December 2014 – Page 111

Silver Soars 17% From Intraday Lows – Biggest Swing On Record; Gold Tops $1210 (+$70 Off Lows)

Silver is up over 17% from its intraday lows today – this is the biggest positive swing since our data began. All the previous major swings have been downshifts, most recently in September 2011 (-22% and -18% over 2 days). Volume is very high also. Gold is back above $1,210,up over $70 from its intraday lows…

The biggest intraday positive swing on record… ($16.82 is next test for SIlver at 50DMA)

And gold and silver are exploding… (gold has broken above its 50DMA at $1205)

Silver & Gold are back above pre-OPEC decision leak levels…

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This was the most valuable company in history (Worth 10 times as much as Apple)

December 1, 2014
Santiago, Chile

Over four centuries ago, the Dutch East India Company made history as the world’s first IPO.

Known as VOC in the Netherlands, the company was one of the most successful ventures in the last several hundred years.

When adjusted for inflation, its highest market capitalization would be worth over $7 TRILLION today (i.e. ten times the size of Apple).

More importantly, it completely dominated the Asian trade in the 17thand 18th centuries.

While the British East India Company is usually more famous nowadays, VOC had almost twice as many ships and moved five times more cargo than its British rivals.

The company was so successful over the long-term that it paid an astonishing 18% annual dividend to its shareholders for almost 200 years.

Given their long tradition of being financially savvy, when the Dutch do something dramatic in the financial markets, it’s important to take notice.

Which is why when the Dutch Central Bank recently announced they had just moved 122.5 tons of gold, worth $5 billion, from storage in New York back to Amsterdam everyone’s alarm bells should be ringing.

The Central Bank’s official statement itself said “this may also contribute to a positive confidence effect with the public.”

Translation: The US is not to be trusted anymore with the custody of our gold.

It’s becoming so obvious where things are headed.

It’s easy to dismiss gold repatriation when “foes” like Venezuela were doing it.

But when your own allies think you’re not to be trusted as a custodian of their gold—that’s the end of your credibility.

What does this mean to you?

The whole system that’s based on the dominance of the US dollar and the US financial institutions is in clear decline.

Governments and businesses are screaming for alternatives and some are actively pursuing them.

The US has spent the last several years debasing its currency. The Fed’s balance sheet has exploded by 529% since 2008.

The US federal government is now just hours away from hitting $18 trillion in debt.

Yet they continue to run up huge deficits, blowing their tax revenue on more bombs, drones, wars, and body scanners.

They slam foreign businesses with enormous fines (up to $9 billion) for doing business in countries the US doesn’t like.

Meanwhile they brazenly and arrogantly spy on their ‘allies’, let alone their own citizens.

Is it any wonder they have lost credibility?

Bear in mind that the US government’s power – and the dollar’s prominence – are based almost exclusively on US credibility.

Where do you think the trend for the dollar is headed when America’s own allies no longer trust the government?

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“I am a hard working taxpayer who is getting pretty fed up. . .”

December 1, 2014
London, England

[Editor’s note: This letter was written by Tim Price, London-based wealth manager and editor of Price Value International.]

So the Swiss have decided not to force their central bank into underpinning its reserves with harder assets than increasingly worthless euros.

At least they had the chance to vote.

But in the bigger picture, the rejection of the “Save Our Swiss Gold” initiative flies in the face of a broader trend towards repatriation and consolidation of sovereign bullion holdings – following on the heels of similar attempts by the Bundesbank, the Dutch central bank, for example, recently announced that it had moved a fifth of its total gold reserves from New York to Amsterdam.

And the physical metal continues its inexorable exodus eastwards, into stronger hands that are unlikely to relinquish it any time soon.

The Swiss vote was preceded by some fairly extraordinary black propaganda, most notoriously by Willem Buiter of the banking organisation that now styles itself ‘Citi’.

Once again we were treated to the intriguing claim that gold is nothing more than “a six thousand year-old bubble”, and a “fiat commodity currency” (whatever that might mean) that has “insignificant intrinsic value”.

Izabella Kaminska for the FT’s Alphaville republished much of Buiter’s ‘research’; the resultant to-and-fro between FT readers on the paper’s website makes for a fascinating scrap between goldbugs and paperbugs.

