in taxes than they receive in transfer payments from the government. His primary point at the time was that it would be difficult for most of those people to support political platforms grounded in tax cut policy because voting for lower taxes would mean voting for lower transfer payments.

Fast forward to today. The fraction of all Americans receiving more in transfer than they are paying in taxes has now surpassed 50%. Mises observed that once the majority of a voters in a democratic system receive more in benefits than they pay in taxes, they will demand ever more wealth transferred to them from the minority of remaining producers. Politically, the wealth of the minority is forcibly extracted to subsidize the majority.

Rather than working for a living, people realize they can vote for a living.

A fundamental problem with democracy is thus revealed. How is it possible to limit size and scope of government when elections are determined by majority vote, and when increasingly more voters act as principals contracting with strong armed government agents to confiscate resources from ever smaller minority groups on the principals' behalf?

Sunday, October 28, 2018

Pressuring the Fed

The heat is on
On the street
Inside your head
On every beat
--Glenn Frey

The president's attacks on the Fed will only get louder as markets move lower. He won't be the only one.

For nearly ten years, stocks have risen to record levels on an ocean of easy money. Investors have been trained to expect ever higher prices. When prices go down, they will play the blame game. And, ironically, they will blame precisely the entity that created the asset price bubble in the first place.

When will the Fed and other central banks give in to the pressure to stop tightening and start relaxing monetary policy once again? "Twenty percent off the highs" is an estimate floating around my circles.
We're nearly 10% off the highs currently.

The faster markets drop, the louder the calls will get, and the quicker the Fed will cave.

Whether that action blows the bubble bigger, or actually serves to pop it, remains to be seen.

no positions

Saturday, October 27, 2018

Voting Sanctions Violence

In violent times
You shouldn't have to sell your soul
In black and white
They really, really ought to know
--Tears for Fears

In lieu of recent events, Kim Strassel argues that people should not settle political differences with acts of violence. Instead, they should settle them at the ballot box.
She does not seem to understand that, in democratic elections, voting is a form of sanctioning violence. Voters become principals of violence when they elect strong armed government agents to force some to do the will of others.

Save for the rare instances where people vote to push government back toward its proper scope in a peaceful manner, voting constitutes pulling levers of aggression.

Friday, October 26, 2018

Double Bottom

You know people are funny sometimes
'Cause they just can't wait
To get hurt again
--Phil Collins

Consistent with the muscle memory pattern, big rally yesterday followed by a mirror image melt this am. This puts most major indexes in position to test a near term double bottom.

You can bet that bulls will make a stand here in an attempt to avoid the abyss and weekend chatter. After all, Monday will be October 29--a 'black' anniversary of sorts for Wall Street...

no positions

Thursday, October 25, 2018

Muscle Memory

Only the beginning
Only just the start

When bull markets turn bearish, the early stages of the turn involve big drops followed by rallies. The rallies are driven by dip buyers doing what worked during the bull market rise. With each rally, the bulls think the worst is over.

Muscle memory takes a while to forget.

no positions

Wednesday, October 24, 2018

Rarely Spontaneous

"You leave public opinion to me."
--James Taylor (Mr Smith Goes to Washington)

In the political arena, seemingly spontaneous events rarely are. They are scripted, organized, and funded with a purpose. From demonstrations to caravans to even death threats, those who consume such 'headline-makers' at face value are liable to be played.

Tuesday, October 23, 2018


I'm gonna free fall
Out into nothin'
Gonna leave this 
World for a while
--Tom Petty

Major offsides this am in the Battle for the 200 Day with stock indexes opening deep in the hole. Dow down about 500 pts and the SPX off nearly 60.

Major tell from where I sit continues to be the banks. This sector was never able to muster strength during the last lift and is now in free fall.

What's driving this? Personally, I think we're seeing early reactions to the end of free money, a.k.a. 'quantitiative tightening' by the central banks. Of course, QT will only last until CBs cave to the notion of rescuing failing markets with another round of free money.

