"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Tuesday, August 2, 2011

S&P now in negative territory for year

The plunge in the stock indices in today's trading has wiped out the entirety of paper gains for the year. There are several things I wish to note about this.

The first is that the so-called "debt ceiling agreement" was supposed to be friendly towards stocks. Remember the soaring indices in Sunday evening trade as the news broke that the agreement had been reached. The market has put all that behind it and is now focusing on the pathetic growth rate in the US economy and the fact that lawmakers and the administration will now proceed to saddle this generation of Americans and the next with even more debt. That debt weighs like an anchor on future economic growth and this is not being lost on traders/investors. As I said in a previous post - only in modern day America could a bunch of hapless politicians congratulate themselves for sinking their nation and their countrymen deeper into a morass of indebtedness. Words cannot express my contempt and disdain for this bunch of pitiful "statesmen". They make Nero look like a genuine patriot by comparison. He at least did something constructive while his city burned. He played his fiddle. Our jokers played us instead.

Secondly - I made a point a while back that the one relatively bright spot for consumers was that even though gasoline prices were soaring higher and still remain stubbornly high, even though food prices continue to trek upwards and consumers leave the grocery stores with fewer goods in their bags for the same amount of money spent, even though medical costs continue to rocket higher, even though their home values continue to sink lower leaving more and more mortgages underwater, even though the employment situation reeks to high heaven, at least, at least, their 401K's and retirement plans were a bit in the black for the year. That has now evaporated like the morning dew. Can you even imagine what the next Consumer Confidence numbers are going to look like?

Friends and readers - this week will be one for the history books in my opinion as it will mark the beginning of the steady decline of the US economic might unless there is a drastic, and I do mean "drastic" change at the ballot box next year. It might even possibly be too late for even that to do any good at this point as the mathematics is now working against us all.

The markets are said to illustrate the combined wisdom of a host of individual traders/investors/players, who survey the current scene and then based on that survey, make decisions accordingly. Based on that alone the markets are saying that looking ahead, the environment for stocks in general is rapidly deteriorating and that we are heading back into Recession.

All eyes will then turn to the Fed for some further round of QE although I doubt it will be called that for political reasons. Either way, should that indeed happen, the floor under the Dollar will collapse.


  1. That first paragraph just kicked ass. Well said! What is icing on the cake is how much the left politicians and buttinsky crack pot "economists" being paraded on the boobus tubeus are whining about the cuts. Id like to see them then hand the next child they see a paper with the word "BILL" written on it saying, "Oh well, Im sure you and your WalMart and McDonalds jobs are good for it!

    Yeah that S&P aint looking too pretty. Chart tells me we take out $1250.. then 1125.. 1000.. then you can pretty much say "it's toast!"

  2. Dear Dan,
    When you started your blog, I posted comments to you about my community, my friends, and my family having literally been saved by Jim Sinclair's blog and your comments.
    I want to reiterate my thanks tonight.
    Unlike the rest of the "paper" hangers-on, I am up tonight. Since the others have taken a 2-3% shave, I am quite pleased that we are net up 4-6% tonight.
    This does not really equate to improved standards of living for me, my family, or my community.
    It just means that we will not perish as fast, liquidate as much, nor lose as much as they who relied upon such empty paper promises.

    So, thank you for your steadfast commitment to HARD ASSETS and helping me and my friends to distinguish what IS money from what money IS NOT.

    I have news for people like our Congress, White House, and Federal Reserve.

    There is no law that our Congress can pass, no rule that the President can set, and no loan that the Federal Reserve can write that will alter my valuation of my own HARD ASSETS.


    It is not for sale.

    It is not for barter.

    It is not for trade.

    And, that is, my friends, what"they will have to pry from my cold bare hands"

    I know who has the clothes on and it is NOT the people posturing in our formerly honored halls of legislative debate or Executive order.

    The man with the best clothes is the farmer working his field, the rancher herding his livestock, the fisherman reeling his catch, the miner spitting dust in his teeth.

    It is not the political hack walking the corridors of DC.

    The contempt for their ilk is high.

    Ergo, I do not bother with their sour political milk. It does not nourish and it does not bring life. It does not deserve my time.

    But, I do bother with jsmineset.com, kitco.com, and King World News everyday for the past four years.

    Anyone seen the next angel at 1650? I felt the wings of God today. I hope you did too my friend.

  3. Gudday from way down south in Australia. Thankyou Dan Norcini for your statements of trading knowledge, your influence is reaching the far corners of our planet. I only wish that the days of real trading were still with us, the days that enabled the human being to actually perform the trades in the market, and have the time to think about a decision or play. It seems the algorithems have taken over what we used to call a market! The majority of public traders in Australia still do not understand this significant change (for the worse) in the way we (or the super computers) conduct exchange transactions. The old ways are still with us where it counts though Dan, with the people in the know. All the best to you Dan from a fan from the far south of the planet.

  4. it will take more than this to wake the majority up.

    and god help the tea party if they get specific on needed entitlement reform like pushing back retirement age and means testing....if they get it done, someone else will come in and take the savings and give it to those hanging on street corners.

    and then there's medicare spending like the .5 mil$ they spent on my friends wife who got lung cancer at 80 after a lifetime of cigarettes and coca cola.....made her sick as a dog w/chemo but extended her misery for a month or two.....and thats healthcare.

    and the MMT'ers say we have the world's reserve currency all we have to do is print it.....how's that workin' out?

    look at all the debt charts since '71(nixon closes the gold window)

    fiat money is like giving a credit card to my nieghbors kid.

    appreciate your insight,dan.

  5. Trader Dan, Can we ever say "Thank you" enough for your guided insight.
    Thank You!

  6. I'll join the choir, and say, Thank you, Dan! Very much!

  7. Grim but true, very good piece Dan.

  8. Dan,
    With the economy down (and going down a lot more in the coming months) and the dollar down (and going down a lot more in the coming months) what do you think will happen with the CCI? I said here before that I expected the index to go down -and it did- but I am sure about the future. The stock market could not only go down but possibly crash before the end of the year. this 'should" drag the index down with it. Any comments?


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