Why did the Treasury chief need to visit Fort Knox?

Treasury Secretary Steve Mnuchin paid a visit to Fort Knox on Monday to inspect our gold holdings at the US Mint’s gold bullion vault.

“I assume the gold is still there,” Mnuchin said in Louisville, Kentucky before traveling to the installation to view the $200 billion in holdings. 

Mnuchin is the first Treasury chief to visit the gold vault in over 70 years. My question is why?

Surely he could have an accounting of the holdings on his desk in minutes, without schlepping to Kentucky. Of course in some circles it has been intimated that there was only an IOU in the vault as the gold reserves were pledged to our debt obligations.

However, after the inspection Mnuchin “playfully” reassured Americans the treasure was still secure.

“Glad gold is safe!” he wrote in a post on Twitter.

It just seems that Mnuchin would have more on his mind these days than taking a tour of Fort Knox. The debt ceiling and tax cuts would be two areas that would keep him in Washington. 

And the fact he made light of the visit, by joking it would make a good movie if the gold was not there, all tell me there was a seriousness to this trip that belies the flippant nature of the remarks.

I will not even get into the brouhaha Mnuchin’s wife got into on social media over the trip.

Thar may be gold in the foothills of the Smokey Mountains, but I want to know who wanted the Treasury Secretary to go on the record and confirm it?

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Stock answer is we don’t know about next 6 months

How can the equity markets trade looking six months out — as is the traditional metric — when it doesn’t know what the next six minutes will bring?

The Dow Jones traded down 274 Thursday on, pick your poison:

  1. Terrorist attack in Barcelona,
  2. White House finance chief Gary Cohen’s departure.
  3. Algos in control since its August
  4. All of the above

It has to be near impossible to be able to formulate an earnings picture looking out the next quarter, when a 140-character tweet can throw all the analysis into the trash bin.

Here’s a analyst’s note on Friday morning, explaining very succinctly what he is up against when figuring direction of the market:

“In a week where we started by worrying about nuclear war, markets have quickly moved on from this, with yesterday’s weak session more of a response to fears that Mr Trump’s strategy for the economy and business is falling apart and later the terrible terrorist attack in Barcelona,”
Deutsche Bank analyst Jim Reid.

So off of that note we have  stocks marginally down for the week. I say that’s not a bad performance even without mentioning the civil unrest in Virginia last weekend.

JPMorgan’s Dimon may have a whale of a problem, again

JPMorgan’s CEO Jamie Dimon is out on his annual bus tour to meet with employees and business and political leaders that have relationships with the bank. The poster boy for banking since 2008 crises is talking about making America great again.

Dimon says he is a patriot first and a banker second. His point is if we do right by America, then his bank and the stock price will do just fine, thank you. Yet there seems to be a dark cloud following Dimon and it looks like a whale.

While Dimon moves across the country, a ghost of banking’s past is rearing its head again. The London Whale trade, which hit JPMorgan in 2012 and cost the bank more than $6B ultimately in trading losses. Congress used it as prima facie evidence for the Volcker Rule’s banning of banks with deposits running their own trading operations called proprietary trading desks.

Bruno Iskil, the JPMorgan European trader who was working with authorities on the case has come out publicly to state he was doing Dimon’s work. While the feds have their charges against two other European traders for lack of evidence of wrongdoing and allege difficulty in expediting them.

At first Iskil and the team were deemed “rogue traders” going out on their own to capture huge profits using the bank’s money. As time went by and the bank’s CIO Ina Drew stepped down, word began leaking out that this was a C-Suite authorized trading program, which before it blew up, brought in huge profits for the bank.

Drew was essentially running a hedge fund within the bank, using other trading desks data to take winning positions in outsized bets, according to Iskil’s newest writings. When news of these losses began to emerge, Dimon called them a”tempest in a teapot”.

Well that leak has now become a chorus as others JPMorgan traders have backed up Iskil’s assertions that Dimon & Co. created the teapot and put it on the boil.

So as Dimon’s latest tour is said to include visits with Congressional leaders over these next weeks, it’s unclear whether his push to scale back the Volcker Rule will have any merit.


EDITOR’S NOTE: The subreddit r/google has barred me from posting after I put this story on the Reddit. While getting over a 1,000 hits from Reddit, the moderator labeled this post spam.

This only confirms what Damore says about the echo chamber. Certainly it’s not spam, but it is not in keeping with the “truth” as Silicon Valley sees it.

July jobs report bigger than Mueller’s motions

Friday’s job number of 209K beat the Street’s 180K estimate with hourly earnings ticking up 0.3% as mid-year raises kick in.

Equity futures markets are up 60 points on Dow unchanged from prior, despite the news out of Washington of a special grand jury being impaneled.

The dollar also strengthen on the job news.

The fact that the markets shrugged off Special Counsel Robert Mueller’s actions, speaks more to the continued DC gridlock, which the equity markets see as a buying opportunity.


I would like to acknowledge the passing of a great newspaperman and researcher Jim Marrs.

Marrs was a prolific writer with 14 published tomes and his book, “Crossfire” was used by Oliver Stone for his film, “JFK”.

Marrs was a cub reporter in Dallas on the day of the assassination and worked tirelessly for many years talking to sources within the Dallas police department and Secret Service to construct an alternative narrative to the events on Nov. 22, 1963.

Marrs taught a course on the Kennedy assassination at the University of Texas at Arlington.

Marrs was 74 years old at the time of his death.

One day inside the bifurcated America we have today

Apologies for the late post. Still trying to get better from my dental accident.

On Friday we get the July employment picture from the Labor Department. If you look at the labor situation against the stock market record-breaking run up this summer, then you get the picture of a bifurcated America.

As the retail sector sheds stores and thousands of part-time workers these numbers don’t hit the headline number, since they are not full-time jobs. However, as some of these companies while paring down their headcount, their stocks have price support as expenses are slashed with the closings and firings.

Yes there are pockets of the US doing very well as stock charts move up from the left axis toward the right. New York, Los Angeles and selected hubs of the 1 percenters have been having a field day over the last 10 months since the election. This despite the fact that many of these despise the president.

But look at most of America, there’s a bleak outlook for the future. They put Trump into the White House, but little has changed for the better in their lives. Congress has been stonewalling the administration on any initiatives to help most Americans who have been suffering since 2008.

So Friday we will get 180,000 jobs created, which is not true because it’s based on guesstimates, and the unemployment rate will probably remain around 4.3%. But none of those numbers will affect most Americans, but the top-echelon Americans will make plenty of cash when the market moves higher on the news.

That’s the example of one day inside the bifurcated America we have today.