WASHINGTON, Sept. 13, 2012 – It could be a wild day on Wall Street today. The bullish trading camp is convinced that Helicopter Ben will drop a satisfyingly large load of QE3 on all of us—actually the bankers—today, juicing the market and helping continue its current stop-and-go rally. The bearish types, however, are probably heavily short at this point and are ready to cascade this market down to Hades and beyond.
All this violent thrashing about inspired us to post today’s header photo of the famous “Fire Scene” that concludes Die Walküre, the second opera in Wagner’s “Ring Cycle.” The whole cycle, video-captured from last season’s epic new production by the Met, is being aired in its massive 16-hour entirety on PBS stations this week. The Maven is watching it all in his secret identities as the Washington Times Communities Performing Arts and sometimes TV critic, and it occurred to him that this scene is a great visual metaphor for the kind of day we’re likely to have today on Wall Street.
To make a very long story short, at this point in the cycle, our heroine, Brünnhilde, Valhalla’s lead Valkyrie—has seriously torqued off her dad, Wotan, who just happens to be the King of the Gods. Brünnhilde has disobeyed dad by trying to save his heroic earthly son Siegmund from death in battle. Problem is, she was really trying to do what dad really wanted someone to do. At any rate, Wotan robs Brünnhilde of her godly powers, puts her to sleep, and places her high on a mountain, surrounded by pillars or lakes of fire. Like Sleeping Beauty or Snow White, she’ll stay there until the world’s greatest hero braves the fire and awakens her with a kiss.
That’s what we’re looking at in the scene pictured above. (It’s actually taken from the Virginia Opera’s rather abridged version of this opera, which they performed last season.) The whole cycle, backstory and all, is an apt metaphor for what’s been going down in the market lately. Because they never do what they say they’re going to do; because they think of their own skins first and not the laws they’re sworn to protect; and because they’re just plain dumb, today’s gods of American government and finance have stuck U.S citizens in a perilous place. And there they’ll stay until someone else rescues them. The gods are actually powerless. Who knew?
Wagner’s entire cycle actually culminates, appropriately, in a “Twilight of the gods,” during which the old order is destroyed for something new but yet unknown. In Wagner’s time, the metaphor was obvious. This was a revolutionary political statement then, and the metaphor still serves us now as we watch bigwigs the world over dithering about, saving their own derrièrs but not ours from the epic problem they created by lying to us.
Take today’s numbers. According to CNBC, “Initial claims for state unemployment benefits rose 15,000 to a seasonally adjusted 382,000, the highest in two months, the Labor Department said on Thursday. The prior week’s figure was revised up to show 2,000 more applications than previously reported.” Note how last week’s figures, as always, have been revised up, a political sleight-of-hand that’s been going on for eons in this Administration.
The excuse for the “higher than expected” drop this week is the aftermath of Hurricane Isaac. That’s weird, though, as quite a few folks are probably now working at least as temps to clean up the hurricane’s mess. “But even accounting for the storm,” says CNBC, “the report suggested little improvement in the labor market after job growth slowed sharply in August. The four-week moving average for new claims, a better measure of labor market trends, climbed 3,250 to 375,000, the highest since the middle of July.” In other words, things ain’t improving and they’re actually getting worse. More hope and change, courtesy of clueless voters who drank the Obama campaign’s Kool-Aid in 2008. When will they ever learn?
Influenced by this, the market is oddly enough only slightly down this morning, as bad news is good these days. I.e., numbers like these should convince the Fed to add more cheap simoleons to the dollar pile and goose the market. But who knows. Disappointment could lead to a swan dive this afternoon.
Meanwhile, other weird things are going on in the market. Gold (also a big problem in the Ring Cycle), and particularly silver, which have both been soaring lately, got gang tackled yesterday for no apparent reason. Jesse’s Café Americain has a clue, however, and we quote at length:
“The violence of the selling was concentrated and hard as you can see from the intraday silver chart… It looks like the infamous “Dr. Evil” strategy in which a big player comes in to a thin market and runs the stops with a mass of concentrated sell orders in order to manipulate the price lower. They make their money and then move along.
“It is illegal to do this, but in some cases and markets the regulators turn a blind eye to these shenanigans. Professional courtesy, indirect policy action, perception manipulation, call it what you like. It may be why futures volume on the CME is down 40%.
“Bad behaviour drives out the good, in exchanges as well as companies and other organizations. Corruption is a steep tax on expected profits, unless you are one of the profiteers, and a member of the audacious oligarchy.
“’Ok guys, you’re mad. Now how are you going to stop me?’
“[J P Morgan] must be quaking in their shoes over the rumoured exposé from the [Commodity Futures Trading Commission].”
Hah. That’ll be the day. Like Wotan, the government sees what’s going on but is apparently looking for some other, unknown hero to straighten it out.
So like Brünnhilde, who always tries to do the right thing, we now sit marooned in a lake of fiscal fire, waiting for someone else to fix this mess. In the end, Brünnhilde has to take care of matters herself. Maybe it’s time for some of us to follow her example.
Meanwhile, we have what we have. Watch out for the whipsawing that’s about to show up in this market, and tread carefully today, particularly if you’re in silver, which we are via ETFs.
(Note to opera fanatics: Our headline software won’t allow me to put in accent marks, so Brünnhilde is missing the umlaut. An alternate way of dealing with this is to spell the umlauted u “ue,” but then, I figured other purists would probably yell. Just thought you’d like to know. Over the years, I’ve come to realize that many true opera fanatics probably know more about the subject than I do, anyway. In any event, I’m starting to put up short reviews of the Met’s televised ring today over at TV Den. Take a look. And if you have time, take a listen to the actual thing. “Siegfried” is up tonight on PBS.)
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.
He currently holds positions in several gold and silver ETFs, including IAU, DGP, and ACQ.
Positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.
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Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.
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