The question is how far markets need to slip before the CBs reverse course.

no positions

Monday, October 22, 2018

Public Opinion as Law

In a big country dreams stay with you
Like a lover's voice fires the mountainside
Stay alive
--Big Country

Courtesy of Amity Shlaes, count James Fenimore Cooper among early American writers who understood the dangers of democracy.
As Cooper observes, democracies tend to substitute public opinion for law. "No tyranny of one, nor any tyranny of the few, is worse than this." This is discretionary rule.

Whether exercised by the many or the few, tyranny is tyranny.

Sunday, October 21, 2018

Socialism and Violence

In violent times
You shouldn't have to sell your soul
In black and white
They really, really ought to know
--Tears for Fears

Socialism is never peaceful. To achieve their goals, socialist regimes must force people to either do things they don't want to do or not do things they do want to do.

Stated differently, socialism contradicts natural law.

Increasingly violent tendencies of socialists should be no surprise. Socialism is grounded in violence.

Saturday, October 20, 2018

Full Employment?

Standing in line, marking time
Waiting for the welfare dime
'Cause they can't buy a job
--Bruce Hornsby & the Range

Several nice points made here by David Stockman regarding so-called claims of 'full employment.' One reiterates what these pages have previously discussed. There continues to be a huge divide between the 'headline' unemployment number (a.k.a. 'U3') and the labor force participation rate.

The number of people currently out of the work force amounts to nearly 17 million. More noteworthy is that that number has not declined despite 'generational lows' in the U3 number.

One would also think that if, as former Fed chair Alan Greenspan claims--that this is truly the tightest labor market that he has ever seen--that wages would be quickly rising per ECON 101. But that's not what we see. Average hourly earnings hourly earnings have gone nowhere for decades.

Full employment? Things just don't add up. Stockman suggests the problem relates to how unemployment is measured, which we'll discuss in an upcoming post.

Friday, October 19, 2018

Politically Tainted Research

Magic and technology
Voodoo dolls and chants
We're making
Weird science
--Oingo Bingo

Interesting piece describing various 'hoax' articles published in academic journals. These articles were submitted by authors seeking to rout out political bias of journal editors. Journal editors, and the editorial review boards that support them, are the gatekeepers who decide what manuscripts get published and which ones get rejected.

The basic proposition of hoax authors is this. If we write our manuscript using all of the politically correct concepts and rhetoric that we know that the editorship prefers, then it does not matter whether the article is grounded in good science or not. Instead, we believe that manuscript will be accepted for publication based on style rather than on substance.

This proposition proved correct. The fields targeted by the hoaxers, such as gender studies, critical race theory, and sociology, offer low hanging fruit for demonstrating the house of cards, from a scientific standpoint, that many of these so-called academic disciplines are based.

However, political bias in the article review process is by no means limited to these fields. While it is usually more subtle, political bias is observable in my disciplines as well. For example, I have been working on a project that explores the impact of regulatory uncertainty on operating decisions. Combing through articles published in various journals that focus on regulation, I frequently encounter innuendoes promoting the altruism of the state and the 'fact' of man-made global warming.

From where I sit, the most concerning example in the piece is the one near the end that involves the rejection of an article by a journal after it was published in that journal. Huh? A math prof from Georgia Tech developed a novel mathematical explanation for the 'greater male variability hypotheses' and submitted a paper to a respectable journal that, after peer review, accepted the paper for publication. Once published, however, academics who were offended by the political implications of the paper subsequently pressured the journal editor to 'unpublish' the piece--and write an apology to journal readership to boot. First hand account of this incident of 'academic activism' can be found here.

This case raises an obvious question. How many papers grounded in good science have been rejected by journals because the authors did not kowtow to the political tastes of the editorship? Worse yet, how many studies were never completed or never converted into manuscripts for similar reasons?

Every paper not published because of conflicts with political orthodoxy impedes progress toward truth through inquiry.

Thursday, October 18, 2018

Less Bad Is Not Good

"I think that when statesmen forsake their own private conscience for the sake of their public duties, they lead their country by a short route to chaos."
--Sir Thomas More (A Man for All Seasons)

Two GMU economists who should know better trot out the tired 'less bad' voting argument. If you vote for a Libertarian Party candidate, they warn, then you are actually reducing liberty.