Among the highlights was Vlady, who wrote:

“When a social construct (gold as money) survives for 6,000 years I would expect curious people to inquire as to whether it is tied to some immutable underlying law, or otherwise investigate if there is something more here than meets the eye. Not so curiously inclined, our court economists prefer to write this off as a 6,000 year old delusion. That says a lot about the sorry state of the economics discipline today.”

Another was the artfully named ‘Financially Repressed by Central Banks’, who wrote:

“I am not a gold bug, but I am a hard working taxpayer who is getting pretty fed up with having my savings earning no interest and possibly being devalued (see Japan) and of not being able to find any sensible place to invest my hard earned due to central bank policies making it impossible to make any return anywhere without taking crazy risks.”

The financial markets feel increasingly unhinged. All-time low bond yields co-exist with all-time high stock markets.

Oil has collapsed along with much of the commodities complex. Emerging market currencies have been hit for six. China threatens the West with another strong deflationary impulse.

Gold is difficult to value at the best of times, in large part because it’s not a productive asset, and partly because it’s conventionally priced in a currency (the dollar) that, like all others, is destined to lose its purchasing power over time.

Viewed purely through the prism of price, gold increasingly feels like something close to a ‘value’ investment, given that ‘value’ investing is essentially about picking up dollar bills for something closer to fifty cents.

We’re currently reading Christopher Risso-Gill’s biography of the legendary ‘value’ investor Peter Cundill, and some of Cundill’s diary entries seem to be peculiarly relevant to this strange, dysfunctional environment in which we are all trapped.

One in particular stands out, which Cundill himself wrote in upper case to make his point:

“THE MOST IMPORTANT ATTRIBUTE FOR SUCCESS IN VALUE INVESTING IS PATIENCE, PATIENCE, AND MORE PATIENCE. THE MAJORITY OF INVESTORS DO NOT POSSESS THIS CHARACTERISTIC.”

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Surprise: GAAP S&P500 EPS Set To Decline 1.3% In 2014

One of the justifications pundits have been forced to use today to explain the unprecedented collapse in holiday spending, which as we noted yesterday, tumbled by 11% is that more and more consumers are simply purchasing items on line. Which is great… until one looks at the actual data which reveals a diametrically opposite reality, namely that shoppers spent an average $159.55 online, down 10.2% from $177.67 last year.

Facts are funny like that.

Which brings us to mass delusion #2: one thing which everyone takes for granted and as ironclad as Yellen’s gospel, is that stocks are higher because profits are soaring. Which they are… on massaged paper. And then reality takes over again.

Recall that Q3 earnings, which were aggressively guided down over the summer, actually ended up surprising to the upside, leading the permabull to screech with joy at the unstoppable strength of US corporate profitability. Of course, that is because a more than equal reduction of Q4 2014 EPS consensus took place, as can be seen on the chart below.

However, one thing that nobody will mention, is that even net of the downward revision, corporate profits in 2014 were far, far worse than most expect. The reason? Non-GAAP adjustments such as adding back “one-time, non-recurring” items such as hundreds of billions in banking legal fees, tens of billions in stock-based employee comp, and other all too real expense items which in the New Normal are now a way of doing business.

What is the bottom line? Well, as of Q3, when adding the consensus number for Q4 EPS, we find that while non-GAAP EPS is set to rise by a healthy 6.6%, real rarnings, as in GAAP EPS, will actually decline by 1.3% in 2014, meaning that for yet another year, the only upside in stocks has been due to – thank you Fed – multiples expansion.

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The Shale Bust Arrives: November Permits For New Shale Wells Tumble 15%

With a third of S&P 500 capital expenditure due from the imploding energy sector (and with over 20% of the high-yield market dominated by these names), paying attention to any inflection point in the US oil-producers is critical as they have been gung-ho “unequivocally good” expanders even as oil prices fell. However, as Reuters reports, new data suggests that the much-anticipated slowdown in shale country may have finally arrived – permits for new wells dropped 15% across 12 major shale formations last month, as one analysts warns, “the first domino is the price, which causes other dominos to fall.”

