Financial sources feeds
Though the mainstream media (and many in Congress) has largely dismissed President Trump's cries about an emergency along the US southern border, even the New York Times and Washington Post have acknowledged in recent weeks that the number of migrants crossing the southern border is climbing rapidly. As the number of apprehensions have increased, the situation has gotten so bad that the administration has decided to start releasing some migrant families because its detention facilities along the border have become so crowded.
And as it turns out, migration is surging north of the border as well, as Canada's statistics agency reported on Thursday that the country experienced the largest inflow of migrants in more than a century last year. Though the figures excluded illegal migrants (who have also reportedly been entering the country in record numbers), more than 320,000 people migrated to Canada last year, with more than 71,000 arriving in the final quarter - including legal refugees attracted by Prime Minister Justin Trudeau's "open door" policy.
The increase is the largest since 1913, when 401,000 migrants entered Canada. The country has detailed migration data stretching all the way back to the mid-19th century.
As birthrates in the developed world continue to slide, the influx of migrants helped Canada's population swell by more than half a million people last year, the largest annual increase since the 1950s, and the fastest pace of growth since the early 1990s. Though it's worth noting that the boom includes many foreign students, some of whom aren't planning to remain in Canada for the long term.
All told, Canada's population increased by 528,421 last year, or 1.4%.
BBG touted the "economic tailwind" from the increase in migration, which helped to offset the country's deceleration in its organic population growth (the increase reportedly fueled a surge in employment).
The worst flooding disaster in the history of the Midwest is just getting started, and as this crisis unfolds we are all going to be feeling the pain. The “bomb cyclone” that recently brought hurricane-force winds and blizzard conditions to the middle of the nation was the spark that set off this catastrophic flooding, and now all of the snow from one of the snowiest winters in decades is going to be feeding into rivers that have already shattered all-time flood records. As you will see below, most of the Great Plains and Upper Midwest is currently covered by more than 10 inches of snow, and all of that water has to go somewhere. As all of that snow melts, we are going to witness an agricultural disaster that is far beyond anything that we have ever seen before in modern American history.
If you think that I am exaggerating even a little bit, please read this article all the way to the end.
As I did research for this article, I was floored by the immense devastation that has already taken place. But if the crisis was over, at least farmers could start picking up the pieces.
Unfortunately, the crisis is not over. In fact, Iowa Governor Kim Reynolds is saying that we are “just getting started”. The following comes from a USA Today article entitled “‘It looked like an ocean’: Severe Midwest flooding could last all spring”…
Gov. Kim Reynolds is warning Iowans what millions of Midwesterners have come to understand in recent days – the severe flooding that has swamped much of the regionmay be a long way from over.
Reynolds said the snowmelt and spring rains could create additional flooding in the weeks ahead because of compromised levees.
“We’re in for the long haul. We’re just getting started,” said Reynolds, who added that her tour of western Iowa this week had revealed unprecedented flooding. “It looked like an ocean.”
This was one of the worst winters for the middle part of the country that we have seen in ages, and now we are entering melting season.
According to Bloomberg, the amount of snow currently covering the upper Midwest and Great Plains is absolutely staggering…
At least 91 percent of the upper Midwest and Great Plains is snow covered to an average depth of 10.7 inches, according to the U.S. National Operational Hydrologic Remote Sensing Center in Chanhassen, Minnesota. The center tracks snow nationwide and sends out airplanes to measure its depth.
So what is going to happen when all of that snow melts and starts pouring into the major rivers?
Needless to say, this is beyond a “worst case scenario” for countless numbers of Midwest farmers.
I am going to share with you some excerpts from mainstream news reports about the devastation that we have already witnessed. After reading each excerpt carefully, I think that you will agree with me that we are literally facing a national food production nightmare.
At this moment, millions of acres of farmland are underwater, and that is not going to change any time soon. When the flood waters came, they moved so rapidly that they literally picked up pigs and baby calves and carried them along. Roads, rail lines and entire small towns have been washed away, and so even if farmers had something left to sell they couldn’t get it to market anyway.
We have also witnessed the loss of massive stockpiles of wheat, corn and soybeans that had already been harvested. The following comes from Reuters…
As river levels rose, spilling over levees and swallowing up townships, farmers watched helplessly as the waters consumed not only their fields, but their stockpiles of grain, the one thing that can stand between them and financial ruin.
“I’ve never seen anything like this in my life,” said Tom Geisler, a farmer in Winslow, Nebraska, who said he lost two full storage bins of corn. “We had been depending on the income from our livestock, but now all of our feed is gone, so that is going to be even more difficult. We haven’t been making any money from our grain farming because of trade issues and low prices.”
According to the U.S. Food and Drug Administration, flood-soaked wheat, corn and soybeans are considered to be “adulterated” and they must be destroyed.
And thanks to the ongoing trade war with China, farmers had a staggering amount of wheat, corn and soybeans stored on their farms right now…
As of Dec. 1, producers in states with flooding – including South Dakota, Nebraska, Kansas, Minnesota, Iowa, Missouri, Wisconsin and Illinois – had 6.75 billion bushels of corn, soybeans and wheat stored on their farms – 38 percent of the total U.S. supplies available at that time, according to U.S. Department of Agriculture data.
Are you starting to get the picture?
In one county alone, more than a million bushels of corn are sitting under the floodwaters at this moment…
Fremont County farmers estimate about 390,000 bushels of stored soybeans and about 1.2 million bushels of stored corn are under water. And Jorgenson said more of last year’s grain was being swallowed up Tuesday as the Missouri River crests.
At local cash prices for corn and soybean, that’s about $7.3 million farmers may be unable to replace. And that’s just one county, Jorgenson noted.
Ladies and gentlemen, food prices are about to start soaring in a major way. There has not been such a massive blow to U.S. food production in my entire lifetime.
For many farmers, this truly is the end of the line. One of the farmers that has reached his breaking point is 23-year-old Clint Pischel…
“When you’re losing money to start with, how do you take on extra losses?” asked Clint Pischel, 23, of Niobrara, Neb., whose lowland fields were flooded by the ice-filled Niobrara River after a dam failed. He spent Monday gathering 30 dead baby calves from his family’s ranch in this northern region of the state, finding their bodies under huge chunks of ice.
Can you imagine losing 30 baby calves and not being able to do anything about it?
But Doug and Eric Alberts were hit even harder. They lost nearly 700 animals to the floodwaters…
Doug and Eric Alberts are trying to round up the surviving hogs on their 9-acre farm in Fremont, Nebraska. There aren’t many. The family estimates they were only able to save 14 out of 700 of their livestock.
The father and son have worked for three years to build this business. Then, a few days ago, the water came.
“About a 3-foot wall … 100-foot wide … just flowing over the road,” Doug recalled.
Within minutes, 7 feet of water covered their farm.
Even before the flooding, farm bankruptcies had hit the highest level since the Great Recession, and now those numbers are going to explode much, much higher.
In addition to everything else, all of this flooding is causing massive topsoil erosion. We had already lost over half our topsoil, and we aren’t too far from an apocalyptic situation…
And severe winter and spring floods take another toll that’s much more difficult to quantify: Soil loss, on a grand scale, right in the region that provides a huge amount of our food supply. The Midwest boasts one of the globe’s greatest stores of topsoil, more than half of which has been lost in the past 50 years. Topsoil is the fragile, slow-to-regenerate resource that drives agriculture. As University of Washington ecologist David Montgomery explained in his terrific 2007 book Dirt: The Erosion of Civilizations: “With just a couple feet of soil standing between prosperity and desolation, civilizations that plow through their soil vanish.”
I wish that I could accurately convey the seriousness of what we are facing.
Food production in the United States is going to be way, way down this year. Prices at the grocery store are immediately going to start rising, and they are going to keep rising all year long. So now is the best time to stock up and to get prepared for what is coming. Our breadbasket has been absolutely devastated, and things are only going to get worse. The mainstream media seems to think that this is just another in a long string of major natural disasters that has hit our nation in recent years, but the truth is not so simple. This disaster is going to have a dramatic impact on our ability to grow our own food, and even if everything went perfectly from this point forward we are talking about a recovery that would take many, many years.
As I conclude this article, I would like to share with you an extended excerpt from something that was posted on Facebook by Cane Creek Mercantile…
Stories have slowly been surfacing, and images have been taken showing the complete and utter chaos Nebraska is currently in. Images of farmers and ranchers wading through the water carrying hay to the haggard cattle, and frightened horses… Using a Deweze feed box to pull near frozen sheep from what would be a snowy grave… Using aluminum scoop shovels to quite literally tunnel out buried bulls. Taking tractors into the mud and slop to skillfully grab ahold of cows who are stuck in belly deep mud and carry them to safety and feed. Highway patrol officers helping free baby calves that had been quite literally frozen to the ground. The list of things go on. Our ag community is working night and day to save each and every animal that they can, sacrificing sleep, food, and their own well-being to provide the livestock those very things. Our farmers and ranchers, and neighbors of the rural communities around the nation are banding together to ensure that help will arrive.
With these things being said, there will be death loss, and sadly in staggering numbers. Fields that are normally used for growing beans, corn, and grain for example… All are under tons of snow or several feet of water. This means these fields will more than likely not produce a crop this year, which will drive prices up throughout the year and into the future until we as a nation can recover further down the road. But please, keep in mind why that is when you go to the grocery store, and remember just how many are affected by this disaster.