The argument goes like this. In democratic, 'first past the post' voting designs, Duverger's Law tells us that two parties will dominate the ballot and that the probability of third party candidates winning is slim. In all likelihood, then, you are throwing your vote away when you vote for third party candidates of any stripe.

Those with libertarian persuasions are being extra foolish, however. Because, per Duverger, only Republican or Democratic party candidates are likely to win, and the Republicans are 'obviously' more supportive of liberty than Democrats, then libertarians are actually voting for less liberty when they pull the lever for Libertarians instead of Republicans.

This is the twisted logic of the political mind.

Both of the dominant political parties run on platforms that reduce liberty. Although one party may seek to reduce liberty more than the other, a vote for either reduces liberty.

Picking the less bad choice still leads to bad. Why compromise with evil?

Wednesday, October 17, 2018

Miseducation About Democracy

If looks could kill
They probably will
In games without frontiers
War without tears
--Peter Gabriel

These pages have observed that one mechanism for leftists to cope with the cognitive dissonance associated with Donald Trump's election as president is to claim that his victory was illegitimate since he did not win the popular vote. An intuitive extension of this delusion is to call for an end to the Electoral College. Many leftists are making such a call.

To the extent that some Americans might view subjecting presidential elections to a national popular vote, Prof Williams suggests that miseducation by the school systems is a primary culprit. This miseducation begins with the premise that the United States was founded as a democracy. As these pages have frequently observed, Prof Williams notes that the United States was founded as a federal republic, not a democracy. The word 'democracy' does not appear in either the Declaration or the Constitution. He includes classic quotes from Madison, Randolph, Adams, and Hamilton all voicing contempt for democratic designs.

Williams goes on to discuss the Electoral College as device for upholding a republican form of government and for breaking the grip of majority rule votes in presidential elections.

That few people can coherently explain our founding ancestors' logic against democracy and their corresponding efforts to thwart it constitutes ignorance of fundamental civics--miseducation that leftists seek to exploit today.

Tuesday, October 16, 2018

Pledging Allegiance

Will it be yes
Or will it be sorry?
--Paula Cole

Battle for the 200 day moving avg is clearly underway in both the SPX...

...and the COMP.

The outcome will determine whether the black boxes will maintain their fidelity to the upside. A decisive break below the 200 day would signal that their allegiance has shifted to the downside.

no positions

Monday, October 15, 2018

Everything Bubble

"It's clear as a bell to those who pay attention. The mother of all evil is speculation--leveraged debt. Bottom line: it's borrowing to the hilt. And I hate to tell you this, but it's a bankrupt business model. It won't work. It's systemic, malignant...and it's global."
--Gordon Gekko (Wall Street: Money Never Sleeps)

Ten years after the credit market meltdown, Ron Paul observes that we are not better off economically. In fact, we are worse off.

Huh? With all the positive economic headlines popping up daily, and stock markets just a couple of percent off all time highs, how can we be worse off?

The problem is leverage and debt--leverage and debt that are multiples higher than the leverage and debt of 10 years ago that nearly took down the financial system.

Today's leverage and debt were spawned by the most aggressive central bank monetary policies in the history of the world--as well as by government policies of bailing out all nearly all institutions that, thru their reckless borrowing and lending practices, nearly tanked the system last time.

Whereas during the last cycle easy money and credit poured into the real estate market, this time around easy money and credit has poured into everything. Credit cards, student loans, cars, housing (again), stocks, and, of course, government. As RP notes, "Federal debt is over 21 trillion dollars and expanding at tens of thousands of dollars per second."

What we have is an Everything Bubble. The crisis potential of this Everything Bubble, when it pops, promises to dwarf the meltdown of 10 years ago. The more accurate comp will likely be the Great Depression.

Sunday, October 14, 2018

Insurance Gone Wrong

Those changing years
They add to your confusion
Oh and you need to hear
The time that told the truth
--Level 42

Article here reiterates a point these pages have made before. Healthcare markets have bastardized the concept of insurance. Insurance markets are supposed to be markets for risk management. Risk constitutes potential, not certain, loss.