As Reuters reports,

Permits for new wells dropped 15 percent across 12 major shale formations last month, according to exclusive information provided to Reuters by DrillingInfo, an industry data firm, offering the first sign of a slowdown in a drilling frenzy that has seen permits double since last November.

…

“Currently, the market is focused on U.S. shale as the place where spending and production must be curtailed,” Roger Read, a Wells Fargo analyst, said in a note Friday. “There is little doubt, in our view, that lower oil and gas prices will result in lower spending and lower shale production in 2015 to 2017.”

A cutback of U.S. production could play into the hands of Saudi Arabia, which has suggested over the past few months that it is comfortable with much lower oil prices.

…

“The first domino is the price, which causes other dominos to fall,” said Karr Ingham, an economist who compiles the Texas PetroIndex, an annual analysis of the state’s energy economy. One of the first tiles to drop: the number of permits issued, Ingham said.

…

The permitting slowdown was particularly pronounced in two Texas formations, the Permian Basin and Eagle Ford shale, which saw new permits decline by 13 and 22 percent respectively.

* * *

Interesting that Eagle Ford – despite its lower costs – is seeing the largest decline in permitting

* * *

Of course, this should all be ignored because – like the NRF’s reporting of a double-digit decline in Black Friday sales – it would break the narrative for the US economic recovery…

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Saudi Arabia’s Attempt to Kill Off U.S. Fracking Could Kill Off Some Unsavory Regimes Too

OPEC Over the Thanksgiving holiday, the Organization
of Petroleum Exporting Countries (OPEC) decided not to cut back on
oil production, thus letting crude prices continue to fall. As a
result of the U.S. the shale oil boom and weaker global economic
growth, oil prices have dropped by nearly 40 percent this year.
Earlier today, the West Texas Intermediate fell briefly below $65
per barrel.

U.S. oil production has risen from about 5 million barrels per
day in 2005 to nearly 8 million today. More supply combined with
faltering demand has predictably resulted in lower prices. Saudi
Arabia produces oil much more cheaply than do American oil
companies that use the higher cost fracking to coax crude out of
the ground. The Saudis are attempting to push the price oil below
the cost of fracking, and thus drive U.S. domestic oil producers
out of the market. (Lower oil prices are intended to bankrupt
Canadian oil sands producers too.)

However, another side effect of low petroleum prices is the
possible destabilization of petro-states like Russia, Venezuela,
and Iran. In an article that suggests that the price of oil could
fall as low as $40 per barrel, Bloomberg News rounds up
the the effects of low prices on various
unsavory regimes:

Oil and gas provide 68 percent of Russia’s exports and 50
percent of its federal budget.
Russia has already lost almost $90 billion of its currency reserves this year, equal to 4.5 percent
of its economy, as it tried to prevent the ruble from tumbling
after Western countries imposed sanctions to punish Russian
meddling in Ukraine. The ruble is down 35 percent against the
dollar since June…

Even before the price tumble, Iran’s oil exports were already
crumbling because of sanctions imposed over its nuclear program.
Production is at a 20-year low, exports have fallen by half since
early 2012 to 1 million barrels a day, and the rial has plummeted
80 percent on the black market, says the IMF.

Lower oil may increase the pain on Iran’s population, though it
may be insufficient to push its leaders to accept an end to the
nuclear program, which they insist is peaceful. …

Venezuelan Rioting: The country was paralyzed by deadly riots
earlier this year after police repressed protests about spiraling
inflation, shortages of consumer goods
and worsening crime.

“The dire state of the economy is likely to trigger renewed
social unrest, while it seems that the government is running out of
hard currency,” Capital
Economics, a London research firm, wrote in a Nov. 28
report.

Declining oil may force the government to take steps to avoid a
default including devaluing the currency, cutting imports, raising
domestic energy prices and cutting subsidies shipments to poorer
countries in the region, according to Francisco
Rodriguez, an economist at Bank of America Merrill Lynch.

“Though all these entail difficult choices, default is not an
appealing alternative,” he said. “Were Venezuela to default,
bondholders would almost surely move to attach the country’s
refineries and oil shipments abroad.”