There will be families that have lost everything. They lost equipment, their houses, sheds, tools, and worst of all, their animals they care deeply for. Their livelihoods are being stripped from them in the most painful manner possible. Many will no longer be able to live the life they’ve known and loved their entire life. They will be displaced, and times for them will be harder than anything anyone will ever have to face. So, when you are at the grocery store, please keep in mind the cause for the prices climbing up, and instead of getting frustrated and complaining for having to pay more, be thankful for what you have and say a prayer for the folks suffering in Nebraska.
The “new normal” along the Mississippi River, the Missouri River and other major rivers in the middle part of the country is going to mean much, much higher prices at the grocery store.
These days, a full cart of groceries can easily run $200 or more.
So how bad will things ultimately get as this crisis continues to unfold?
We are facing something that we have never faced before, and nobody is quite sure what is going to happen next.
President Trump has with a single bombshell tweet rattled an already tense and war-torn region by announcing "it is time" for the US to "fully recognize Israel's sovereignty" over the Golan Heights.
"After 52 years it is time for the United States to fully recognize Israel's Sovereignty over the Golan Heights, which is of critical strategic and security importance to the State of Israel and Regional Stability," Trump tweeted midday Thursday, marking a dramatic reversal of US policy which has historically alongside global international allies seen it as occupied territory.
After 52 years it is time for the United States to fully recognize Israel’s Sovereignty over the Golan Heights, which is of critical strategic and security importance to the State of Israel and Regional Stability!— Donald J. Trump (@realDonaldTrump) March 21, 2019
The impact has been immediately felt in Israeli politics, where politically embattled Prime Minister Benjamin Netanyahu stands less than three weeks away from his toughest election yet — after a campaign marred by multiple formal charges of corruption and ongoing state investigations.
Trump's tweet, and apparent willingness to move forward on the White House's long signaling that it would dramatically shift policy from prior administrations, hands Netanyahu a huge foreign policy victory and boosts his stature domestically, after he recently renewed a diplomatic push with Trump for the US to recognize the Golan Heights as part of Israel.
Netanyahu was quick to thank Trump, tweeting: "At a time when Iran seeks to use Syria as a platform to destroy Israel, President Trump boldly recognizes Israeli sovereignty over the Golan Heights. Thank you President Trump! @realDonaldTrump."
At a time when Iran seeks to use Syria as a platform to destroy Israel, President Trump boldly recognizes Israeli sovereignty over the Golan Heights. Thank you President Trump! @realDonaldTrump— Benjamin Netanyahu (@netanyahu) March 21, 2019
Beyond Trump's shock Thursday tweet, it's unclear if the White House will release additional specifics or a timeline on any formal recognition. Israel fully annexed the Golan Heights in 1981 after capturing it from Syria during the Six-Day War of 1967. The United Nations has never recognized Israeli annexation and settlement there, but has repeatedly condemned it.
The American Conservative's Daniel Larison points out the near-term impact of Trump's words:
Perhaps most dangerous of all is the signal that it sends to Israeli hard-liners that want to annex some or all of the West Bank. It tells them that illegal occupation will eventually be rewarded with full U.S. recognition, and it also tells them that the U.S. isn’t going to pay any attention to international law when it comes to making decisions regarding Israeli control over occupied territories.
And more broadly, it is sure to inflame tensions between Israel, Syria, Iran and Lebanese Hezbollah after weeks of relative calm following last year's dangerous uptick in (dozens of) Israeli airstrikes on Syria and sporadic fire across the contested Golan region.
A mere weeks ago Syria also notified Israel through United Nations diplomatic channels that it is prepared to go to war if Israel does not leave the Golan Heights.
Syrian Deputy Foreign Minister Faisal Mikdad reportedly sent the threatening war message through the head of the United Nations Truce Supervision Organization (UNTSO), Christine Lund, earlier this month, according to a World Israel News report and later picked up other major Israeli sources, including The Jerusalem Post. “Syria will attack Israel if it does not leave the Golan Heights,” Mikdad told the UN representative.
Damascus' firm warning came in response to a controversial bill recently under renewed consideration by US Congress, co-sponsored by Republican Senators Ted Cruz and Tom Cotton, and Democratic Rep. Mike Gallagher, which aims to give formal US recognition of Israel’s sovereignty over the Golan Heights region.
No doubt, Trump's tweet will give this Congressional effort huge bipartisan momentum, even if national security experts and pundits attempt to throw caution against interrupting the tenuous status quo.
After The Fed folded in the most aggressively dovish manner ever, the dollar and stocks rebounded heroically today - as if nothing had happened - while Treasury yields shrugged off the plunge protection team's plans and reflected Powell's clearly dismal economic expectations...
We just have a feeling that this won't end well...
Overnight saw China stocks shrug off US weakness...
UK's FTSE managed gains but European markets generally lagged - despite gains after US opened...
US Equity markets were panic bid all day as buybacks, short-squeezes, and AAPL sent stocks soaring above pre-Powell levels...Trannies and Nasdaq are up 1.8% from pre-Powell...
Dow futures are up 440 points from the pre-open lows...
And here is the catalyst that ignited today's momentum...the same analyst who upgraded AAPL today to 260 (with it trading at 220) only to see the stock plunge to 140...
Big short-squeeze today...
And buybacks dominated...
Biogen was battered...
But Semi stocks (SOX Index) soared to a new record high, seemingly knowing something that South Korean exports don't...
Growth stocks soared and while Value stocks were bid today, they remain lower from Tuesday's close...
Financials kept falling...
Credit markets did rally today but not very impressively...
Japan was closed overnight (hence the flatline) but we note barely any rebound in bond yields (despite the surge in stocks)...
30Y Yields refused to play along with the equity market buying panic...
The market is now pricing in 22bps of rate-cuts in 2019...
The Dollar soared higher after China closed, retracing all the post-Powell losses...
Cable traded lower on the day as fears on a no-deal brexit rose...
Cryptos were dumped shortly after the US equity open...
Commodities were all lower on the day as USD surged but only copper is lower post-Powell...
Gold dumped back to pre-Powell levels, holding above $1300 though and managed a late-day rally..
WTI oscillated around $60 all day...
Finally, we offer the following from reader KW: A pre-market Kudlow conversation
Larry : You guys need to upgrade something big to turn the negative futures
Wall Street : Larry , what do you have in mind ?
Larry : Upgrade BA.
Wall Street : Larry ! Give us a stock that won’t fall out of the sky ! We can’t manipulate that .
Larry : okay , AAPL
Wall Street : Good one !
Larry : gotta run , I’m on PPT duty today . Steven has off .
Wall Street : shit Larry ! Last time you bought too fast at open ?
Larry : get ready !
And that might have been how this happens...
Apple added over $36 billion market cap today, topping its 200DMA for the first time since Nov 19th.
In the wake of the widely publicized "largest college admissions scam ever prosecuted" that broke last week, it has become clear that the SAT and ACT tests used to gauge student intellect for college admission (or at least their aptitude to take tests) are susceptible to being gamed.
“The case is about the widening corruption of elite college admissions through the steady application of wealth combined with fraud,” said Andrew Lelling, U.S. Attorney for the District of Massachusetts.
These tests are part of what has been referred to as a "rigged system" to get children into colleges - a system that benefits the affluent and the wealthy. Children from families in the top 1% of income distribution are 77 times more likely to attend an Ivy-plus school, according to a new Bloomberg Businessweek article.
Now, one 27 year old Harvard dropout is planning to "fix" the system.
L.A.-based startup Imbellus says it has a test that accurately gauges critical thinking. The company is being run by 27-year-old Rebecca Kantar, a Harvard dropout. Kantar believes that a big part of the college admissions problem is the $10 billion standardized testing industry that, in addition to being "rigged", only works for a small percentage of kids. The SAT and the ACT still sit atop of all standardized tests, as they help determine who gets entry to select colleges. Kantar believes that these tests "reveal little, if anything, about whether a student has the cognitive skills essential for success beyond college."
Her company has raised more than $23.5 million and has hired a dozen Ph.Ds. (any comparisons to Theranos here are purely coincidental).
Kantar said: “The system has coalesced around things that work for at most 30 percent or so of kids. They don’t work for the rest.”
She argues that tests like the SAT and ACT actually exacerbate inequality by giving advantages to wealthier students who can pay for tutoring and test-taking services. And, she argues, these tests only gauge what a student knows, not the traits that employers say they need for the future: problem-solving, critical reasoning, collaboration, creativity and empathy.
And as we reported recently, it's obvious that these tests can be gamed.
Kantar's company has instead developed digital assessments that resemble video games. They put users in simulated environments and present them with a series of tasks, while capturing the decision making process that users employ to complete them. And because each simulation is unique, the tests are "cheatproof".
Her tests are also being used in hiring potential employees. They have worked with companies like McKinsey to create game based tests that measure "prospective employees’ decision-making, adaptability, and critical thinking." McKinsey says they will double the number of candidates taking the Imbellus assessment by the end of 2019.
Kantar believes that the issue is not with students lacking competency, it's with students lacking preparation. “It’s not an aptitude problem—it’s a practice problem. They aren’t practicing the right kind of thinking,” she told Bloomberg.
