Both in the U.S. and in Iraq, establishment bureaucrats had to pause and take notice this past week. A Tea Party candidate defeated the Republican House Majority Leader in the U.S., and in Iraq rebels took a number of cities as they pressed toward Bagdad. This took its toll on the ever-rising stock market — pushing it 0.7% lower for the week. Precious metals rose over 3% while their miners shot up about twice that amount.
Monday, stocks in Asia and the U.S. closed nearly unchanged. In Europe though, they tacked on another 0.4% gain, as major stock indices continued making new marginal highs, and the VXO fell another 2% to end at 10.07. Tuesday, stocks in Asia and Europe rose 0.3%. In the U.S., stocks closed nearly unchanged on very low volume. Unbelievably, the VXO dropped below 10 to close at 9.81. Precious metals gained 1% and their miners gained about twice that amount.
Wednesday, stocks in Asia rose 0.4% while stocks in Europe and the U.S. fell 0.4% on abysmal volume. The VXO jumped up over 7% to close at 10.54. While precious metals did little, their miners gained nearly 2%. The big story of the day was that Eric Cantor, Republican House Majority Leader, was defeated in the Republican primary by a Tea Party candidate despite a campaign funding advantage of forty times. What good is money if it can’t buy a few lousy votes?
Thursday, stocks in Asia fell 0.4% but in Europe they ended virtually unchanged. In the U.S., stocks dropped 0.4% on low volume as oil and gold rose in response to renewed conflict in Iraq. Precious metals and their miners jumped over 2% higher for the day while the VXO shot up 10% to close at the still very low level of 11.59. Friday, in Asia stocks moved little. In Europe the fell slightly, and in the U.S. stocks gained 0.3% on low volume.