The current situation in the oil markets looks like yet another
boom-bust-boom-bust cycle in which low prices lead to low
exploration, production, and technology investments that, in turn,
leads to high prices and higher levels of technology investments,
again resulting in more production and lower prices, and so
forth.

In the meantime, enjoy the cheaper fuel and relish the fiscal
pain of global bad actors.

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Swiss Gold No – Repatriation, Demand from Russia, India and China More Important

Swiss Gold No – Repatriation, Demand from Russia, India and China More Important

By Ronan Manly

Introduction
Switzerland’s ‘Save our Swiss Gold’ referendum was convincingly rejected yesterday by the Swiss electorate following an aggressive anti-gold campaign in recent weeks that had been closely watched both in Switzerland and abroad.

Unusually, it involved the Swiss National Bank (SNB) very actively, and ultimately successfully, trying to convince the electorate along with the main political parties to return a ‘no’ vote.

The initiative had proposed a series of measures which would have obliged the SNB to hold a minimum of 20% of its reserves in gold, prevent the SNB from selling any gold, and force the SNB to repatriate that portion of its gold reserves that are currently stored abroad and to store gold in Switzerland.

The referendum campaign had evolved out of a popular initiative which had initially collected over 100,000 signatures between 2011 and 2013. Under Swiss law, this allowed the motion to go forward as an official referendum, even though the Swiss government, Swiss parliament and Swiss National Bank had all come out in opposition to the Gold Initiative.

In rejecting the referendum, the Swiss People voted 77.3% against, versus 22.7% for. Voters in all 23 of Switzerland’s cantons rejected the initiative in what was an unfortunate defeat for the initiative’s organisers. In most cantons, the results showed a three to one ratio in opposition to the initiative, and even a four to one ratio in a few cantons.

Opposition parties, and the SNB, are already pitching the referendum outcome as a ring of endorsement for the SNB’s current monetary policy strategy of pegging the Swiss Franc to the Euro at the 1.20 level. This is not necessarily the case and it needs to be remembered that the result also shows a substantial minority of the Swiss electorate who disapproved of the SNB’s gold reserve management strategy.

Anti-Gold Establishment?
The weak showing for the ‘yes’ vote continues a trend that was seen in the series of opinion polls that were conducted during the campaign in October and November. Two official polls had been produced by political pollster gfs.bern on behalf of state broadcaster SRF. In the October poll, the yes vote was 44% versus 39% no, with 17% undecided. The last poll published on 19 November had shown the yes vote slipping to 38%, with the no vote at 47%, and 15% undecided.

The weakening of the ‘yes’ vote in the final two weeks of the campaign was most likely influenced by more effective campaigning by the no side, as well as the continued intervention of the Swiss National Bank through various media appearances. The fact that none of the main political parties in Switzerland had backed the initiative also looks to have made an impact with the electorate.

Another ‘unofficial’ series of on-line polls, run by the ’20 Minuten’ media group, had always put the no side in front, and in a poll published on 18 November, had found the ‘yes’ vote at 28%, versus 65% for no, with 8% undecided.

Cantonal wipe-out
Every canton, except the Italian speaking Ticino canton, rejected the initiative by more than 70%. Turnout for the referendum was 48.7%, with about 581,000 of the electorate voting in favour of the motion, versus approximately 1,974,000 against.

The two cantons with the largest populations, namely Zurich and Bern, only returned yes votes of 20.6% and 21.6% respectively.

The cantons of French speaking Switzerland, aka Swiss Romande, recorded the highest no vote, with one canton, Vaud, rejecting the initiative by a huge 83% to 17% margin. Switzerland’s French speaking region comprises the western cantons of Geneva, Vaud, Neuchatel, Jura, and most of Fribourg, as well as parts of the Bern canton and the western areas of the Valais canton.

In Geneva, for example, the electorate returned a vote of 23.5% yes vs 76.5% no, while the Jura canton voted 19.4% yes vs 80.6% no, and the Neuchatel canton recorded an outcome of only 20.0% yes vs 80% no.