She continued: “If you want to change the default settings in the system, you’ve got to start at the top. I’m not saying that kids don’t need to know history or math or biology. They do. But my thought is, can you move the North Star of the system a bit? You’re still going to biology class and history class, but in those courses there’s a little less focus on specific modules of curriculum and more focus on practicing the thinking that’s required for work and not just college. What I’m trying to do is to reconnect K-12 education with the world of work and the reality of being an adult.”
To read the full longform Bloomberg Businessweek writeup, go here.
Authored by Steen Jakobsen via Saxobank,
Last night's FOMC meeting made it official: the Fed has thrown in the towel, and central banks are committed to defying the business cycle. But where does this leave us in terms of positioning for 2019, 2020 and beyond?
If you are familiar with my research over the last 20 years, you know that I am no fan of central banks; they are glorified bureaucrats with an academic sense of infallibility who believe they have a supreme power’s insight into the economy and markets. But yesterday marked a new low for world central bankers as the US Federal Open Market Committee completely threw in the towel.
Anyone who ever thought the Fed or other central banks are truly ‘independent’ should spend $20 on the great 2018 Paul Volcker book "Keeping at It". In it, Volcker tells the story of how both Jimmy Carter and Ronald Reagan tried (with partial success) to force easing on him and the Fed in the 1980s.
(Also have a look at Nixon and his relationship with Volcker’s predecessor as Fed chair, Arthur Burns...)
Current chair Jerome Powell saw himself as a new Volcker, but last night he cemented his panicky shift since the December FOMC meeting, and instead cut the figure of Alan “the Maestro” Greenspan, who set our whole sorry era of central bank serial bubble blowing in motion.
The Fed’s mission ever since has been a determined exercise in defying the business cycle, and replacing it with an ever-expanding credit cycle.
This latest FOMC meeting has set in motion a race to the bottom, with the European Central bank currently in the lead, but the Fed and the Bank of England are gaining fast.
I am presently in London, and on my way to China and Hong Kong with Saxo's Gateway to China events. I am joined at these events by the impressive Dr. Charles Su of CIB Research, China. He and I agree on many things, but one in particular:
Monetary policy is dead.
My view has long been that monetary policy is misguided and unproductive, but the difference now is that we are reaching the most major inflection point since the global financial crisis as central bank policy medicine rapidly loses what little potency it had.
In the meantime, the harm to the patient has only been adding up: the economic system is suffering fatigue from QE-driven inequality, malinvestment, a lack of productivity, never-ending cheap money and a total lack of accountability.
The next policy steps will see central banks operating as mere auxiliaries to governments' fiscal impulse. The policy framework is dressed up as "Modern Monetary Theory", and it will be arriving soon and in force, perhaps after a summer of non-improvement or worse to the current economic landscape. What would this mean? No real improvement in data, a credit impulse too weak and small to do anything but to stabilise said data and a geopolitical agenda that continues to move away from a multilateral framework and devolves into a range of haphazard nationalistic agendas.
For the record, MMT is neither modern, monetary nor a theory. It is a the political narrative for use by central bankers and politicians alike. The orthodox version of MMT aims to maintain full employment as its prime policy objective, with tax rates modulated to cool off any inflation threat that comes from spending beyond revenue constraints (in MMT, a government doesn’t have to worry about balanced budgets, as the central bank is merely there to maintain targeted interest rates all along the curve if necessary).
Most importantly, however, MMT is the natural policy response to the imbalances of QE and to the cries of populists. Given the rise of Trumpism and democratic socialism in the US and populist revolts of all stripes across Europe, we know that when budget talks start in May (in Europe, after the Parliamentary elections) and October (in the US), governments around the world will be talking up the MMT agenda: infrastructure investment, reducing inequality, and reforming the tax code to favour more employment at the low end.
We also know that the labour market is very tight as it is and if there is another push on fiscal spending, the supply of labour and resources will come up short. Tor Svelland of Svelland Capital, who joins Charles and I at the Gateway to China event, has made exactly this point. The assumption of a continuous flow of resources stands at odds with the reality of massive underinvestment.
Central bankers and indirect politicians are hoping/wishing for inflation, and in 2020 they will get it – in spades. Unfortunately, it will be the wrong kind: headline inflation with no real growth or productivity. A repeat of the 1970s, maybe?
Get ready for bigger government and massive policy interventions on a new level and of a new nature. These will be driven by a fiscal impulse to stimulate demand rather than to pump up asset prices. It will lead to stagflation of either the light or even the heavy type, depending on how far MMT is taken. With all of these '70s throwbacks preparing to take the stage, we can't help but wonder if 'Paul Breitner hair' is ready for a comeback as well!
Last night, a client asked an excellent question: how much of this scenario is already priced in? Here is my take: Saxo's macro theme since December has been the coming global policy panic, and this has now been fully realised. The Fed proved slower to cave than even the ECB, but last night saw them give up entirely. The US-China trade deal, another key uncertainty, is priced for perfection despite plenty of things that can go wrong.
The Brexit deal, however, is extremely mispriced. The UK’s biggest challenge may not even be the circus act known as Brexit, but rather the collapsing UK credit cycle which our economist Christopher Dembik has put at risking a 2% drop in UK GDP. If nothing changes over the next six to nine months, and nothing will change, the UK economy will be in free fall. Forget Brexit, UK assets are simply mispriced from the lack of credit juice in the pipeline.
China is also misunderstood and mispriced. If our two talks so far with clients on China and its opening up of its markets have taught me anything, it is that the western ‘reservation’ on anything Chinese is entirely built on bias. Governance is the word that keeps coming back in discussions. I am no fan of Chinese-style governance, but... less than 10% of global AUM is currently in China. This year alone will see the inclusion of China’s bonds in global indices like Barclays, Russell, and S&P and the allocation to China in the MSCI’s emerging markets index will quadruple from 5% to 20%. The overall China-bound inflow over the next three to five years will exceed $1 trillion using very conservative estimates.
China is perhaps the country in the world least likely to treat inbound capital poorly. It has transitioned from being a capital exporter to now being an importer. It has a semi-closed capital account, which means little money flows out, but a massive inflow is beginning to stream in as global investors acquire Chinese assets.
China and its growth model now need to share the burden of becoming an industrialised country, and Beijing knows that only the only way keep the capital flowing in 2019 is to treat investors well. On the domestic front, meanwhile, the CPC seems to be signaling that it wants domestic investors to move excess savings from the ‘frothy’ and less productive housing market to the equity market, where capital can flow to more productive enterprises. Foreign investors are more likely to want to participate in the more liquid and familiar equity market.
2019 for China is like 2018 for the US. The first 10 months of 2018 saw the US stock market near-entirely driven by the buy-back programmes fueled by Trump’s tax reform. US companies plowed over $1 trillion into buybacks over the year. This year, the Chinese government is telling its 90 million domestic retail investors to raise their allocation to the stock market while global capital allocators/investors will need to increase their exposure to China as its capital markets are reweighted.
But where does this leave me on asset allocation at the moment?
Equities: the Fed, ECB, BOE and BOJ have all given up because they only believe in credit cycles. The price of money going down is not enough for growth as it’s only the second derivative of the growth engine; the first derivative is quantity of money. This is stabilising but because of base effects (a very high starting point), it will not be enough. For now, however, the market is euphoric due to the usual lack of integrity from merry bureaucrats. A new high could be on the cards, but... slowly change overweight to China from the US mainly, but also MSCI.
Fixed income: 250 bps in 10-year maturities... where are all the sell side analysts calling for 400 bps? The FOMC panic took out the 260 bps floor – is 200 next? Probably. Observe how the two/10-year yield curve is now attacking 10 bps. My economic studies really only taught me three useful things (but then, I’m a terrible economist):
The yield curve is never wrong.
Say’s law (supply creates its own demand).
Productivity is everything.
An inversion of the 2/10 is coming, I don’t see 200 bps before the late summer, however, when concern about the lack of growth overtakes the global policy panic in place.
Commodities: it’s all structural – Tor Svelland taught me that. We like all commodities, especially all sectors that have a foot in infrastructure. This is due to the coming of MMT, partly, but its mainly due to widespread underinvestment.
Cash: love it!
Forex: Underweight the two credit monsters: GBP and AUD. Overweight the US dollar, NOK, CHF, JPY. I like carry (for the summer) in TRY, ZAR and BRL.
Over the last year, Neuberger Berman portfolio manager Steve Eisman - who gained notoriety beyond Wall Street thanks to 'The Big Short' and his portrayal by Steve Carrell in the movie adaptation - has taken seemingly every opportunity to talk his book, which apparently consists of concentrated bets against the financial systems of two developed nations: The UK and Canada.
Though UK banks largely bottomed out in October and have managed only a tepid rebound since, their Canadian peers have clawed back much of their losses from late last year. But this hasn't shaken Eisman's faith in his bet against Canadian banks, which is effectively a bet against the Canadian housing market (though Eisman doubts the fallout will be anywhere near as intense as the US housing market collapse that minted his reputation).
During an interview with the FT that was published on Thursday, Eisman explained that he's simply betting on a "normalization of credit" in the Canadian economy, where lax lending terms fueled a housing bubble that has been tentatively acknowledged as a systemic risk by the Bank of Canada. For the first time ever, the central bank late last year even started buying mortgage bonds late last year to
prop up the sliding Canadian housing market help increase the tradeable float of its benchmark securities
"I’m calling for a simple normalisation of credit that hasn’t happened in 20 years," Mr Eisman told the FT, while declining to name the banks he is shorting, or the full extent of his positions. He said the effects would hurt banks and the real estate sector, but would not be as intense as the financial crisis a decade ago in the US, when he and others saw huge profits from the implosion of the subprime mortgage market. "This is not ‘The Big Short: Canada’ - I’m not calling for a housing collapse," he said.