Risk is not associated with routine expenses. Groceries, oil changes, utility bills are everyday costs that cannot be insured because there is no way to price policies to pool risk in a manner that does not simply transfer economic costs from one entity to another.

Similarly, many health care costs are not legitimately insurable as well. Regular doctor's visits, flu shots, maintenance drugs, etc constitute regular expenses that cannot be managed by risk pooling. Instead, insurance reimbursements for routine medical bills are simply subsidies being paid to one person by another person.

Unfortunately, subsidized markets lack competitive pressure for improvement. Thus, costs for most healthcare products and services rarely decline.

On the other hand, catastrophic medical occurrences like contracting cancer or treatment following a sudden heart attack are the types of events that insurance was designed to manage. Their low probability/high cost nature means that risk pools can be designed in a manner that health insurance programs can actually create economic value to individuals and society at large.

Unfortunately, combining legitimately insurable health care risks with those costs that should not be covered dilutes the true economic benefit of health insurance. It also obscures opportunities to truly reduce economic impact of risky health care events (through better insurance program design + improvements in treatment + reduction in catastrophic event occurrence) over time.

Saturday, October 13, 2018

Militant Left

We'll be fighting in the streets
With our children at our feet
And the morals that they worship will be gone
--The Who

Some people are voicing surprise at the recent escalation in the militant nature of the left. But it should be no surprise. Leftists are statists. When they sense that their statist institutions are being threatened, leftists will do what they can to neutralize the threat.

In pretense that the state does not act aggressively, however, leftists will rarely begin with overt force. Instead, they will follow a familiar progression that unfolds as follows:

Social pressure. Public ridicule, belittlement, etc. aimed at embarrassing or shaming the target into 'voluntarily' removing the threat.

Legal action. Laws, law suits, arrests, impeachment meant to keep the threat at bay.

Physical violence. When the previous two measures don't work, then overt physical force is employed against the threat.

Because leftists are collectivists, they mistakenly believe that ridicule and shaming work against members of out-groups just as effectively as against members of their in-group. They fail to realize that out-group members are often less influenced by rhetoric than leftists are. As such, no matter how loud the left shouts--and they have been shouting--little social pressure is actually exerted on out-groups. Consequently, this tactic has been largely ineffective in quelling recent threats to the state.

Until recently, running to the courts to obtain legal recourse against state threats has been an effective fallback tactic. However, since President Trump took office, he has been nominating judges for benches from the Supreme Court on down that promise to tilt the balance of judiciary power away from leftist agendas.

Because legal channels are also failing them, leftists are increasing turning to overt violence as a preferred measure for preserving the state. This explains rising militant tendencies of the left.

Friday, October 12, 2018

Follow Thru

I saw the world crashing all around your face
Never really knowing it was all just mesh and lace
--Modern English

Got follow thru on Wednesday's melt when an afternoon sell program lopped about 400 points off the Dow in short order. Yesterday's 500+ pt loss found both the Dow and SPX south of their 200 day moving avg.

However, this morning woke to jiggy futures and after a gap open the SPX currently sits...on its 200 day moving average.

Not sure this gap open is what the bulls really want to see but, for now, it appears the algos are trying to determine whether the 200 day is a valid line in the sand for technical support. Should the answer be negative, the robots will likely skee-dat-al back to the south.

no positions

Thursday, October 11, 2018

Going Down

I'm sick and tired of you setting me up, yeah
Setting me up just to knocka, knocka, knocka me down
--Bruce Springsteen

The indicators now seem prescient. Big down day in stocks yesterday with major indexes down 3% or more. Dow down more than 800 points and closed on its lows.

Many indexes, including the Nasdaq, Russell 2000, and the Trannies have now broken below their 200 day moving averages.

Early follow this morning thru finds the SPX sitting top of its 200 day:

Am wondering how the robots respond. Algos have been buying the trend higher for years. Do they sell the trend lower as well?

no positions

Wednesday, October 10, 2018

Open Season

I must've dreamed a thousand dreams
Been haunted by a million screams
But I can hear the marching feet
They're moving into the street

Breitbart project documents nearly 600 acts of violence and harasment against Trump supporters and associates. Acts range from shooting Republican senators on a practice baseball field, to beating up people on the street wearing Trump shirts, to threatening remarks made about the president.