The Italian speaking canton of Ticino, which is in the south-east of the country, recorded the highest yes vote at 33.3% vs a no vote of 66.7%. In the opinion polls in the run-up to the referendum, Ticino had shown the highest yes vote, so the relatively stronger yes vote in Ticino compared to other cantons was expected, albeit, the yes vote still collapsed in Ticino relative to what the earlier polls had indicated.
Incidentally, Ticino is the canton where three of the four largest gold refineries in Switzerland are located, namely, Pamp, Valcambi and Argor-Heraeus.

Apart from Italian speaking Ticino, the strongest showing for the yes vote was seen in the cantons located in the north-east of the country, such as St. Gallen, Thurgau, and the two half cantons of Appenzell Ausserrhoden, and Appenzell Innerrhoden, and also the more centrally located canton of Schwyz. St. Gallen, for example, returned a 27.4% yes vote vs 72.6%, while Schwyz recorded 29.3% vs 70.7% no.

SNB Satisfaction
In a press release, the SNB said that it was “pleased to hear of the outcome of the gold initiative vote”, and that the gold initiative would have constrained its ability to maintain price stability. The SNB also reiterated that it will continue to impose its defence of the 1.20 CHF/EUR exchange rate with the ‘utmost determination’ and that it is prepared to buy ‘unlimited’ quantities of Euros for this purpose.

Luzi Stamm, National Councillor for the SVP, and one of the organisers of the gold initiative campaign, believed that the Swiss National Bank’s involvement helped the no campaign, saying that “the credibility of the SNB is obviously very high.”

Yves Nidegger of the SVP, another proponent of the yes campaign, said that the defeat was probably not a surprise given that none of the main parties officially supported the initiative.

Christophe Darbellay, national councillor and president of the Christian Democratic People’s Party (PDC), whose party was also against the initiative dramatically said that “the People have clearly said no to the SVP group (Swiss People’s Party) who wanted to put the SNB and Switzerland on morphine”.

The committee representing the large group of politicians who had opposed the gold initiative said in a statement following the vote that “the result confirms the confidence of the population towards the SNB and its recent monetary policy”, and that the Swiss people had “testified to the importance of a National Bank that is free and independent in its capacity to act.”

A similar point was made by Eveline Widmer Schlumpf at a press conference of the Swiss Federal Council (the Swiss Government) that was held following the results. Widmer Schlumpf is a member of the Federal Council and head of the Department of Finance, was also a committee member of the no-campaign.

Conclusion
Given that the gold initiative campaign was up against a well organised and well funded coalition of the main political parties and the SNB, the referendum outcome is probably not all that surprising.

The Swiss media and banking sector were also, on balance, more aligned with the SNB’s arguments, and the media failed to really ask any tough questions about the nation’s gold reserves and the SNB’s custodianship of said reserves.
Although the referendum has produced the desired outcome for the Swiss National Bank, the Bank now has to return to its main problem of dealing with the relative strength of the Swiss Franc versus the Euro.

With the CHF/EUR rate currently at the 1.20 mark, a line which the SNB has insisted it will defend, the immediate question for the financial markets is whether the Swiss Franc will now weaken slightly or whether the SNB will need to intervene in the short term by expanding its balance yet further via the purchase of large quantities of Euros.

The gold price has taken a short term hit, no doubt partially due to the Swiss referendum result. However, it is important to remember today’s context – with central banks in Russia and China and other creditor nation’s central banks continuing to diversify into gold and adding to their gold reserves, and with countries such as the Netherlands and Germany beginning to repatriate their existing gold reserves. Thus, there may come a point in the next few years when the Swiss will look back at this referendum and wonder whether it was a lost opportunity to reverse the debasement of the once venerable Swiss Franc.

Importantly, the Swiss gold referendum may be another contributing factor to the people of European countries demanding transparency regarding their gold reserves and to a demand for repatriation of and audits of national gold reserves.

There is also the fact that there is a growing level of awareness regarding the importance of gold as a monetary asset and store of value to protect against systemic and monetary crisis.

Get Breaking News and Updates On Gold Markets Here

MARKET UPDATE
Today’s AM fix was USD 1,178.75, EUR 945.46 and GBP 750.56 per ounce.
Friday’s AM fix was USD 1,184.50, EUR 950.80 and GBP 753.98 per ounce.
On Friday, gold declined over 2% and silver lost nearly 7%. The scale of the losses, particularly for silver, surprised participants as there was no breaking news story and markets had largely priced in a no victory in the Swiss gold referendum.