Adding to the already precarious finances of Canadian households, more Canadians are plundering their home equity to finance everything from renovations to car purchases.
Meanwhile, Canadian home sales crashed in January...
...while new home prices dipped for the first time in a decade.
Fortunately for Eisman - who hasn't disclosed specifics about his bets against Canadian or UK banks - more investors are piling into bets against the "big six" Canadian banks, which have seen their profits sag as they have raised their loan-loss provisions.
Mr Eisman is not alone: collective wagers against Canadian banks have risen 19 per cent since the start of the year to positions worth US$12.3bn, according to S3 Partners, a data provider based in New York. The activity is largely driven by falls in the country’s property market after years of rapid growth, according to Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.
"Unsold inventories are beginning to stack up,” said Mr Dusaniwsky. “Even the turbocharged markets of Vancouver and Toronto are experiencing slowing demand and price fragility.” Toronto’s TD Bank has emerged as the most popular target for the short sellers, with bets against its stock up 17 per cent to a total of $3bn since January. Bets against CIBC, also based in Toronto, have jumped 26 per cent to $2.3bn, while those against Bank of Montreal are up 37 per cent to $1.3bn, according to S3 Partners.
But as the Canadian economy continues to slow, Eisman believes a day of reckoning for the country's banks is inevitable, and its housing market, is inevitable. "Canadian banks are an oligopoly," he said. "They’re not mentally prepared."
In what is one of the most corrupt and vile things to have ever happened to the American political system, residents of New Jersey will now be taxed when something 100% out of their control happens. New Jersey’s governor Phil Murphy signed 19 bills into law on Monday, one of which, was the so-called “rain tax.”
Unfortunately, there were supporters of this tyrannical and wholly dictatorial law. Dubbed S-1073, supporters call it “flood defense,” and say it will serve as a long-needed tool to manage flooding and dirty runoff from rainwater. So there are actually human beings on earth who want others and themselves stolen from because it rains. There is nothing more disturbing that the current political path the United States is currently one. It’s downright horrifying, actually.
Government is downright evil and shameless when it comes to taxation. These pillagers of the public just sit around all day thinking and dreaming of events and things to tax. – Judy Morris Report
“Most importantly, it gives communities a way to access new resources in a fair and equitable manner, and invest in related benefits such as additional green space. We urge the governor to sign it,” said New Jersey Future’s Chris Sturm, who serves as the advocacy group’s managing director for policy and water, according to a report by Patch.
Some have criticized the bill (albeit, now enough) saying that it would impose taxes “based on the weather” which is an unfair system of stealing the money of others. Obviously, if you have any heart at all. It also gives the government much more power and more authority to steal more money by expanding what’s already an overly unfair burden (all taxation is “unfair”) on New Jersey residents who were saddled with several new taxes in 2019.
Assemblyman Christopher DePhillips has said the “rain-tax” bill permits local communities to tax “based on the weather,” and allows unlimited bonding and debt to be placed on the backs of property taxpayers. Not that bonding and debt aren’t already on the backs of the taxpayer, it is, but now New Jersey gets to carry the financial burden when it rains. “The last thing this state needs is more debt and another runaway tax. Especially one that taxes the weather” said DePhillips.
The so-called soft socialism of western nations is just an illusion. Western nations are bankrupt, their economies are disintegrating before their very eyes and the promises of lifetime pensions, welfare and healthcare are nothing more than propaganda lies that voters willingly drink. In the end, they will have nothing and be much worse off. Such is the fate of a person who votes for the police powers of the state to steal from another to give them what they want but never earned. –Judy Morris Report
Google is once again helping the Chinese government and its Orwellian control over the flow of information.
Earlier this month, evidence emerged suggesting that Google has continued to develop the "Dragonfly" censored search engine despite claiming they had abandoned it after an internal revolt.
Now, ZDNet reports that Google has banned ads for virtual private network (VPN) products targeting Chinese users - citing "local legal restrictions."
VPNs are the only way Chinese users can circumvent draconian internet filters which have blocked sites such as Facebook, Twitter, Gab, Instagram, Reddit, Discord, WhatsApp, WikiLeaks, Google and Gmail. Blocked news websites include Zero Hedge, BBC, Bloomberg, Reuters, WSJ, NYT and Business Insider.
"It is currently Google Ads policy to disallow promoting VPN services in China, due to local legal restrictions," Google said in a Wednesday email.
The email was received and shared with ZDNet by VPNMentor, a website offering advice, tips, and reviews of VPN products.
In January 2017, Beijing cracked down on VPN services - requiring that all providers active in China register for authorization from the CHinese government. In July, China forced Apple to remove all VPN apps from its App Store. After that, a "full-out ban on all VPNs was imposed on March 31, 2018," according to ZD - though some apps continued to function regardless.
Nonetheless, Chinese officials are now using the ban to go after users caught using VPNs. The first fine for using a VPN product was issued earlier this year to a Guangdong.
Despite banning consumers from using VPN apps, China remains one of the top sellers of VPN technologies. A November 2018 study found that almost 60 percent of the top free mobile VPN apps are run by companies with Chinese ownership or based in China.
We wonder if Google employees will protest yet another example of helping China to keep its citizens in the dark?
Let’s be very clear what yesterday’s full frontal capitulation by the Fed means: It’s coming. The next recession that is. It’s just a matter of the how and the when. Now mind you the Fed will never, ever overtly tell you a recession is coming. They can’t. Their underlying primary mission is to keep confidence up. A Fed predicting a recession would cause all kinds of havoc in capital markets and almost certainly bring about a recession. So they won’t tell you, but their actions speak loud and clear.
First understand what the capitulation means: It means that all their 2018 statements of optimism and predictions of raising rates in 2019 and previous insistences on a balance sheet roll-off being on”autopilot” were all wrong. Reality and markets rolled over them. They didn’t see the slowdown coming and only after markets dropped 20% in December did they change their policy stance and have now cemented a dovish stance for years to come.
Yesterday’s capitulation was so complete and even more dovish than markets had expected. How scared is the Fed? How scared should markets be? What are they seeing that forces them to not only halt the balance sheet roll-off, but to only project a token rate hike for 2020 in effect ending the rate hike cycle?
To visualize the extent of the capitulation look where the Fed’s “normalization” process will now end in September:
A pitiful end to a process that was falsely advertised as “normalization”. And it’s a global problem.
Every major central bank on the planet is now carrying enormous balance sheets. All have turned fully dovish, none will reduce their balance sheets. 10 years after the financial crisis no central banks will have normalized and can’t. The ECB is still running negative rates with no end in sight.
Let’s call a spade a spade: Normalization would crash capital markets globally. The world is destined to never see a true normalization and central banks will be forced to remain accommodative in the face of slowing growth. The promise of organic growth following what was supposed to be temporary central bank intervention was simply a pipe dream. The Fed tried and failed. Markets and the economy have forced their hand and now the US Fed is trapped and is forced to be the dovish for years to come. Intervention and accommodation have become permanent. Globally.
Growth peaked in 2018 as a result of the temporary sugar rush following the US tax cuts.
And note the glaring gap in public narratives even in the US. This is the Fed’s latest economic forecast:
GDP growth below 2% and below 4% unemployment forever and ever amen. Who can believe it 10 years into an economic expansion financed by ever more debt?
Not I, especially if you consider that the administration’s federal budget is entirely dependent on 3% GDP growth in perpetuity. After all they project trillion dollar deficits with 3% growth. Excuse me, but I have a question: What’s the deficit with less than 2% GDP growth as opposed to 3% GDP growth? What’s the deficit with a recession coming? A lot higher than 1 trillion dollars I venture to guess which means funding requirements will explode higher beyond even the current absurdity of already running trillion deficits at the end of a long business cycle.
Markets are increasingly pricing in rate cuts in 2020 following the Fed decision. Why? Well, because that’s what usually happens next when the Fed ends its rate hike cycle.
Let’s dissect this chart:
During the past 2 market bubbles the Fed ended its rate hike cycle in June of 2000 and August of 2006 respectively as unemployment was at a cyclical low. In 2000 the unemployment rate was below 4% as it is now. In 2006 unemployment settled in the 4.5% range. In both cases a recession soon followed as the business cycle turned. In 2000 the recession ensued a mere 9 months following the end of the rate hike cycle and the Fed was forced to cut rates a mere 6 months following the rate hike pause as markets were dropping to new lows.
In 2006 markets proceeded to rally until November of 2007 and then the recession unfolded beginning in December of 2007.
They key question for everyone here is will we see a 2000 or 2007 repeat? Both have major implications for equity markets.
In 2006 markets rallied hard after the Fed ended its rate cycle. Markets proceeded to place a major topping pattern in 2007 and then the financial crisis unfolded.
Bulls will want to cling to this scenario as it suggests a recession is still 2 years away.
Two problems with this scenario: 1. Markets are already starting to price in a rate cut for January (47% probability as of yesterday). In the 2006 example the Fed did not cut rates until August 2007, 14 months after the pause and the recession began in December 2007, hence the lead time here is much shorter. And remember the Fed doesn’t cut by advanced schedule, it’s unfolding events forcing them to. The timing will be driven by markets and the economy. Everything in the Fed statement and the global macro data is suggesting that things have deteriorated much faster than anyone anticipated just 6 months ago. So a rate cut could also come sooner than anyone expects. 2. Markets are already engaged in a potential major topping pattern:
Just like they were in 2000.