The list likely under-reports the number of incidents. For example, the assault against Rand Paul at his home in Kentucky last year does not appear on the list as far as I can tell. Also, because the mainstream media has largely been derelict in its reporting duties here, there are surely some incidents that simply have not been documented.

Open season has been declared on Trump supporters.

Projecting where this goes from here is not pleasant.

Tuesday, October 9, 2018

Safety Net Gone

I say, we can go where we want to
A place they will never find
And we can act like we come from out of this world
And leave the real one far behind
--Men Without Hats

Interesting comments from bond guru Barry Habib attached to Art Cashin's morning comments today. As to why long bond rates have ripped higher so quickly, Habib opines:

"A major cause of this is that the Fed safety net is gone. It didn't take long - right after October 1. Along with ECB buying cuts.

"Here's the interesting thing - more volatility ahead for yields rising and less volatility for them falling! That's because without the safety net, yields will behave more normally. It's been a long time, but the Fed buying has muted the selling in bonds and rise in yields. That's gone now. And when bonds were rallying, the Fed buys juiced it. That's gone too. So the rally will be less than we have been accustomed to, and the sell offs will be deeper. It will feel different, but it's finally now going to be 'normal.'"

What he's saying is that unnatural underlying bid to the bond market coming from central banks is going away as quantitative easing programs are discarded in favor of quantitative tightening. With the safety net gone, bond prices will fall much quicker as they seek their true, unmanipulated value.

Monday, October 8, 2018

Piling Up

Your face appears again
I see the beauty there
But I see danger
Stranger beware

Last week we noted weakness in the banks, small cap stocks, and long term bonds--in addition to lack of broad market participation as major indexes rise--as potential 'tells' of a market turn. Let's add the Dow Transports to the list today.

After marking new highs a couple weeks back, the Trannies have rolled over, easily slicing thru the 50 day moving avg. The 200 day MA remains a coupla percent below.

Bearish indicators are piling up...

no positions

Sunday, October 7, 2018

Socialist Destructionism

There's a place where the light won't find you
Holding hands while
The walls come tumbling down
When they do, we'll be right behind you
--Tears for Fears

In the first part of this article, Tom DiLorenzo reviews Mises's masterful critique of socialism w.r.t. the objective of destroying existing society. After that has been accomplished, so the socialist mindset goes, then promises of a vague utopian alternative can commence.

But that utopian alternative never materializes. It can't, said Mises, because socialism "does not build; it destroys. For destruction is the essence of it. It produces nothing, it only consumes what the social order based on private ownership of the means of production has created...each step leading toward socialism must exhaust itself in the destruction of what already exists."

As DiLorenzo observes, this situation has played out over and over again in socialist regimes--from yesterday's Soviet Union to today's Venezuela. The primary mechanism of destruction is capital consumption. "Socialism and destructionism...propose to use up capital so as to achieve present wealth at the expense of the future...The policy of destructionism is the policy of the spendthrift who dissipates his inheritance regardless of the future."

Gaining support for destructionism requires inciting the masses through agitation, begging for votes, stirring up electoral excitement, street riots, and terrorism. Intellectuals and intelligentsia become "recruiting agents for socialism." They must call for the righteous destruction of all cultural values that block progress toward the socialist ideal.

Viewed in the light of destructionism, modern day attacks on Western culture institutions should not be surprising. 

Saturday, October 6, 2018


You should've been gone
Knowing how I made you feel
And I should've been gone
After all your words of steel
--Steve Perry

One of President Trump's first actions when he took office was to withdraw the US from the Trans Pacific Partnership (TPP) negotiation. This was a victory for free, rather than managed trade. Trump subsequently signaled that he might also withdraw the U.S. from the North American Free Trade Agreement (NAFTA).

Instead, the president has negotiated a 'NAFTA 2.0' with Mexico and Canada. The new deal, officially dubbed the U.S.-Mexico-Canada Agreement (USMCA), constitutes a revision of the previous agreement between the trade bloc.
As Ron Paul observes, the 1000 page treaty enumerates various sweetheart deals and procedures for economic meddling. If this were truly a free trade deal, the document would be less than a paragraph long, as it would amount to simply a declaration that government would get out of the way of people from different countries engaging in voluntary exchange.