Gold in USD – 5 Years (Thomson Reuters)

The Swiss public rejected the proposal to boost central bank gold reserves yesterday and the precious metals weakness continued at the open in Asia when gold fell 2.1% and silver slumped 6.7%, reaching the lowest in five years at $14.42/oz.

The precious metals then rebounded in the course of the Asian trading day, as there was an increase in physical demand and some traders closed out bearish bets leading to a “short squeeze.”

Spot gold rebounded to a high of $1,182.70 an ounce, and was up 1% at $1,179.00 an ounce in late morning trading in Europe. Silver was up 2.7% at $15.83 an ounce, having earlier rallied as much as 6% to a high of $16.34.

Spot platinum was up 0.6% at $1,203.70 an ounce, while spot palladium was down 0.4% at $801.90 an ounce.

Moody’s cut Japan’s sovereign rating, plummeting the Japanese yen to a seven-year low against the euro, also created a demand for gold, traders told Reuters.

Premiums in China remained steady near $1-$2 and demand in China remains very robust with withdrawals on the Shanghai Gold Exchange (SGE) at 52 tonnes last week. This means that total Chinese demand for gold is headed for 2,000 tonnes in 2014.

SPDR Gold Shares, the world’s largest gold-backed exchange-traded fund, saw holding fall another 1.2 tonnes on Friday to 717.6 tonnes, to 6-year low as weak hands continue to liquidate ETF holdings.

On Friday, India the second largest importer and buyer of gold bullion, removed its import tax and other restrictions on gold imports which is a bullish development

The Perth Mint’s silver sales in November climbed to their highest since January as lower prices attracted retail investors, while gold sales fell to a three-month low. The Perth Mint runs the only gold refinery in Australia, the world’s second biggest gold producer after China. Silver coin sales jumped to 851,836 ounces in November from 655,881 ounces in October, data on the mint’s website showed

Sales of gold American Eagle coins from the U.S. Mint reached 60,000 oz in November down 11% month on month but up 25% on November 2013. Silver Eagles sales in November reached 3.426 million oz, down 41% month-on-month but up nearly 50% year-on-year.

Essential Guide to Storing Gold Bullion In Switzerland

www.GoldCore.com

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November Was The Worst Month For Crude Since Lehman

November’s asset performance can best be summarized in three words: oil, oil, oil. Deutsche Bank explains why:

There were some pretty big moves in markets last month with Oil clearly under the spotlight. Indeed Brent and WTI were down 18.3% and 17.9% in November with the most recent leg lower driven by OPEC’s decision not to cut production volumes. For Brent November was the biggest one month decline since the height of the Lehman crisis in October 2008 whilst for WTI it was the worst since December 2008.

Brent and WTI are now 33% and 28% lower versus where it started the year and are now trading at their lowest level since the spring of 2010. Away from oil the month was also generally weak for commodities which coincides with the 5th consecutive monthly gains for the USD. Copper and Silver were down -6% and -4% respectively although Gold managed to find better support, only down 0.5% in November. On FX, JPY was a clear underperformer amongst major currency pairs following the recent surprise monetary easing announcement.

On the positive side we did see equities generally rally higher in November as well as seeing another positive month for core fixed income markets. The Shanghai Composite (11%) posted its 7th consecutive month of gains this year with November being the best month since Dec 2012. Indeed with a YTD total return of around 31% the Shanghai Composite is returning more than twice that seen from the S&P 500 (+14.0%) and over 3 times more than the Stoxx600 (9%) and the Nikkei (9%) this year. The expectations of easier monetary policy to come as well as greater investor participation via the SH-HK stock connect were possibly behind those gains.

Away from equities, core government bond markets in the US, UK and Germany produced positive total returns of 1.0%, 3.2%, and 0.9%, respectively. With the exception of US HY, credit benchmarks on both sides of the pond have generally delivered positive total returns in November although much of that is still driven by the rally in core rates. US HY (-0.8%) had a weak November after a positive month in October not helped by the performance in HY oil credits as well as seeing some mild outflows. Staying in Fixed Income, EM bonds saw negative returns in Latam (-2.5%) and EEMEA (-0.9%). Asia (+0.3%) was a relative outperformer as the region, as a net importer of energy, probably benefitted from the recent sell-off in Oil prices.