In 2000 the Fed stopped the rate hike cycle in June of 2000, markets had already topped in March or 4 months before. In 2000 the market counter rally peaked in September 3 months following the rate hike pause printing lower highs. The Fed started cutting rates in December another 3 months later. The recession began in March of 2001, 4 months later.
Compare to now:
Markets peaked in September 2018 and the Fed for all intents and purposes stopped its rate hike cycle in December, 3 months after markets peaked. And here we are another 3 months later and markets are at risk of peaking here, engaged in a major topping pattern. So you see this script aligns much more closely to the 2000 scenario versus the 2007 scenario. This suggests a rate cut may come A LOT sooner than people anticipate.
What would force a rate cut? Simple. Worsening economic data, dropping markets and an inversion of the yield curve.
Yield curves have already flattened significantly and as history shows an inversion can happen suddenly following such periods of consolidation and a recession follows shortly. And what does the 30 year vs 5 year yield curve suggesting here in context of markets and cyclical low unemployment?
To my eye it suggests highly elevated inversion risk consistent with a business cycle coming to an end, the only question is the when and how.
Look, nobody has the all answers here, the world doesn’t follow a predetermined script, all I can point to are the technicals in context of macro events and the fact is the Fed is chasing and they know it. To go this dovish implies they know there’s more than just noise in the data. There’s a real concern that a recession may be unfolding and they’re trying their dearest to provide some runway here.
Fact is global growth, while claimed to be stabilizing, has yet to show any serious surprise to the upside. China trade deal, Brexit, all these supposed trigger events for growth are taking longer than expected and there are still no clear resolutions on the table. At this rate they may be too little too late to stop the cycle.
How will we know which scenario applies? The 2007 or 2000 scenario? New market highs would suggest there is time and room before the recession hits.
However if markets sell off over the next few weeks and months central banks may have lost control. They are already all dovish, they can’t surprise on the dovish side any longer. That carrot has been removed by yesterday’s Fed capitulation. All they have left is QE4 and rate cuts to come. And those will come at the point of either new market lows and/or deteriorating data. So, ironically, markets may decide the timing of the rate cut. If the 2000 script unfolds we may see rate cuts a lot sooner than anyone can anticipate. A ridiculous notion at this precise moment in time I know. But everyone talks tough after a 500 handle rally on the S&P 500.
Fedex this week suggested the slowdown is not over. The Fed yesterday suggested the same. Yesterday’s drop in financials following the Fed announcement suggested someone is paying attention. Will the rest of the market? The next few weeks will provide a lot more clarity as Q1 earnings and outlook adjustments come in.
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NFA News Releases
Elite Forex Blog - Market Research & Analysis
For years New Zealand has been utilised by app developers, social media companies and software developers to test new technologies, but the risks and benefits for Kiwi consumers and businesses remain unclear. Ged Cann reports. If you want to test it, come to New Zealand. That's the mantra overseas, where New Zealand's advantages as a testing ground have been common knowledge in the international tech industry for decades, according to one world-wide developer.
There are a number of analogous facts shared by the attack on the North Korean embassy in Spain and the terror event in Christchurch which suggest that the same team was involved in both incidents. In both cases the perpetrators showed that they were well versed in "breach and clear" tactics against buildings filled with people. In both cases the buildings were cleared efficiently and quickly even though the goal of the North Korean incident was focused on intelligence gathering as opposed to mass murder. Aerial analysis of the North Korean embassy in Spain, the Al Noor Mosque and the Linwood Islamic Centre show that all buildings are of similar size and each would have required the same know-how and training to breach.
Earlier this year, the United Kingdom, Australia, Canada and New Zealand – which along with the United States are members of the “Five Eyes” alliance – came together to collectively attribute to Russia what may be the most costly cyber attack in history. This public affirmation provided a rare glimpse into the depth of defense cooperation among the world’s English-speaking democracies.Formalized in 1955, Five Eyes collaboration has proven a remarkable success both throughout the Cold War and in the post-9/11 era of counterterrorism. The informal alliance has until now remained rooted in intelligence sharing. However, in a world of complex and rapidly evolving security challenges, the Five Eye countries should consider a new area of shared focus: leveraging the commercial technology sector to address common national security concerns.
- This is the worst attack on peaceful Muslims in their own holy place
- New Zealand is the most anti-Gun jurisdiction in the world - it's impossible for a normal citizen to obtain and keep a firearm in this place
- New Zealand is the country with the most internet Censorship in the western world, beaten only by China and North Korea
- NZ is controlled by the Crown. Unlike other British Territories like the Bahamas for example, NZ never declared their 'independence' and the Queen is the Queen of New Zealand, visits there, and technically owns all the land.
- Property in New Zealand is mostly bought 'freehold' (update: should be "leasehold" but the point is that you don't really own it) in that you have a 99 year renewable lease and you never actually 'own' the land like you do in other places. That may seem like a simple technicality but the fact is there would never be a Rockefeller story in NZ if you discovered $100 Million worth of Gold on your land you can bet you would only get a pittance finders fee for it. God save the Queen.
Under the Crown Entities Act, Ministers are required to "oversee and manage" the Crown's interests in the Crown entities within their portfolio (sections 27 and 88). The board of the entity has the key role in ensuring the entity is achieving results within budget. This is done by a monitoring department on behalf of the Minister unless other arrangements for monitoring are made. Monitoring departments make explicit agreements with their Minister, setting out what monitoring they will undertake and how they will do it. Crown entity boards should also facilitate clear and transparent monitoring, for example, by providing the Minister and monitoring department with good information on which to make judgements about performance.
The Department of Internal Affairs maintains a hidden list of banned URLs and their internet addresses on a NetClean WhiteBox server, which as of 2009 contained over 7000 websites. The DIA then uses the Border Gateway Protocol to tell ISPs that they have the best connection to those internet addresses.When a user tries to access a website, the ISP will automatically send their data through the best connection possible. If the user is trying to access a website hosted at an internet address that the DIA claims to have the best connection to, the ISP will divert the traffic to the DIA.If the website the user is trying to access is on the DIA's list of banned URLs, then the connection is blocked by the WhiteBox server.The user instead sees a filter notice page and has the option of getting counselling or anonymously appealing the ban.If the website is not on the list of banned URLs, then the DIA transparently passes on the data to the actual website and the user is left unaware that the request was checked.
IN MEDICINE, trials are conducted on guinea pigs, rats, mice and rabbits. In digital businesses, tests are performed on New Zealanders. Their country is proving the perfect location for software firms, social networks and app developers discreetly to try out and refine their products. Take Microsoft, which last year made New Zealand its first test market for Sway, a new app that helps users create websites, and which has since been released into other markets. Other big technology firms, including Facebook and Yahoo, also use New Zealand as a development lab, as do games companies and small startups.
Not happy with the arrangement, Chicago HFT titan DRW Holdings wishes to be even "faster" than Jump and Vitru, and plans to move just a few yards closer to the exchange, having recently put an antenna on a light pole. Next to that is yet another light pole that has been rigged with antennas owned by McKay Brothers, an Oakland-based company. Meanwhile, on nearly all the roads in the area, trading companies have erected antennas or rented space on towers and poles, all of them littered with white circular dishes to try and get closer to the CME data center, all for the purpose of frontrunning slower traders, even if there are still no lasers to be seen, unlike what a visitor to the NYSE in Mahwah, NJ can observe.
Amid the legal fray, elected officials in Aurora find themselves confused, trying to figure out which projects should be approved and which projects should be rejected. It appears that the elected officials didn’t initially understand the weight of the decisions that they were making in approving and rejecting these towers. For instance, Alderman Bill Donnell described his technological know-how by saying: “I came from being a guy who didn’t know where the cloud was to realizing speed matters. I didn’t realize being a millisecond faster was all that important."
Back in March 2016, when it appeared that HFTs are starting to cannibalize one another, the CME sold its data center building for $131 million. The local government thought it had the issue squared away when it required CyrusOne to lease space to traders on its tower at "fair market rates". The intention was to “equalize wireless access to the CME.”
Sixty miles east of Wall Street, a spit of land shaped like a whale’s tail separates Long Island Sound and Conscience Bay. The mansions here, with their long, gated driveways and million-dollar views, are part of a hamlet called Old Field. Locals have another name for these moneyed lanes: the Renaissance Riviera.That’s because the area’s wealthiest residents, scientists all, work for the quantitative hedge fund Renaissance Technologies, based in nearby East Setauket. They are the creators and overseers of the Medallion Fund—perhaps the world’s greatest moneymaking machine. Medallion is open only to Renaissance’s roughly 300 employees, about 90 of whom are Ph.D.s, as well as a select few individuals with deep-rooted connections to the firm.
“They did study us,” said Simons as he spoke about his career in money management. “Of course, they didn’t find anything.”
While Simons refused to say how much Medallion has in assets, Bloomberg calculations put it at about $10 billion. Simons did say there is about $45 billion in the firm’s other funds, which are still open to outside investors, and generate far smaller returns than Medallion.. They employ longer-term trading strategies, so the funds haven’t delivered the same level of returns as Medallion.