After all, truly free trade does not require a treaty.

Friday, October 5, 2018

Peak Performance

Until it ends
There is no end
--Cyndi Lauper

Jason Goepfert plots every instance that the Dow has closed at a 52 week high with less than 50% of NYSE stocks above their 200 day moving average. Stated differently, the graph shows the instances where the DJIA marked new highs while the broad market was in a bear market.
Not a timing mechanism to be sure (see 1999 runup), but the data suggest we're closing in on a major peak.

no positions

Thursday, October 4, 2018

Bond Yield Breakout

Long bonds were pummeled yesterday. Ten Year yields decisively broke thru resistance to levels not seen since 2014. This morning yields touched 3.2% before pulling back.

Elongating the time horizon indicates that the long term downtrend in T-note  yields has clearly been broken. A band of resistance rests above current levels in the 3.5-4.0% range.

One would think that it will take a while for yields to chew thru that overhead supply. If yields would happen to quickly push thru those, then that would be telling.

no positions

Wednesday, October 3, 2018

Russell Weakness

But when I saw her smile across the crowded room
Well I knew we'd have to leave the party soon
As the band began to play out of tune
--The Hooters

Those feeling bearish about domestic stock markets at this point are probably looking for signals that the trend may be about to change. A few of those signals seem to be appearing, e.g., higher interest rates, weakness in financials.

There is also a long held tenet that bull markets on the verge of flipping over will demonstrate weakness in the most speculative segments first. One of those segments is smaller cap stocks.

The Russell 2000 has indeed shown some weakness recently--certainly underperforming the larger cap indexes which are close to marking all-time highs. Technically, a multi-month uptrend in the RUT has broken down:

To be fair, however, this weakness is very short term. When time horizon is elongated, the breakdown shown above seems less onerous in the larger scheme of things:

That said, tremors often precede earthquakes.

no positions

Tuesday, October 2, 2018

Victimhood Markets

I heard about you and that man
There's just one thing that I don't understand
You say he's a liar and he put out your fire
How come you still got his gun in your hand?

Victim mentality and victimhood culture go hand in hand with markets for victimhood. On one side of the market are the sellers--people who want to trade their position as a victim or perceived victim for something of value.

Victims might value material wealth, as in the case of an accident victim suing for damages. In other cases, victims might welcome psychic income from people who sympathize with their victimhood. Victims might also gain social status if the culture tends to worship or otherwise elevate victimhood.

On the other side of the market are the buyers--those who seek to benefit from the victimhood of others. Overt examples are ambulance chasing attorneys who take on victimized clients under the auspices of obtaining a slice of a legal settlement.

More subtle are charitable people who wish to help others perceived as victimized. In exchange for their assistance, charitable people gain psychic income from the satisfaction of helping others. If they believe in God, charitable people might also gain a spiritual sense that they have strengthened their case for progressing to the afterlife.

Increasingly active on the buy side of victimhood markets are political factions. These groups seek to leverage the victimhood of others to gain political capital that will help them advance their agendas. By acquiring elements of victimhood and the emotional capture that comes with it, political factions calculate that they will gain votes or similar assets that they can ultimately convert into control of the strong arm of government.

When political factions are involved, victimhood markets are a means for gaining power and authority over others.

Monday, October 1, 2018

Caution...Or Not?

Ever had that feeling
Almost broke in two 
Said that you were leaving
Like you do, like you do

Although major stock indexes are running toward new highs this am, hard to see them capturing the flag without participation by the banks.

Following a lift when it needed to a couple of weeks back, the bank index has once again flipped over and is marking new lows as it heads toward the bottom of the trading channel. Today's heaviness (see that inverted hammer in yellow?) in the midst of a broad lift in the tape is a signal that strength is being sold in this sector.

Because rhythm has largely left the markets, perhaps all of this means nothing anymore. In the 'old days,' however, weakness in the banking sector on a big up for the overall tape would constitute a significant caution signal.