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Global Manufacturing PMI Tumbles To 14-Month Low

Is it any surprise oil prices are cratering? With global GDP expectations plumbing cycle lows, JPMorgan just confirmed the global slowdown is accelerating as their Global Manufacturing PMI printed 51.8 – its slowest level of ‘expansion’ since September 2013.New Orders fell to the lowest reading since July 2013 and New Export Orders to the lowest since June 2013.

But the US is really decoupling this time…

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Guest Post: Fanning The Flames In Ferguson

Submitted by James H. Kunstler via Kunstler.com,

The climactic uproar in Ferguson, Mo., a week ago took a zany turn when the “we want peace” message of Michael Brown’s family rotated 180 degrees to the imperative command, “burn this bitch down,” hollered repeatedly by stepfather Louis Head outside the grand jury headquarters as the decision was announced. The assembled crowd dutifully obliged and burned down many of the businesses that the local population depends on for routine commerce.

The scripted quality of these events seemed as formally predictable as an 1856 minstrel show, and the parallel is worth reflecting on because the nation appears determined to explode again in some kind of a civil war — bearing in mind Karl Marx’s advisory that “history repeats, first as tragedy, then farce.” As is the case with many show-biz extravaganza’s of our time the script had many authors.

First were the cable TV news venues, led by the race hustlers at CNN, whose limitless pandering to the intemperance of black viewers played a large part in cultivating the mood of injustice that failed to square with the objective reality of Michael Brown’s shooting at the hands of policeman Darren Wilson. Every conceivable delusion generated by the event was nurtured to the max in order to amp up the melodrama at the expense of clarifying what had happened. In the end, CNN celebrities Don Lemon and Anderson Cooper got the explosion of violence that their producers had worked so hard to fuel.

Next were the professional black race hustlers such as the Reverend Al Sharpton, now an MSNBC anchor! It seems generally forgotten that Sharpton fomented the 1988 Tawana Brawley rape farce that occupied the nation’s attention for a good year before all the allegations unwound into a limp skein of falsehoods, and Sharpton along with his race hustler lawyer sidekicks, Alton H. Maddox and Vernon Mason, were found liable for making defamatory claims against a Dutchess County (New York) Assistant District Attorney (alleged to be among several Brawley rapists). Now, 25 years later, a new crop of race hustlers has come along such as Brown family lawyer Benjamin Crump, who previously worked for Trayvon Martin’s family in the 2012 Florida case. In Act 3 of the Ferguson soap opera, you can be sure Crump will be trolling the “deep pockets” of Missouri for a “settlement.”

Next are the two idiots on The New York Times op-ed page: Nicholas Kristoff and Charles M. Blow. Kristoff, in his latest installment of racial self-mystification — When Whites Just Don’t Get It, Part 5 — proposes a “national commission” to study America’s race troubles. Wow, what an original idea! Commissions are so darn effective, don’t you think? Mr. Blow repeatedly makes the point that Americans are not willing to have an honest debate about racial issues. That is true largely because public figures such as Mr. Blow will instantly label as “racist” any idea or opinion that contradicts their own pleadings. Is disproportionate black crime a problem? “Racist!” Don’t go there.

A week after the grand jury decision and the riot that followed, the Michael Brown incident is already disappearing down the national memory hole. Why? Mainly because anyway you cut it Michael Brown was a poor candidate for martyrdom. The generous view of his fate is that he made a series of very poor choices one summer’s day. So now CNN is shopping for a replacement. As of Sunday night, they seemed to have settled on 12-year-old Tamir Rice, who was shot while brandishing a BB gun in Cleveland, Ohio. The media insist on calling it “a toy gun,” though photos depict a BB gun obviously designed to look like a regular automatic pistol. Poor Tamir Rice was foolishly acting out a childish mime show, pretending to shoot at passers-by. Someone in the neighborhood might have advised him that this was a good way to get himself shot. But no one did. Now, why was that?

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