"Now is the time for people to really understand this is not just something you can pass off and say 'it will be alright'," Mr Price said. "Politicians use the term ‘sub-optimal’ and what does that mean? It means high risk and less secure."
"We’re going to have to explain that to the public at some point, we may even have to explain that to victims and witnesses.""Somebody may be arrested for shoplifting here but back home they could have a serious conviction. There could be a reason why they are here."
“In a short timescale we’re not going to be able to get 27 agreements,” Mr Price said. "Bilaterals are a lot slower, a lot clunkier. ECRIS is a really important part of our business – turning that off is going to have a significant impact on our ability to make this country safer and to make European countries safer as well."
If the UK leaves the EU without a deal on 29 March, export licences for millions of tonnes of waste will become invalid overnight. Environment Agency (EA) officials said leaking stockpiles could cause pollution.The EA is also concerned that if farmers cannot export beef and lamb, a backlog of livestock on farms could cause liquid manure stores to overflow. A senior MP said the problems could cause a public health and environmental pollution emergency. An EA source said: “It could all get very ugly, very quickly."The emails leaked to the Guardian were sent to EA staff, asking for 42 volunteers to staff crisis management centres that would deal with incidents. On Tuesday the chief executive of the civil service revealed plans to move up to 5,000 staff into an emergency command and control centre in the event of no deal.
"No deal would be a green light to criminal fraudsters and create a public health and environmental pollution emergency. EA officials should not carry the can for the failings of government to get a deal through and this shows how hollow the prime minister’s promises were about protecting the environment if we leave the EU."
The Queen and other senior royals will be evacuated from London in the event of riots triggered by a no-deal Brexit, under secret plans being drawn up by Whitehall.Emergency proposals to rescue the royal family during the Cold War have been "repurposed" in recent weeks, as the risk continues to rise of the UK crashing out of the EU without a deal before next month’s deadline.
"It seems to me we have got to guard against two things. One is an irrational pessimism that says that everything will be a catastrophe and irrational optimism which says everything will be okay.
“Juan Guaidó is a character that has been created for this circumstance,” Marco Teruggi, an Argentinian sociologist and leading chronicler of Venezuelan politics, told The Grayzone. “It’s the logic of a laboratory – Guaidó is like a mixture of several elements that create a character who, in all honesty, oscillates between laughable and worrying.”
“‘These radical leaders have no more than 20 percent in opinion polls,” wrote Luis Vicente León, Venezuela’s leading pollster. According to León, Guaidó’s party remains isolated because the majority of the population “does not want war. ‘What they want is a solution.’”
Targeting the “troika of tyranny”
Training from the “‘export-a-revolution’ group that sowed the seeds for a NUMBER of color revolutions”
Birthing the “Generation 2007” regime change cadre
“Galvanizing public unrest…to take advantage of the situation and spin it against Chavez”
“This could be the watershed event, as there is little that Chavez can do to protect the poor from the failure of that system,” the Stratfor internal memo declared. “This would likely have the impact of galvanizing public unrest in a way that no opposition group could ever hope to generate. At that point in time, an opposition group would be best served to take advantage of the situation and spin it against Chavez and towards their needs.”
Towards violent destabilization
.@NicolasMaduro, jamas me has hecho caso. Me has fustigado/perseguido como @chavezcandanga jamás osó. Óyeme, tienes sólo dos opciones en las próximas 24 horas:
1. Como Noriega: pagar pena por narcotráfico y luego a @IntlCrimCourt La Haya por DDHH.
2. O a la Gaddafi.
Update: Burelli contacted the Grayzone after the publication of this article to clarify his participation in the “Fiesta Mexicana” plot.Burelli called the meeting “a legitimate activity that took place in a hotel by a different name” in Mexico.Asked if OTPOR coordinated the meeting, he would only state that he “likes” the work of OTPOR/CANVAS and while not a funder of it, has “recommended activists from different countries to track them and participate in the activities they conduct in various countries.”Burelli added: “The Einstein Institute trained thousands openly in Venezuela. Gene Sharpe’s philosophy was widely studied and embraced. And this has probably kept the struggle from turning into a civil war.”
“I think it is time to gather efforts; make the necessary calls, and obtain financing to annihilate Maduro and the rest will fall apart,” Machado wrote in an email to former Venezuelan diplomat Diego Arria in 2014.
Guaidó heads to the barricades
Cracking down on Popular Will
Cordial reunión en la ONU con Elliott Abrams, enviado especial del gobierno de EEUU para Venezuela. Reiteramos que la prioridad para el gobierno interino que preside @jguaido es la asistencia humanitaria para millones de venezolanos que sufren de la falta de comida y medicinas.
A pawn in their game
“There is a class reasoning that explains Guaidó’s rise,” Sequera, the Venezuelan analyst, observed. “Mejía is high class, studied at one of the most expensive private universities in Venezuela, and could not be easily marketed to the public the way Guaidó could. For one, Guaidó has common mestizo features like most Venezuelans do, and seems like more like a man of the people. Also, he had not been overexposed in the media, so he could be built up into pretty much anything.”
“For the first time,” Brownfield, the former American ambassador to Venezuela, gushed to the New York Times, “you have an opposition leader who is clearly signaling to the armed forces and to law enforcement that he wants to keep them on the side of the angels and with the good guys.”
SummaryRevlon is controlled by a single insider for 30 years billionaire Ronald Perelman.Perelman has developed in his career a method of hostile takeovers that dates far before Revlon.Due to a rule, if he is able to get 90% of Revlon he'll get voting rights of all 100%.The float (available shares for purchase) is low 2.29 M, almost all of which are held short.Recently, Barna Capital purchased a 2% stake, putting the institutional control above 10.1%, making a Perelman takeover impossible.
Today is one of those days. Right off the open an algo starts selling 100 shares into the bid. The spread is 3%. If I place a bid higher than last sale, let's say 500 shares. It will sell me 500 shares. And will sell 100 shares at whatever bid is lower than last. This is just bluntly manipulation. It's just moving share price lower. It's only job.Take a look at lv2 for instance. There's at least a 5 to 1 ration ask to bid at all times. Strange for a stock that doesn't exist for sale.When Perelman buys stock, his 15k algo buys move the stock from 50 cents to a dollar. When 8 buy 15k shares. The stock usually goes down. So I'm working against a short. And he's not.About 2 million shares out the remaining float is in ETF. So that basically not tradable as they only rebalance their portfolios and do not trade actively. That lease roughly 500k shares tradable period. With 2.6 million already shorted. Magic i suppose 🙂
Today is one of those days. Right off the open an algo starts selling 100 shares into the bid. The spread is 3%. If I place a bid higher than last sale, let's say 500 shares. It will sell me 500 shares. And will sell 100 shares at whatever bid is lower than last. It's just moving share price lower. It's only job. And here's one more thing. When the algo buys stock, the 15k algo buys move the stock from 50 cents to a dollar. When I buy 15k shares, the stock usually goes down. So I'm working against a short.
GreenmailIn the late 1980s, Perelman was accused of engaging in greenmail. "Greenmail" occurs when someone buys a large block of a company's stock and threatens to take over the company unless he is paid a substantial premium over his purchase price. In the case of someone with a reputation as a corporate raider, the mere act of buying up shares could send a company into a panic and investors into a buying frenzy. Perelman insists he seriously intended to buy every corporation he bought into.He was first accused of greenmail in late 1986 during a run at CPC International when he bought 8.2% of CPC at around $75 a share and indirectly sold it back to CPC through Salomon Brothers a month later at $88.5 a share for a $40 million profit. Both CPC and Perelman denied it was greenmail despite appearances to the contrary, including what looked like an artificial price increase by Salomon shortly before they sold Perelman's shares.Another accusation of greenmailing levied against him was the best-known and stemmed from his attempt to purchase Gillette in November 1986. Perelman opened negotiations with a bid of $4.12 billion. Gillette responded with an unsuccessful lawsuit and public insinuations of insider trading. Perelman accumulated 13.8% of Gillette before he made what he would later call the worst decision he ever made and sold his stake to Gillette later that month for a $34 million profit. Gillette had put word out that Ralston Purina had agreed to buy a 20% block of stock, making any attempt by Perelman to buy Gillette much more difficult. Perelman decided to sell his share to Ralston Purina, but before he did so Gillette's executives called him up, asking if he'd sell his shares to them and they'd sell the shares to Ralston Purina. He sold his shares to Gillette and Ralston backed out of the deal.
PanavisionIn April 2001, M&F Worldwide bought Perelman's 83% stake in Panavision for $128 million. This would be unremarkable except that Perelman controlled M&F Worldwide and the price paid for his stake was four times market value. At the time, M&F Worldwide was a healthy company with an excellent balance sheet while Panavision was bleeding red ink. M&F Worldwide's other shareholders cried foul, alleging the only person who stood to benefit from the deal was Perelman and took their complaints to the courts. Perelman insisted the deal was an excellent one and in the best interest of the shareholders because Panavision was well-positioned to profit from the move to digital cinematography.The share price tumbled from six to three after the deal and reflected M&F Worldwide shareholders' lack of confidence. Perelman tried to pacify M&F Worldwide's shareholders with a $15 million settlement, but the judge rejected it as grossly inadequate. Ultimately, Perelman agreed to undo the deal.
Fred TeppermanPerelman hired Fred Tepperman as his CFO after Tepperman left Warner Communications in 1985. Starting with Pantry Pride, Tepperman worked on every single business deal Perelman orchestrated throughout Tepperman's seven-year stint at MacAndrews & Forbes. Tepperman's tenure came to an abrupt end just after Christmas in 1991 when Perelman fired him for being derelict in his duties. Tepperman had been distracted, he claimed, by caring for his Alzheimer's-afflicted wife of 30 years. A clause in Tepperman's contract entitled him to a large portion of his salary and benefits in the event of an injury that prevented him from being able to work; Tepperman claimed he had suffered such an injury, albeit psychologically, as a result of the effect his wife's condition had on him. His demands totaled $30 million. That number stems partially from Tepperman's salary, which started at $275,000 and rose to $1.2 million in 1990 and partially from his large benefits package. Perelman was quick to file a countersuit for fraud, claiming that Tepperman had sneakily changed the company's retirement plan in such a way that Tepperman would personally gain millions of dollars. It took over three years for the case to make it to court. The case ended with a sealed settlement.
- They understand value.
- They are looking for an edge.
- They are looking for that next disruptive technologies and companies.
- They value their time and they know that time is best spent with loved ones and enjoying the world’s treasures.
- They don’t need to look at quotes every minute because they purchased prior to the IPO.
- They have a vision of their financial future.
- They want to have control over their financial future.
- They recognize that finance is not a spectator sport.
- They (themselves, not through an LLC) get on the cap table.
Back in 1998, Mark Cuban and his partner Todd Wagner sold Broadcast.com, a giant multimedia company focused on streaming audio and video, to Yahoo! for $5.7 billion. At the time, Mark Cuban received 14.6 million shares of Yahoo trading at $95, thus his concentrated position had a market value of $1.4 billion. In order to protect the value of the 14.6 million stocks he decided to set up a costless Options Collar, which allowed him to protect his billions without paying any insurance premium. Probably because there was a lock-in period for him to sell the Yahoo share, or he used these Yahoo shares as collateral for a bank loan, or he didn’t want to miss the opportunity if Yahoo continued to rally, he chose to enter a collar to lock in his share value without selling the shares.
- Revlon is controlled by a single insider for 30 years billionaire Ronald Perelman.
- Perelman has developed in his career a method of hostile takeovers that dates far before Revlon.
- Due to a rule, if he is able to get 90% of Revlon he’ll get voting rights of all 100%.
- The float (available shares for purchase) is low 2.29 M, almost all of which are held short.
The Court declared that, in certain limited circumstances indicating that the ‘sale’ or ‘break up’ of the company is inevitable, the fiduciary obligation of the directors of a target corporation are narrowed significantly, the singular responsibility of the board being to maximize immediate stockholder value by securing the highest price available. The role of the board of directors transforms from ‘defenders of the corporate bastion to auctioneers charged with getting the best price for the stockholders at a sale of the company.’ Accordingly, the board’s actions are evaluated in a different frame of reference. In such a context, that conduct can not be judicially reviewed pursuant to the traditional business judgment rule, but instead will be scrutinized for reasonableness in relation to this discrete obligation.
Did you know that the CIA has its own Venture Fund? And did you know that Venture fund was key in starting Facebook and Google? As explained in the book Splitting Pennies – the world is not as it seems.
For many readers especially on Zero Hedge this comes as no surprise, as you are well aware of the octopus that wraps its tentacles around the globe. But it may surprise you how active In-Q-Tel is and how chummy they are with the rest of the VC community. It’s as if they are just another VC, but with another purpose. Let’s look at some of the stats, from Crunchbase:
Here’s a list of recent investments…
If you dig back you won’t see Google or Facebook on there – which is company policy for retail consumer investments that can impact the public (it’s kept secret behind an NDA). Here’s how it works – In-Q-Tel may invest in your startup but there’s a big catch. First, you have to sign an NDA which is enforced strongly – that you are not to disclose your partner. Second, you must agree to ‘cooperation’ when it comes to information sharing now or down the road, such as location data on people using Facebook, Google, or other systems – perhaps only to feed it into a big data brain at Palantir. Or perhaps for more street level surveillance. The surveillance is known by fact, not conspiracy theory – but by fact – due to the disclosure of classified documents by Edward Snowden. If it were not for Snowden, we could only guess about this. The name of the main program is PRISM but there are many others.
For those in the VC community that are deep in the know- the “Deep VCs” like Peter Thiel for example, the Snowden revelations would come as no surprise. MUST READ – No Place To Hide – the story of the NSA, PRISM, and Snowden (written by Greenwald).
But for others, it may come as a surprise that not only the CIA has its own VC fund, but that it sits on many corporate boards alongside many Wall St. firms and other VCs.
And of course, they always do well.
Let’s consider the doors they opened for Google, or in the case of Google it was more like the doors that were closed. Google was not the best search engine, it was not superior technology – it wasn’t even really very good. It just became a monopoly and crushed the competition. Many wonder how they were able to do it, and that this is part of the Entrepreneur “Magic” that few have. Well we can say in the case of Google there was no Magic they had a helping hand from a friend in the deep shadows. Google wanted to become huge – the CIA wants information (they always do, so we don’t use the past tense ‘wanted’). So it was a cozy and rational partnership – in exchange for making the right handshakes at the right time, allowing Google to become a global behemoth, all they needed to do was share a little information about users. Actually, a lot of information. No harm in that, right?
But in doing so Google violated itself as well as prostituted its model and its users. Google still does this and is not nearly as flagrant as its brother Facebook, however Google shares more detailed ‘meta data’ which is actually more useful to Echelon systems like Palantir that rely on big data, not necessarily photos of what you ate for breakfast (but that can be helpful too, they say).
The metaphor is making a deal with the devil; you get what you want but it comes at a price. And that’s the price users pay to Google – they get service ‘free’ but at a huge cost, their privacy. Of course – this is all based on the concept of Freedom which really does exist in USA. You don’t have to use Google – there are many alternatives like the rising star Duck Duck Go:
But who cares about privacy; only criminals, hackers, programmers, super wealthy (UHNWI) and a few philosophers.
Google remains the dominant search platform and much more. Google exploits niche by niche even competing with Amazon’s Alexa service.
The argument here is that Google wouldn’t be Google without the help of the CIA. This isn’t our idea it’s a fact, you can read about it here on qz.com:
Two decades ago, the US intelligence community worked closely with Silicon Valley in an effort to track citizens in cyberspace. And Google is at the heart of that origin story. Some of the research that led to Google’s ambitious creation was funded and coordinated by a research group established by the intelligence community to find ways to track individuals and groups online. The intelligence community hoped that the nation’s leading computer scientists could take non-classified information and user data, combine it with what would become known as the internet, and begin to create for-profit, commercial enterprises to suit the needs of both the intelligence community and the public. They hoped to direct the supercomputing revolution from the start in order to make sense of what millions of human beings did inside this digital information network. That collaboration has made a comprehensive public-private mass surveillance state possible today.
There you have it – Google is the child of the digital revolution of the surveillance state. Why spy, when you can collect data electronically and analyze with machine learning?
The new spy is the web bot.
And the investors in Google did well – so that’s the investing story that matters here. It pays well to have friends in high places, and in dark places. Of all the investments In-Q-Tel made, almost all of them have done very well. That doesn’t mean that Palantir is going to grow to the size of Google, but it does provide natural support should a company backed by In-Q-Tel run into problems.
By the time Facebook came out, digital surveillance was already in the n-th generation of evolution, and they really stepped up their game. In the creepiest examples, Facebook doesn’t necessarily (and primarily) collect data on Facebook users – it does this too. But that’s just a given – you don’t need to perform surveillance on someone who gives all their data to the system willingly – you always know where they are and what they are doing at any given moment. The trick is to get information about those who may try to hide their activities, whether they are real terrorists or just paranoid geniuses.
How does Facebook do this? There are literally hundreds of programs running – but in one creepy example, Facebook collects photos that users take to analyze the environment surrounding. Incidentally, the location data is MUCH MORE accurate than you see on the retail front end. So you get the newspaper and see a gift in your mailbox for your birthday – you take a photo because the ribbons are hanging out. What shows up in the background? All kinds of information. What the neighbor is doing. License plate of the car driving by. Trash waiting to be picked up by the street. A child’s toy left by the sidewalk. You get the picture. Facebook users have been turned into sneaky little digital spies! While they are walking around with their ‘smartphones’ (should be called ‘dumbphones’) scrolling their walls and snapping photos away – they are taking photos of you too. That means, Facebook collects data for the CIA about users who don’t have Facebook accounts. This is the huge secret that the mainstream media doesn’t want to tell you. Deleting your Facebook account will do nothing – every time you go out in public you are being photographed, video recorded, and more – all going into big data artificial intelligence for analysis.
But here’s the best part. You own it! The CIA may have a bad reputation but it is part of the US Government, and thus – profits go back to the Treasury (those which are declared) or at least they are supposed to. Considering this, why is there a stigma about even talking about In-Q-Tel when in fact we should be more involved in any US Government operation when it is technically owned by the people and funded by taxpayers? Meaning, do taxpayers have rights to know what goes in in taxpayer funded entities, like In-Q-Tel? The big difference between In-Q-Tel and the CIA is that In-Q-Tel functions just like any other VC – they disclose most of their investments, they attend conferences, they accept business plans. You can literally submit your idea to In-Q-Tel and get funding. Of course, like any VC there’s a very small chance of being funded.
So what’s an investor’s take on this story? In-Q-Tel is not Freddie Mac there is nor a quasi-government entity; it’s not an NGO and there is no implicit guarantee that In-Q-Tel’s deals will do any better than Andreessen Horowitz.
However, their deals do very well. Companies they fund not only have the backing of the CIA explicitly, it’s not only about business – it’s about national security! Under that guise, it’s no wonder that companies like Google and Facebook rocket to the top.
We are not suggesting that investors double down on In-Q-Tel bets. We are only suggesting that at a minimum, we follow what they do. It’s a data point – a good source of information. And the best part is that it’s public.
Their most recent investment is in a virtual reality company in Boca Raton, FL called Immersive Wisdom:
Immersive Wisdom® is an enterprise software platform that allows users to collaborate in real-time upon diverse data sets and applications within a temporal and geospatially-aware Virtual, Mixed, and Augmented Reality space. Immersive Wisdom is hardware-agnostic and runs on VR, AR, as well as 2D displays. Regardless of geographic location, multiple users can be together in a shared virtual workspace, standing on maps, with instant access to relevant information from any available source. Users can simultaneously, and in real time, visualize, fuse, and act upon sensor inputs, cyber/network data, IoT feeds, enterprise applications, telemetry, tagged assets, 3D Models, LiDAR, imagery and UAV footage/streaming video, providing an omniscient, collaborative view of complex environments. Immersive Wisdom also acts as a natural human interface to multi-dimensional data sets generated by AI and machine learning systems. The platform includes a powerful SDK (Software Developer Kit) that enables the creation of customer-specific workflows as well as rapid integration with existing data sources/applications.
Cool stuff for sure – but it’s in early stages. Pre IPO Swap suggests real Pre IPO ‘unicorns’ not because of size, but because of the right mix of risk and reward. https://preiposwap.com/pitch See why we think so in our pitch.
In any analysis, it’s worth watching In-Q-Tel, which is a top source of funding and investment data we watch on www.preiposwap.com Pre IPO Swap.
To get real-time updates on companies like this, companies that In-Q-Tel invests in - www.preiposwap.com/follow follow our blog free.
The New York-based investment firm’s Composite fund invests across multiple strategies and is the company’s largest and longest-running. It returned 3.5 percent last month, the person said, as the S&P 500 Index sunk 9.2 percent.
D.E. Shaw was founded by computer scientist David Shaw and has more than $50 billion in assets under management, including $28 billion in hedge funds. Its Composite fund has largely been closed to new investors since mid-2013, but the group continues to build out new strategies and products. Recent areas of development have included private credit opportunities in Europe and renewables investing.
The company founded by Peter Thiel, Elon Musk and Max Levchin has spawned three billionaires, many, many millionaires and generation-defining companies. Here, we break down the key players from the most notorious group in Silicon Valley.
On 13 March 1986, Microsoft went public at $21 a share. 100 shares would be worth $2100.Microsoft has since had 9 splits (Microsoft Stock Split History) for a total of 288x.Split adjusted IPO price would be 21/288 = $0.073. Your 100 shares would have become 28,800 shares.MSFT closed at $50.94 on 27 April 2016, which would make that $2100 investment worth $1,467,072, a 69860% return on investment. $2100 in 1986 would be approximately $4563 in 2016 so a 69860% ROI adjusts to 32154% after inflation.
Alpha Z Advisors.
This should serve as a wake up call to all managers and investors to re-asses the risk management plan - as in today's market anything is possible.
To see an example of an options strategy that has a 5+ year record, see Alpha Z Advisors - Strategies based on Anomalies.
Read the Entire Zero Hedge article:
Shorting vol (naked) with "Other People's Money..."? What could possibly go wrong?
Q: Have I lost all the money in account, then?A: Yes
I am writing to give you an update on the situation here with your account.We have spent the week unwinding our short natural gas call position as expediently as possible.Today which was to be the final day of liquidation, the market flared as prices appear to have been caught in a "short squeeze."The speed at which it took place is truly beyond anything I have seen in my career. It overran our risk control systems and left us at the mercy of the market.In short, it was a rogue wave and it overwhelmed us.Unfortunately, this has resulted in a catastrophic loss.Our clearing firm, FC Stone now requires us to liquidate all positions. We hoped to have this done today. If not, it will be completed tomorrow.Your account could potentially be facing a debit balance as of tomorrow. OptionSellers.com will be processing fee credits over the course of the coming days to help alleviate debit balances. What these will be will be determined after all positions are cleared.This has in effect, crippled the firm. At this point, our brokers at FC Stone have been assisting us in liquidation.Our offices will remain open and we will all still be here to answer your questions and process account closings. We will do everything in our power to ease what discomfort we can.I am truly sorry this has happened.I will be updating you again via memo in 24 hours.Regards,OptionSellers.com
What do I do about this Debit Balance?You likely received a debit call notice from FC Stone this morning via email. You may receive it in the mail as well. This is a call to add funds to bring the balance back up to zero. Instructions for paying the balance on the notice. Any questions on debit balances can be directed directly to FX Stone at the number on the notice. Stone requests the funds asap but if it takes a few days, that is OK.What happens if I don't pay the balance?We recommend balances be paid. If it is not paid, it becomes like any other unpaid bill.
As we noted previously, what is notable is that the move in nat gas was so powerful, it nearly caused a VIXtermination-type event in the VelocityShares Daily 3X Inverse Natural Gas ETN, which seeks to produce three times the opposite daily move of US natural gas prices and is known by its stock market ticker DGAZ.Derivatives strategist Pravit Chintawongvanich, who rose to popularity with his hourly hot takes during the February VIXplosion that anihilated several inverse VIX ETNs, pointed out that DGAZ and its “long” leveraged cousin UGAZ could be liquidated if natural gas prices move sharply: "Because these products offer 3x daily leverage, a one day move greater than 33 per cent in either direction would blow up one of them," he wrote.In other words, the market was this close to another inverse ETN extinction event, only this time not in volatility but in natural gas. Meanwhile, the DGAZ's days may be limited: starting off the month with $500MM in assets, in just two weeks it has been cut in half, and as of this morning had just $247MM in assets.
"I promise you every day when I woke up, I was checking for rogue waves..."
"I truly invested your funds like you were a family...I'm sorry this rogue wave capsized your boat... I wish you great luck and good health."
- Malta is providing a way for those on the OFAC list to avoid / circumvent sanctions
- By providing an OFAC loophole, Malta is as a state, aiding and abetting criminals (who are criminals according to the United States)
- As a side business, it is easy for these participants to launder money directly (for themselves) or for their criminal network friends. It is possible, and likely, that copy cats of Pilatus have setup laundry businesses using similar and less obvious loopholes.
- On the regulated front, Malta is providing a backdoor to the European Union (EU) with light regulation. This isn’t necessarily, by itself, a bad thing – but combined with the other more serious problems, it becomes a matter of discussion.
- Malta’s financial system can survive Pilatus bank and Ali Sadr trial. But what’s next? What next scandal lies in the shadows, another fraud to be unraveled? Could it involve a high-profile Russian diplomat on DOJ’s black list? If Pilatus is isolated, Malta can survive. As soon as the next mole pops up in the garden, it will be impossible for Malta to whack them all.
- Not only is the case about Ali Sadr Hasheminejad disturbing by itself, his bank, which was financed with his own illegal gains, was used to open a bank. That bank, among other things, was a laundry for Iranian capital. The bank was approved by MFSA, Malta’s regulator, who recently asked the ECB to rescind its bank license.
- The creator of this passport program, Joseph Muscat, is accused of taking bribes from wealthy criminals from banned/blocked places due to his name appearing in the Panama Papers. We need to note here that we have not seen the contents of these documents, so there is no smoking gun evidence. But the timing is otherwise too coincidental for a forensic auditor.
- For Malta, this is a recent phenomenon, that started around 2013.
- Cyprus isn’t flagrantly taunting violating US rules. Russian Mafia has been in Cyprus for decades, but so are many other interests as well. Malta’s passport program and the Panama Papers leaks made Malta stick out as a world leader in EU passport selling to those on a black list OFAC or other.
- There is Mafia in Italy, but Mafia doesn’t run the government (anymore). What Muscat has done is created his own Maltese Mafia.
Important Reference Articles to read on this topic
Predator Arbitrage trading dashboard
Traditional Macro Economic Analysis
Arbitrage vs. Traditional Trading
Learn more @ www.totalcryptosuniversity.com
They wept in relief as the verdict was handed down in Manhattan federal court Friday after the jury deliberated for less than a day.
Jurors heard testimony that the men spent almost all of their work days in the chatroom, where they exchanged market color, inside jokes and personal information.
The three former traders told jurors that, at the urging of the defendants, they altered the rate or pressured others to submit false data to benefit trading positions held by Connolly and Black. Parietti said Connolly ordered him to disclose positions to the submitters in London because Connolly believed his team was being undermined by others at the bank who were rigging the rate in their favor.The defense argued that there were no clear guidelines on how banks should submit their rates for the calculation of Libor until at least 2008, and that they weren’t expressly forbidden from taking derivative trading positions into account when making the submission until 2013.During cross-examination, attorneys for Connolly and Black attempted to portray the government’s witnesses as liars who initially defended their practices to investigators and changed their stories only in exchange for a deal with prosecutors.